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| document type = CORRESPONDENCE-LETTERS, INCOMING CORRESPONDENCE, UTILITY TO NRC
| document type = CORRESPONDENCE-LETTERS, INCOMING CORRESPONDENCE, UTILITY TO NRC
| page count = 967
| page count = 967
| project = TAC:63146
| stage = Other
}}
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=Text=
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{{#Wiki_filter:REQULATO INFORNATION DISTRIBUTION TEN (R IDS)s~J ACCESSION NBR: 87020b019b
{{#Wiki_filter:}}
'OC.DATE: 87/02/03 NOTARIZED:
NO DOCKET 0 FACIL: STN-50-.529 Palo Verde Nuc.lear Stati ond Unit 2.Ari zona Pub li 05000529 AUTH.NAME AUTHOR AFFILIATION TOYd T.5, Nudge.Rosed Quthried Alexander 8c Ferden REC IP.NAI.'tE RECIPIENT AFFILIATION NIRAQLIA, F.J.Division of Pressurized Water Reactor Licensing-B (post 8
 
==SUBJECT:==
Foemands tmo vole og tnansaction documents ee S6121S closing+~C of two sale 8c leasback transactionsd one e/affiliate ChrMsler Corp 8c one e/affiliate Commercial Federal Corp p//4pn&DISTRIBUTION CODE: BOOSD COPIES RECEIVED: LTR ENCL SIZE: TITLE: Licensing Submittal:
Application/General Info Amdt NOTES: Standardized plant.N.Davis>NRR: 1Cg.05000529 REC IP IENT ID CODE/NAKE PMR-B PD7 LA LICITRAd E 01 10 04 03 Ob INTERNAL: ACRS AEOD/PTB ELD/D E EXTERNAL: LPDR"NSIC NOTES: COPIES LTTR ENCL1 i+l 1 1@1 1$1 1 1 RECIPIENT ID CODE/NANE PWR-B PD7 PD 05 ADN/LFNB ELD/HDS3 11 IE/DGAVT/GAB 09 SP NRC PDR ,'2 COPIES LTTR ENCL TOTAL NUMBER OF COPIES REGUIRED: LTTR 18 ENCL
~HS I t p'<<.~4)f<<V'i)6>>p'>)>~I 4 II'H!H, H I tl~ls N~'S), si if, N a's~H i.)hf'I~i 4 1 I l I l I N f 4.p I~"'l"<<HC!N fs.I'I..I.H" 3~j"'I 3>"U)H')H j']H)Q;ZI I'.j,s i W',4<<'4 J l 4 g Nl.'L<<N>H,<~."(".3",i3 g,p tf)44 s ft>H7 HN'..NH~~4, s H~!I<s jl j=-l<'>>>H('''
4 If<<]I N i,s'''
MUDGE ROSE GUTHRIE ALEXANDER K FERDON RI2l K STREET, N.W.WASHINGTON>
D.C, 20037 202 420"0355 SVITC 2020 333 SOUTH ORANS AVCNUC LOS ANOCLESp CALII g 0007l RI3 BI3 lll2 I80 MAIDEN LANE NEW YORK, N.Y.10038 2 I2-SI 0-7000 CASLC ADDRESS>SALTVCHINS NCW YORK TELEX>WV IRTSS0 TCLCCOPICRc 2IR-248-2855 SUITC 000, NORTHSRIDGC CCNTRE SIS NORTH FLAOLCR DRIVE WEST PALM BEACH, FL.3340I 305-850 BIOO l2, RUC DC LA PAIX 7SOOR, PARISH FRANCC tl)~.Bl~S7.7I February 3, 1987 Director of Nuclear Reactor Regulation Attention:
Frank J.Miraglia, Director Division of Pressurized Water Reactor Licensing-B Nuclear Regulatory Commission Washington, D.C.20555 Re: Sale and Leaseback Transactions by EL PASO ELECTRIC COMPANY-Palo Verde Nuclear Generating Station Unit 2 (Docket No.STN 50-529)
 
==Dear Mr.Miraglia:==
Enclosed herewith on behalf of El Paso Electric Company in connection with the above-captioned docket are two volumes of transaction documents relating to the December 18, 1986 closing of two sale and lease-back transactions, one with an affiliate Chrysler Corporation and the other with an affiliate of Commercial Federal Corporation.
An index is attached to each volume indicating the documents contained therein.oboiqb 870203 8702 ADOGK 05000529 PDR A~PDR I 1021.700..2898.59:1 0 I/,~kx C, If I can be of further assistance, please do not hesitate to call at (212)510-7750.Sincerely, li.Timothy Michael Toy Copies with enclosures to: Joseph F.Scinto, Esq.Office of General Counsel Nuclear Regulatory Commission 7735 Old Georgetown Road Bethesda, Maryland 21930 Edwin J.Reis, Esq.*Deputy Assistant General Counsel Nuclear Regulatory Commission 7735 Old Georgetown Road Bethesda, Maryland 21930 Oreste Russ Pirfo, Esq.~Office of General Counsel Nuclear Regulatory Commission 7735 Old Georgetown Road Bethesda, Maryland 21930 Arthur C.Gehr, Esq.Snell&Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 Dane George, Esq.*Kemp, Smith, Duncan&Hammond 2000 MBank Plaza El Paso, Texas 79901 Norman M.Segal, Esq.*Robert B.Michel, Esq.*Mudge Rose Guthrie Alexander&Ferdon 180 Maiden Lane New York, New York 10038*w/o enclosures 1021.700.2898.59:1
 
'.8702060196 I EL PASO ELECTRIC COMPANY Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities CHRYSLER FINANCIAL CORPORATION December 18, 1986 TRANSACTION DOCUMENTS Description Participation Agreement Tab Appendix A-Definitions Trust Agreement Facility Lease Trust Indenture, Mortgage, Security Agreement and Assignment of Rents (with forms of Initial Series Notes attached)Initial Series Notes Collateral Trust Indenture t Series 1986A Bond Supplemental Indenture Letter of Credit and Security Agreement Letter of Credit Assignment, Assumption and Further Agreement Deed and Bill of Sale 12 Deed 13 Deed and Assignment of Beneficial Interest Extension Letter (Collateral Trust Trustee)14 15
 
PARTICIPATION AGREEMENT dated as of December L 1986 a01ong CHRYSLER FINANCIAL CORPORATION, as Owner Participant EL PASO FUNDING CORPORATION, as Loan Participant THE FIRST NATIONAL SANK OF BOSTON, in its'individual capacity.and as Owner Trustee under a Trus't Agreement, dated as of December 1, 1986 with Chrysler Financial Corporation, as Owner Trustee FIRST CITY NATIONAL SANK OF HOUSTON, in its individual capacity and as Indenture Trustee under a Trust Indenture,,Mortgage, Security Agreem'ent and Assignment of Rents, dated as of December 1, 1986 with the Owner Trustee, as Indenture Trustee t EL PASO-ELECTRIC COMPANY;as Lessee lt k r r I Sale and'Leaseback of an Undivided Interest in Palo, Verde Nuclear Generating Station Un'it-.'2''and Ce'rtain Common.Facilities 0
TABLE OF CONTENTS Paa!e Section 1'ection 2 Section 3 1 3 Section 4 3 3 Section 5 Section 6 o 8 11 12 27 34 35 54>>57 56 56 57 57 Section 7 Section 8 Section 9 Section 10 Section ll Section 12 Section 13 Section 14 Section 15 Section 16 Section:17 Section 18 Section 19 APPENDIX appendix A,-Definitions SCHEDULES-Notice of Closing'Pricing Assumptions
-Initial Series Note Amortization
-Recordations'nd Filings Schedule 1 Schedule 2 Schedule 2A Schedule 3 EXHIBITS Exhibit A-Form of Bill of Sale and Assignment, Exhibit B-Afadavit of Trustee~<'/a>>~h'4>>:>>~,,>>>>h=>>>>t h h>>'r A h hh 5~>>'t i"-*>>, I hh, Definitions.
Participation by the Loan Participant:
Releveraging; Refunding; Reoptimization; Issuance of Initial Series Bonds.Participation by the Owner Participant; Partial Refund of the Investment
.....Purchase, Sale, Financing and Lease of the Undivided Interest and the Real Property Interest.Notice of Closing;Closing.'epresentations, Warranties, Agreements and Directions of the Loan Participant Representations, Warranties and Agreements of the Owner Participant
.......Representations, Warranties and Agreements of the Owner Trustee and FNB..Representations, Warranties and Agreements of FCNB Representations, Warranties and Agreements of the Lessee Conditions Precedent.Consent to Assignment of the Facility Lease;Consent to Indenture..........
Lessee',s Indemnities
.Transaction Expenses..Owner Participant's Transfers.
Brokerage and Finders'ees and Commissions Survival of Representations and Warranties; Binding EfFect Notices.Miscellaneous Oi 0 PARTICIPATION AGREEIIEVT PARTICIPATION AGREEMENT.
dated as of December 1.1986.among CHRYSLER FINANCIAL CORPORATION.
<<!vfichigan corporation (the Owner Participant).
EL PASO FUNDING CORPORA-i TION.a Del;iw;ire corporation (the Loan Participant).
THE FIRST NATIONAL BAiVK OF BOSTON.'i iation;il banking;issociation.
in its individual cnpncity (FNB)and as Owner Trustee (the Owner Trustee)under a Trust Agreement.
dated as of December 1.1986.with the Ow>>er Participaiit.
FIRST CITY iVATIONAL BANK OF HOUSTON.a national banking;issociation.
in its individual capacity (FCiVB)and as Indenture Trustee (the Indenture Trustee)under a Trust Indenture.
Mortgage.Security Agreement and Assignment of Rents, dated as of December 1.1986.with the Owner Trustee.and EL PASO ELECTRIC COMPANY, a Texas corp'oration (the Lessee)'.WIT N ES S ETHr WHEREAS, the Owner Participant desires to cause the Trust to acquire the Undivided Interest and the grant of the Real Property Interest and to lease them to the Lessee under the Facility Lease: WHEREAS, the Lessee desires to sell the Undivided Interest and grant the Real Property Interest to the Trust and lease them bnck from the Trust under the Facility Lease: WHEREAS, the Owner, Trustee.and the Lessee will enter into the Purchase Documents with respect to the sale and purchase of the Undivided Interest and the grant of the Real Prop'erty Interest: WHEREAS.pursuant to the terms nnd provisions oF the Indenture..tlie Owner Trustee will authorize the creation.issuance and sale and delivery of the Initial Series Notes and the granting oF th'e" security therefor..
and the Indenture Trustee will authenticate the Iiiitial Series iVotes: and WHEREAS, the Loan Participant is willing to purchase the Initial Series iVotes on the-terms nnd conditions set forth herein;NOW.THEREFORE, in consideration oF the premises nnd of other good and valunble considern-
~~tion.receipt of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1.Definitions.
For the purposes hereof, capitalized terms used herein shall have the meanings nssigned to such terms in Appendix A;provided, however, that, for all purposes of this Participation Agreement.
to the'xtent different from Appendix A.hereto, the terms Deemed Loss Event, Event of Loss.Ecoriomic-Useful Life and Final Shutdown (including for purposes of such.definitions, all defined terms contained in or relating to any of such definitions) shall have the respective meanings set forth or appended to.the Facility Lease as amended Frorri time to time in accordance with its terms.References
, in this'Participation A'greemerit to sections, paragraphs and clauses are to sections, paragrnphs and , clauses-in this.Participation Agre'ement unless"oth'erwise,indicated.
h.','.~...SECTION:2.
'ai'trcipation",'by the'Loari, Paiticip'ant Releveraging;.
Re'funding; Reoptimizatiori;
.,".'Issuance, of Iriitial'-Series:
Bonds.(a)Loan Participant's Commitment.
Subject to the satisfaction of, the conditions in Sections-5(a) nnd.11('a), on the Closing'Date the Loin Participant agrees to'lend to the Owner Trustee.'on a'onrecour'se b'asis, an amount.(the'Loan)'.equal'to the Loan Perce'ntage oF the Purchase Price and to,.,'issue the'Initial'/Series Bonds in.a public offeri'ng,'to-be consummated on.,the Closing'Dnte,for the purposes of, funding',the'Loan.
-.*;';,',.(b}Payment;Terms of t'e liiitial Series-Notes.'Proceeds of the Loan sh'all be made available in such="mariner, as the parti'es niny agree upon.The Loan shall be e'v'idenced'by the'Initial'Series"Notes.
The-Initiril Series<<Notes shall be issuedby the, Owner.Trustee.under, and pirrsunnt'to'he.Inde'nture.
shall be,~":-'.in'he nggregnte principal nmount of,-the L'oan and,shnll.benr interest;it'the atte or rates per nnniim*, ariel,sh:ill.be pnynble as set'Forth in'the Indenture.
/'/r C 1/
(c)Rclerera<in<.Upon the occurrence of an adjustment pursuant to Section 3(d)of the Facility Lease.subject to the contlitions set forth in Section 11(c).on the Releveraging Date the Loan Participa>>t agrees to lend to the Owner Trustee.on a nonrecourse basis.an additional a>>iou.Releveraging Loan)equal to the applicable Releveraging Amount.There nray be up to two Rele ing Loans under this Section 2(c).the Releveraging Date or Dates of which shall be mut acceptable to the Lessee.the Owner Participant and the Loan Participant.
Proceeds of each Releveraging Loan shall be paid directly to the Indenture Trustee.in immediately available funds.at the Indenture Trustee's Office.and such proceeds shall be applied forthwith as a partial refund of the Investment.
Each Releveraging Loan shall be evidenced by a Releveraging Note.which Note shall be issued by the Owner Trustee under and pursuant to the Indenture, be in the principal amount of the Releveraging Loan in respect of which it is issued, and bear interest at the rate or rates per annum and be payable as set forth in the Indenture.
No releveraging shall increase the principal amount of the Notes above 80 percent of the Purchase Price.'d)Refimdin~.
Subject to the satisfaction of the conditions set forth in Section 11(d), if El Paso and the Owner Participant agree that the Initial Series Notes should be refunded on the Refunding Date.if,any, the Loan Participant agrees to lend to the Owner Trustee, on a nonrecourse basis.an amount (the Refunding Loan)equal to the sum of (i)the amount necessary to refund the principal-I;unounts of the Initial:Series Notes plus a'y premium thereon and each Refeveraging Note theretofore issuetl and to pay accrued intere'st on each thereoF from, and including, the last elate as of which, interest was payable thereon (or.if no such date has occurred.the date of issue thereof)to.but exclutling.
the Refunding Date and (ii)if any releveraging is to occur on the Refunding Date.an amount equal to the applicable Releveraglng Amount.Proceeds of the Refunding Loan shall be paid directly to the Indenture Trustee at the Indenture Trustee's Office and applied (x)to the extent necessary to-refund the unpaid principal of, and such premium and accrued interest on.the Initial Series Notes and each Releveraging Note (if theretofore issued), and (y)to the extent of such Releveraging Amount, for the account of the Owner Trustee, as a partial refund.of the Investment.
in each case in immediately available funds.The Refunding Loan shall be evidenced by the Refu Note or Notes.which Note or Notes shall be issued by the Owner Trustee under and pursuant t Indenture.
be in the principal amount of the Refunding Loan, and bear interest at the rate or rates per annum and be payable as set forth in the Indenture.
On the Refunding Date the Refunding Note or Notes shall be exchanged b'y the Owner Trustee for.the Initial Series Notes and each Releveraging Note theretofore issued.'The Lessee shall give the parties hereto written notice of the Refunding Date (if a refunding shall have been agreed to by.the Owner Participant) no less than seven Business Days prior thereto.Not less than four Business Days prior to the Refunding, Date, the Loan Participant shall deliver to the Owner Participant and the Lessee a certificate setting forth the information necessary to complete the form of Refunding Notes (including the schedules thereto).Upon such delivery, and upon approval by the Lessee and the Owner Participant of the terms thereof, the Owner Participant and the Lessee shall cause the form of Refunding Notes to be completed; The parties hereto shall make-" a good faith.efFort: to cooperate to effect such-amendments of the Transaction, Documents as may.be;,.>I':;necessary'or'appropr'(ate.to
'effec't<such re'fun'ding; so long.as such''mendm'ents do, not', in theopinion'.;...'.
of Cravath, Swaine R:Moore,'dversely afFect the tax benefits contemplated by the Owner Participant in, entering''into the transactions;cont'emplated,by, this Participation Agreement and the othe'r, Transaction Do'cuments.-No refun'ding'shall'increa'se the principal amount of the'Notes above 80.~percent.of the Purchase Price.*('e)Reoptimi-ation.
'Subject to the satisfaction of the conditions set'forth in, Section 11(e),'if the'" Lessee, in,a timely.manner, prov'ides the Owner:Trust'ee and the Owner Participant.witfi info'rmation sufficient for the Owner Truste'e to direct the adjustmerits described.
in Section 3:12 of the Indenture.-
;together with a,certificate (in forri>and substance reasonably satisfactory to the Owner Participant) to ,the effect that such adju'stments minimize the.aggregate'increase in Basic Rent occurring as a'result of'the operation of Section 3(d)of the Facility'Lese'while preserving Net Econon>Ic Return.th'e Owner;Trhstee-shall deliver to the Indentiire Trustee',a-certificate pursuant to" such.Section3.12.
Notv" standing the foregoinj<, the'Owner.'Participant'-and the Owner Trustee n)ay,rely on'l>e certi 6-*'*h delivered by the Lessee and shall have no obligation to verify the same.No reoptimization pursuant to this Section 2(e)shall occur without the consent of the Owner Participant during the month o l f November or December of any year.ECTION 3.Participation by the Owner Participant; Partial Refund of the Investment.(a)Oivner Participant's Commitment.
Subject to the satisfaction of the conditions in Sections 5(a)and ll(a), on the Closing Date the Owner Participant agrees to (i)cause the Trust to make an equity investment in the Undivided Interest in an amount (the Investment) equal to the Investment Percentage of the Purchase Price and (ii)cause the Trust to make an equity investment in the Rea l Property Interest for the amount set forth in Schedule 2 as the"Real'Estate Investment" (the Real Estate Investment).
On the Closing Date, the Owner Participant shall provide to the Owner Trustee an amount equal to the Estimated Transaction Expenses.Proceeds of the Investment and the Real Estate Investment shall be made available in such manner as the parties may agree upon.(b)Partial Refund.In the event that the Indenture Trustee shall have received the proceeds of a Releveraging Loan or that portion of the Refunding Loan equal to the applicable Releveraging Amount, the Indenture Trustee shall, immediately upon its receipt thereof, return the same to the Owner Participant as a partial refund of the Investment, and for purposes hereof the"Investment" shall thereupon be reduced accordingly.
SECTION 4.Purchase, Sale, Financing and Lease of the Undivided Interest and the Real Property.Interest.''(a)The Undivided Interest.=Subject to the satisfaction of the'conditions in Sections 5(a)and 11(a), receipt from the Owner Participant of the Investment and receipt from the Loan Participant-of the proceeds of the Koan, the Owner Trustee shall (i)on the Closing Dat'e cause the Trust to purchase the Undivided Interest from the Lessee for the amount speciBed in Schedule 2 as the"Purchase Price" (the Purchase Price), and (ii)promptly after receipt ofthe amount thereof from the Owner Participant disburse the Estimated Transaction Expenses, in each case in accordance with the payment instruc-tions in the Notice of Closing.Subject to the satisfa'ction of the conditions in Section ll(b), on the Closing Date the Lessee shall sell the Undivided Interest to the Trust for the Purchase Price.Concurrently with such purchase and sale, the Trust shall lease the Undivided Interest to the Lessee, and the Lessee shall lease, the Undivided Interest from the Trust, pursuant to the Facility Lease.(b)The Heal Property Interest.Subject to the satisfaction of the.conditions in Sections 5(a)and ll(a)and receipt from the Owner Participant'f the.Real Estate Inv'estment, on the Closing Date the Owner Participant shall cause the Trust to acquire.the Real Property Interest froin the Lessee for a purchase price equal to the amount set forth in Schedule 2 as the"Real Estate Investment." Subject to the satisfaction of the conditions in Section ll (b), on the Closing Date the Lessee shall grant the Real Property Interest to the Trust for the ainount set-forth in Schedule 2 as the"Real Estate Investment.".'oncurrently''with'such acquisition b', the Trust," the Trust sh'all lease.the Real Property, Interest to the.',Lessee,, and"the Lessee sliall.lease the Real'ProperNJ.'Inter'e'st from the Trust;pursuant to the'Facility,-
'r r'easer SECTION 5.Notice of Closing;Closing.','.'(a)Notice of Closin'g'.'-
Not..later than two Business-'Days prior to.the'losing Date, the L'essee,'shall deliver to'the:Own'er'articipant,, the'Owner Truste'e,,'the Loaii Participant, the Collateral Trust Trus'tee and the" Indenture Trustee.a'notice,'substantially,'n the form of Sch'edule 1 (the'Notice-of'losing), which shall (i)state that the Closing'Date shall occur on the date speciBed therein;-(ii)=list.the.then known.Transaction'Expenses payable by the Owner Trustee pursuant to Section 14(a)(the'-Estimated Transaction Expenses), and (iii)provide pa'yment instructions in respect, of the disposition
', of the Purchase Price'and acquisition.
price of the Real Property Interest.
(b)Closin.Upo>>satisfaction of the conditions in Section 5(n)<<nd 11(a)and receipt t'ro>>i the Owner Participant of the Investnient and the Real Estate Investment
<<nd receipt fron>the Loan Participant of the proceeds of the Loan.on the Closing Dnte the Owner Trustee slmll cause the Purchnse Price to be paid nnd the tcquisition price of the Real Property Interest to be paid.in each ense in nccordnnce with the payment instructions in the Notice of Closing.Upon satisfaction o" conditions in Section 11(b).on or<<s of the Closing Date the Lessee shall deliver to the Owner Ti the Purchase Documents.
SECTION 6.Representations, warranties, Agreements and Directions of the Loan Participant.(a)Representations and warranties.
The Loan Participant represents and warrants that: (1)Due Otganhation.
The Loan Participant is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware and has the corporate power and authority to carry on its business as presently conducted, own its properties.
and enter into and perform its obligations under this Participation Agreement and each other Transaction Document and each Financing Document to which it is a party.(2)Due Authorization.
This Participation Agreement and each other Transaction Docu-ment and each Finnncing Document to which the Loan Participant is a pnrty hns been duly nuthorized by all necessary cor'pornte action.on the part of the Loan Participant and does not require the consent or approval of its stockholders or ai>y trustee or holder of any of its'ndebtedness or other obligati'ons, except such as have beeri.or on or before the Closing Dnte will have been..duly obtained, given or accomplished.,=
(3)Execution and Enforceabilitg.
This Participation Agreement and each other Transnction Document nnd'each Financing Document to which the Loan Participant is a party has been duly executed and delivered by the Loan Participant and constitutes its legal.valid and binding agreement, enforceable against it in accordance with its terms.(4)No Violation.
Neither the execution, delivery or performance by the Loan Participant of this Participation Agreement, any other Transaction Document or any Financing Docume which it is a party, nor the consummation by the Loan Participant of the transactions coi plnted hereby or thereby, nor compliance by the Loan Participant with the provisions hereot or thereof, conflicts with, or results or will result in the breach of any provision of.or is inconsistent with, the Certificate of Incorporation or ByLaws of the Loan Participant or contrnvenes any Federal, Delaware or New York law applicable to it, or any indenture, mortgage or agreement to which the Loin Participant is a party or by which it.or its property is bound.or requires any Governmental Action with respect to the Loan Participant under any Federal.Delaware or New York law applicable to it, except such as have been, or on or before the Closing Date will have been, duly obtained;given or accomplished.
(5)No Other Business.Except.as contemplated by this Participation Agreement; the other Transacti'on'Documents and the;Financing Documerits and:except as other'wise co'ntem'pin'ted by, the Section 6(c)'pplication, the Loin Participant has'ot engiged.'in any busiriess or'activity" of any type or kin'd wh'atever.
'6)EBISA.The Loan Participant is n'ot-acquiring, and will not acquire, any Note with the-."plnn assets", of any,"employee benefit plan'," within the meaning of section 3('3)of ERISA;or any'plan," within the meaning,'of section 4975(e)'(1)''of the Code..~.(7).inc'estinent Repr'esen'tation".-'-The-Loan Participant.
is acquiring,'and will acquire, each Note to be acquir'ed by'it, he'reunder"and u'nder th'-Indenture solely for purposes of pledging'such,'otes to the'Collateral Trust Trustee to secure Bonds issued'rom tin>e to time unde'r.the':,-Collateril Tritest.Indenture.
The L'oan,Participant understands that no'Note to be acquired by it~hereunder" or under the Indenture will.have b'een registered under the Securities Act hnd that'ncli such.Note-will bear-the legend set forth-in'Sectiori 4.5 of the Indenture.
0 i (b)A iiccments.
The Loan Particip;uit agrees thiit: (I)Transfers of Notes.Any transfer or assignment of any Note or of all or any part of the Lo;ui Participant's interest hereunder or under any other Transaction Docunie>>t or;iny Financing Docunient shiill be eH'ected in a transaction constituting an exenipted tr;uisaction untler.the Securities Act and on the express condition that each transferee.
assignee or participant sh;ill agree to be bound by the terms and provisions hereof and thereof.Neither the Loiui Participant nor any subsequent Holder of a Note may sell.exchange or transfer any Note to any other Person (other than the Collateral Trust Trustee)unless such transferee delivers to the other parties hereto a representation and warranty (and an opinion of counsel satisfactory to e;ich of the other parties iiereto)to the e8'ect that neither the transfer of such Note to.nor the ownership of such Note by, such transferee will cause such transferee, or any other party hereto.to be engaged in a"prohibited transaction," as defined in section 406 of ERISA or section 4975 of the Code.which is not at such time subject to in exemption contained in ERISA or in the rules.regulations.
releases or bulletins adopted thereunder.
(2)Payment of Bonds.Except as provided in this Participation Agreement.
without the consent of the Owner Participant and the Lessee, the Loan Participant will not refund or optionally prepay any Bond issued in respect of any Note except in connection with the refunding or optional prepayment of an equal principal amount of the corresponding Notes pledged*"pursuant to the Collateral Trust In'denture in respect thereof.('3)Quiet Enjoyment.
The Loan, Participant acknowledges Section 6'(a)of the Facility Lease.(4)No Other Business.During such time.as any Note is o<itstandiiig and held by the Loaii Participant or the Collateral Trust Trustee.the Loan Participant will riot (i)engage'>>any business or activity other than (I)in connection with the'Transaction Documents or the Financing Documents or (2)as otherwise contemplated by the Section 6(c)Application or (ii)amend or engage in any activity or take any action not permitted by Article THIRD.FOURTH or~~~~SIXTH of its Certificate of Incorporation, as in effect on the date of execution and delivery hereof.without,-in each case, the consen't of the other parties hereto.(c)Direction to the Indenture Trustee.The Loan Participant, as purchaser of each Note.(i)authorizes and directs the.Indenture Trustee to execute, deliver and perform this Participation Agreenient,.(ii)authorizes and directs the Indenture Trustee to register such Note'in the name of-the Loan.Participant and, upon authentication and delivery thereof pursuant to this Participation Agreement and the Indenture, to deliver such Note (upon completion by the Loan Participant of the assignment attached thereto)to the Colliteral Trust Trustee pursuant to the Collateral Trust Indenture, (iii)acknowledges and agrees that, in connection with this Participation Agreement.
the Indenture, Trustee shall have the benefits'and protections of Article VIII.of the Indenture and (iv)agrees that, in the event"of a conflict between the provisions of this Participation Agreement and the=Indenture, the Indenture Tr'uste'e shall, as between the Indenture Trustee and the Lban Participant, be...-".-Fully-piotected in.relying on,'the'express term*s'of the Indenture.".-SECTION 7.=Representations, Warranties and,Agreemertts of the Owner Participant.
H (a)Represe'ntations.and Warranties., The Owner'Participant represents and warrants that: ", (I)Due Organi~tion.
The 0'wner, Pirticipant,is a corporation duly organized and v'alidly'xisting.
in good standing'under, the liws of the State of Michigan and has the corporate'power'and'
..authority to enter, into and perform its.obligations under this Participation Agreenient and each.oth'er Transaction Document to which it is a@arty."',~'--'2)'Due Authori~tion.
This Participation Agree'ment, and each*other'Transaction Docu-ment to'hich the'wner.Participant'is.,a party.has been<luly.,':author'ized by ill necessary.corporate;ictio'n'on,the part of the Owner'Participant"anti does.not require'the consent or r I/f h approval of its stockholders or any trustee or holder of any of its indebtedness or other obligations, except such as have been duly obtained.given or accomplished.
(3)Execution and Enforceabilitp.
This Participation Agreement and each other Transa on Document to which the Owner Participant is a party has been duly executed and delivered'wner Participant and constitutes its legal, valid and binding agreement, enforceable again accordance with its terms.(4)No Violation.
Neither the execution, delivery or performance by the Owner Participant of this Participation Agreement or any other Transaction Document to which it is a party, nor the consummation by the Owner Participant of the transactions contemplated hereby or thereby, nor compliance by the Owner Participant with the provisions hereof or thereof, conflicts with, or results in the breach of any provision of, or is inconsistent with, its documents of incorporation or By-Laws or contravenes any Applicable Law applicable to it, or any indenture, mortgage or agreement for borrowed money to which the Owner Participant is a party or any other agreement or instrument to which the Owner Participant is a party or by which it or its property is bound or requires any Governmental Action with respect to the Owner Participant under Federal, Texas or Michigan law applicable to it on or before the Closing Date, except such as are contemplated by the'Transaction Documents or the Financing Documents or such as have been, or on or before the Closing Date"will have been, duly obtained, given or accomplished; provided, however, that the..'wner Participant makes no representation or warranty a's to any Applicable Law or Governmen-tal Action relating to the Securities Act, the Secur'ities Exchange Act, the Trust Indenture Act, the.Federal Power Act, the Atomic Energy Act, the Nuclear Waste Act, the Holding Company Act, the New Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona Public Utility Act, energy or nuclear matters,.public'utilities, the environment, health and safety or Unit 2.II i (5)No&uner Participant's L~.Neither the execution, and delivery by the Owrier Participant of this Participation Agreement or any other Transaction Document to which the Owner Participant is or is to become a party, nor the performance, by, the Owner Participan obligations hereunder or thereunder, will subject the Trust Estate or the Lease Indenture I'r any portion of either thereof, to any Owner Participant's Lien.(6)Acquisition for Investmen4 The Owner-Participant is acquiring the beneBcial interest in the Trust and the Trust Estate for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof in violation of Section 5 of the Securities Act, but subject, nevertheless, to any requirement of law that the disposition of the Owner Participant's property shall at.all times be within its control.lj (7)No Prior'Security Interest.There exists no security interest in or other Lien on the Leas'e Indenture, Estate in the States of Texas, New Mexico, Arizona or Michigan arising as a result...:of claims, against the.Own'er'articipant unrelated.,to the, transaction's-contemplated by the.::-;';Tr'ansa'ction, Documents.
or th'-Finan'cing Docum'ents.
which is prior.'to.the Indenture'Trustee's
', ,'ecurity'.interest'in the'Lease, Indenture.
Estate." (8)Securities Act;Neither the Owner Participant-nor,anyone authorized to act on its behalf has directly or indirectly ofFered or sold any security issued" or to be issued to Bnance Unit'2,.or any security the ofFering of which for the purposes of the Securities Act would be deemed to be*.part of the.ofFerings.
contemplated by the Transaction Documents and the'Firiancing Documents, or,.solicited any"ofFer, to acquire any such security fr'om any Person;in, violation of Section'of.'the,.'Securities'Act'..
I'Y p!t'9)EHISA"The Owner-Participant is not acquiring'.its interest, in the Trust with, the"planassets" of, any"empl'oy'e'e beneBt plan" w'ithin the-meaning of section 3(3)of ERISA or any~" plan" within the:,mean'ing of section 4975'(e)(I')of-the'Code: 'C 1 4
 
deem necessary or appropriate to protect and preserve such security interest and the rights of the Owner Participant to receive payments thereunder, (iii)until all amounts due to the Owner Participant have been received by the Owner Participant, the Lessee (in its capacity as such and as transferee under the Special Transfer)shall not, without the prior written consent of P'wner Participant, take any action under, accept or approve any amendment to, or deliver instruction under, any Transaction Document the eEect of which would be to (A)relieve otherwise afFect the obligation of the Lessee to make such payments, (B)terminate the Trust Agreement, (C)terminate or rescind the Facility Lease or (D)sell, assign, transfer or deliver the Trust Estate to any Person and.(iv)the Lessee agrees, from time to time, to do all such acts and execute all such instruments of further assurance as shall be reasonably requested from time to time by the Owner Participant for the purpose of fully carrying out and eE'ectuating this Section'(b)(4) and the intent hereof.On the date which is 100 days after the receipt by the Owner Participant of all amounts due to the Owner Participant, the security interest and lien hereinabove provided shall, so long as the Lessee.is not then the subject of any bankruptcy, insolvency or similar proceeding, terminate, and the Owner Participant, at the request of the Lessee, shall execute and deliver to the Lessee such termination statements, releases or other instruments presented to the Owner Participant as shall be reasonably required to eEect such termination.
(5)Letter of Credit Dragoings.
The Owner Participant will, not later than the later of (a)a'easonably practicable.
period after delivery of a notice under Section 9(c)or 9(d)of the Facility Lease and (b)the time when a failure of the Lessee to pay the amounts specified in such section in and of itself becomes an Event of Default under the Facility Lease, attempt once to draw under the Letter of Credit, if one is in efFect and drawable in an amount at leMt equal to the applicable Equity Portion of Rent;provided, hotvever," that the failure of the Owner Participant so to attempt to draw-shall have no consequence but to limit its claim against the Lessee to an amount equal to what the Owner Participant would have been entitled to had such failure to pay of the Lessee not in and of itself become an Event of Default.SECTION 8.Representations, Warranties and Agreements of the Owner Trustee and FNB.(a)Representations-and Warranties.
FNB, as Owner Trustee and (except as otherwise provide in the last sentence of this Section 8(a))in its individual capacity, represents and warrants that: rr (1)Due Organimtion.
FNB is a national banking association duly organized and'alidly
~I existing, in good standing under the laws.,of:the United States of America and has all requisite corporate pow'er and authority to enter.into and perform'its'obligations under (x)the Trust-Agreement-and; to, the extent it is a part'y hereto in its in'dividual capacity, this Par'ticipation Agreement and(y)'acting as Owner Trustee, this Participation Agreement and each other Transaction-Document to which FNB is a party, as Owner Trustee..(2)Due Authrorization; Enforceability; etc.'his Participation Agreement and each other.Transaction Document';to'which,-FNB is'party.have-been'dhty-authorized by-all necess'ary
~.;-.''orporate action'of FNB'(in.its-iiidividual'capacity:or.
as Owner.-.Trustee,'as the.case may-be)'and;
-.,"..l ,upon execution'and deliv'ery hereof and thereof;each of this Participation Agreement and each such other Transaction Document will have been.duly executed and delivered'and will be a legal, valid andi.binding agreement of FNB (in its respective capacities), enforceable against it (in;its'respective:capacities)-in accordance, with its ter'ms;it beirig understood that,FNB is not making, any,=.."-,.re'presentation;-'or'arranty'asrto the',priorities
'of.the'Liens created, or-to be'created under.any Transaction Document,'title;to the Trust Estate'or recor'dings or'filings I'e'cessary in connect'ion'-,,-"-" I therew'ith..
*;(3)Notes..'p'on'execution of, the.Initial Series Note, auth'entication',thereof pursuant.to,the
','ndenture a'nd delivery ther'eof against"paymeiit therefor.in accordance with this Participation
~~'greeinent such'Note will be,'a legal, valid''and bi'nding obligation.,'of cthe'Own'er'Trust'e'e;-
'enforceable against the, Gwner;.Trustee'in'ccordance'with its terms.~r'I (4)No Violation.
Neither the execution and delivery by (x)FNB of the Trust Agre'ement and, to the extent FNB is a party hereto in its individual capacity, this Participation Agreement and (y)the Owner Trustee of this Participation Agreement and each other Transaction Document (other than the Trust Agreement) to which the Owner Trustee is a party, nor the performance by FNB, in its individual capacity or as Owner Trustee, as the case may be, of its obligations under each thereof, conQicts with, or results in the breach of any provision of, its Articles of Association or By-Laws and does not contravene any Applicable Law of the United States of America or Tlfe Commonwealth of Massachusetts governing the banking or trust powers of FNB, and does not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument to which FNB is a party or by which'it is bound or require any Governmental Action with respect to the Owner Trustee under any Federal or Massachusetts law, except such as are contemplated by the Transaction Documents or the Financing Documents or such as have been duly obtained, given or accomplished; provided, hocoeoer, that no representation or warranty is made (i)with respect to the right, power or authority of FNB or the Owner Trustee to act under the ANPP Participation Agreement or the License in respect of the Undivided Interest or Unit 2, or (ii)as to any Applicable Law or Governmental Action relating to the Securities Act, the Securities Exchange Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act, the Nuclear Waste Act, the Holding Company Act, the New Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona'Public Utility Act, energy or nuclear matters, public utilities, the'environment, health and safety or Unit 2.(5)'Defaults.
To the best knowledge of the Owner Trustee, no Indenture Default or Indenture Event of Default has occurred and is continuing.
The Owner Trustee is not in violation of any of the terms of this Participation Agreement or any other Transaction Document to which it is a party:---(6)Litigation.
There is no action,-suit, investigation or proceeding pending or, to the knowledge of FNB, threatened against FNB (in any capacity)before any court, arbitrator or administrative or governmental body and which relates-to its banking or trust powers which, individually or in the aggregate, if decided adversely to the interests of FNB in such capacity, would have an adverse efFect upon the ability of FNB (in any capacity)to perform its obligations under this Participation Agreement or any other Transaction Document to which it (in any capacity)is a party.(7)''ocation of the Cliief Place of Business and Chief Executioe Once;etc.The chief place of business and chief executive'fBce of.the Owner Trustee-and the once where its records concerning the accounts or contract rights relating.to the transactions contemplated hereby are kept are.located in Boston,'Massachusetts."-(8)No Prior Security Inter'.There exists no security interest in the Lease Indenture Estat'e in the States of Texas, New.York or'Arizona or in The Commonwealth of Massachusetts arising as*-a'result of any, claim against'FNB'unrelated to,the, transactions contemplated by the Transaction'Documents"or the.Financing';Docu'merits w1iich.'is
'prior,'o, the Indenture Trustee's security.'" interest in the'Lease Indenture',Estate;
''''~*'.(9)No Leisor'e Liene.'Neither the execution by FNB (in any capacity)'f this Participation
~Agreement or any'other Tr'ansaction Document to which.it (in any capacity)is a party,.nor the performance in such capacity by it of its obligations hereunder o', thereunder, will subject the'rust Estate or the Lease Indenture Estate;or any portion'ther'eof; to any Lessor.'s Lien.'The-representations and'warranties in Section"'8(a)'(2) and':Section 8(a),(3),'s to Transaction Documents'and e'ach Note being legal, valid'and'binding obligations enforceable in accordance with their respective:terms', ar'e given only by FNB in its capacity as Own'er Trustee and not in'its individual
'capacity, except that FNB does.represent-in its individual capacity that it is authorized'under the law''of the United States, of America and The Commonwealth of Massachusetts to execute and'deliver'he Transaction Documents to which:it is a party.'.r"~*-9-4 (b)Agreements.
FNB agrees, in its individual capacity, that: (1)Discharge of Liens.FNB will not create or permit to exist.and will, at its own cost and expense, promptly take such action as may be necessary duly to discharge.
all Lessor's Lie~" (2)Certain Amendments, Unless a Default or an Event of Default has occurred continuing or an Event of Loss has occurred or a Deemed Loss Event has been declared, FN wi l not amend any of the payment terms of any Note or take any action to refund any Note after the date of issue thereof pursuant to the terms of this Participation Agreement and the Indenture without the prior written consent of the Lessee.Except for amendments or supplements made pursuant to Article X of the Trust Agreement or cont'emplated by Section 7(b)(4), FNB will not amend or supplement, or consent to any amendment of or supplement to, the Trust Agreement without the prior written consent of the Lessee unless a Default or an Event of Default has occurred and is continuing or the Lease Termination Date has occurred or an Event of Loss has occurred or a Deemed Loss Event has been declared, if such amendment would materially and adversely alfect the rights of the Lessee under the Facility Lease or this'Participation Agreement.
(3)Change iu Location of Chief Place of Business and Chief Executioe Once, etc.FNB shall notify the Lessee, the Loan Participant and'the Indenture Trustee promptly after any change in the location of its chief executive ofBce, principal and chief place of business or place where its records concerning the accounts or contract rights relating'"to the transactions contemplated,'ereby are kept.(4)No Petition Agreement.
Prior to the 181st day following the payment in full of the Bonds, and the discharge in accordance with'its terms of the Collateral"Trust Indenture, FNB (in any capacity)agrees that it will not ale a petition, or join in the Bling of a petition, seeking reorganization, arrangement, adjustment or composition*of or in-respect of the Loan Participant under the Bankruptcy Code or any other applicable Fedenl or state law or the law of the District of Columbia.r'(5)Quiet Enjoyment.
FNB acknowledges Section 6(a)of the Facility Lease.(c)Agreements.
The Owner Trustee agrees that:~~~~(1)Rights in Relation to ANPP Participants.
The rights and remedies of the Owner Trustee and the Owner Participant in the Undivided Interest and in the Real Property Interest are subject and subordinate to the'rights and remedies of the ANPP Participants-(other.
than (i)the Lessee or (ii)any Person who shall become an ANPP Participant.
in respect of.the Lessor's Interest)under the ANPP,.Project Agreements.
'2)Lessee to be Participant.
Except as'provided in Sections 15.2.2, 15.6.4 and 15.10 (or any'omparable successor, provisions) of the ANPP Participation Agreement, the Lessee shall be and.remain the sole"Participant" for-all purposes of the ANPP Participation Agreeinent and the sole'.""representratiye (with power to bind, the Lessor and the Indenture.
Trustee)in all dealings with.the'=."'ther ANPP-Participants'in
'relation to the'property;"riglits;.titles'and'interests of'the'-Lessee
-'-''.""'nnsferred-to the Lessor p'ur'suant."'to th''ransaction'Docum'ents; prooidsd,"'tunus'ocr, that the""i'foregoing shall'not'limit in any way.any-liability or obligation that the Lessee" may incur to the', Owner Trustee or the Owner Participant.
underiany Transaction Document as a result thereof.I J..<<*,";.,(3)Cash'Bids.
On" the Lease Termination~Date:and',upon the Lessee failing.t'o purchase or*otherwise'eacquire all'he"'right,'title'and-inte'rest in PVNGS and:contnctual rights'related;"'.j."", theret'o necessary" for the o'peration of the in'terest~(the'essor's Interest)acquired by'the L'essor ,pursuant.to the Transaction Documents, the Lessor shall,'and, subject'to the rights" of'the.L'essee-
'nder.Sections 12 and 13(b)of'the Facility Lease, at'any time prior to the Lease Termination'Date the.Lessor:.may, entertain cash bids fr'om each;ANPP Participant for'the',Lessor's Interest.I I'I r r r r-10-I I I'I I p.,i'
'(4)Survival.The provisions of Sections 8(c)(1), (2)and (3)shall remain in full force and ,g~eifect until'such time as the ANPP Administrative Committee or the ANPP Participants shall otherwise, consent, by amendment to the ANPP Participation Agreement or otherwise.
/i The Owner Trustee acknowledges that before taking possession of the Undivided Interest or any part-thereof or of any other interest in PVNGS, either of the following may be required: (i)the issuance of an appropriate license from the NRC, whether by amendment to the License or otherwise, or (ii)a partial transfer of the License authorizing the Lessor to possess its interest in PVNGS, to the extent of the Undivided Interest, upon application for partial transfer of suc License to such extent Bled pursuant to Applicable Law.(5)A+davit.The Owner Trustee will, upon the request of the Owner Participant, execute and cause to be Bled with the County Recorder, Maricopa County, Arizona, a duly completed aiBdavit in substantially the form of Exhibit B.(6)Reimbursement for Certain Insurance Costs.The Owner Trustee will reimburse the Lessee, or shall cause the Lessee to be reimbursed, for the incremental costs incurred by the Lessee in obtaining the nuclear liability insurance required by Section 10(a)(9)(ii)of the Facility Lease to be maintained after the Lease Termination Date to the extent such costs are attributable t th argi al,cost of providing, such coverage for the Owner Trustee and the Owner Participant; 1 de provided, hoivever', that the Owner Trustee's obligation;for such r'eimbursement shall not inc u e any costs of such insurance attributable to coverage'or the Lessee's continuing obligations set.forth in Section 10 (b)(3)(xi)or.13(a)" or'ttributable to the Lease Term.S ECTION 9.Representations, Warranties and Agreements.
of FCNB.'i i (a)Hepresenta'tions and'narra'nties:
FCNB represents and warrants that: (1)D'ue Organ&ation.'CNB is"a'national banking association duly organized and validly existing in good standing under the laws of the United States of America and has the corporate power and authority and legal right to enter into and perform its obligations under the Indenture, this Participation Agreement and each other Transaction Document to which it is a party.(2)Due Authorization; Enforceability; etc.This Participation Agreement,and each other Transaction Document to which FCNB is a party have been or will be duly authorized by all necessary corporate action on the part of FCNB and each has been duly executed and delivered (3)Authentication-of Each iVote.-The individual who shall on behalf of FCNB authenticate each Note to be issued pursuant to the Indenture shall be, at the time of'such,authentication, an Authorized OfBcer.J i (4)No Violation.
Neither.the execution and delivery by FCNB of this Participation
.Agreement or the Indenture, nor'the authentication on its behalf of any Note, nor the consumma-tion'by it of the t'ransactions contemplated hereby or thereby, nor the compliarice by it with.th'", provisions hereof or.,thereof, will contravene any Applicable.'Law governing its,,banking
'or-trust,'.-,"--..powers;or;coiitrave'ne.or.-
result in-a'breach.of,-or
'constitute"-a-.default".under its.Articles of,.',;,'.Incorporation'or'By-Laws, or require any Gove'rnm'ental Action under'any Fe'deral'or Texas'-law," except such as have'been, or on or before the Closing Date will have been,'uly obtained, given or'ccomplished; provided, hvivever, that no representation or war'ranty is made as to any Applicable
'aw or Governmental Action relating to the'Securities Act, the Securities Exchange Act, the Trust ,Indenture"Act,'the'Federal Power.Act;"the Atomic Energy,'A'ct, the Nuclear Waste Act,.the'Holding Company'Act the New.Mexic'o Public'Utility Act;the Texas Public'Utility Regulatory.
Actthe Arizona Public Utility',Act,'energy or.nuclear matters;public utilities,"the environment,, health and safety or Unit 2.(b)Agreements.'.
FCNB'agrees that:".'--(1)-Agreement to Disctuirge Liens;,,FCNB will'not.create or peimit to.exist, and will promptly**'ake.such'ction as'may-be necessary duly to discharge, all Indenture Trustee's Liens'...:.
I II'11-.i i*4 s r rr i J"~(2)No Petition Agreement.
Prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture, the Indenture Trustee agrees that it will not Ble a petition.or join in the Bling of a petition, seeking~reorganization, arrangement, adjustment or composition of or in respect of the Loan Parti under.the Bankruptcy Code or any other applicable Federal or state law or the law of the of Columbia.(3)Quiet Enjoyment.
The Indenture Trustee acknowledges Section 6(a)of the Facility Lease.II SECTION 10.Representations, Warranties and Agreements of the Lessee.(a)Representations and Warranties.
The Lessee represents and warrants that, as of the date of execution and delivery hereof and as of the Closing Date: (1)Due Organ&ation.
The Lessee is a corporation duly organized and validly existing in good standing under the laws of the State of Texas and has the corporate power and authority to carry on its business as presently conducted, to own or hold under lease its properties and to enter into and perform its obligations under this Participation Agreement and each other Transaction Document and Financing Document to which it is a party.The Lessee is duly qualiBed and in good standing to do business as a foreign corporation in the States of New Mexico and Arizona and has not failed to-qualify to,do business or.to be.in go'od standing in any other jurisdiction where failure so to qualify or.be in good standing would materially and adversely afFect the Bnancial condition of the Lessee or its ability to perform any obligations under this Participation Agreement, any other Transaction, Document or any Financing Document to which it is a party.(2)Due-Authorization.
The execution, delivery and performance by the Lessee of this'articipation Agreement and each.other Transaction Document and Financing Document to which it is a party hav'e been duly authorized by all necessary corporate action on the part of the'essee and do not, and will not, require the consent or approval of the stockholders of the Lessee or any trustee or holder of any indebtedness or other obligation of'he Lessee, other than (i)e Mortgage Releases, (ii)the Bnding of the ANPP.Administrative Committee described in S 15.6.2 of the ANPP Participation Agreement and (iii)such other consents and approvals as been duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant.
(3)Eiecution.
This Participation Agreement has been, and each other Trarisaction Docu-ment a'nd Financing Document to which the Lessee is a party, have been duly executed and'delivered by'he Lessee, and this Participation Agreement'constitutes,'a'nd each such Transaction
'Document and Financing Document constitutes, the'legal,'alid'nd binding agreement of the Lessee, enforceable against it in accordance with its"terms.
(4).No Violation, etc..Neither the execution, delivery or performance by the Lessee of this Participation Agreement or any other Transaction Document or Financing Document to which it'-is a'party;,nor the, consummation by*.the-Lessee.
of the transactions;-contemplated hereby or,''.-.",,'.'.th'ereby
'rior'ompliance by the.'Lessee.
with,-.the.
provisions.hereof:or thereof;, conBicts or will'., conBict with, or results or will, result.'iri" a breach or.contravention;of any of the.p'rovisions'of, the'-, Restated Articles of Incorporation or By-Law's of the Lessee or any subsidiary of the Lessee or, to the.best of its knowledge, any oth'er AIBliate of:the" Lessee, or any Applicable Law applicable to it, or any indenture mortgage, lease or-any other;agreement or instrument to.which the Lessee or any-subsidiary of the Lessee or, to th'e best of its knowledge, any.other AIBliate of the Lessee,,is a''arty or,by'which the property of.'the L'ess'ee'or''any'such subsidiary.or,'o-the.'best.of, its'knowledge, any other ASliate of the Lessee,,is:bound, o'r results or.will result in;the creation or~i'mposition'o'f any.,Lien (other-than"Permitted Liens)upon any property=of the Lessee, any.such,*, subsidiary or,-.to, the best of its'knowledge, any, other AIBliate'f the Lessee.There is no provision of the'estated Articles'oF Incorporation or By-Laws'f the.Lessee,'or any Applicable Law apphcahle to it;or any such indentur'e,'ortgage, lease or oth'er agreement or instrument'which
.m'aterially andversely sects, or, in the.future'is likely'(so
'far'as th'e Lessee-can'now fores r s a s~~!
materially adversely afFect, the business, operations, afFairs.c'ondition, properties or assets of the Lessee, or'ts ability to perform its obligations.
under this Participation Agreement or any other Transaction Document or Financing Document to which it is a party.(5)Governmental Actions.No Governmental Action under any Federal, Texas, New Mex-ico, Arizona or New York law is or will be required in connection with the execution, delivery or performance by the Lessee of, or the consummatio'n by the Lessee of the transactions contem-plated by, this Participation Agreement or any other Transaction Document or Financing Document to which it is a party, except such Governmental Actions (i)as have been, or on or before the Closing Date will have been, duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant and the Loan Participant, (ii)as may be required under existing Federal, Texas, New Mexico, Arizona or New York law to be obtained, given or accomplished from time to time after the Closing Date in connection with the maintenance, use, possession or operation of Unit 2 or otherwise with respect to Unit 2 and the Lessee's or the Operating Agent's involvement therewith and which are, for PVNGS, routine in nature and which the Lessee has no reason to believe will not be timely obtained and (iii)as may be required under Applicable Law not now in efFect.No Governmental Action by any Federal, Texas, New Mexico, Arizona or New York Governmental Authority relating to the Securities Act, the Securities Exchange Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act, the Nuclear'Waste Act, the Holding Company Act, the New Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona Public Utility Act, energy or nuclear matters, public utilities, the environment, health and safety or Unit 2 is or will be required: (a)by virtue of the participation by the Owner Trustee, the Indenture Trustee, the Owner Participant or the Loan Participant in the consummation of the transactions contemplated by this Participation Agree-ment, any other Transaction Document or any Financing Document or (b)to be obtained with respect to Unit 2 by any of such Persons during the Lease Term, except such Governmental Actions (i)as have been, or on or before the Closing Date will have been, duly obtained, given or accomplished, with true'copies thereof delivered to the O~ner Participant and the Loan Participant, (ii)as may be required by Applicable Law not now in effect, (iii)as may be required in consequence of any transfer of ownership of any Note or Bond by the Holder thereof, the beneBcial interest in the Trust by the Owner Participant, or the Undivided Interest or the Real Property Interest by the Owner Trustee, (iv)as may be required in consequence of the issuance, sale or exchange and delivery of Bonds (other than the Initial Series Bonds), (v)as would be required by Applicable Law existing on the Lease Termination Date in connection with taking possession of an interest in Unit 2, (vi)as may be required by existing Applicable Law if, after the Lease Termination Date, the Lessee should provide transmission services for the Owner Trustee or cease to be agent for the Owner Trustee as provided under the Assignment and Assumption, or (vii)as may be required in consequence of any exercise of remedies or other rights by any such Person in connection with taking possession of an interest in Unit 2.Nothing in the License or the License Amendment or any other Governmental Action with respect to the NRC will materially interfere with the ability of the Owner Trustee to transfer or convey the Undivided Interest and the Real Property Interest to a person, partnership, corporation or governmental corporation or agency engaged in the generation, transmission or distribution of energy who will be in a position to enjoy all the beneBts of, have all the rights of, and be an ANPP Participant, so long as such person, partnership, corporation or governmental corporation or agency complies with the licensing requirements of the NRC and obtains, or becomes a transferee of, a license from the NRC.(6)Securities Act.Neither the Lessee nor anyone acting on its behalf has directly or indirectly ofFered or sold any Bond, any interest in any Note, any note issued with respect to any other undivided interest in Unit 2, the Undivided Interest or any other undivided interest in Unit 2, the Facility Lease or any other lease of an undivided interest in Unit 2, or any similar security or lease, or any interest in any security or lease the offering of which, for purposes of the Securities Act, would be deemed to be part of the same ofFering as the ofFering of the aforementioned securities or leases.or solicited any offer to acquire any of the afore~nentioned securities or leases.in violation of Section i of'he Securities Act.and.except as contemplatetl by this Particip>tion Agreenient.
neither the Lessee nor any one authorized to act on its behalf will take a>>y a~'hich would subject the issuance or sale of any Note or any interest in the I acility Lease other debt instrument (other than the Bonds)issued or to be issuetl to Anance the Undiv Interest to the registration requirements of such Section>.(7)Title to the Undivided Interest;Real Property Interest;Security Interest.On the Closing Date, (i)good and marketable title to the Undivided Interest will be duly.validly and effectively conveyed and transferred to the Owner Trustee, free and clear of all Liens, except (A)Permitted Liens described in clauses (i), (vi), (ix), (x)and (xi)of the definition of such term.(B)the nmtters set forth in the exceptions to the title report delivered pursuant to Section 11(a)(19)(which.in the case of accrued taxes shall not exceed 14%of 81,750.000) and (C)Permitted Liens described in clause (v)of the definition of such term aggregating not more than 14%of 85.000.000.(ii)good and marketable title to the Real Property Interest will be duly, validly and effectively conveyed and transferred to the Owner Trustee, as provided in the Deed and the Assignment of Beneficial Interest, (iii)El Paso will have good and marketable title to its ownership interest in the Retained Assets, free and clear of all I iens except Permitted Liens.the Lien of the Existing Mortgages and matters disclosed in the title report referred to in Section 11(a)(19).(iv)the Lessee will have good and valid title to its ownership interest in the PVNGS Site.(v)Unit 2 will be wholly located on the PVNGS Site without any material encroachments by any portion thereof on any other property, (vi)all flings and recordings necessary or advisable to perfect the Owner Trustee's right.title and interest in and to the Undivided Interest anti the Real Property Interest.and to perfect for the benefit of the Indenture Trustee and the Holder of the Notes the Arst priority security interest, mortgage and assignment of rents provided for in the Indenture.
will have been duly made and (vii)no other action, including any action under any f'raudulent conveyance statute, will be required to protect the right, title and interest oF the Owner Trustee in a'nd to the Undivided Interest and the Real Property Interest, in each case against the clai all Persons (other than the Permitted Lien described in clause (xi)of the definition thereof).perfect such Arst priority security interest, mortgage and assignment of rents in favor of t e Indenture Trustee under and pursuant to the Indenture.
(8)Non-Interference.
None of the Permitted Liens described in clauses (ii).(iii).(iv), (v).(vii), (viii)and (xii)of the definition of such term will, on and after the Closing Date, materially interfere with the use or possession of the Undivided Interest or the Real Property Interest or the use of or the exercise by the Owner Trustee of its rights under the Purchase Documents and the Assignment and Assumption with respect to the interests in PVNGS granted or to be granted under the Purchase Documents and the Assignment and Assumption.
Nothing in the ANPP Participation Agreement or in any ANPP Project Agreement will materially interfere with the ability of the Owner Trustee, subject to Applicable Law, to transfer or convey the Undivided Interest and the Real Property Interest to a person, partnership, corporation or governmental corporation or agency engaged in the generation, transmission or distribution of energy, who will be in a position to enjoy all the benefits of, have all the rights of, and be an ANPP.Participant.
(9)Personal Property.Unit>based on the agreements of El Paso and the other ANPP Participants in the ANPP Participation Agreement and of the Lessee and the Owner Trustee herein and in the other Transaction Documents, is, to the full extent permitted by Applicable Law.personal property.(10)Location of Chief Erecutive Once.The chief executive ofBce and place of business of the Lessee and the office where it keeps its records concerning its accounts or contract rights is located at 303 North Oregon Street, El Paso.Texas 79901.(11)Financial Statements.
The consolidated balance sheets oF the Lessee and subsid v (A)as of'Deceinber:31.
1985 anti 1984.respectively.
anti the related consolidated statenie~
income, retained earnings and sources of funds invested in utility plant and other plant for each of the years in the three-year period ended December 31, 1985, together with the notes accompany-ing such financial statements, all certified by Peat, Marwick, Mitchell R Co., and (B)as of September 30, 1986 and 1985, respectively, and the related consolidated statements of income, retained earnings and sources of funds invested in utility plant and other plant for the nine-month periods ended September 30, 1986 and September 30, 1985, respectively, together with the notes accompanying such financial statements, all certified by the Chief Financial Officer, the Control-ler or an Assistant Controller of the Lessee, as furnished to the Owner Participant, fairly present the Bnancial position of the Lessee and its subsidiary taken as a whole at each such date and the results of their operations for each of the periods then ended, in conformity with generally accepted accounting principles, applied on a consistent basis, subject in the case of the consoli-dated balance sheets and the related consolidated statements described in clause (B)above, to the condensation of certain Bnancial information and the omission of certain, footnote disclosures as permitted by the rules and regulations of the SEC and to year-end audit adjustments.
The Lessee knows of no such adjustments which would, if made on the date hereof, be material.(12)Disclosure.
Neither any of the Bnancial statements to which reference is made in paragraph 11 above, nor the reports to which reference is made in this paragraph 12, nor any certificate, written statement or other document prepared by or for, or at the direction of, the Lessee and furnished to the Owner Participant in connection with the transactions contemplated hereby (under the circumstances at the time and for the purposes for which any statement made therein was made)contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading.
There is no fact known to the Lessee that materially and adversely affects or, so far as the Lessee can now reasonably foresee, is likely to materially and adversely afFect, the business or Bnancial condition of the Lessee or any material portion of the properties of the Lessee or the ability of the Lessee to perform its obligations under this Participation Agreement or any other Transaction Document or Financing Document to~~~which the Lessee is a party except as disclosed in the Lessee's Annual Report on Form 10-K for~the year ended December 31, 1985, as amended by Amendment No.1 on Form 8 dated April 2, 1986, the Lessee's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1986, June 30, 1986 and September 30, 1986, and the Lessee's Current Reports on Form 8-K dated June 16, 1986, July 22, 1986, August 29, 1986, September ll, 1986 and October 1, 1986, copies of which have been provided to the Owner Participant.
(13)Litigation.
There is no action, suit, investigation or proceeding pending or, to the knowledge of the Lessee, threatened against the Lessee before any court, arbitrator or administra-tive or governmental body which questions the validity or enforceability of this Participation Agreement or any other Transactio'n Document or Financing Document to which the Lessee is a party, and, except as disclosed in the reports to which reference is made in paragraph 12, there is no action, suit, investigation or proceeding pending or, to the best knowledge of the Lessee, threatened against the Lessee before any court, arbitrator, or administrative or governmental body which, individually or in the aggregate, if decided adversely to the interests of the Lessee, would have a material adverse elfect on the business or Bnancial condition of the Lessee or materially and adversely afFect the ability of the Lessee to perform its obligations'under this Participation Agreement or any other Transaction Document or Financing Document.(14)Tax Returns.The Lessee has Bled all Federal, state, local and foreign, if any, tax returns which were required to be Bled, and has paid all Taxes shown to be due and payable on such returns and has paid all other Taxes'n respect of the Lessee's interest in Unit 2 and in the real property described in the Real Property Interest which are payable by the Lessee to.the extent the same have become due and payable and before they have become delinquent, except for (i)any Taxes the amount, applicability or validity of which may be in dispute and which are currently being contested in good faith by appropriate'proceedings and with respect to which the Lessee has set aside on its books reserves (segregated to the extent required by generally accepted accounting principles) deemed by it'to be adequate and (ii)any Taxes relating to PVNGS in respect of which the.Operating Agent has'not given notice to the Lessee that the same are due and payable.The Federal income tax returns of the Lessee have been audited by the IRS for taxable years through 1973.(15)ZRISA.In reliance upon, and subject to the accuracy of the representations ma the Loan Participant in Section 6(a)(6)and the Owner Participant in Section 7(a)(9), the execution and delivery of this Participation Agreement and the other Transaction Documents and Financing Documents to which the Lessee is a party will not involve any prohibited transaction within the meaning of ERISA or section 4975 of the Code.(16)Begulation.
So long as the Facility Lease is in efFect, assuming the proper Bling of Form U-7D with the SEC on or within 30 days after the Closing Date, under Applicable Law now in efFect, neither the Loan Participant, the Owner Participant, FNB nor the Owner Trustee will be or become, solely by reason of either its entering into this Participation Agreement or any other Transaction Document or Financing Document to which any of them is a party, or the transactions contemplated hereby or thereby, subject to regulation (i)as an electric utility, a public utility or a holding company of a public utility or an electric utility by any Federal, state or local public utility commission or other regulatory body, authority.
or group (including, without limitation, the SEC, the FERC, the NMPSC, the Arizona Corporation Commission or Texas Public Utility Commission) or (ii)in any manner by the NRC.The Lessee is not subject to regulation by the Arizona Corporation Commission as a public utility or a public service corporation.
(17)Authorizations, etc.The Lessee has not failed to obtain any Governmental Action or other authorization, license, approval, permit, consent, right or interest where a failure to obtain such would materially and adversely afFect the ability of the Lessee to carry on its business, as presently, conducted.
(18)No Default, etc.The Lessee is not in default, and no condition exists that, with the giving'of notice or lapse of time or both, would constitute a default by the Lessee, under ei r Existing Mortgage or any other material mortgage, deed of trust, indenture, lease, cont other instrument or agreement to which the Lessee is a party or by which it or any properties or assetd may be bound.(19)Certain Documents.
True and correct copies of the ANPP Participation Agreement, the Material Project Agreements and the Existing Mortgages have been delivered to Cravath, Swaine h Moore.No ANPP Project Agreement will, on and after the Closing Date, materially and adversely interfere with (i)except, in the case of the Generation Entitlement Share only, for the ANPP Participation Agreement, the title of the Owner Trustee to the Undivided Interest or the Real Property Interest or (ii)except for the ANPP Participation Agreement, the use of, or the exercise by the Owner Trustee of its rights under the Facility Lease, the Purchase Documents and the Assignment and Assumption with respect to, the Undivided Interest and the interests in the PVNGS Site (including the Real Property Interest)granted or to be granted under the Purchase Documents and the Assignment and Assumption.
No payment default or other default of a material nature by the Lessee has occurred and is continuing under either Existing Mortgage or any ANPP Project Agreement.
Each of the ANPP Participation Agreement and the other ANPP Project Agreements is in full force and efFect, and no breach of any thereof, to the Lessee's knowledge, by any other party thereto has occurred and is continuing; except where the failure to be in force and efFect" or such breach would'not have a material and adverse efFect on the Undivided Interest, the Real Property Interest, Unit 2 or the rights, interests and beneBts of the Owner Trustee or the Owner Participant under any Transaction Document.Upon execution and delivery of the Mortgage Releases and the recordation the"eof or of VCR releases in respect thereof, (i)the respective mortgagees and secured parties thereunder will have released the lien of the Existing Mortgages on the Undivided Interest and the Real Property Interest and (ii)the rights of the Owner Trustee in the Undivided Interest and the Real Property Interests will not e, and will not become, subject or subordinate to the rights of any Person, except the Inde Trustee under the Indenture and the ANPP Participants under, and to the extent expressly set forth in, the ANPP Participation Agreement (as in effect on the Closing Date), and except as may otherwise expressly be permitted by the Facility Lease.The lien of the Existing Wlortgages does not extend to rights of the Lessee under any Transaction Document (other than the Lessee's leasehold interest under the Facility Lease), or to the Generation Entitlement Share included in the Undivided Interest.(20)Unit 2.The description of Unit 2 set forth in Exhibit B to the Bill of Sale, as delivered on the Closing Date, will be correct and sufficiently complete to identify such property.(21)Investment Company Act, Etc.The Lessee is not (a)an"investment company," or a company"controlled" by an"investment company," within the meaning of the Investment Company Act or (b)a"holding company" or a"subsidiary company" or an affiliate of a"holding company,"'within the meaning of the Holding Company Act.(b)Agreements.
(1)Delivery of Documents.
The Lessee shall deliver to the Owner Participant and the Loan Participant (and, in the case of Sections 10(b)(1)(iii)and 10(b)(1)(iv), the Owner Trustee): (i)FINhNclhL SThTEMENTs: (A)as soon as practicable, and in any event within 120 days, after the end of each Bscal year of the Lessee, a consolidated balance sheet of the Lessee as of the end of such Bscal year and related consolidated statements of income, retained earnings and sources of funds invested in utility plant and other plant for such year, all in reasonable detail and certified in an opinion by a nationally recognized Brm of independent public accountants, and the annual and interim reports of the Lessee to its stockholders as soon as the same have been mailed to such stockholders, (B)as soon as practicable, and in any event within 60 days, after the end of each Bscal quarter (other than the last Bscal quarter)of each Bscal year of the Lessee, a consolidated balance sheet of the Lessee as of the end of said period and a related consolidated statement of income, retained earnings and sources of funds invested in utility plant and other plant for said period, all in reasonable detail, and certified by the Chief Financial Officer, the Controller or an Assistant Controller of the Lessee and (C)as soon as practicable after the same have been Bled, a copy of all documents Bled by the Lessee with the SEC pursuant to the reporting requirements of the Securities Exchange Act;(ii)0TH@a Rzeoms: promptly upon their becoming available, any registration state-ment, offering statement, investment memorandum or prospectus prepared by the Lessee in connection with the public ofFering of securities (other than public offerings of securities under employee benefit plans, customer stock purchase plans or dividend reinvestment plans);(iii)NoYIcz oF Darhvr.T: promptly upon the Lessee becoming aware of the existence thereof, written notice specifying any condition which constitutes a Default or an Event of Default or a default by any ANPP Participant under the ANPP Participation Agreement, and, in each case, the nature and status thereoF, (iv)ANNUht.Czavmchm: within 120 days after the end of each Bscal year of the Lessee, a certificate of the Lessee, signed by the Chief Financial Officer, the Controller or an Assistant Controller of the Lessee, to the effect that such officer has reviewed, or caused to be reviewed by individuals under his supervision, this Participation Agreement and each other Transaction Document and each Financing Document to which the Lessee is a party, and has made, or caused to be made under his supervision, a review of the transactions contemplated hereby and thereby and the condition of the Lessee during such preceding fiscal year, and such review.has not disclosed the existence during such Bscal period, nor does such officer have knowledge of the existence as of the date of such certiflcate, of'any condition or event that constitutes a Default or Event of Default or, if any such condition or event exists, specifying the nature and period of existence thereof and any action the Lessee has taken.is taking, or proposes to take with respect thereto;\(v)OPINION OF COUNSEL: within 120 days after the end of each Bscal year of the an opinion or opinions, satisfactory to the Owner Participant, the Owner Trust Collateral Trust Trustee and the Indenture Trustee, of Kemp, Smith, Duncan R Ham counsel for the Lessee, Snell R Wilmer, special Arizona counsel for the Lessee, and/or other counsel acceptable to the Owner Participant (A)either to the efFect that (1)all flings and recordations (or refilings and rerecordations) required to (i)convey to the Owner Trustee, and preserve the title of the Owner Trustee to, the Undivided Interest and the Real Property Interest, and (ii)so long as any Note is Outstanding, grant, perfect, and preserve t'e security interest of the Indenture Trustee in the Lease Indenture Estate, have been duly made, or (2)no such additional flings, recordings, refllings or rerecordings are necessary to (i)convey to the Owner Trustee, and preserve the title of the Owner Trustee to, the Undivided Interest and the-Real Property Interest, and (ii)so long as any Note is Outstanding, grant, perfect and preserve the security interest of the Indenture Trustee in the Lease Indenture Estate and (B)specifying the particulars of all action required during the period from the, date of such opinion through the last day of the next succeeding calendar year, including, in the case of each UCC continuation statement required to be Bled during such period, the ofBce in which each such.continuation statement is to be filed and the filing date and fling number of the original Bnancing statement or Bxture fling to be continued, and the dates within which such continuation statement may be filed under Applicable Law;such opinion shall address such additional matters relating to actions to be taken by the Lessee pursuant to Section 10(b)(2)as the Owner Participant or the Loan Participant may reasonably request;(vi)ANPP INFORMATION:
upon receipt by the Lessee, unless prohibited by Applicable Law and subject to applicable confidentiality undertakings with respect thereto, copies of (A)minutes of all committee meetings of the ANPP Administrative Committee, the ANPP Engineering and Operating Committee, the ANPP Auditing Committee and any committee composed of the ANPP Participants, (B)all annual capital budgets, a operation and maintenance budgets and monthly statistical reports on the operation of PVNGS and (C)all notices to or from the NRC with respect to violations or other material occurrences with respect to PVNGS.(vii)REQUEsTED INFoRMATION:
with reasonable promptness, unless prohibited by Appli-~cable Law, such other data and information as to the business and properties of the Lessee or as to Unit 2, PVNGS or the PVNGS Site as from time to time may be reasonably requested by the Owner Participant, subject, hocoeuer, to applicable confidentiality undertakings with respect thereto.(2)Further Assurances.
The Lessee shall cause to be promptly and duly taken, executed, acknowledged and delivered all such further acts, documents and assurances as the Owner Participant may from time to time reasonably request in order to carry out more efFectively the intents and purposes of this Participation Agreement,.the other Transaction Documents and the Financing Documents, and the transactions contemplated h'ereby and thereby.The Lessee shall cause the financing statements (and continuation statements with respect thereto)and the documents enumerated and described in Schedule 3, and all other documents necessary or advisable in that connection, to be recorded or filed at such places-and times, and in such manner, and will take all such other actions or cause such actions to be taken, as may be necessary or reasonably requested by the Owner Participant, the Collateral Trust Trustee, the Owner Trustee or the Indenture Trustee, in order to establish, preserve, protect and perfect the title of the Owner Trustee to the Undivided Interest and in order to protect the Owner Trustee's interest in the PVNGS Site granted by the Real Property Interest, and the Owner Trustee's rights and interests under this Participation Agreement and the other Transaction Documents and, so ion n>>v Note is Outsta>>ding.
the Arst n>>d prior security interest of the 1>>de>>ture Trustee in the Lease l>>de>>ture Estate.('3)Covenants.(i)MwliTI'.i.ii(x or Co>>vo>>nTt:.
ExtsTt:.M:t:..
sr<:.The Lessee shall at all ti>>ies>>mi>>tai>>
its existe>>ce as a corporation under the laws of the State of Texas.except as per>>iitted by pnragraph (ii)below (including any consent given by the Owner Participant pursunnt to such paragraph (ii)).and qualify nnd remain qualified to do business in each jurisdiction where the conduct of its business or the ownership of its properties requires such qunlificntion.
The Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its rights (charter and statutory) and franchises:
provided, hou:ever, that the Lessee may discontinue any right or franchise if its board of directors shall determine that such discontinuance is necessary or desirable in the conduct of its business and does not materinlly and adversely affect or diminish any right of the Owner Participant or the Loan Participant.(ii)ME>>(u:.>>, SALE, crt:.: Owwen Pw>>Ting'AiwT.
Without the consent of the Owner Participant, the Lessee shall not, and shall not permit any of its subsidiaries to.convey.transfer or lease to any Person any asset except for fair value.Without the consent of the Owner Participant, the Lessee shall not, and shall not permit any of its subsidinries to.(1)consolidate with any Person.(2)merge with or into any Person or ('3)except for (i)payments.in accordance with normal dividend policy of the Lessee.of cash dividends to holders of common stock nnd preferred stock.(ii)exchanges of Axed assets for other Axed assets whose fair value is equal to or greater than the fair value oF the Axed nssets exchn>>ged or (iii)conveyances.
transfers or leases of assets for cash where such cash is to be recorded by the Lessee, convey, transfer, lease or dividend to any Person, in nny single transnctio>>
or series of related transactions, any asset or assets if the book value of such nsset or assets exceeds 5%of its total assets as shown on the most recent consolidated bnlance sheet of the Lessee delivered to the Owner Participant pursuant to Section 10(b)(1)(i)(A):
unless immedintely after giving effect to such transaction: (A)the Person who is the"Lessee" under the Facility Lease immediately following such consolidation, merger, conveyance, transfer, lease or dividend (the Surviving Lessee)shall be a corporation which (i)is organized under the laws of the United States of America, a state thereof or the District oF Columbia, (ii)is a"public utilitv" under applicable law, (iii)is an ANPP Participant under the ANPP Participation Agree>>ient
~with respect to Unit 2 (including the Undivided Interest), (iv)shall have assumed each covenant and condition of the Lessee under the ANPP Participation Agreement and each other ANPP Project Agreement and (v)holds a valid nnd subsisting license from the NRC to possess Unit 2 (including the Undivided Interest);(B)the Surviving Lessee, if other than the Lessee immedintely prior to such transaction, shall execute and deliver to the Owner Participant an agreement, in form and substance reasonably satisfactory to the Owner Participant, containing the assump-tion by the Surviving Lessee of each covenant and condition of this Participation Agreement, each other Transaction Document and each Financing Document to which the Lessee immediately prior to such transaction was a party immediately preceding such transaction;(C)no Default (other than failure to deliver documents nnd other informntion specified in Section 10(b)(1)(vi))and no Event of Default shall have occurred nnd be continuing, no Event of Loss shall hpve occurred and no Deemed Loss Event shall hnve been declared;(D)the Bonds (or, if the Bonds nre not then rated.the preferred stock of the Surviving Lessee)nfter giving effect to such transaction.
(1)shnll be rated nt least
-incestu~ent
<<rade" by Standard R Poor's Corporation
<<nd bloody's Investors Service.I>>c.and (2)shall have an investment rating by Standard R Poor's Corporation a>>d bloody's Investors Service.Inc.not less than one"sarnttest notch" below the rating assigned to the Bonds (or.if the-Bonds are not then rated.the preferred stock of the Surviving Les imn>ediately prior to such transaction (or.if neither of such rating organizations rate the Bonds (or, if applicable.
the preferred stock of the Surviving Lessee)at the tii by any nationally recognized rating organization in the United States of An>erica): (E)the Surviving Lessee shall have a Net Worth equal to or greater than the Net Worth of the Lessee immediately prior to such tr'ansactions and equal to or greater than$500,000,000;(F)the Surviving Lessee shall have delivered to the Owner Participant and the Indenture Trustee, an Officers'ertificate and an opinion.reasonably satisfactory to the Owner Participant, of counsel to the Surviving Lessee.each stating that (1)such transaction complies with this subparagraph (ii)and (2)all conditions precedent to the consummation of such transaction have been satisfied and any Governmental Action required in connection with such transaction has been obtained, given or accomplished: (G)the Surviving Lessee shall have delivered to the Owner Participant an opinion.reasonably satisfactory to the Owner Participant.
of independent counsel to the Surviv-ing Lessee stating that such transaction would not result in a loss of;my of the tax benefits described in Section 13(c)(1): (H)such transaction is otherwise permitted by and in compliance with the ANPP Participation Agreement: (I)the Coverage Ratio of the Surviving Lessee shall be at least 1.6 to 1: and (J)the Surviving Lessee, if other than the Lessee immediately prior to such transaction, shall have provided a Letter of Credit which meets the requirements forth in Section 10(b)('3)(xvii) to the Owner Participant in the same ariiount as available immediately prior to such transaction.
Upon the consummation of such transaction the Surviving Lessee.if other than the Lessee, shall succeed to, and be substituted for.and may exercise every right and power of.the Lessee immediately prior to such transaction under this Participation Agreement.
each other Transaction Document and each Financing Document to which the Lessee immediately prior to such transaction was a party immediately prior to such transaction, with the same efFect as if the Surviving Lessee had been named herein and therein.(iii)MEn(:En, SALE, ET(:.: BoNDHOLDElts.
The Lessee shall not enter into any transaction constituting a consolidation, merger, conveyance, transfer, lease or dividend not permitted by Section 10(b)(3)(ii), irrespective of any consent or waiver of the Owner Participant, unless immediately after giving efFect to such transaction, the Bonds (or, if the Bonds are not then rated, the preferred stock of the Surviving Lessee)shall be rated at least"investment mmle" by Standard bt Poor's Corporation and Moody's Investors Service, Inc.(iv)Pnlou NQTI('.E Yo RhTINc: AcENctEs.Prior to entering into any transaction as to which the conditions set forth in paragraphs (ii)and (iii)above shall be applicable.
the Lessee shall give notice thereof to the rating agencies specified in such paragraphs.
such notice to be sufficiently in advance of such transaction to enable the rating agencies to respond thereto prior to consummation thereof.(y)IN(:unuse:N(:i'.
()(: DEuT.Without the consent of'he Owner Participant.
the Lessee shall not.and shall not permit any of its subsidiaries (whether consolidated or unconsoli-dated)to.issue.assume or become liable in respect of'A)any Debt maturing more than o 70 year after the date of such issuance.assumption or liability (inclutling current nraturities of Debt with an original naaturity of more than one year)-if.irnnaediately thereafter.(i)the total rullount of all Debt of the Lessee and its subsidiaries (whether consolidated or unconsoli-dated)denaturing more than one year after the date of such issuance.assun>ption or becoming liable (reduced by Cash Available for Investment
<<nd excluding 8115.000.000 of such Debt until August'31.1987)shall exceed 70%of Consolidated Capitalization.
in each case as shoivn on a pro forma consolidated balance sheet on and as of the date of such issuance.assumption or becoriiing liable.or (ii)the Coverage Ratio of the Lessee woukl be less than 1.6 to 1.or (B)any Debt maturing one year or less after the date of such issuance.assumption or beconiing liable (excluding current maturities of Debt with an original maturity of<nore than one year)if, immediately thereafter, the total amount of all Debt of the Lessee and its subsidiaries
'(whether consolidated or unconsolidated) maturing one year or less after the date of such issuance, assumption or becoming liable shall exceed 20%of Consolidated Capitalization.
in each case as shown on a pro forma consolidated balance sheet on and as of the date oF such issuance, assumption or becoming liable.For purposes of the foregoing clause (A).there shall be excluded any Debt which has been legally defeased or for the payment of which funds have been segregated in escrow.(vi)C)wi(u:.tw Ctl(t:.v Extx:tmvv.
OvFt(:c.The Lessee shall notify the Owner Trustee.the Owner Participant.
the Loan Participant and the Indenture Trustee proinptly after any change in the location of its chief executive ofHce and place of business.principal place of business or place where the Lessee maintains its business recortls.(vii)N()Pt.rn'l()N Ar:Iu:.I:.xn:sY.
Prior to the 181st day following the payntent in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture.
the Lessee shall not file a petition.or join in the filing of a petition.seeking reorganization.
arrangement, adjustment or composition of or in respect oF the Loan Participant under the Bankruptcy Code or any other applicable Federal or state law or the law of the District oF Columbia.(viii)ANPP Pn()JI:.(w Admi:.t:.xn:.was.
Except where the failure to tlo so would not have a material and adverse effect on the Undivided Interest, the Real Property Interest.Unit 2 or the rights, interests and benefits of the Owner Trustee or the Owner Participant under any Transaction Document, the Lessee at all times.unless the Owner Participant shall otherwise consent, shall (1)perform its obligations under, and comply with the terms of.each ANPP Project Agreement to be complied with by it, (2)exercise its rights under the ANPP Participation Agreement to maintain each ANPP Project Agreement in full force and efFect.(3)keep unimpaired all of the Lessee's rights, powers and remedies under each ANPP Project Agreement and prevent any forfeiture or impairment thereof, (4)enforce the ANPP Participation Agreement in accordance with its terms, (5)not take, fail to take or join in any action with respect to any ANPP Project Agreement exceyt as otherwise permitted by subclause (7), (6)not accept or approve any amendment or any other change to the ANPP Participation Agreement and (7)not accept or approve any amendment to any ANPP Project Agreement the effect of which would be to (A)reduce the Generation Entitlement Share included in the Undivided Interest, (B)relieve the Lessee of any obligation under the ANPP Participation Agreement in respect of the Undivided Interest or the Real Property Interest on or after the Closing Date, (C)impose, directly or indirectly, on the Owner Trustee or the Owner Participant at any time any obligations, (D)discriminate against (x)the Owner Trustee or the Owner Participant in its capacity as lessor in a sale and leaseback transaction or (y)any present or future ANPP Participant because such ANPP Participant derived or will derive its status as"Participant" under the ANPP Participation Agreement from a lessor in a sale and leaseback transaction, or (E)deprive the Owner Trustee or the Owner Participant.
as the case may be.of the benefit of Sections 15.2.2.15.10 and,'32.1 oF the ANPP Participation Agreement (or any comparable successor provisions).
The Lessee shall (X)provitle copies of
;>>iy proposed a>>>e>>d>>ie>>t to or modification of the ANPP Participatio>>
Agree>>ie>>t to the Owner Participant
>>ot less tha>>4i clays prior to the execution thereof by the Lessee (except where the Lessee is u>>aware thereof 45 days prior to such execution.
i>>which case the Lessee shall provide notice thereof as pron>ptly as possible after beco>>>i>>g so<<tv>>re)a>><>>po>>such execution furnish to the Owner Participant a copy of<<>>y such an>e>>di>>ei
>>iodificatio>>
<<s executed.(ix)N()TI5 AYI)B()sl)s.The Lessee will not.and will not permit any of its subsidiaries or a>>y of its Affiliates over which it has control to.acquire any Notes or Bonds.except in strict.compliance with the provisions of Section 1.04(b)of the Bond Supplemental I>>denture.
as in e8'ect on the Closing Date.(x)Co(>>'I:.un(<i@.
The Lessee shall cooperate with the Owner Participant and the Owner Trustee in obtaining the valid and effective issue, or, as the case may be.transfer or amendment of all Governmental Actions (including, without limitation.
the License)neces-sary or, in the opinion of the Owner Participant, desirable for the ownership.
operation and possession of the Undivided Interest (including the related Generation Entitlement Share)or any portion of Unit 2 represented thereby, or the exercise by the Owner Trustee of the rights created by the Real Property Interest, by the Owner Trustee or any transferee.
lessee or assignee of the Owner Trustee for the period from and after the Lease Termination Date.The Lessee shall accept and cooperate in receiving the Special Transfer.(xi)Dixx>xlxusst()wtw<:.
The Lessee shall comply with and discharge all of its obligations under the ANPP Participation Agreement and Applicable Law with respect to Deco>>i>>iissio>>-
ing, and will use its best efforts to ensure that Decommissioning is accomplished utilizing<he safest means available.
The Lessee shall (i)establish the Decommissioning Trust Fund a>>tl.if the Lessee elects, a second fund in order to meet the requirements of Section 4G8A of the Code (the Second Fund), (ii)grant to the Owner Trustee a security interest in the Decommissioning Trust Fund and the Second Fund, if any, as security for the'performance bv the Lessee of its obligations under this Section 10(b)(3)(xi), and (iii)provide any additi funds required in respect of Decommissioning to the extent that the Decommissioning Fund and the Second Fund.if any, are inadequate for any reason.The Lessee agrees to pay.be solely responsible for, indemnify, and holel harmless each Indemnitee and any successor.
assign or transferee (including by way of a lease)of any Indemnitee.
from and against all Decommissioning Cost and all claims relating or allocable to, or incurred in connection with.Decommissioning notwithstanding (i)th'e occurrence of the Lease Termination Date.any Event of Default, Default, Event of Loss, Deemed Loss Event or any other event or occurrence, (ii)any provision of any Transaction Document, or other document.instrument or agreement, including the ANPP Participation Agreement.(iii)any provision of the License or any other license or permit, or (iv)any Applicable Law, charter or by-law provision,~Governmental Action or other impediment (including, without limitation, the bankruptcy or insolvency of the Lessee), either now or hereafter in efFect;it being understood that the obligations of the Lessee hereunder are and shall be absolute, unconditional and irrevocable and shall not be afFected by any circumstances of any character, including, without limitation.
those of the type set forth in Section 4 of the Facility Lease.Not later than July 1, 1989, the Owner Participant and the Lessee shall cause a Person or Persons, selected by the Lessee and reasonably acceptable to the Owner Participant (which'ay include any Person designated by the ANPP Participants to conduct a review of decommissioning costs related to PVNGS, provided such Person be reasonably acceptable to the Owne>Participant), who shall be expert in the area of decommissioning of nuclear electric generating units, to establish a best estimate of Decommissioning Cost and to establish the periodic payments to be deposited on the following October 1 or April 1.as the case nmy be, and every six months thereafter in the Deco>>>missioni>>g Trust Fund and the Second Funtl.if any, in order to make the aggregate an>ount in the Decommissioning T 70 Fond and the Seco>>d Fund.if any.at October l.2013.equal to Deco>>>>>>issio>>i>>g Cost.Xo later than o>>e>>month before October 1 of each of the years 1994.1999.2004.2009.2011<<>>tl'13.a>>d not later than one>>)onth before October 1 of each od<1->>u>>fibered year thereafter until Decommissioning shall have been co>>depleted.
the Owner Participa>>t
<<>>d the Lessee shall cause such a Person or Persons to review and revise.if necessary.
as of such October l.such esti>>iate and such amounts.The initial estimate and each such review shall take into consideration'i) the experience of the electric utility industry generally in the deco>>imis-sioning of nuclear generating units.(ii)all Applicable Law and Governmental Action relating to the decommissioning of nuclear generating units, (iii)all technological or scientific developments in the decommissioning of nuclear generating units.(iv)earnings and pro-jected earnings during the Basic Lease Term on funds paid into the Decommissioning Trust Fund and the Second Fund, if any, prior to such review, (v)the amount of periodic payments , required to be made into the Decommissioning Trust Fund and the Second Fund.if any.during the Basic Lease Term subsequent to such October 1, (vi)the investments permitted under the Decommissioning Trust Agree'ment and (vii)any other facts or circumstances relating to the decommissioning of nuclear generating units which such Person or Persons shall deem relevant to such review.In conducting such review, such Person or Persons shall be permitted to employ, at the expense of the Lessee, such additional consultants.
including.
but not limited to, investment advisors and legal counsel.as it.or they shall reasonably deem necessary for such review.In addition, if as a result of any Governmental Action dealing with decommissioning of nuclear generating units (including, but not limited to.the fi>>anci>>g thereof or responsibility therefor), either the Owner Participant or the Lessee shall reaso>>a-bly conclude that the Decommissioning Trust Fund and the Second Fund.if a>>y.are inadequate or excessive for the purposes thereof, it may request a review of the Deco>>i>>iis-sioning Trust Fund and the Second Fund, if any, pursuant to this Section 10(b)(3)(xi).The determination of such Person or Persons shall be conclusive and bindi>>g as between the parties hereto.In no event shall any periodic payment be less than zero.The Lessee shall not deposit any funds in respect of Decommissioning Cost in any fund other than the Decommis-sioning Trust Fund and the Second Fund, if any: All costs incurred pursuant to this Sectio>>10(b)(3)(xi)shall be paid by the Lessee.The Lessee agrees to pay, and shall indemnify, defend and hold harmless each Indemni-tee and any successor, assign or transferee (including by way of a lease)of any Indemnitee.
on an After-Tax Basis, from and against any and all Taxes howsoever imposed with respect to the Decommissioning Trust Fund or the Second Fund, including, without limitation.
the establishment, existence or funding of the Decommissioning Trust Fund or the Second Fund.if any, and the earnings on amounts paid into or retained by the Decommissioning Trust Fund or the Second Fund, if any (whether imposed on or with respect to such Indemnitee.
successor, assign or transferee, the Decommissioning Trust Fund or the Second Fund, if any, the Decommissioning Trustee, the Lessee, or any AfHliate of any thereof).Any such indemnity payment shall be payable not later than 10 days after demand by the Indemnitee entitled thereto.As to any matter indemnified pursuant to the foregoing sentence involving Federal income taxes, the contest provisions contained in Section (13)(c)(9)shall apply.mutatis nuitandce, and as to other matters indemnified pursuant to the foregoing sentence, the contest provisions contained in Section 13(b)(4)shall apply, m>>tatis mutandis.In the event that (i)the Facility Lease shall have expired or been terminated (other than in connection with an Event of Loss, Deemed Loss Event or Event of Default).(ii)the Lessor shall (other than in connection with a termination pursuant to Section 14 of the Facility Lease)sell the Undivided Interest and the Real Property Interest to.any Person (including the Lessee in connection with the exercise by the Lessee of the purchase option provided by Section 13(b)of the Facility Lease)and (iii)the net sales proceeds.(discounted back semiannually to the Lease Termination Date at a rate per annum equal to the Prime Rate)received by the Lessor shall exceed 20%of Facility Cost.then the Lessor shall reinib>>rse the Lessee fron)<<ny acklitional net proceeds oi'such sale in an;unount equal to such net proceeds attributable to the decomniissioning obligation of the Lessee under this Section 10(b)(3)(xi)with respect to the period from and after the date of such sale through the remaining uset'ul life of Unit 2 (whereupon the rein)bursement obtigations of the Lessor under this paragr shall terminate):
provided.Iiou:ever, that any such reimbursement shall not reduce aniount of such net sales proceeds (discounted as aforesaid) retained by the Lessor to, amount equal to less than 20%of Facility Cost.The reimbursement obligations of the Lessor under the preceding paragraph are for the sole benefit of the Lessee, and no other Person shall be a third party beneficiary with respect thereto.In the event that the Lessee and the Lessor shall not agree as to the amount of net sales proceeds attributable to the decommissioning obligation of the Lessee under this Section 10(b)'(3)(xi), such amount shall be determined by the Appraisal Procedure.
The Owner Trustee and El Pyo shall cause the Decommissioning Trust Agreement to be executed as promptly as practicable after the Closing Date.The Decommissioning Trust Agreement shall be based upon the version thereof heretofore agreed to insofar as restric-tions on permissible investments are concerned.
The terms and conditions thereof shall provide that (a)the arrangements thereunder shall.to the extent consistent with this Section 10(b)(3)(xi), be structured to permit qualification under Section 468A of the Code and (b)to the maximum possible extent consistent with the Owner Trustee's being granted a security interest in the Decommissioning Trust Fund or the Second Fund of the Lessee.provide protection to the Owner Trustee and the Owner Participant against creditors of El Paso an<i against the bankruptcy or insolvency of El Paso.(xii)C()xlxll'.n(:IAI.
Opl',nATI()N ol'NIT 2.On or before September 30.1987.Unit 2 will have achieved an electric output of not less than 95%of its nominal capacity of L270 megawatts during a test period of at least 100 consecutive hours.(xiii)OTI(Rn LEAst's wtTH REspE<."r To PVNGS.The Lessee agrees that it will deliver the Owner Participant, promptly following execution and'delivery thereof.all transac documents (the New Lease Documents) pertaining to any true lease transaction that Lessee or any Afaliate of the Lessee may enter into with respect to Unit 2.The parties hereto agree, upon the written request of the Owner Participant delivered within 60 days of receipt of such transaction documents, to enter into (within a reasonable time as specified in such request)such amendments to the Facility Lease and the other Transaction Documents as are necessary or desirable to (a)include as Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life any or all (as the Owner Participant may select)comparable events, occurrences or circumstances under the New Lease'ocuments and (b)delete or modify any or all (as the Owner Participant may select)Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life in connection with the foregoing; it being the intent and purpose of the foregoing to permit the Owner Participant to cause the Facility Lease and the other Transaction Documents to be amended, as it shall elect, to augment the specified Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life to include, mutate inutandls, any or all comparable events, occurrences and circum-stances under the New Lease Documents; provided, however, that each such additional Event of Loss, Deemed Loss Event and provision relating to Economic Useful Life shall include.multis mutandis, the same qualifications and incorporate, mutatis mutanks, the same definitions as shall be provided in the New Lease Documents and that in connection with the foregoing the Owner Participant shall be entitled to amalgamate any such additional Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life into the then present provisions of the Facility Lease and the other Transaction Documents so as to succinctly incorporate such additional events, occurrences and circumstances.
In connection with any proposed amendment under the foregoing provisions.
neither the Lessor nor the Lessee shall be required to accept any change to the schedules of Casualty Values.Spe Termination Values, Special Casualty Values, Enhanced Casualty Values and Termination Values attached to the Facility Lease.The Owner Participant agrees.without limiting its rights under Section 13(c), that it will not seek any amendment to the Facility Lease and the other Transaction Documents pursuant to this Section 10(b)(3)(xiii)unless the Owner Participant shall have determined, based upon an opinion of its counsel and after consultation with the Lessee, that such amendment will not materially adversely affect its status as owner of the Undivided Interest for Federal income tax purposes.(xiv)CERTAIN CHANGEs To ANPP PhRTIciphTIQN AGREEMENT.
El Paso shall use its best efForts to grant a ground lease to the Lessor covering the PVNGS Site (which shall provide for rent of$1 per year until the expiration of the Lease Term and Fair Market Rental Value thereafter), in which case the Lessor shall simultaneously sell back to the Lessee the realty covered by the Deed and the Assignment of Beneficial Interest for a price equal to the Real Estate Investment.
The parties hereto will cooperate in efFecting the foregoing.
El Paso shall, within a reasonable time following the Closing Date, undertake to have Section 15.6.3.1 and Section 15.8 of the ANPP Participation Agreement amended to delete the requirement in such Section 15.6.3.1 and Section 15.8 that the rights and remedies of the parties to sale and leaseback transactions be subject and subordinate to the rights and remedies of the ANPP Participants.
El Paso's obligations under the preceding sentence shall be discharged if El Paso shall once introduce, for consideration by all the ANPP Participants, an amendment, in form and substance reasonably satisfactory to the Owner Participant, to the ANPP Participation Agreement and vote afarmatively for such amendment in connection with all deliberations concerning such amendment by the ANPP Participants and all committees of ANPP.If at any time, through the efforts of El Paso or otherwise, any of the restrictions on lessors contained in Sections 15.6.3, 15.8, 15.10 and 20.8 of the ANPP Participation Agreement are eliminated or reduced for or are made inapplicable to (through amendment, waiver or otherwise) any lessor acquiring an interest in all or any part of any Generating Unit or Capital Improvement (as such terms are defined in the ANPP Participation Agreement), El Paso shall cause such restrictions to be comparably eliminated or reduced or made inapplicable to the Owner Trustee.The parties hereto agree to enter into such amendments to this Participation Agreement and the other Transaction Documents and such other instruments and documents , as shall be necessary or appropriate to efFect the foregoing.
If for any reason any of the restrictions on lessors contained in Section 15.6.3, 15.8 or 15.10 of the ANPP Participation Agreement are applicable on the Lease Termination Date or the Lessee shall not have granted to the Lessor a ground lease as contemplated above by the Lease Termination Date, and the efFect of such restriction or restrictions is to reduce the amount received by the Lessor upon a disposition (by sale, lease or otherwise) from what would have been realized had such restriction or restrictions not been applicable or had such ground lease been in efFect, then the Lessee shall pay to the Lessor an amount equal to such reduction, payable within 10 days after determination of such amount.Such amount shall be determined promptly after the Lease Termination Date by agreement between the Owner Participant and the Lessee or, if they shall be unable to agree within 30 days after the Lease Termination Date, by the Appraisal Procedure.(xv)AcQUIslTIQN oF OTHER LEAsED INTEREsTs IN PVNGS.The Lessee shall not acquire, by purchase or lease, any interest in PVNGS from or through any ANPP Participant (including any interest at any time owned by any other ANPP Participant) from and after the date which is five years prior to the date on which the Lessee'is required to give its notice pursuant to Section 13(a)of the Facility Lease unless and until the Lessee shall have irrevocably given the notice pursuant to Section 13(a)of the Facility Lease of its election to exercise the purchase option permitted by, Section 13(b)of the Facility Lease.(xvi)OTHER AGREEMENTS.
The Lessee shall not enter into or become bound by any agreement or arrangement which would proscribe its ability to assume the obligations and liabilities of the Owner Trustee in accordance with Section 3.9(b)oF the Indenture or to accept the Special Transfer.(xvii)LECTOR QF CREDlT.At all times during the Basic Lease Term there shall be in fu force and ekect for the benefit of the Owner Participant an irrevocable.
transferable stand-by letter or letters of credit (such letter or letters oF credit and all letters of credit or other credit support instruments issued or executed from time to tinie being herein referred to as the Lcttct'f Credit)having an original stated term of not less than 2 years.issued by an Eligible Bank or Eligible Banks (the Issuing Banl'), or some other form of credit support acceptable to the Owner Participant in its sole judgment.The initial Letter of Credit shall be issued by BONY and shall be substantially in the Form heretofore agreed upon.Each Letter of Credit shall (1)be in an amount not less than Casualty Value less the principal amount of and accrued and unpaid interest (since the Basic Rent Payment Date immediately preceding each date in the schedule of Casualty Value)on the Notes Outstanding from time to.time (except that if, as a result of the occurrence of an event requiring an adjustment to Rent pursuant to Sections 3(d)or 3(e)of the Facility Lease or Section 13, the amount available to be drawn under the Letter of Credit becomes less than such amount, the Lessee shall not be in default under this provision if, within 30 days of the implementation of such adjustment pursuant to Section 3(f)of the Facility Lease, the Lessee replaces the Letter of Credit with a Letter of Credit complying with the terms and provisions of this Section 10(b)(3)(xvii), and except that until January K 1.992, the amount of the Letter of Credit shall not be less than the amount of the initial Letter of Credit issued by BONY), (2)permit partial drawings, (3)permit the Owner Participant to assign all or any part of its interest therein without the Issuing Bank's or the Lessee's consent, (4)not contain provisions materially less Favorable to the Owner Participant than those of the initial Letter of Credit, and (5)provide for reinstatement within three Business Days from the date of any drawing thereunder in respect of Supplemental Rent (other than Casualty Value, Termination Value.Special Termination Value.Specia'asualty Value or Enhanced Casualty Value)(except that the Lessee shall not be in defau under this pro'vision if such a reinstatement does not occur.but the Lessee replaces the Letter of Credit within 30 days of the date oF such a drawing with a Letter of Credit complying with the terms of this Section 10(b)(3)(xvii)).Any reimbursement agreement between the Lessee and the Issuing.Bank relating to any Letter of Credit shall (1)not contain default or termination provisions which are less favorable to the Lessee than those in the Letter of Credit Agreement, (2)require that the Issuing Bank pay any draws on the Letter of Credit from general funds, (3)not permit the Issuing Bank to exercise its right to set off against any amount owed as reimbursement to the Issuing Bank for draws on the Letter oF Credit and (4)if the Lessee's reimbursement obligation is collateralized, be no less favorable to the Owner Participant than the terms of the Letter of Credit Agreement.
The Lessee shall not amend any provision of the Letter of Credit Agreement or any reimbursement agreement with respect to any replacement Letter of Credit in a manner materially adverse to the interests of the Owner Participant (including without limitation provisions relating to termination of the Letter oF Credit)without the prior written consent of the Owner Participant.
The Lessee shall give the Owner Participant notice of the scheduled expiration date of the Letter of Credit not more than 90 nor less than 60 days before the scheduled expiration date.If BONY or any Issuing Bank has its long-term unsecured debt securities (or if it has no long-term unsecured debt securities rated.its long-term deposits)downrated to less than Baal by Moody's, then within 30 days thereafter the Lessee shall replace the Letter of Credit with one issued by an Eligible Bank.The I:.essee will deliver any certiBcates required to be delivere'd.under the Letter of Credit as and when required.If the Lessee has not secured a commitment for a renewal or replacement Letter of Credit complying with all the terms of this Section 10(b)(3)(xvii)on or prior to the 60th da.76 preceding the stated expiration date of the Letter of Credit then in effect.or within 15 days after any Issuing Bank shall have given not less than 30 days'otice of the termination of its Letter of Credit prior to its stated expiration date, the Lessee shall notify the Owner Participant of such fact and the Owner Participant shall have the opportunity to Bnd a Person acceptable to it willing to issue a letter of credit for the account of the Lessee on substantially the same terms as the Letter of Credit then in effect, except that the annual fee payable under such replacement letter of credit may be up to'A%of the maximum drawable amount under the Letter of Credit.If the Owner Participant has not so found a Person on or prior to the 45th day preceding the stated expiration date of the Letter of Credit then in effect, or within 25 days after any Issuing Bank shall have given not less than 30 days'otice of the termination
.of its Letter of Credit prior to its stated expiration date or, when the Issuing Bank may terminate the Letter of Credit on less than 30 days'otice, at least Bve days prior to the termination of the Letter of Credit pursuant to such notice, the Lessee shall, unless an Event of Default shall have occurred and be continuing or an Event of Loss shall have occurred or Deemed Loss Event shall have been declared, have the right to purchase the Undivided Interest and the Real Property Interest at any time thereafter at least two Business Days before the expiration date of the Letter of Credit for an amount equal to the excess of (x)the greater of (i)Enhanced Casualty Value and (ii)Fair Market Sales Value of the Undivided Interest and the Real Property Interest, over (y)the unpaid principal amount of, and (if such Enhanced Casualty Value is equal to or greater than such Fair Market Sales Value)accrued interest since the last preceding Basic Rent Payment Date on, the Notes outstanding on such purchase date, after giving effect to the payment, if any, of the principal installment due and payable and paid in respect of the Notes on such date.If the Lessee shall have made such payment and shall have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture, the Lessor shall, so long as no Default or Event of Default shall have occurred and be continuing, Transfer the Undivided Interest and the Real Property'Interest to the Lessee.If the Lessee shall have made such payment but shall not have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture, the Owner Participant shall effect the Special Transfer, in which case, without fiirthsr act on 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, payable on each Basic Rent Payment Date thereafter, equal to the aggregate amount of principal, premium, if any, and accrued interest then payable on all Notes then Outstanding and (ii)the Facility Lease shall become a security agreement for all purposes of Applicable Law.The foregoing paragraphs of this Section 10(b)(3)(xvii)are for the beneBt only of the Owner Participant and the Lessee.Section 11.Conditions Precedent.(a)Oumsr Participant and Loan Participant Conditions.
The obligation of (x)the Loan Partici-pant to make the Loan on the Closing Date, and (y)the Owner Participant to make the Investment and the Real Estate Investment on the Closing Date, shall be subject to the fulBllment, on or prior to the Closing Date, of the following conditions precedent (each instrument, document, certiBcate, opinion, policy or writing referred to below to be in form and substance satisfactory to the Loan Participant and the Owner Participant):
(1)Notice of Closing, Transaction Documents.
Each shall have received executed copies, or sets of executed counterparts, of the Notice of Closing, each Transaction Document, each Financing Document and such other documents as are contemplated by this Participation Agreement.
(2)Authentication Bequest.The Owner Trustee shall have delivered to the Indenture Trustee a request, dated the Closing Date, authorizing the Indenture Trustee to authenticate and deliver to the Collateral Trust Trustee (pursuant to the Loan Participant's order herein con-trrirred)the irritinl Series Notes uporr the Loan Participarrt's payment of tire proceeds of the Lo;rrr.('3)Original Counterpart of the Facility Lease.The Owner Trustee shall hnve tleliver the Indenture Trustee the counterpart of the Facility Lease marked"THIS COUNTERPA THE ORIGINAL COUNTERPART." (4)Due Autlrorimtiorr.
Execution and Delir:en'.
All of the documents described in clause (1)of this Section 11(n)shall have been duly authorized, executed and delivered by the respective pnrties thereto and shall be in full force and effect on the Closing Date.an<i the Loan Participant and the Owner Participant shall have received evidence as to such authorization.
I execution and delivery.(5)Initial Series Note and Bond Transactions; Inuestment.
In the case of the Loan Par'tici-pnnt, (A)the Loan Participant shall have received the proceeds from the sale of the Initial Series Bonds ns n result oF the consummation of the transactions contemplnted'by the Underwriting Agreement.(B)the Owner Trustee shall have executed, and the Indenture Trustee shnll have authenticnted and delivered to the Loan Participant,,the Initial Series Notes evidencing the Loan made on the Closing Date,{C)the Collateral Trust Trustee shall hnve accepted the Bond Supplemental Indenture and shall have released the amount of the Loan From the lien of the Collateral Trust Indenture, and (D)the Owner Participant shall have nrnde the Investrrrent nrrd the Real Estate Investment.
{6)Loan.In the case of the Owner Participant.
the Loan Participant shall have made the Lo;m.(7)ANPP Admirristrative Committee.
The ANPP Administrative Committee shall lmve nrade the finding required by Section 15.6.2 of the ANPP Participation Agreement.
(8)&#xb9;Violation.
The making by the Owner Participant of the Investment and the Real Estate Investment nnd by the Loan Participant of the Loan shnll not violate nny Applicable (9)No Default.No Default or Event of'Default or, in the case of the Loan Pnrtic Indenture Default or Indenture Event oF Default, shall have occurred aml be continuing ant no Event of Loss or Deemed Loss Event shall have occurred.(10)Recording and Filing.The recordations and filings described in Schedule'3 shall have been duly made and all recording and filing fees with respect thereto shall have been paid.A certificate on Form U-7D with respect to the Facility Lease shall have been duly executed and delivered and shall be in due form for filing.(11)Representations and Warranties.
In the case of the Owner Participant, the representa-tions and warranties of the Loan Participant, the Owner Participant, FNB and the Owner Trustee and the Indenture Trustee set forth in Sections 6(a), 7(a), 8(a)and 9(a), respectively, shall be true and correct on and as of the Closing Date with the same efFect as though mnde on and as of the Closing Date, and the Loan Participant and the Owner Participant shall have received an appropriate.
certificate, dated the Closing Date, to such effect.(12)Representations and Warranties of the Lessee.(A)The representations and warranties of the Lessee set forth in Section 10(a), in any other Transaction Document, in the Underwriting Agreement and in any certificate or other document to which the Lessee is a party executed or delivered in connection with the transactions contemplated hereby or thereby shnll be true and correct on and as of the Closing Date with the same efFect as though made on aAd as oF the Closing Dnte and (B)no Deemed Loss Event or Event of Loss shall have occurred nnd no Default or Event of Default shall have occurred and be continuing and the Loan Participant nnd the Owner Participant shall have received an OScers'ertificate of the Lessee.dated the Closing Date.to such eH'ect.The following stntements shall be true.and such Officers'ertificate shnll state thnt: (i)there has been no materinl adverse change in the properties.
business.prospects or fin.co>>tlitio>>
of the Lessee since September.'30, 1986.and no event has occurred since thn I which would materially adversely afFect the ability of the Lessee to perform its obligations under this Participation Agreement or any other Transaction Document or Financing Document and (ii)to such ofBcer's knowledge there has been no material adverse change or development since September 30, 1986 relating to Unit 2, to PVNGS or to nuclear power plants generally which afFects the operation of Unit 2 or the value of the Undivided Interest or the financial condition of the Lessee.(13)Opinions of Counsel.In the case of the Owner Participant, it shall have received (a)favorable opinions of Mudge Rose Guthrie Alexander R Ferdon, Shaw, Pittman, Potts R Trowbridge, Meyer, Hendricks, Victor, Osborn R Maledon, Rodey, Dickason, Sloan, Akin R Robb, P.A.and Baker 8 Botts, each dated the Closing Date and addressed to the Owner Participant, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents and Financing Documents as the Owner Participant may reasonably request, (b)a favorable opinion of Cravath, Swaine R Moore, as special counsel to the Owner Participant, with respect to such Federal tax and other tax matters as the Owner Participant may reasonably request, and (c)a favorable opinion of Sullivan h Cromwell, counsel to BONY, addressing such matters relating to the Letter of Credit and the Letter of Credit Agreement as the Owner Participant may reasonably request.In the case of the Loan Participant, it shall have received favorable opinions of Cravath, Swaine R Moore and Mudge Rose Guthrie Alexander&Ferdon each dated the Closing Date and addressed to the Loan Participant addressing such matters relating to the transactions contemplated hereby and by the other Transaction Docu-ments and Financing Documents as the Loan Participant may reasonably request.The Loan Participant and the Owner Participant shall have received favorable opinions of Mudge Rose Guthrie Alexander R Ferdon, Kemp, Smith, Duncan R Hammond, Snell R Wilmer and Csaplar R Bok, each dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents and Financing Documents as either such Person may reasonably request.(14)Taxes.All Taxes, if any, payable in connection with the execution, delivery, recording and filing of the Transaction Documents and Financing Documents and all the documents and instruments described in Schedule 3, or in connection with the issue and sale of the Initial Series Notes and the Initial Series Bonds and the making by the Owner Participant of the Investment and the Real Estate Investment, and all Taxes payable in connection with the consummation of the transactions contemplated hereby and by the other Transaction Documents and Financing Documents, shall have been duly paid in full.(15)Appraisab.
The Owner Participant shall have received a letter, dated the Closing Date and addressed to the Owner Participant, from Ebasco Business Consulting Company containing an appraisal of the Undivided Interest, which appraisal shall cover such matters as the Owner Participant shall have requested and shall reflect such appraiser's reasonable conclusion that (w)the fair market value in the hands of the Owner Trustee of the Undivided Interest on the Closing Date, taking into account the efFect and existence of the Real Property Interest, the Assignment and Assumption and the ANPP Participation Agreement, is equal to the Purchase Price as set forth in the Notice of Closing, (x)the estimated remaining economic us'eful life of Unit 2 (including the Undivided Interest)is at least thirty-eight and three-quarters years, (y)at the expiration of the first four years of the Renewal Term the Undivided Interest will have an estimated residual value, taking into account the efFect and the existence of this Participation Agreement, the Real Property Interest, the Assignment and Assumption and the ANPP Participation Agreement, in the hands of the Owner Trustee or a Person (unrelated to the Lessee)who could lease or purchase the Undivided Interest from the Owner Trustee for commercial use, equal to at least 20%of the Purchase Price, determined without including in such value any increase or decrease for inflation or deflation during the period from the Closing Date through the expiration of the first four years of the Renewal Term, and (z)taking into account the efFect and the existence of the Real Property Interest, the Assignment and Assumption and the ANPP Participation Agreement, the
>>se of the U>>divided Interest at the Lease Terrni>>ation Date by any User is feasible froi>><<>>e>>gi>>eering anti eco>>oniic point of view a>>d is conimerci illy reasonable.
The Oiv>>er Participa>>t shall have receivetl<<>>appraisal of the value of the Real Property Interest.which appraisa reflect the<<ppraiser's reasonable conclusion that the fair inarket value in the ha>>ds of the Trustee of the Real Propertv Interest on the Closing Date is equ;il to the Real Estate I>>vestme, s set forth i>>the Notice of Closing and shall cover such other matters as the Owner Participant sh;ill have requested.
(16)Ogering and Sale of Interest..
The Loan Participant.
the Owner Trustee and the Owner Participant shall have received a letter or letters from Babcock R Brown Financial Corporation and Systems Marketing, Inc.with respect to the offering and sale of the interests in the transactions contemplated by this Participation Agreement and each other participation agree-ment dated the date hereof relating to an undivided interest in Unit 2.(17)Governmental Action.The Lessee.shall have obtained all Governmental Actions (in-cluding, without limitation, the License Amendment, the New Mexico Order, and'the FERC Order.which orders shall be final and nonappealable) required or, in the opinion of the Owner Participant.
advisable.
for the consummation of all the transactions contemplated by this Partici-patio>>Agreement and the other Transaction Documents and the Financing Documents.
(1S)No Change or Proposed Change in Tax Laces.No change shall have occurred or bee>>proposed in the Code or any other tax statute.the regulations thereunder or any interpretatio>>
thereof or executive order in respect thereof that would adversely affect the tax consequences anticipated by the Owner Participant with respect to the transactions conteniplated by the Transaction Documents.
unless the effect of such change or proposed change can be wholly accommodated through Section 3(d)of the Facility Lease.(19)Title Matters;Certain Reports.The Owner Participant shall have received (i)an updated title report, dated the Closing Date, with respect to the Nuclear Plant Site (as defin the ANPP Participation Agreement), which report does not disclose any exceptions mat , adverse to the possession or operation of Unit 2 or the performance by the Lessee obligations under this Participation Agreement and the other Transaction Documents.(ii)such title insurance policies with respect to the Nuclear Plant Site (as defined in the ANPP Participa-tion Agreement) and improvements thereon (including the Owner Trustee's interests therein)as it shall have reasonably requested, (iii)such insurance policies with respect to PVNGS.or the Lessee as the Owner Participant shall have requested, (iv)a survey of the Nuclear Plant Site, (v)such certificates and reports from th'e Lessee, independent insurance brokers and the insurance manager for PVNGS with respect to insurance relating to PVNGS, Unit 2 or the Undivided Interest as the Owner Participant shall have requested, (vi)such certificates and reports from its independent insurance consultant as the Owner Participant shall have requested, (vii)such certificates and reports from its independent engineering consultant as the Owner Participant shall have requested and (viii)a site arrangement plan of the Nuclear Plant Site.(20)Special Certigcate of the Lessee.The Owner Participant shall have received a ce'rtifi-cate of the Lessee, dated the Closing Date, to the effect that, (A)Unit 2 has been in all material respects completed in a good and workmanlike manner and in accordance with the plans and specifications relating thereto (as the same may have been modified from time to time to reflect Unit 2 as actually completed), Applicable Law (including, without limitation, the regulations of the NRC), the License and the ANPP Participation Agreement, (B)all Governmental Actions necessary for the commercial operation of Unit 2 (including the Undivided Interest)have been received, other than any such Governmental Action that is routine in nature for PVNGS or that cannot be obtained under Applicable Law, oz is typically not applied for, prior to the time it is required, and that the Lessee expects to be obtained in due course.(C)the plans and specificatio>>s relating to Unit 2 are complete in all material respects (modified or to be moc';is aforesaid) anti consistent with prudent engineering practice.(D)the testing and s-"30-procetlures;i>>tl the operation<<nd maintenance programs for Uiiit 2 were consiste>>t with such plaiis;i>><l specifications.
Applicnble Law aiid prudent engi>>eeri>>g prnctice.(E)U>>it 2 lias bee>>testetl in;iccortla>>ce with;ill customary testing and startup procedures which would hnve bee>>performed o>>or prior to the Closing Date.and such tests nntl procedures intlicate thiit Unit 2 will hnve the capacity a>>d Functionnl ability to perform in coinmercial operation.
on n continuing b;isis.the function for which it is designed in accordance with such plans a>>d specificntions
<<ntl hns a nominal capncity oF 1.270 i>>egawatts electric.(F)all material Governmental Actions relating to.the construction.
operation or maintenance of Unit 2 are listed in a schedule thereto.(G)there is no present event or condition which would materially adversely affect the capability of Unit 2 to operate in accordance with such plans and specifications and (H)based upon the Lessee's present reasonable expectations.
and subject to Applicable Law, the rights and interests made available to the ANPP Participants (including the Lessee)pursuant to the ANPP Participation Agreement (including the Real Property Interest), as such rights and interests are made available or are to be made available to the Owner Trustee, any successor or assign of the Owner Trustee or any-Transferee" of the Owner Trustee under Section 15.10 of the ANPP Participation Agreement.
under and.pursuant to this Participation Agreement, and the Assignment and Assumption.
are ndequate to permit, during the period following the Lease Termination Date or the taking of possession of the Undivided Interest and the Real Property Interest in the exercise of remedies u>>der Section 1G of the Facility Lease.in accordance with the ANPP Project Agree>>ie>>ts (i)the construction.
location.occ>>patio>>.
connection maintenance.
replacement.
renewnl.rep;iir or removnl of Unit 2.(ii)the use.operation and possession of Unit 2.(iii)the construction.
>>se.operntion.
possession.
maintenance.
replacement.
renewal and repair oF all alterations.
mo<lific;i-tio>>s.additions.
accessions.
improvements.
appurtenances, replncements and substitutions thereoF and thereto.(iv)adequate ingress to and egress from Unit 2 for any reasonable purpose in connection with the exercise of rights under the Assignment and Assumption and the ownership and possession of the Undivided Interest and the Real Property Interest and (v)the obtaining oF nuclear fuel, of water and of transmission services to the ANPP Switchyard sufficient to enable delivery of the Generation Entitlement Share related to the Undivided Interest in a commercially efficient manner and on commercially reasonable terms.Nothing in the loregoing clnuse (H)shall be deemed to be or'e construed as a warranty by the Lessee as to the performance by the Operating Agent of its obligations under the ANPP Participation Agreement.
Such certificate shall also be attested to by the Vice President-Power Supply of the Lessee, who shall state that (i)as a qualifie engineer, he has made such investigation, inspection and review as he deems necessary to make the statements in such certificate and (ii)to the best of his knowledge, the statements of the Lessee in such certificate are true and correct.(21)Registration Statement.
The Loan Participant and the Owner Participant shall have received an Officers'ertificate of the Lessee, dated the Closing Date, to the efFect that on the date it became efFective and on the Closing Date, the Registration Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and the final prospectus did not nnd does not contain any untrue statement of a material fact or omit to state a material fact necessary to mnke the statements contained therein not misleading under the circumstances under which any such shnll have been made.(22)Completion of Documentation.
All.schedules to and blanks in the Transaction Docu-ments and Financing Documents shall have been completed to the satisfaction of the parties hereto.(cD)Commitment Fee.The Lessee shall have paid the Owner Participant before the Closing Date a commitment fee in the amount heretofore agreed upon.(24)Other Matters.The Lonn Participnnt and the Owner Participant shall have received siich other tloc>>me>>ts.
certificntes anti opinions as the Loan Participnnt or the Owner Participa>>t.
or their respective counsel, shall rensonnbly request.-'31-(b)Lessee Conditions.
The obligation of the Lessee to sell and lease back the Undivided Interest and to grant the Real Property Interest on the Closing Date pursuant to Section 4 shall be subject to the fulfillment on or prior to the Closing Date of the following conditions precedent.
in each case in form and substance satisfactory to the Lessee: (1)Paragraph (a)Documents.
The Lessee shall have received copies of the docum certificates, opinions (other than the opinion referred to in clause (b)of the first sentence of Section ll(a)(13)), appraisals, letters and forms described in paragraph (a)of this Section 11.All such opinions shall be addressed to the Lessee, except the opinions of (i)Shaw, Pittman, Potts&Trowbridge, (ii)Meyer, Hendricks, Victor, Osborn&Maledon, (iii)Rodey, Dickason, Sloan, Akin&Robb, (iv)Baker&Botts, (v)Mudge Rose Guthrie Alexander&Ferdon to the Owner Participant and to the Loan Participant and (vi)Cravath, Swaine&Moore to which reference is made in clause (b)of the first sent'ence of Section 11(a)(13).(2)Payment of Purchase Price.The Owner Trustee shall have paid to the Lessee an amount equal to the Purchase Price and the acquisition price of the Real Property Interest.(3)Special Opinion of the Lessee's Counsel.The Lessee shall.have-received a favorable opinion of Kemp, Smith, Duncan&Hammond, dated the Closing Date and addressed to the Lessee, with respect to such Federal tax and other matters as the Lessee may reasonably request.(4)Accountant's Letter.The Lessee shall have received a letter satisfactory to it from Peat, Marwick, Mitchell&Co., to the efFect that, under generally accepted accounting principles and FASB No.13, the Facility Lease is an"operating lease." (5)Orders.The FERC Order, the NMPSC Order and the License Amendment shall be in form and substance satisfactory to the Lessee.(6)Registration Statement.
The Registration Statement shall have been declared efFective by the SEC and the Underwriters shall have purchased, or shall substantially simultaneously purchase, the Initial Series Bonds pursuant to the Underwriting Agreement.
(7)Completion of Documentation.
All schedules to and blanks in the Transaction ments and Financing Documents shall have been completed to the satisfaction of the parties hereto.(c)Conditions to Releveraging.
The obligation of the Loan Participant to make, and the Owner Trustee to borrow the proceeds of, a Releveraging Loan on a Releveraging Date shall be subject to the fulfillment on or prior to such Releveraging Date of the following conditions precedent (each instrument, document, certificate, opinion or other writing to be in form and substance satisfactory to the Loan Participant and the Owner Participant):
(1)Authentication Request, etc.The Owner Trustee shall have delivered to the Inde'nture Trustee a request, dated such Releveraging Date, authorizing the Indenture Trustee to authenti-cate and deliver a Releveraging Note to the Loan Participant upon its payment to the Indenture Trustee, for the account of the Owner Trustee, of the proceeds of such Releveraging Loan.(9)Releeeraging Note and Bond Transactions.(A)The Loan Participant shall have received the proceeds from the sale of Releveraging Bonds in an amount suificient to make such Releveraging Loan, (B)the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated and delivered to the Loan Participant, a Releveraging Note or Notes evidencing such Releveraging Loan and (C)the Collateral Trust Trustee shall have accepted a supplement to the Collateral Trust Indenture subjecting such Releveraging Note or Notes to'the lien of the Collateral Trust Indenture and shall have released the amount of such Releveraging Loan from the lien of the Collateral Trust Indenture.
(3)No'Violation.
The return to the Owner Participant of a portion of the Investment and the making by the Loan Participant of the Releveraging Loan shall not violate any Applicable Law.(4)No Default.No Default or Event of Default or (in the case of the Loan Participant)
Indenture Default or Indenture Event of Default shall have occurred and be continuing, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared.(5)Representations and Warranties.
The representations and warranties of FNB and the Owner Trustee and the Lessee set forth in Sections 8(a)and 10(a), respectively, shall be true and correct on and as of such Releveraging Date with the same effect as though made on and as of such Releveraging Date (with all references to the Closing Date in such representations and warranties being changed to a reference to such Releveraging Date), and the Loan Participant and the Owner Participant shall have received appropriate certiBcates, dated such Releveraging Date, to such efFect.(6)Opinions of CounseL The Loan Participant and the Owner Participant shall have received favorable opinion of each of Cravath, Swaine R Moore, as special counsel for the Owner Participant, Csaplar R Bok, as counsel for the Owner Trustee, Snell R Wilmer, as special counsel for the Lessee, and Kemp, Smith, Duncan R Hammond, as counsel for the Lessee, each dated such Releveraging Date and addressing such matters relating to the transactions in connection with the Releveraging Loan as the Loan Participant or the Owner Participant may reasonably request.(d)Conditions to Refunding.
The obligation of the Owner Participant and the Loan Participant to participate in a refunding of the Notes, if any, as provided in Section 2(d), shall be subject to the ,.fulBllment on or before the Refunding Date of the following conditions precedent (each instrument, document, certiBcate, opinion or other writing to be in form and substance satisfactory to the Loan'articipant and the Owner Participant):
(1)Authentication Request, etc.The Owner Trustee shall have delivered to the Indenture Trustee a request, dated the Refunding Date, authorizing the Indenture Trustee to authenticate and deliver the Refunding Note or Notes to the Loan Participant against redelivery of the Initial Series Notes (and each Releveraging Note theretofore issued)to the Indenture Trustee for cancellation.
(2)Refuriding Note and Bond Transactions.(A)The Loan Participant shall have received the proceeds from the sale of Refunding Bonds in an amount sufficient to make the Refunding Loan, (B)the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated and delivered to the Loan Participant, the Refunding Note or Notes evidencing the Refunding Loan made on the Refunding Date and (C)the Collateral Trust Trustee shall have accepted the Refunding Supplemental Indenture subjecting the Refunding Note or Notes to the lien of the Collateral Trust Indenture and shall have released the Initial Series Notes (and each Releveraging Note, theretofore issued)from the lien of the Collateral Trust Indenture.
(3)No Default.No Event of Default or (in the case of the Loan Participant)
Indenture Event of Default shall have occurred and be continuing, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared.(4)Representations and Warranties.
The representations and warranties of FNB and the Owner Trustee and the Lessee set forth in Sections 8(a)and 10(a), respectively, shall be true and correct on and as of the Refunding Date with the same eiFect as though made on and as of the Refunding Date (with all references to the Closing Date in such representations and warranties being changed to a reference to the Refunding Date), and the Loan Participant and the Owner Participant shall have received appropriate certiBcates, dated the Refunding Date, to such efFect.~(5)Refunding Registration Statement.
The Loan Participant and the Owner Participant shall have received an Officers'ertiBcate of the Lessee, dated the Refunding Date, to the efFect that on the date it became efFective and on the Refunding Date, the Refunding Registration Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and the final prospectus did not and does not contain any untrue statement of a material fact or omit to state a material<t necessary to make the statements contained therein not misleading under the circumst under which any such shall have been made.(6)Opinions of Counsel.The Loan Participant and the Owner Participant shall have received favorable opinions of each of Cravath, Swaine R Moore, as special counsel for the Owner Participant, Csaplar R Bok, as counsel for the Owner Trustee, Snell R Wilmer, as special counsel for the Lessee, and Kemp, Smith, Duncan R Hammond, as counsel for the Lessee, each dated the Refunding Date and addressing such matters relating to the transactions in connection with the Refunding Note or Notes as the Loan Participant or the Owner Participant may reasonably request, (e)Conditions to Heoptimi-ation.
The obligation of the Owner Participant and the Loan Partici-pant to participate in a reoptimization of the Notes, as provided in Section 2(e), shall be subject to the fulfillment on or before the date thereof of the following conditions precedent (each instrument, document, certificate, opinion or other writing to be in form and substance satisfactory to the Loan Participant and the Owner Participant):
(1)'ote and Bond Transactions.
The conditions set forth in Section 3.12 of the Indenture and Section 1.04(c)of the Bond Supplemental Indenture (and the Refunding Supplemental Indenture, if any)shall have been complied with.(2)No Default.No Event of Default or (in the case of the Loan Participant)
Indenture Event of Default shall have occurred and be continuing and no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared.(3)Representations and Warranties.
The representations and warranties of FNB and the Owner Trustee and the Lessee set forth in Sections 8(a)and 10(a), respectively, shall be tru correct on and as of such date with the same efFect as though made on and as of such date (references to the Closing Date in such representations and warranties being changed a reference to such date), and the Loan Participant and the Owner Participant shall have received appropriate certificates, dated such date, to such efFect.(4)Opinions of CounseL The Loan Participant and the Owner Participant shall have received favorable opinions of each of Cravath, Swaine R Moore, as special counsel for the Owner Participant, and Kemp, Smith, Duncan R Hammond, as counsel for the Lessee, each dated such date and addressing such matters relating to the transactions in connection with the reoptimiza-tion as the Loan Participant or the Owner Participant may reasonably request.SECTION 12.Consent to Assignment of the Facility Lease;Consent to Indenture.(a)Consent to Assignment of Facility Lease-The Lessee hereby acknowledges, and consents in all respects to, the partial assignment of the Facility Lease by the Owner Trustee to the Indenture Trustee under and pursuant to the Indenture and agrees: (i)to make each payment of Basic Rent and Supplemental Rent due or to become due thereunder to the extent constituting Assigned Payments (excluding, in any event, all Excepted Payments)directly to the Indenture Trustee as provided in Section ll(b)of the Facility L'ease, so long as any of the Notes shall be Outstanding and unpaid;and (ii)not to seek to recover any payment (other than a payment that both the Owner Trustee and the Lessee agree was made in mistake)made to the Indenture Trustee in accordance with the Indenture once said payment is made.
(b)Consent to Indenture.
The Lessee hereby consents in all respects to the execution and delivery of the Indenture, and to all of the terms thereof, and the Lessee acknowledges receipt of an executed counterpart of the Indenture; it being understood that such consent shall not be construed to equire the Lessee's consent to any future supplement to, or amendment, waiver or modiBcation of the erms of, the Indenture or any Note.(c)Consent to Assignment by Loan Participant.
Each of the parties hereto acknowledges that the Loan Participant is assigning its right, title and interest in and to the Transaction Documents to the Collateral Trust Trustee as security for the Bonds to the extent set forth in the Collateral Trust Indenture, and each of the parties hereto consents to such assignment.
SECTION 13.Lessee's Indemnities.(a)General Indemnity.
The Lessee agrees, whether or not any of the transactions contemplated hereby shall be consummated and whether or not the Facility Lease, any other Transaction Document or any Financing Document shall have expired or have been terminated, to assume liability for, and the Lessee does hereby agree to indemnify, protect, defend, save and keep harmless each Indemnitee, on an After-Tax Basis, from and against, any and all Claims which may be imposed on, incurred by or asserted against any Indemnitee (whether because of an act or omission by such Indemnitee or otherwise and whether or not such Indemnitee shall also be indemniBed as to any such Claim by any other Person)in any way relating to or arising out of (i)Unit 2, the Undivided Interest, the Real Property Interest, PVNGS or the PVNGS Site, or any part of any thereof, any ANPP Project Agreement, the issuance or payment of the Bonds or the Notes, this Participation Agreement or any other Transaction Document or any Financing Document (including, unthout limitation, the perform-ance or enforcement of any of the obligations and terms hereunder or thereunder), (ii)a disposition of all or any part of the Undivided Interest, the Real Property Interest, Unit 2 or any other interest of the Owner Trustee in connection with any termination of the Facility Lease, or (iii)the design, construction, assembly, manufacture, Bnancing, erection, purchase, acceptance, rejection, ownership,~~~acquisition, delivery, redelivery, nondelivery, transportation, insuring, lease, sublease, preparation, nstallation, repair, rebuilding, improvement, modiBcation, transfer of title, abandonment, possession, repossession, use, operation, maintenance, condition, sale, return, storage or disposition of the Undivided Interest, Unit 2, the Real Property Interest, any Capital Improvement, the PVNGS Site, any other facilities or property in or on the PVNGS Site or any other interest of the Owner Trustee in any thereof or any accident, nuclear incident or extraordinary nuclear occurrence in connection with any thereof (including, unthout limitation, (A)claims or penalties arising from any violation of law or liability in tort (strict or otherwise) or from the active or passive negligence of any Indemnitee, (B)loss of or damage to any property or the environment or death or injury t'o any Person, (C)latent and other defectswhether or not discoverable, (D)any claim for patent, trademark, service-mark or copyright infringement and (E)any claim of any Indemnitee incurred in the administration of this Participation Agreement, any other Transaction Document or any Financing Document and not paid as Transaction Expenses or included in Facility Cost and, if not included in Transaction Expenses, the reasonable fees and disbursements of counsel and other professionals incurred in connection there-with);provided, tunoeoer, that the Lessee shall not be required to indemnify any Indemnitee pursuant to this Section 13(a), (1)for any Claim in respect of Unit 2, the Undivided Interest or the Real Property Interest arising from acts or events not attributable to Decommissioning or to any act or omission of the Lessee, whether as agent for such Indemnitee or otherwise, nor attributable to the period on or before the Lease Termination Date, which occur after satisfaction of the Lessee's redelivery obligations pursuant to Section 5 of the Facility Lease, except to the extent expressly provided in any Transaction Document, the ANPP Participation Agreement or any other agreement or undertaking of the Lessee, (2)for any Claim against such Indemnitee resulting solely from acts which would constitute the willful misconduct or gross negligence of such Indemnitee (unless imputed'o such Indemnitee by reason of Unit 2, the Undivided Interest, the Real Property Interest, PVNGS, the PVNGS Site or any other facilities at the PVNGS Site or any occurrence in connection with any thereof or by reason of any act or omission of the Lessee, whether as agent For such Indemnitee or P otherwise), (3)for any Transaction Expense to be paid by the Owner Trustee pursuant to Section 14(a), (4)for any Claim resulting solely from a transfer by the Owner Trustee or the Owner Participant of all or part of its interest in the Facility Lease, Unit 2, the Real Property Interest or the Undivided Interest other than in connection with any early termination of the Facility Lease r exercise of remedies under Section 16 thereof or the transfer contemplated by Section 7(b)(4)first transfer.by the Owner Participant to an ASliate of the Owner Participant or (5)in the case o t e Loan Participant, the Indenture Trustee and the Collateral Trust Trustee, for any Claim based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Registration Statement or the Refunding Registration Statement or any document or agreement in connection with the sale of the Bonds which is based upon information furnished to the Lessee or its agents by such Indemnitee expressly for use therein.To the extent that an Indemnitee in fact receives indemnification payments from the Lessee under the indemnification provisions of this Section 13(a), the Lessee shall'e subrogated, to the extent of such indemnity paid, to such Indemnitee's rights with respect to the transaction or event requiring or giving rise to such indemnity, but only so long as such subrogation shall not materially adversely afFect the rights of such Indemnitee or any other, Indemnitee hereunder.
Nothing herein or elsewhere contained shall be construed as constituting a guaranty by the Lessee of the principal of, premium, if any, or interest on the Notes or the Bonds or of the residual value or useful life of the Undivided Interest.(b)General Tax Indemnity.
(1)Indemnity.
All payments by the Lessee, BONY or any Issuing Bank in connection with the transactions contemplated by the Transaction Documents shall be free of withholdings of any nature whatsoever (and at the time that the Lessee, BONY or any Issuing Bank is required to make any payment upon which any withholding is required, the Lessee shall pay an additional amount such that the net amount actually received by the Person entitled to receive such payment will, after such withholding, equal the full amount of the payment then due)and shall be free of expense to each Indemnitee for collection or other charges.If, for any reason, the Less s required to make any payment to a taxing authority with respect to, or.as a result o withholding tax imposed on any Indemnitee in respect of the transactions contemplated b Transaction Documents, which withholding tax is not the responsibility of the Lessee under this.Section 13(b)as determined pursuant to this Section 13(b)but without regard to the immediately preceding sentence of this Section 13(b)(1), then such Indemnitee shall pay to the Lessee an amount which equals the amount paid by the Lessee with respect to, or as a result of.such withholding tax.Whether or not any of the transactions contemplated hereby are consummated, except as provided in Section 13(b)(2), the Lessee shall pay, and shall indemnify, defend and hold each Indemnitee harmless, on an After-Tax Basis, from and against, any and all Taxes howsoever imposed (whether imposed on or with respect to the Indemnitee, the Lessee, Unit 2, the Undivided Interest, the Real Property Interest, any Capital Improvement or the PVNGS Site or any part thereof or interest therein or otherwise) by any Federal, state or local government or subdivision thereof or taxing authority in the United States of America or by any foreign country or subdivision thereof or by any foreign or international taxing authority in connection with or-relating to (A)the design, construction, financing, purchase, acquisition, acceptance, rejection, delivery, nondelivery, transportation, ownership, assembly, possession, repossession, operation, use, condition, maintenance, repair, improvement, sale, return, storage, abandonment, prepara-tion, installation, replacement, redelivery, manufacture, insuring, leasing, subleasing, modification, transfer of title, rebuilding, rental, importation, exportation or other application or disposition of, or the imposition of any Lien other than Owner'Participant's Liens and Lessor's'Liens (or incurrence of any liability to refund or pay over any amount as a result of any Lien other than Owner Participant's Liens and Lessor's Liens)on, Unit 2, the Undivided Interest, th'e Real Property Interest, any Capital Improvement or the PVNGS Site, or any part thereof or interest therein, (B)the payment of Rent or the receipts or earnings arising from or received with respect to, and the indebtedness with respect to, Unit 2, the Undivided Interest, the Real Pro Interest or any Capital Improvement, or any part of any thereof, interest therein or application or disposition thereof, (C)any amount paid or payable pursuant to this Participation Agreement, any other Transaction Document or any Financing Document or the transactions contemplated hereby or thereby, (D)Unit 2, the Undivided Interest, the Real Property Interest, any Capital Improvement or the PVNGS Site, or any part of any thereof or interest therein, or the applicability of the Facility Lease to the Undivided Interest, the Real Property Interest or any Capital Improvement, or any part of any thereof or interest therein, (E)this Participation Agreement, any other Transaction Document or any Financing Document or (F)otherwise with respect to or in connection with the transactions contemplated by this Participation Agreement, any other Transaction Document or any Financing Document.(2)Erclueions from General Tax Indemnity.
Section 13(b)(l)(except for the first two sentences thereof)shall not apply to: (i)Taxes based on, or measured by, net income imposed by the United States Federal Government (including, without limitation, any minimum Taxes, capital gains Taxes, any Taxes on, or measured by, items of tax preference, surcharges, additions to tax, penalties, fines or other charges in respect thereof);(ii)Taxes (other than sales, use or rental Taxes)imposed by any state or local government or subdivision thereof or other taxing authority in the United States or by any foreign country or subdivision thereof or by any foreign or international taxing authority that are based on, or measured by, the net income, items of tax preference, net worth or capital of an Indemnitee, except, with respect to the Owner Trustee, the Trust, the Trust Estate, the Owner Participant and any Affiliate of any thereof, any such Taxes imposed by a jurisdiction as a result of a relation or asserted relation of such jurisdiction to the transactions contem-plated by the Transaction Documents or the Financing Documents or as a result of the activities of the Lessee, any ANPP Participant or any ASliate of any thereof in such jurisdiction; provided, however, that the amount of any Taxes for which the Lessee is obligated to indemnify under the preceding exception shall be calculated on a pro forma basis as the amount by which: (x)the incremental Taxes which the Indemnitee is obligated to pay in such jurisdiction, calculated as: 'a$(1)the actual amount of Taxes which the Indemnitee is obligated to pay in such jurisdiction (except to the extent that any allocation or apportionment method used by such jurisdiction takes into account the income or activities of business entities organized.
outside the United States of America), taking into account any actual net operating loss carryovers, reduced by (2)the amount of Taxes which the Indemnitee would be obligated to pay in such jurisdiction (except t'o the extent that any allocation or apportionment method used by such jurisdiction takes into account the income or activities of business entities organized outside the United States of America), assuming that the transac-tions contemplated by the Transaction Documents and the Financing Documents had not occurred, taking into account any net operating loss carryovers that would have been available if such transactions had not occurred, exceeds (y)any actual aggregate net reduction in Taxes in all other jurisdictions in which the Indemnitee is subject to tax (whether such reduction results from the operation of allocation or apportionment formulas, from credits or otherwise), such aggregate net reduction calculated as: (1)the aggregate amount of Taxes which the Indemnitee would be obligat pay in all other jurisdictions in which such Indemnitee is subject to tax.assi that the transactions contemplated by the Transaction Documents and the Fin.ing Documents had not occurred, reduced by (2)the actual aggregate amount of Taxes which the Indemnitee is obligated to pay in all other jurisdictions in which such Indemnitee is subject to tax: prooided further, however, that, with respect to any tax based on or measured by capital or net worth, the Lessee's indemnity obligation shall not exceed the incremental portion of such Tax attributable to the transactions contemplated by the Transaction Documents or the Financing Documents;(iii)Taxes attributable to the Undivided Interest or the Real Property Interest that are imposed with respect to any period after the later of (a)the Lease Termination Date and (b)satisfaction of the Lessee's redelivery obligations pursuant to Section 5(a)of the Facility Lease, unless such Taxes relate to events occurring or matters arising prior to or simultane-ously with such date or redelivery;(iv)Taxes on or with respect to an Indemnitee arising from any voluntary transfer (it being understood that the term"voluntary transfer" does not include any transfer provided for in the Transaction Documents or the Financing Documents and does not include any transfer to the Lessee or any ASliate thereof)by such Indemnitee of any interest in the Undivided Interest, the Real Property Interest, the Trust Estate, the Indenture Estate, the'otes or any other right or.interest arising under the Transaction Documents or the Financing Documents, unless an Event of Default has occurred and is continuing, or Taxes arising from an involuntary transfer by such Indemnitee of any such interest arising fro a bankruptcy or similar proceeding in which such Indemnitee is the debtor unless bankruptcy or other proceeding was caused by the Lessee or any AfBliate thereof (exec such bankruptcy or other proceeding was so caused solely in connection with activities of such Indemnitee unrelated to the transactions contemplated by the Transaction Documents or the Financing Documents);(v)Taxes based on or measured by any fees, commission or compensation received by the Owner Trustee, the Indenture Trustee or the Collateral Trust Trustee for acting as trustee, or for other services rendered, in connection with any of the transactions contem-plated by the Transaction Documents or the Financing Documents;(vi)Taxes on or with respect to an Indemnitee arising by reason of such Indemnitee's failure to Ble proper and timely reports or returns (unless the filing of such reports or returns is the obligation of the Lessee under the Transaction Documents or the Financing Docu-ments)and any penalties or additions to tax imposed by reason of such Indemnitee's failure to comply with the laws imposing such Tax or its material failure to comply with its obligations under Section 13(b)(6), in each case unless such failure results from any action of the Lessee or failure by the Lessee to comply with any provision of the Transaction Documents or the Financing Documents, including the failure to provide necessary information;
'(vii)Taxes on or with respect to an Indemnitee arising as a result of a,material failure of such Indemnitee to fulfill its obligations with respect to the contest of any claim in accordance with Section 13(b)(4)of this Participation Agreement or to provide the Lessee with information (other than tax returns)within the knowledge of such Indemnitee reasona-bly and timely requested by the Lessee, and not otherwise available to the Lessee, to enable the Lessee to complete and file or furnish any report, return or statement in accordance Section 13(b)(5);
(viii)Any Taxes imposed on the Lessor or the Owner Participant resulting from, or which would not have occurred but for, Lessor's Liens or Owner Participant's Liens and any Taxes imposed on the Indenture Trustee which would not have occurred but for Indenture Trustee's Liens;(ix)Any Tax on or with respect to any Indemnitee resulting from the gross negligence or willful misconduct of such Indemnitee (it being understood that no Indemnitee is responsible for determining whether a Tax is payable if such Tax is the responsibility of the Lessee under this Section 13(b));and (x)Taxes imposed on or with respect to a transferee (or a subsequent transferee) of an original Indemnitee (other than a transferee or a subsequent transferee if such transferee or subsequent transferee is an AlBliate of the original Indemnitee) to the extent that the amount of such Taxes exceeds the amount of Taxes that would have been imposed on or with respect to such original Indemnitee but for the transfer to such transferee or, if imposed, would not have been subject to indemnification under this Section 13(b);provided, hotuever, that the exception in this paragraph (x)shall not apply to any transferee where such transfer shall have occurred during the continuance of an Event of Default;provided, however, that the foregoing paragraphs (i)through (x)shall not apply to any Tax imposed on the Collateral Trust Trustee, the Loan Participant or the indenture estate under the Collateral Trust Indenture except that the foregoing paragraph (v)shall apply in the case'of the Collateral Trust Trustee.(3)Calculation of General Tax Indeninity Payments: If any Indemnitee realizes a net permanent tax benefit by reason of the payment of any indemnity under Section 13(b)(1), such Indemnitee shall pay the Lessee, but not before the Lessee shall have made all payments theretofore due to such Indemnitee pursuant to this Section 13(b), an amount equal to the lesser of (x)the sum of such tax benefit plus any other net tax benefit realized by such Indemnitee as the result of any payment made by such.Indemnitee pursuant to this sentence (such latter benefit being determined in a manner consistent with the definition of After-Tax Basis and with the last'sentence of Section 13(b)(6))and (y)the amount of such payment by the Lessee to such Indemnitee and any other payment by the Lessee to such Indemnitee therefore made pursuant to Section 13(b)(1)less the aggregate amount of all prior payments by such Indemnitee to the Lessee pursuant to this Section 13(b)(3)with respect to amounts paid pursuant to Section 13(b)(1), it being intended that no Indemnitee should realize a net tax benefit pursuant to this Section 13(b)unless the Lessee shall Brst have been made whole for any payments by it to such Indemnitee pursuant to Section 13(b)(1);provided, tun@ever, that (A)in computing any perma-nent tax benefit, such Indemnitee shall be deemed first to have utilized all deductions and credits available to it otherwise than by reason of any payment by the Lessee pursuant to this Section 13(b)and (B)notwithstanding the provisions of this Section 13(b)(3), such Indemnitee shall not be obligated to make any payment to the Lessee pursuant to this Section 13(b)(3)if at the time such payment shall be due a Default or Event of Default shall have occurred and be continuing.
(4)Generul Tus;Indemnity-Contest+
If a written claim shall be made against any Indemnitee for any Tax for which the Lessee is obligated pursuant to this Section 13(b), such Indemnitee shall notify the Lessee promptly of such claim, but the failure so to notify the Lessee shall not afFect any obligation of the Lessee pursuant to this Section 13(b)except as provided in Section 13(b)(2)(vii).If the Lessee shall request in writing within 30 days after receipt of such notice, such Indemnitee shall in good faith and at the Lessee's expense contest the imposition (including the amount)of such Taxes;provided, bc@eever,.that such Indemnitee may in its sole discretion select the forum for such contest and determine whether any such contest shall be by (A)resisting payment of such Taxes, (B)paying such Taxes under protest or (C)paying such Taxes and seeking a refund thereof;provided further, however, that (X)such Indemnitee shall not be obligated to contest any claim in which the amount in question is less than$250,000, (Y)at such Indemnitee's option, such contest shall be conducted by the Lessee in the name of such Indemnitee (subject to the preceding proviso)and (Z)in no event shall such Indemnitee be required or the Lessee permitted to contest the imposition of any Taxes for which the Lessee is obligated pursuant to this Section 13(b)unless (v)the Lessee shall have acknowledged its lia to such Indemnitee for an indemnity payment pursuant to this Section 13(b)as a result of claim if and to the extent such Indemnitee or the Lessee, as the case may be, shall not prevai in the contest of such claim, (w)such Indemnitee shall have received from the Lessee (i)satisfactory indemnity for any liability, expense or loss arising out of or relating to such contest including, but not limited to, (A)all reasonable legal, accountants'nd investigatory fees and disbursements, (B)the amount of any interest, additions to tax or penalty that may be payable as a result of contesting such claim and (C)if such contest is to be initiated by the payment of, and the claiming of a refund for, such Tax, sufBcient funds to make such payment on an After-Tax Basis and (ii)an opinion of independent tax.counsel selected by the Lessee and approved by such Indemnitee (which approval shall not be unreasonably withheld)and furnished at the Lessee's sole expense to the efFect that a Reasonable Basis exists for contesting such claim or, in the event of an appeal, that there exists a substantial possibility that an appellate court or an administrative agency with appellate jurisdiction, as the case may be, will reverse or substantially modify the adverse determination, (x)the Lessee shall have agreed to pay such Indemnitee on demand all reasonable costs and expenses that such Indemnitee may incur in connection with contesting such claim (including, without limitation, all costs, expenses, losses, reasonable legal and accounting fees, disbursements, penalties, interest and additions to tax), (y)such Indemnitee and the Owner Participant shall have reasonably determined that the action to be taken will not result in any danger of sale, forfeiture or loss of, or the creation of any Lien (except if the Lessee shall have adequately bonded such Lien or otherwise made provision to protect the interests of such Indemnitee in a manner satisfactory to such Indemnitee and the Owner Participant) on, Unit 2, the Undivided Interest, the Real Property Interest, or any part of or interest in any of the foregoing, and (z)if such contest shall be conducted in a manner requiring the payment of the claim, the Lessee shall have paid the amount required.The Lessee agrees to give such Indem reasonable notice of any contest prior to.the commencement thereof.If any Indemnitee obtain a refund of all or any part of any Taxes paid by the Lessee (or if any such refund woula payable to siich Indemnitee in the absence of an offsetting liability for taxes payable to the taxing authority in question by such Indemnitee in respect of which the Lessee is not responsible pursuant to this Section 13(b)), such Indemnitee shall pay the Lessee, but not before the Lessee shall have made all payments theretofore due to such Indemnitee pursuant to this Section 13(b), an amount equal to the lesser of (xx)the amount of such refund, including interest received (or receivable in accordance with the foregoing parenthetical clause)and attributable thereto, plus any permanent net tax benefit realized by such Indemnitee (determined in a manner consistent with the definition of After-Tax Basis and with the last sentence of Section 13(b)(6))as a result of any payment by such Indemnitee made pursuant to this sentence (after taking into account the tax consequences of the receipt of such refund and such interest)or (yy)such tax payment by the Lessee to such Indemnitee theretofore made pursuant to this Section 13(b)plus the amount of any interest actually received by such Indemnitee in connection with such refund to the extent not previously re8ected in such tax payment by the Lessee, in either case net of any expenses of contest not already paid or incurred by the Lessee;provided, tuneeuer, that (I)in computing any permanent tax benefit, such Indemnitee shall be deemed Brst to have utilized all deductions and credits available to it otherwise than by reason of any payment by the Lessee pursuant to this Section 13(b)and (II)notwithstanding the provisions of this Section 13(b)(4), such.Indemnitee shall not be obligated to make any payment to the Lessee pursuant to this Section 13(b)(4)if at the time such payment shall be due a Default or an Event of Default shall have occurred and be continuing.
An Indemnitee shall not be required to make any payment pursuant to this Section 13(b)(4)before such time as the Lessee shall have made all payments and indemnities then due under the Transaction Documents to such Indemnitee.
Notwithstanding anything contained in this Section 13(b)(4)to the contrary, no Indemnitee shall be required to contest any claim i~
subject matter thereof shall be of a continuing nature and shall have previously been adversely decided pursuant to the contest provisions of this Section 13(b)(4)unless there shall have been a change in the law (including, without limitation, amendments to statutes or regulations.
adminis-trative rulings and court decisions) after such claim shall have been so previously decided.and such Indemnitee shall have received an opinion of independent tax counsel selected by the Lessee and approved by such Indemnitee (which approval shall not be unreasonably withheld)and furnished at the Lessee's sole expense to the efFect that such change provides a Reasonable Basis for the position which such Indemnitee and the Lessee, as the case may be, had asserted in such previous contest or for an alternative position based upon such change that the Lessee now desires to assert.Nothing contained in this Section 13(b)shall require any Indemnitee to contest or permit the Lessee to contest a claim which such Indemnitee would otherwise be required to contest pursuant to this Section 13(b)if such Indemnitee shall waive payment by the Lessee of any amount that might otherwise be payable by the Lessee under this Section 13(b)by way of indemnity in respect of such claim.(5)General Tm Indemnity-Reports.If any report, return or statement is required to be filed with respect to any obligations of the Lessee under or arising out of this Section 13(b), the Lessee shall timely Ble the same, except for any such report, return or statement which such Indemnitee has notified the Lessee that it intends to Ble.The Lessee shall either Ble such report, return or statement so as to show the ownership of the Undivided Interest or the Real Property Interest, as the case may be, in the Owner Trustee and send a copy of such report, return or statement to the Owner Trustee and such Indemnitee or, where not so permitted, notify the Owner Trustee and such Indemnitee of such requirement and prepare and deliver such report, return or statement to the Owner, Trustee and such Indemnitee in a manner satisfactory to the Owner Trustee and such Indemnitee within a reasonable time prior to the time such report, return or statement is to be Bled or, where such return, statement or report shall be required to reSect items in addition to any obligations of the Lessee under or arising out of this Section 13(b), timely provide the Owner Trustee and such Indemnitee with information sufficient to permit such report, return or statement properly to be made with respect to any obligations of the Lessee under or arising out of this Section 13(b)(and the Lessee shall hold each Indemnitee harmless from and against any liabilities, obligations, losses, damages, penalties, claims, actions, suits and reasonable costs arising out of any insufBciency or inaccuracy in any such report, return, statement or information).
The Lessee shall not have any right to examine the tax returns of any Indemnitee.
The Lessee shall have the right to conduct all negotiations with the State of Arizona Department of Revenue with respect to the computation of the value of Unit 2, the Undivided Interest and the Common Facilities for purposes of computing Arizona property'taxes.(6)Genenxl Tax Indemnity-Payment.All Taxes shall be paid when due and payable and, unless otherwise requested by the appropriate Indemnitee, the Lessee shall pay any Taxes for which it is liable pursuant to this Section 13(b)directly to the appropriate taxing authority and shall pay each Indemnitee promptly on demand in immediately available funds any amount due such Indemnitee pursuant to this Section 13(b)with respect to such Taxes.Any such demand shall specify in reasonable detail the payment and the facts upon which the right to payment is based.Each Indemnitee shall promptly forward to the Lessee any notice, bill or advice received by it concerning any Taxes.Within 30 days after the date of each payment by the Lessee of any Taxes, the Lessee shall furnish the appropriate Indemnitee the original or a certified copy of a receipt for the Lessee's payment of such Taxes or such other evidence of payment of such Taxes as is acceptable to such Indemnitee.
The Lessee shall also furnish promptly upon request such data as any Indemnitee may require to enable'such Indemnitee to comply with the requirements of any taxing jurisdiction.
Whenever any payment is to be made by the Lessee under this Section 13(b)and it shall be necessary, in calculating the After-Tax Basis amount of such payment, to compute the amount of any liability for federal, state or local tax imposed on or measured by the net income of any Indemnitee, such computation shall be based on the assumption that such taxes shall be payable at the highest marginal statutory rates in efFect for the relevant period.-41 taxes imposed by a particular state or local taxing jurisdiction, shall mean and include any consolidated or comb'ined group of which such Indemnitee is or shall be a member.that is treated as such by such state or local taxing jurisdiction.
(8)Supporting.Yfaterial.
Each Indemnitee shall provide to the Lessee such suppor material (other than tax returns)as the Lessee shall reasonably request in connection with~matters set forth in this Section 13(b).The Lessee shall reimburse to any Indemnitee any expenses incurred in providing requested supporting material to the Lessee.(9)Cooperation.
The Owner Participant agrees (without committing itself to take any action), upon the written request and at the expense of the Lessee, to discuss and to give reasonable consideration to suggestions of the Lessee regarding the minimization of any Taxes for which the Lessee is responsible under this Section 13(b).(c)Special Tax Indemnity.
(1)Tax Assumptions, The Facility Lease has been entered into, and the Owner Participant's Net Economic Return has been computed, on the basis of the following assumed Federal income tax beneBts: (i)The Facility Lease will be treated as a true lease under which the Owner Trustee will be the purchaser, owner and lessor of the Undivided Interest and the Real Property Interest and the Lessee will be treated as the lessee of the Undivided Interest and the Real Property Interest.(ii)The Owner Participant will be entitled to take into account in computing its Federal income tax liability each item of income, gain, deduction, loss and credit of the Trust.(iii)Not less than 90.30391 percent of the property constituting the Undivided Interest constitutes"section 38 property" as such term is used in Section 48(a)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986), that was placed in service not earlier than May 20, 1986 (such percentage'of the property constituting t Undivided Interest being hereinafter referred to as the Clause (iii)Property);
and not less t 90.30391 percent of the Purchase Price is attributable to Clause (iii)Property.(iv)Not more than 9.69609 percent of the property constituting the Undivided Interest constitutes property that was placed in service prior to May 20, 1986 (the Clause (iv)Property);
and not more than 9.69609 percent of the Purchase Price is attributable to the Clause (iv)Property.(v)The Owner Participant will be allowed deductions under the accelerated cost recovery system with respect to the Undivided Interest pursuant to Sections 168(a)and 168(b)(1)of the Code (as such Sections are applicable to property placed in service during 1986 as to which the~Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986);the Owner Participant shall not make an election under Section 203(a)(1)(B)of the Tax Reform Act of 1986;the Owner Participant's taxable year in which the Closing Date occurs will be an 11-month taxable year;the Owner Participant's aggregate adjusted basis for purposes of computing such deductions will be equal to 100 percent of the Purchase Price;and the Owner Participant will be entitled (assuming that it does not make an afBrmative election to take slower depreciation deductions pursuant to Section 168(b)(3)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election'under Section 203(a)(1)(B)of the Tax Reform Act of 1986);it being understood that any election imputed to, or deemed made by, the Owner Participant as a result of actions of another Person shall not be considered to be an afBrmative election by the Owner Participant) to take such deductions (resulting in a write-ofF of the Purchase Price to a zero salvage value)at the following times in the following amounts:
deductions (resulting in a write-off of the Purchase Price to a zero salvage value)at the following times in the following amounts: Year 1986.1987.1988.1989.1990.1991.1992 1993.1994.1995.Percentage (to be applied against i00 percent of the Purchase Price)8%14%12%10%10%10%9%9%9%9%(the deductions described in this Section 13(c)(1)(v)being hereinafter referred to as the ACRS Deductions).(vi)The indebtedness evidenced by the Notes will constitute a loan made to the Owner Trustee;all amounts paid on the Notes other than payments of principal will be deductible by the Owner Participant, when paid or accrued, pursuant to Section 163(a)of the Code in accordance with the accrual method of accounting (it being understood that such deductions will not be afFected by any other provisions of the Code such as Section 163(e))(the deductions described in this Section 13(c)(1)(vi)being hereinafter referred to as the Interest Deductions).(vii)The Owner Participant will be allowed current deductions for amortization of an amount equal to the Transaction Expenses computed on a straight-line basis over the Basic Lease Term (the Amortization Deductions).(viii)The Owner Participant will have at all relevant times sufllcient Federal taxable income against which to apply the ACRS Deductions, the Interest Deductions and the Amortization Deductions.(ix)The Notes will bear interest pursuant to their terms at the rates applicable from time to time;the principal amount of the Notes will constitute no more than 80 p'ercent of the Purchase Price;and the Notes will be amortized by certain payments of principal pursuant to the terms thereof.(x)Basic Rent will be paid on the Basic Rent Payment Dates.Basic Rent will be payable in advance in semi-annual installments during the Basic Lease Term commencing on July 2, 1987, and the Renewal Term as set forth in the Facility Lease., (xi)None of the Trust, the Owner Trustee and the Owner Participant will at any time be required to include any amount in gross income for Federal income tax purposes with respect to the transactions contemplated by the Transaction Documents or the Financing Documents other than (A)payments of Basic Rent in the amounts and no earlier than at the times such payments are required to be made in accordance with the Facility Lease, (B)payments of Casualty Value, Termination Value, Special Termination Value and Special Casualty Value and payments pursuant to the exercise of the Lessee's options to purchase the Undivided Interest as described in the Facility Lease at the time such payments are made and (C)any payments required to be made on an After-Tax Basis pursuant to the Transaction Documents at the time such payments are made.(xii)The Owner Participant's marginal Federal rate of income tax is 46 p'ercent for its taxable year ending December 31, 1986, 39.950685 percent for its taxable year ending December 31, 1987, and 34 percent for each taxable year thereafter, without giving efFect to any credits against tax.
(xiii)The Owner Participant's cash investment in the Undivided Interest at the Closing Date will be an amount equal to the Investment Percentage of the Purchase Price.(xiv)The Closing Date will be December 18, 1986.(xv)The Owner Trustee and the Owner Participant will be entitled to treat each item income, gain, deduction, loss and credit with respect to the transactions contemplated by the Transaction Documents and the Financing Documents as derived from or allocable to sources within the United States.(2)Tax Representations.
The Lessee represents and warrants to and covenants with the Owner Participant that: (i)On the Closing Date and throughout the Lease Term the Undivided Interest will constitute"recovery property" and"10-year property" within the meaning of Sections 168(c)(1)and 168(c)(2)(C)of the Code (as such Sections are applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)as in eEect on the date hereof.(ii)Assuming that the Owner Participant will be treated as the owner of the Undivided Interest for Federal income tax purposes, (x)on the Closing Date and throughout the Lease Term not less than 90.30391 percent of the property constituting the Undivided Interest will constitute"section 38 property" in the hands of the Owner Participant within the meaning of Section 48(a)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)as in'effect on the date hereof that was placed in service not earlier than May 20, 1986, and (y)on the Closing Date and throughout the Lease Term not less than 90.30391 percent of the Purchase Price will be attributable, in the hands of the Owner Participant, to such property.(iii)Unit 2 will be"placed in service" for the purposes of Section 168 of the Code (as s Section is applicable to property placed in service during 1986 as to which the Owner Particip has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)no later th the Closing Date and each item of property constituting the Undivided Interest will be so placed in service no later than the Closing Date..(iv)None of the property constituting the Undivided Interest and none of the Purchase Price shall be subject to the provisions of Section 168(f)(12)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986).(v)To the best of its knowledge, the Lessee and each Afhliate thereof have provided to the Appraiser all factual information in their possession which is relevant to such Appraiser's conclusions and such information is accurate and complete on the Closing Date.Neither the Lessee nor any AfBliate thereof has any'eason to believe that the Appraiser's conclusions are inaccurate.(vi)Assuming that the Owner Participant will be treated as the owner of the Undivided Interest for Federal income tax purposes, the Owner Participant will be entitied to the ACRS Deductions, the Interest Deductions and the Amortization Deductions.(vii)None of the Trust, the Owner Trustee and the Owner Participant will at any time be required to include any amount in gross income for Federal income tax purposes with respect to the transactions contemplated by the Transaction Documents or the Financing Documents other than the amounts described in clauses (A), (B)and (C)of Section 13(c)(1)(xi)at the respective times referred to therein.(viii)The Owner Trustee and the Owner Participant will be entitled to treat e'ach item income, gain,'deduction, loss and credit with respect to the transactions contemplated by Transaction Documents or the Financing Documents as derived from or allocable to sources within the United States.(ix)The provisions of Section 168(f)(10) of the Code (as such Section is applicable to property placed in service dur'ing 1986 as to which the Owner Participant has made no election under Section 203(a),(1)(B) of the Tax Reform Act of 1986)as in efFect on the'Closing Date (including the amendment contained in Section 1809(a)of the Tax Reform Act)will not apply to the transactions contemplated by the Transaction Documents or the Financing Documents in a manner that could cause a Loss and the Lessee will not take any action pursuant to Section 168(b)(3)or 168(f)(2)(C)of the Code (as such Sections are applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)'that is inconsistent with the Owner Participant's entitlement to the ACRS,Deductions.(x)Neither Unit 2'(other than Common Facilities) nor any item of property constituting the Clause (iii)Property was placed in service for Federal income tax purposes prior to May 20, 1986.(xi)At all times prior to the closing on the Closing Date the Undivided Interest was owned by the Lessee.(xii)The provisions'of Section 168(e)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B) of the Tax Reform Act of 1986)will not apply to the transactions contemplated by the Transaction Documents or the Financing Documents.
4 (xiii)Throughout the Lease Term the Undivided Interest will not constitute-tax-exempt use property" within the meaning of Section 168(j)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(l)(B) of the Tax Reform Act of 1986)as in efFect on the Closing Date (including the amendment made by Section 1802 of the Tax Reform Act of 1986)and the provisions of Section 168(j)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made n0 election under Sec-tion 203(a)(1)(B)of the Tax Reform Act of 1986)as in effect on the Closing Date (including the amendment made by Section 1802 of the Tax Reform Act of 1986)will not apply to the transactions contemplated by the Transaction Documents or the Financing Documents.(xiv)No part of the Undivided Interest will be used predominantly outside the United States within the meaning of Section 168(f)(2)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986).(xv)On the Closing Date, no improvements, modi6cations or additions to the Undivided Interest are required to render the Undivided Interest complete for its intended use by the Lessee.(xvi)On the Closing Date, no part of the cost of the Undivided Interest or the Real Property Interest paid for or incurred by the Lessee or any Afhliate thereof shall not have been reimbursed by the Owner Trustee.(xvii)On the Closing Date the fair market value of the Undivided Interest was$95,500,000, the fair market value of the Clause (iii)Property was$86,240,232.08, the fair market value of the Clause (iv)Property was$9,259,767.92 and the fair market value of the Real Property Iriterest was$49,203.78.(xviii)(A)It is reasonable to expect (x).that the Undivided Interest will be useful to and useable by a Person other than the Lessee or any Person related to the Lessee at the end of the Basic Lease Term and at the end of the Renewal Term and capable of continued leasing or transfer to such a Person at such times and (y)that it will be commercially feasible for the Owner Trustee or the Owner Participant to enter into such a lease or transfer at such times in a transaction pursuant to which the Owner Participant would realize.with respect to the Undivided Interest, the residual value set forth in the report of the Appraiser apart from any amounts such a Person would be required to expend pursuant to the Assignment and Assumpti otherwise in connection with the acquisition, use or possession of the Undivided Interes apart from any amounts that such a Person would be required to expend in connection with the acquisition, use or possession of the Real Property Interest and (B)the Undivided Interest does not constitute, and will not constitute during the Lease Term,"limited use property" within the meaning of Revenue Procedure 76-30;provided, however, that this representation is not a represenation that any residual value will in fact exist at the end of the Basic Lease Term and any Renewal Term.(xix)The provisions of Section 467 of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B) of the Tax Reform Act of 1986)will not apply to the transactions contemplated by the Transaction Documents or the Financing Documents..(xx)Neither the Lessee nor any AIHliate thereof legally or beneBcially or constructively owns or will own (within the meaning of Section 318 of the Code)any capital stock of the L'oan Participant.
(3)Consistent Tax Returns.The Lessee agrees that neither it nor any of its AlBliates will at any time take any action, directly or indirectly, or Gle any returns or other documents inconsist'ent with the assumptions and representations set forth in Sections 13(c)(1)and (P.), and that the Lessee and any such AIHliate will file such returns, maintain such records, take such actions and execute such documents as reasonably requested by the Owner Participant from time to time as may be appropriate to facilitate the realization of such assumptions by the Owner Participant.
The Lessee covenants and agrees to maintain, or cause to be maintained, such other records as may be necessary in orde verify the factual basis For the matters referred to in this Section 13(c).Except for the Lessee returns,'he Lessee shall make the records referred to in the preceding sentences available, or c such records to be made available, for inspection by the Owner Participant or its authorized agents, during normal business hours at the Lessee's once at 303 North Oregon Street, El Paso, Texas 79901, upon request by, and Bve days'rior notice from, the Owner Participant.
The Lessee shall, at its expense, upon request by the Owner Participant, provide to the Owner Participant a copy of such records which shall be certiBed to be a true copy by an aIHdavit attached thereto and executed by an ofBcer of the Lessee.Notwithstanding the preceding sentence, the Owner Participant or its authorized agents shall have the right to make copies and extracts of any such records at the Owner Participant's sole expense.(4)Indemnification
-Lose of Tax Benefit The Lessee shall indemnify the Owner Participant on an After-Tax Basis for.(i)any loss, disallowance, delay in obtaining, or recapture of the Federal income tax beneBts described in Section 13(c)(1)resulting in whole or in'substantial part from any one or more of the following events or things: (A)any representation or warranty of the Lessee in Section 13(c)(2)'or elsewhere in this Participation Agreement, the other Transaction Documents or the Financing Documents'hall prove inaccurate at any time or the Lessee shall breach any of its covenants in Section 13(c)(2)or any of its agreements, covenants, duties, undertakings or other obliga-tions under this Participation Agreement or the other Transaction Documents or the Financing Documents, or (B)any act or failure to act by the Lessee or by any Afhliate, transferee, sublessee, or.assignee of the Lessee or by any user of the Undivided Interest or the Real Property Inter or by any person to whom the Lessee or any ASliate thereof shall sell power or er generated at PVNGS, or by any person having custody or possession of Unit 2 or the Undivided Interest or the Real Property Interest or by any ANPP Participant or by any manufacturer, vendor, supplier, contractor or subcontractor of Unit 2 or any part thereof or by any AfHliate of any of the foregoing or by any subsequent transferee, sublessee or assignee or by any trustee, receiver, liquidator or debtor in possession of any of the foregoing, other than, in the case of the Lessee, the execution and'delivery of one or more of the Transaction Documents or the Financing Documents and acts specifically required or expressly permitted to be performed by the Lessee under the Facility Lease or any Transaction Document or any Financing Document;provided, however, that (w)any act of the Lessee performed to satisfy a general covenant to comply with Applicable Laws or Prudent Utility Practice or to cause the Undivided Interest to be operated and maintained or to carry out obligations under the ANPP Participation Agreement and related agreements, (x)any act that is permitted by implication or because it is not required or prohibited by such documents, (y)any act that implements a general requirement or right on the part of the Lessee in a manner that is not specifically required or expressly permitted under such documents and (z)the making of any Capital Improvement shall each be an act or failure to act for which the Lessee is responsible under this Section 13(c)(4)(i)(B), or (C)the sale or other disposition of Unit 2, the Undivided Interest, the Real Property Interest, any item of property constituting the Undivided Interest or the Real Property Interest or any interest in the Trust or.the Trust Estate upon the exercise by the Owner Participant or the Owner Trustee of its remedies under the Facility Lease upon the occurrence of an Event of Default thereunder, or (D)the bankruptcy, or other proceedings for the protection of debtors, of or involving the Lessee or any transferee, sublessee or assignee of the Lessee or any subsequent transferee, sublessee or assignee or any AHiliate of any of the foregoing (in each case other than the Lessor and the Owner Participant), or any foreclosure on any property of any of the foregoing, or (E)any damage to or destruction, loss of use, loss of generating capacity, theft, nongovernmental taking or requisition or repair of or any addition, improvement, modiflca-tion, alteration, replacement or substitution of or to Unit 2 or the Undivided Interest or the Real Property Interest or any part of any thereof, or (F)any governmental taking or requisition of title, use or otherwise of Unit 2, the Undivided Interest or the Real Property Interest or any part of any thereof if such taking or requisition does not immediately constitute an Event of Loss under the Facility Lease, or (G)any payment by any manufacturer or any other vendor or supplier or contractor or subcontractor with respect to any part of Unit 2 or the Undivided Interest or'he Real R'operty Interest, but in the event of any such payment made to the Owner Participant, any indemnity pursuant to this Section 13(c)(4)(i)(G)shall take into account any economic benefit realized by the Owner Participant from the receipt of such payment without double counting for any economic loss for which such payment provided compensation, or (H)any issuance, defeasance, refinancing, refunding, redemption, purchase, repurchase, cancelation, retirement; reoptimization, substitution, releveraging, modification or remarket-ing of the Notes, or the Bonds, or any other debt securities issued or assumed pursuant to the Transaction Documents or the Financing Documents or any terms or provisions of any thereof or otherwise in connection with the Bnancing, refinancing or any Supplemental Financing of Unit 2, any Capital Improvement, the Undivided Interest or the Real Property'Interest or any part of any thereof or interest therein, including, without limitation, the purchase or deemed purchase by the Lessee or the Loan Participant of any such Notes, Bonds or securities, or (I)the presence of the Loan Participant, or any successor or assign thereof.in the transactions contemplated by the Transaction Documents and the Financing Documents." or-(J)the existence or operation of the ANPP Participation Agreement.
the ANPP Pr'greements or any amendment to any of the foregoing (including without limitatio rights and remedies of the ANPP Participants) or any obligations of the Lessee or restric of rights of the Owner Trustee or the Owner Participant or provisions of any of the Transaction Documents or the Financing Documents (including without limitation the provisions of the Assignment and Assumption) resulting from any of the foregoing, or (K)the existence, provisions, operation or implementation of the License or the License Amendment, or (L)the existence, provisions, operation or implementation of Title USA Company of Arizona Trust No.530, or (M)the existence, operation or implementation of the provisions set forth in Sec-tion 10(b)(3)(xi)hereof, or (N)the existence, provisions, operation or implementation of Section 8(g), 15(iii)or 16(a)(vii)of the Facility Lease, or (0)the existence or asserted existence of a partnership or association between or among the Owner Participant or the Owner Trustee and any other Person or Persons, or (P)the existence, operation or implementation of the provisions of the Lease permitting the Lessee to elect the Renewal Term pursuant to Section 3(a)(iii)and Section 1R of the Facility Lease, and (ii)any inclusion in the Owner Participant's gross income, for Federal income tax purposes, of any amount in respect of any replacement or substitution of, any alteration to or modi6cation in, or any addition or improvement to, any item of property comprising the Undivided Intere~any part thereof or any expenditure made, or property furnished by the Lessee in respect of~item of property or pursuant to the Transaction Documents or Financing Documents (whether or not permitted or required under the Transaction Documents or the Financing Documents)(any such loss, disallowance, delay in obtaining, recapture or inclusion described in Sec-tion 13(c)(4)(i)or Section 13(c)(4)(ii)being referred to as a Loss).(5)Indemnity Payment-After-Tax BaHa (i)In the event of a Loss, the Owner Participant, unless pursuant to Section 13(c)(8)the Owner Participant is not entitled to payment with respect to such Loss, shall notify the Lessee of such Loss and the Lessee shall pay to the Owner Participant on an After-Tax Basis an amount (the Indemnity Payment)which shall be equal to the sum of the aggregate additional Federal income taxes payable by the Owner Participant as a result of such Loss and any interest, penalties or additions to tax payable as a result of such Loss (except to the extent such penalties result from the Owner Participant's failure to Ble returns that are timely and proper insofar as they relate to matters unrelated to the transactions contemplated by the Transaction Documents or the Financing Documents).(ii)If the Owner Participant, as the result of a Loss occurring with respect to any year under circumstances that require the Lessee to indemnify the Owner Participant with respect to such Loss pursuant to Section 13(c)(4)(i), shall be entitled to claim (taking into account the assumptions set forth in Section 13(c)(6))with respect to any subsequent year Federal income tax savings that would not have been realized but for such Loss, the Owner Participant shall promptly pay to the Lessee an amount equal to the sum of such Federal income tax savings plus the amount of any Federal, state or local income tax savings the Owner Participant shall realize (taking into account the'assumptions set forth in Section 13(c)(6))as the result of any pay made pursuant to this sentence;provided, however, that such sum shall not be payable (A)b socli tinie<<s tlie Lessee shall have macle all paynients or i>>demoities theo clue porsu<<nt to the Trans<<ction Documents<<od the Fio;iocing Docoo>cuts
<<nd (B)wliile:ioy Def',iiilt or Event of Default shnll have occurred<<nd be continuing:
provided further.however.that such soio shall oot exceed the excess of the.<<niounts previously paid by the Lessee to the Owner Participant purso<<nt to Section 13(c)(5)(i)with respect to the Loss that gave rise to such tnx savings over the<<niooots previously paid by the Owner Participant to the Lessee pursuant to this Section 13(c)(5)(ii)with respect to such Loss.(iii)If the amount thnt the Lessee would be required to pny pursuant to Sectioo 13(c)(5)(i)with respect to a Loss shall exceed$250,000 and if (A)the Bonds (or, if the Bonds are not then rated.the preferred stock of the Lessee)shall be rated at least"investment grade" by Standard R Poor's Corporation and ivfoody'.s Investors Service, Inc.(or, if neither of such rating organizations shall rate the Bonds (or if applicable, the preferred stock of'he Lessee)at the time,-by any nationally recognized rating organization in the Unites States of America).or (B)the Lessee shall have provided to the Owner Participant a letter of credit or other security with respect to its obligations under this Section 13(c)(5)(iii), in each case adequate in the sole judgment of the Owner Participant.
then the Lessee may elect, notice of which election shnll be given by the Lessee to the Owner Participant not later than 15 days after the Owner Participant shall have requested a payment by the Lessee pursuant to this Section 13(c).to pny to the Owner P<<rticipnnt.
io lieu of the application of Sections 13(c)(5)(i)nnd (it).on<<n After-Tnx Basis.On each succeeding Basic Rent Payment Date during the Basic Lease Term.<<n<<n>ooot which.when ndtled to the Basic Rent pnyable on such Bnsic Rent Payment Date.shall preserve to the Owner Participant the sanie Net Economic Return (after taking into nccoun't nny pnst.present or future tax benefits reasonnbly expected by the Owner Participant to be nvailable to it)that the Owner Participant would have realized if it had not suffered such Loss.The Lessee shall not be permittetl to make the election set f'orth in this Section 13(c)(5)(iii)if the Lease Termination Date or an~~~~Event of Loss shall hnve occurred, a Deemed Loss Event shall hnve been declared or a Default or Event of Default shall have occurred and be continuing.
If the Lease Termination Date shall occur , after the Lessee shall have commenced making payments pursuant to this Section 13(c)(5)(iii).on the Le;ise Tern>ination Date the Lessee shall pay to the Owner Participant on an After-T<<x Basis in a lump sum an amount which shall preserve to the Owner Participnnt the same Net Economic Return (after taking into account previous payments pursuant to this Sec-tion 13(c)(5)(iii)with respect to such Loss)that the Owner Participant would hnve realized if it hnd not suffered such Loss.(6)Determination of Paymen&.Whenever it may be necessary for purposes of this Section 13(c)to determine (a)whether a Loss hns occurred, (b)the amount of taxes resulting f'rom any Loss suffered by the Owner Participant or (c)the amount of any Federal income tax savings referred to in Section 13(c)(5), such determination shall be made on the assumptions that (a)the Federal income taxes of the Owner Participant are payable at the highest marginal statutory tax rates in eff'ect f'r corporate taxpayers for the respective years to which any Loss or Losses relate (the Effective Bate), (b)in computing its Federal income tax liability, the Owner Participant could have currently fully utilized the tax benefits that are the subject of such Loss against taxes payable at the Effective Rate and (c)the Owner Participant can currently fully utilize any tax savings resulting from a Loss against Federal income taxes payable at the Effective Rate (it being understood, in connection with any Loss with'respect to the benefits described in Section 13(c)(1)(xv), that nothing set forth in this sentence shall require the Owner Participant to assume that it can utilize any foreign tax credits that it cannot in fact utilize).For purposes of determining the amount of taxes payable by the Owner Participant upon receipt of any payment required to be made by the Lessee to the Owner Participant pursuant to this Section 13(c)and the nmoont of any tax savings realized by the Owner Participant as a result of any pnyment made by the Owner Participant pursuant to Section 13(c)(5)it shall be assumed that Fetleral.state.locnl and foreign taxes are payable by the Owner Participant at the highest mnrginal statutory rates in effect f'r the relevant period.The determination of the<<mount pnyable to or by the Owner P<<rticipnot porsonnt to this Section 13(c)shall be made in the first instance by the Owner Participant, who'shall furnish the Lessee with a notice setting forth in reasonable detail the computations and methods used in computing'uch amount;and if requested by the Lessee.such determination shall be verified in writing by a firm of nationally recognized independent public accountants selected by the Owner Participant and acceptable to the Lessee.The costs of~verification shall be borne by the Lessee unless an error (to the disadvantage of the Lessee)~percent or more shall be discovered in which case such costs shall be shared equally.Any statements furnished to the Lessee pursuant to this Section 13(c)(6)shall (a)be signed by a Responsible Oificer of the Owner Participant and (b)state in reasonable detail the basis upon which such amount or adjustment has been determined.
The Lessee agrees that it will not have the right to inspect the tax returns, books, records or any other documents of the Owner Participant or any AERliate thereof in order to verify the basis or the accuracy of the calculations so made or of the amounts set forth in any such statement and that the determinations made by the independent accountants in accordance with this Section 13(c)(6)shall be conclusive and binding.(7)Effective Date.An Indemnity Payment shall be payable not later than 10 days after demand by the.Owner Participant, except as provided in Section 13(c)(8).(8)Excluded Events.The Owner.Participant shall be responsible for, and shall not be entitled to any payment in respect of, any Loss occurring primarily (or, in the case of Section 13(c)(8)(ii), solely)as a direct result of one or more of the following events: (i)a failure of the Owner Participant to claim in a proper or timely manner the ACRS Deductions, the Interest Deductions or the Amortization Deductions for the appropriate years (any disclosure or failure to make a disclosure pursuant to Section 6661 of the Code shall not cause a claim to be considered improper), unless (A)the claiming of any such deductions would be inconsistent with any prior-audit adjustment by the IRS with respect to which the Lessee is required to indemnify the Owner Participant pursuant to this Section 13(c)(except to the extent such prior audit adjustment is being contested in accordance with the provisions of Sect'3(c)(9)), (B)the Owner Participant shall have furnished the Lessee with an opini independent tax counsel, selected by the Owner Participant and reasonably satisfactory t Lessee, to the efFect that as a result of a tax law change, Event of Loss, Deemed Loss Event, Termination Event or an act, omission or misrepresentation of the Lessee (or any other Person referred to in Section 13(c)(4)(i)(B))such claim would not be proper pursuant to the standards of ABA Formal Opinion 85-352 or (C)such failure to claim any such deductions for the appropriate year is caused by a failure of the Lessee to take any action or provide the Owner Participant with any information or document that the Lessee is required to take or provide pursuant to the Transaction Documents or the Financing Documents;(ii)the failure of the Owner Participant to have sufhcient Federal taxable income to benefit from the ACRS Deductions, the Interest Deductions or the Amortization Deductions;(iii)any voluntary sale by the Owner Participant or any involuntary sale or other disposition resulting from the bankruptcy of, the foreclosure against, or any similar proceeding against, the Owner Participant or the Owner Tru'stee, of the Undivided Interest;the Trust Estate, or any beneficial interest therein, unless a Default or an Event of Default shall have occurred and be continuing;(iv)any Event of Loss or Deepened Loss Event whereby the Lessee is required under the Facility Lease to pay, and shall have paid in full, Casualty Value or Special Casualty Value, as the case may be, for all the Undivided Interest, or any termination of the Facility Lease whereby the Lessee is required under the Facility Lease to pay, and shall have paid in full, Termination Value or Special Termination Value for all the Undivided Interest, except to the extent the payment made with respect to such Event of Loss or termination did not properly reflect the time of the occurrence of (or the time of the tax efFect resulting From)such Event of Loss or termina' (v)the failure of the OwnerTrustee to be taxed as a conduit entity unless such failure arises as a result in whole or in substantial part from one or more of th'e events or things set forth in Section 13(c)(4);(vi)the inability of the Owner Participant to claim the ACRS Deductions, the Interest Deductions or the Amortization Deductions due to the Owner Participant or any AfBliate of any thereof or any predecessor of any thereof being or becoming an entity subject to the provisions set forth in Section 168(f)(1 1), 168 (j), 465, 469, 501, 593, 851, 856, 871, 881, 1361, 1381 or 1391 of the Code as in efFect on the date hereof, in each case unless such inability or becoming subject results in whole or in substantial part from the transactions contemplated by the Transaction Documents or the Financing Documents;(vii)failure of the transaction to qualify as a"true lease" for Federal income tax purposes, resulting in the Owner Participant not being treated as the.owner of the Undivided Interest for Federal income tax purposes, except if such failure shall result in whole or in substantial part from any one or more of the events or things set forth in Section 13(c)(4);(viii)the Owner Participant or the Owner Trustee being treated as engaged in a partnership or association with any other Person, if such partnership or association arises primarily out of any relationship among thy Owner Participant or the Owner Trustee and such other Person other than a relationship arising as a result in whole or in substantial part of the existence, provisions, operation or implementation of the transaction contemplated by the Transaction Documents, the Financing Documents or the ANPP Project Agreements or as a result in whole or in substaritial part from any one or more of the events or things set forth in Section 13(c)(4);(ix)the taxable year of the Owner Participant or the Owner Trustee during which the Closing Date occurs being shorter than a taxable year containing 12 months unless the existence of such taxable year containing fewer than 12 months shall result from any aspect of the transactions contemplated by the Transaction Documents or the Financing Documents; and (x)the failure of the Owner Participant to ful611 its material obligations to contest a proposed adjustment or adverse determinatio'n as provided in Section 13(c)(9).(9)Contests.(i)If the IRS proposes in writing an adjustment in the Federal income tax liabilityof the Owner Participant, which adjustment if sustained would result in a Loss, the Owner Participant
.>hall notify the Lessee promptly of such adjustment and of all action taken or proposed to be taken by the IRS and the Owner Participant shall for at least 30 days after giving such notice forbear, if such forbearance is permitted by law, payment of any tax (including interest, penalties and additions to tax thereon)asserted to be payable as a result of such proposed adjustment.
The Lessee agrees that the Owner Participant's failure to provide any notice referred to in the preceding sentence shall not afFect the Lessee's obligations under this Section 13(c)unless such failure shall preclude the Lessee from pursuing its rights under this Section 13(c)(9).(ii)If the Lessee requests within 30 days after the Owner Participant's notice pursuant to Section 13(c)(9)(i) that the proposed adjustment be contested, the Owner Participant shall contest the proposed adjustment in good faith at the trial court level upon receipt of an opinion of independent tax counsel of nationally recognized standing selected by the Lessee and reasonably satisfactory to the Owner Participant to the efFect that there exists a basis in law and fact under the standard imposed by ABA Formal Opinion 85-352 for such contest and at each appellate level upon receipt of an opinion of independent tax counsel of nationally recognized standing selected by the Lessee and reasonably satisfactory to the Owner Participant to the efFect that there exists a substantial possibility that an appellate court will reverse or substantially modify the lower court decision;provided, however, that (A)the Owner Participant shall be entitled to pursue or forego any administrative appeals, proceedings, hearings and conferences, shall be required to contest any proposed adjustment beyond the level of administrative proceedings only if timely requested by the Lessee and shall not be required to pursue any appeal to the United States Supreme Court,-51 (B)the Owner Participant shall'determine the court of competent jurisdiction in which to contest the proposed adjustment either before or a'fter payment of the tax asserted to be payable as a result thereof, and (C)the Owner Participant shall keep the Lessee informed as to the progress of any litigation and, if requested by the Lessee, shall consult with" the Lessee's counsel (pro that the conduct of all administrative proceedings and litigation shall nevertheless remain the sole control and discretion of the Owner Participant and its tax counsel).The Owner Participant shall not be required to take any action pursuant to this Section 13(c)(9)(ii)unless (A)the amount of the Indemnity Payment (or equivalent amount payable under Sec-tion 13(c)(5)(iii))arising from all proposed adjustments with respect to a taxable year, plus all indemnities that would arise by reason of the fact that the subject matter of any such adjustments is of a continuing nature, shall be in excess of$250,000;(B)the Lessee shall have acknowledged its liability to the Owner Participant'for an indemnity payment pursuant to this Section 13(c)(9)(ii)as a result of any proposed adjustment if and to the extent the Owner Participant shall not prevail in the.contest of such proposed adjustment and the Lessee shall have agreed to indemnify'the Owner Participant in a manner satisfactory to the Owner Participant for any liability or loss that the Owner Participant may incur as a result of contesting such proposed adjustment;(C)the Lessee shall have agreed to pay, and shall pay, the Owner Participant on demand all reasonable costs'and expenses that the Owner Participant may incur in connection with contesting.
such proposed adjustment (including, without limitation, reasonable legal, accounting and investiga-tory fees, disbursements, penalties, interest and additions to tax);(D)no Event of Default shall have'ccurred and be continuing; and (E)the Owner Participant shall have determined that the action to be taken will not result in any danger of sale, forfeiture or loss of, or the creation of any Lien (except for Liens permitted under the Transaction Documents and except if the Lessee shall have adequately bonded such Lien or otherwise made provision to protect the interests of the Owner Participant in a manner satisfactory to the Owner Participant) on the Undivided Interest, the Real Property Interest, Unit 2 or any part thereof or interest therein.The Owner Participant shall also not be required to contest any proposed adjustment if the subject matter thereof shall be of a continuing nature and shall have previously been decided p'ursuant to the c provisions of this Section 13(c)(9), unless there shall have been a change.in the law (incl without limitation, amendments to statutes or.regulations, administrative rulings and court decisions) after such previous contest shall have been so decided, and the Owner Participant shall have received an opinion of independent tax counsel selected as provided in this Sec-tion 13(c)(9)(ii)and furnished at the Lessee's sole expense to the efFect that the.prior authorities are no longer determinative of the issue and that under such new law there exists a basis in law and fact under the standard imposed by ABA Formal Opinion 85-352 to contest such proposed adjustment.(iii)If the Owner Participant shall elect to contest a proposed adjustment by paying the tax claimed (including such other amounts payable as interest, penalties or additions to tax)and seeking a refund, and if the proposed adjustment would be a Loss.with respect to which the Lessee could.be required to indemnify the Owner Participant pursuant to this Section 13(c), then the Lessee shall advance to the Owner Participant on an interest-free basis and with no additional net after-tax cost to the Owner Participant the aggregate amount of such taxes, interest, penalties and additions to tax that the Owner Participant shall have elected to pay.If the Owner Participant subsequently receives a refund, in whole or in part, of such taxes, interest, penalties or additions to tax (or if the Owner Participant would have received such a refund but for the fact that funds advanced by the Lessee were applied in payment of a tax liability of the Owner Participant for which the Lessee is not responsible under this Section 13(c)), or if the Lo'ss is not one for which the Lessee is required to make an Indemnity Payment (or payment pursuant to Sec-tion 13(c)(5)(iii)), the Owner Participant shall promptly pay to the Lessee the amount of such refunded or credited (or refundable or creditable) taxes, money advanced, interest, penalties or additions to tax plus the amount of any related interest received (or receivable) by the Ow Participant from the taxing authority; provided, however, that the Owner Participant may the amount of such refunded taxes, interest, penalties or additions to tax against any amount due and owing by the Lessee to the Owner Participant pursuant to this Section 13(c): provided further, however, that the Owner Participant shall not be required to make any payment to the Lessee pursuant to this Section 13(c)(9)(iii)to the extent such payment (minus any such interest attributable thereto not previously paid by the Lessee)would exceed the amount previously paid by the Lessee to the Owner Participant with respect to the Loss giving rise to such refund.(iv)Notwithstanding anything to the contrary contained in this Section 13(c)(9), the Owner Participant may at any time decline to take any action or any further action with respect to a proposed adjustment that it would otherwise be required to take pursuant to this Section 13(c)(9)or may settle any contest without the consent of the Lessee;provided, however, that if the Lessee shall have properly requested such action or contest pursuant to Section 13(c)(9)(ii)and shall have duly complied with all the terms of this Section 13(c)(9), the Owner Participant shall notify the Lessee that the Owner Participant waives its right to any Indemnity Payment by the Lessee that would otherwise be payable by the Lessee pursuant to this Section 13(c)in respect of such adjustment, including any indemnities arising solely from such adjustment in subsequent years or which would arise by reason of the fact that the subject matter of such adjustment is of a continuing nature.In such event, the Owner Participant shall, within 30 days of such notice, reimburse the Lessee for the amount of all taxes, interest, penalties and additions to tax previously advanced by the Lessee to the Owner Participant pursuant to Section 13(c)(9)(iii).(v)If the Lessee shall have appropriately requested the Owner Participant to contest any proposed adjustment as above provided and shall have duly complied with all the terms of this Section 13(c)(9), the fact of the Lessee's liability for indemniBcation to the extent required pursuant to this Section 13(c)shall become Bxed upon a Final Determination of the liability of the Owner Participant for the tax and any interest, penalties and additions to tax asserted to be payable as a result of such proposed adjustment.
A"Final Determination" with respect to a Loss shall mean (A)a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree or other order has become Bnal (i.e., when all allowable appeals have been exhausted by either party to the action to the extent required by this Section 13(c)(9))or, in any case where judicial review shall at the time be unavailable by reason of the proposed adjustment involving a decrease in a net operating loss carryforward, a decision, judgment, decree or other order of an administrative ofBcial or agency of competent jurisdiction, which has become Bnal (i.e., all administrative appeals have been exhausted by either party to the extent required by this Section 13(c)(9)), (8)a closing agreement entered into under Section 7121 of the Code or any other settlement agreement entered into in connection with an administrative or judicial proceeding, or (C)the expiration of the time for instituting a claim for refund, or if such a claim was Bled, the expiration of the time for instituting suit with respect thereto.Notwithstanding anything in this Section 13(c)(9)to the contrary, the Owner Participant shall not be required to make any payments to the Lessee under this Section 13(c)(9)while there shall be an amount due and owing by the Lessee to the Owner Participant under any of the Transaction Documents or the Financing Documents, or if and for so long as an Event of Default shall have occurred and be continuing.
The amount payable to the Owner Participant pursuant to this Section 13(c)(9)shall be paid upon receipt by the Lessee of a written demand therefor from the Owner Participant accompanied by a written statement describing in detail such Loss and the computation of the amount so payable.(vi)The provisions of this Section 13(c)(9)shall apply mutatis mutandis with respect to claims for interest, penalties and additions to tax referred to in Section 13(c)(iv)of the Facility Lease unless the Owner Participant shall have received an opinion from independent tax counsel selected by it to the efFect that it is more likely than not that such interest, penalties or additions to tax are payable.
(10)Adjustments.
The assumed Federal income tax beneflts set forth in Section 13(c)(1)shall be adjusted to reflect any adjustments provided for in Section 3(d)of the Facility Lease.In the event any payments shall be due to the Owner Participant under this Section 13(c), the schedules of Casualty Values, Termination Values, Enhanced Casualty Values, Special Casualty Values and Sp Termination Values shall be appropriately adjusted.If an event giving rise to the payment amount determined by reference to a schedule of Casualty Values, Enhanced Casualty Values.Termination Values, Special Casualty Values or Special Termination Values shall occur and the date as of which the Owner Participant shall be aEected shall be earlier than the date taken into account in computing such schedule, such Values shall be appropriately increased based otherwise on the same assumptions previously used by the Owner Participant in calculating such schedule.(ll)Agliated Group.For purposes of this Section 13(c), the term"Owner Participant" shall include any member of an afBliated group of corporations of which the Owner Participant is, or may become, a member if consolidated or combined returns are or shall be Bled for such afBliated group for Federal, state or local income tax purposes.(12)Payments.All payments to be made to the Owner Participant or the Lessee pursuant to this Section 13(c)shall be made in immediately available funds to such bank and/or account in the continental United States for the account of the Owner Participant or the Lessee as from time to time the Owner Participant shall have directed the Lessee or the Lessee shall have directed the Owner Participant, as the case may be, in writing.If the date on which any payment to be made pursuant to this Section 13(c)shall not be a Business Day, such payment shall be made on the next succeeding Business Day.(13)Interest.Interest at the Penalty Rate shall be payable on any amount not paid when due under this Section 13(c)until such amount shall be paid.SECTION 14.Transaction Expenses.(a)Transaction Expenses.Subject to the provisions of Section 14(c), with funds provided b Owner Participant, the Owner Trustee hereby agrees that it will pay whe'n due the following cost exp'enses (Transaction Expenses): (i)the reasonable legal fees and disbursements of Mudge Rose Guthrie Alexander h Ferdon (as counsel for the Loan Participant), Cravath, Swaine h Moore, Csaplar R Bok, Shaw, Pittman, Potts R Trowbridge, Meyer, Hendricks, Victor, Osborn R Maledon, Rodey, Dickason, Sloan, Akin R Robb, Baker R Botts, Sullivan R Cromwell and Willkie Farr R Gallagher (as counsel for the Indenture Trustee), for their services rendered in connection with the execution and delivery of this Participation Agreement and the other Transaction Documents and Financing Documents and all fees, expenses and disbursements incurred by any of such law flrms, the Owner Participant or the Loan Participant in connection with such transactions;(ii)the initial (but not the ongoing)fees and expenses of the Owner Trustee, the Paying Agent and the Indenture Trustee;(iii)all stenographic, printing, reproduction, and other reasonable out-of-pocket expenses (other than investment banking or brokerage fees)incurred in connection with the execution and delivery of this Participation Agreement and the other Transaction Documents and Financing Documents and all other agreements, documents or instruments prepared in connection there-with (including all computer analysis and travel related costs);(iv)the fees of the appraisers for services rendered as contemplated by Section ll(a)(15)and the fees of the consultants for services rendered as contemplated by Section ll(a)(19);(v)all costs of issue of the Initial Series Bonds, including, without limitation, the costs of preparing the Financing Documents, flling fees relating to the Registration Statement and e fees, expenses and disbursements of Willkie Farr R Gallagher, as counsel for the Collateral Trustee, Mudge Rose Guthrie Alexander R Ferdon.as counsel for the Loan Participant, XVillkie Farr R Gallagher, as counsel for the underwriters of the Bonds, the initial fees of the Collateral Trust Trustee and its out-of-pocket expenses through the Closing Date.rating agency fees and the fees and commissions of the underwriters of the Bonds;and (vi)the fees and out-of-pocket expenses of Babcock R Brown Financial Corporation and Systems Marketing, Inc.in connection with the placement of the beneficial interest in the Trust.Subject to the provisions of Section 14(c)below, funds for the payment of Transaction Expenses will be provided by the Owner Participant to the Owner Trustee and the Owner Trustee will promptly disburse such funds.(b)Post-Closing Expenses and Letter of Credit Costs.The Lessee will pay, as Supplemental Rent, (i)the ongoing fees, expenses, disbursements and costs (including legal and other professional fees and expenses)of or incurred by the Owner Trustee, the Indenture Trustee, the Paying Agent and the Collateral Trust Trustee, including in connection with the issue, sale and purchase of Notes and Bonds after the Closing Date, (ii)all fees, expenses, disbursements and costs (including legal and other professional fees and expenses)incurred by the Loan Participant, the Ow'ner Participant, the Owner Trustee, the Indenture Trustee, the Paying Agent and the Collateral Trust Trustee in connection with (a)any Default, Event of Default, Indenture Default or Indenture Event of Default, (b)the entering into or giving or withholding of any amendment, modification, supplement, waiver or consent with respect to any Tnnsaction Document or Financing Document, (c)any Event of Loss or Deemed Loss Event, (d)any transfer of all or any part of the right, title and interest of the Indenture Trustee in, to and under the Transaction Documents, (e)any transfer of all or any part of the Trust Estate, (f)any ,,transfer contemplated by Section 7(b)(4)and (g)any releveraging, refunding or reoptimization
,,referred to in Section 2(c), 2(d)or 2(e), and (iii)all costs and expenses with respect to the Letter of Credit and the Letter of Credit Agreement.(c)Lessee's Obligation.
Notwithstanding Section 14(a), iri the event the transactions
'contem-lated by this Participation Agreement shall not be consummated, the Lessee shall pay or cause to be aid, and shall indemnify and hold harmless the Loan Participant, the Indenture Trustee, the Owner Trustee and the Owner Participant in respect of, all Transaction Expenses, unless such failure to consummate shall result solely from the Owner Participant's default in making its Investment.
I"",SECTION 15.Owner Participant's Transfers.(a)Transfer After the Closing Date, except as contemplated by the Facility Lease, the Owner Participant shall not assign, convey or otherwise transfer all or any part of (including, u:ithout limitation, an undivided interest in)its right, title or interest in and to this Participation Agreement, any of the other Transaction Documents or the Trust Estate (except its right to receive Excepted Payments)to any Person (a Transferee) except on the following conditions: (i)the Transferee shall enter into an agreement or agreements whereby such Transferee confirms that (1)it shall be bound by the terms of this Participation Agreement and each other Transaction Document, to the extent of the interest transferred, as if it had been originally named as the Owner Participant hereunder and thereunder and (2)if such Tnnsferee is a public utility company, it shall have waived its right to claim Special Casualty Value upon the occurrence of a Deemed Loss Event of the type specified in clause (1)of the definition thereof;(ii)the Transferee shall be a.financial institution, a corporation or a partnership; and (iii)such transfer shall not violate the Securities Act or any provision of, or create a relationship which would be in violation of, any Applicable Law or agreement to which the transferring Owner Participant or the Transferee is a party or by which its property is bound.Upon any such transfer, the transferring Owner Participant shall be released from its obligations under is Participation Agreement and the other Transaction Documents to the extent of the interest 55-transferred.
An agreement to transfer shall not in and of itself constitute a transfer for purposes of this Section 15.(b)Procedure.
If the Owner Participant transfers all or any part of its interest hereun pursuant to this Section 15, it shall give written notice thereof to the Lessee, the Owner Trustee Indenture Trustee and the Loan Participant, specifying the name and address for notices to Transferee, such other information and evidence as shall be necessary to establish compliance with this Section 15 and the extent of the interest transferred to such Transferee.
If, as a result of any such transfer, the original"Owner Participant" is not to continue to receive all payments to be made by the Indenture Trustee to the"Owner Participant" under the Indenture, the original"Owner Participant" shall from time to time, by notice to the Indenture Trustee, with copies to the.Lessee, the Owner Trustee and the Collateral Trust Trustee, designate the manner in which any such payments to such"Owner Participant" are to be allocated, and the Indenture Trustee and the Lessee shall be entitled to rely on such notice for all purposes.This Section 15 shall not apply to the Special Transfer.This Section 15 is for the benefit of the Lessee, the Owner Trustee and the Owner Participant and may not be enforced by any other party hereto.SECTION 16.Brokerage and Finders'ees and Commissions.
Except to the extent of amounts payable by the Owner Participant pursuant to Section 14, the'essee will indemnify and hold harmless the Loan Participant, the Indenture Trustee, the Owner Trustee and the Owner Participant in respect of any commissions, fees, judgments or other expenses of any nature and kind which any of them may become liable to pay by reason of any claims by or on behalf of brokers, Bnders, agents, advisors or investment bankers in connection with the transactions contemplated by this Participation Agreement, any other Transaction Document or any Financing Document, or any litigation or similar proceeding arising from any such claim, other than those claims arising out of written undertakings of the party claiming indemnification under this Section 16 or any Affiliate or shareholder (or AlHliate of such shareholder) of such Person with any such broker, finder, agent, advisor or investment banker.SECTION 17.Survival of Representations and Warranties; Binding EfFect.(a)Survival.All.indemnities, representations and warranties contained in this Participation Agreement, in any other Transaction Document, in any Financing Document and in any agreement, document or certificate delivered pursuant hereto or thereto or in connection herewith or therewith, shall survive, and shall continue in eEect following, the execution and delivery of this Participation Agreement, the making of the investments and the loan referred to herein, any disposition of any interest in the Undivided Interest, Unit 2 or any other property referred to in this Participation Agreement and the expiration or other termination of any of the Transaction Documents or Financing Documents and shall be and continue in efFect nohoithstanding (i)any investigation made by the Owner Participant or the Loan Participant or (ii)the fact that any of the Indenture Trustee, the Owner Trustee, the Loan Participant or the Owner Participant may waive compliance with any of the other terms, provisions or conditions of any of the Transaction Documents or Financing Documents.
The obligations of the Lessee under Sections 10(b)(1)(vi), 10(b)(1)(vii), 10(b)(2), 10(b)(3)(vii), 10 (b)(3)(x), 10(b)(3)(xi), 10(b)(3)(xiv), 10(b)(3)(xv), 10(b)(3)(xvi), 10 (b)(3)(xvii), 13, 14, 16 and 19(f)shall survive the expiration or other termination of this Participation Agreement or any other Transaction Document or Financing Document.The modification by law of any statute of limitations or the waiver or extension of any 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.(b)Binding Egect.All agreements, representations and warranties in this Participation Agree-ment, the other Transaction Documents and the Financing Documents and in any agreement, document or certificate delivered concurrently with the execution of this Participation Agreement or from time to time thereafter, shall bind the party making the same and its successors and permi 56-assigns and shall inure to the benefit of each party for whom made and their respective successors and permitted assigns, and, to the extent.provided in the next sentence, each Indemnitee and its successors and assigns.The obligations of the Lessee under Sections 10(b)(3)(xi)and 13 and under Section 20 of~~~e Facility Lease are expressly made for the benefit of, and shall be enforceable by, any Indemnitee, parately or together, without declaring the Facility Lease to be in default and notwithstanding any assignment by the Lessor of the 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 Participation Agreement, or in this Participation Agreement or any Transaction Document or any Financing Document.All payments required to be made pursuant to Sections 10(b)(3)(xi)and 13 shall be made directly to, or as otherwise requested by, the Indemnitee
.entitled thereto upon written demand by such Indemnitee.
Except to the extent permitted by Sections 10(b)(3)(ii)and (iii), the Lessee shall not assign any of its rights or obligations hereunder without the prior written consent of the Owner Participant and the Owner Trustee.Except as otherwise indicated, all references herein to any party to this Participation Agreement and the other Transaction Documents shall include the permitted successors and assigns of such party.SECTION 18.Notices.All communications, notices and consents provided for herein shall be in writing, including telex, telecopy or other wire transmission containing a request for assurance of receipt in a manner typical with respect to communications of that type, or mailed by registered or certified mail, and shall be addressed (i)if to the Owner Participant, at Greenwich OfHce Park I, Greenwich, Connecticut 06836, Attention:
Leasing and Investment Services;(ii)if to the Loan Participant, at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, Attention:
President;(iii)if to FNB or the , Owner Trustee, at 100 Federal Street, Boston, Massachusetts 02110, Attention:
Corporate Trust, Division (TWX No.940581);(iv) if to the Indenture Trustee, at First City Financial Center, 1301.Fannin Street, 21st Floor, Houston;Texas 77002,.Attention:
Corporate Trust Department; and (v)if to the Lessee, at 303 North Oregon Street, El Paso, Texas 79901, Attention:
Secretary; or at such other dress as any party hereto may from time to time designate by notice duly given in accordance with he provisions of this Section'to the other parties hereto.All such communications, notices and consents given in the manner provided above shall be eiFective on the date of receipt of such"" communication or notice."'ECTION 19.Miscellaneous.(a)Execution.
This Participation Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Although this Participation Agreement is dated as of the date first above written for convenience, the actual dates of execution hereof by the parties hereto are respectively the dates set forth under the signatures hereto, and this Participation Agreement shall be efFective on the latest of such dates.(b)Intention of the Choner Trustee and the Oun~Participant.
Each of the Owner Trustee and the Owner Participant intends to exercise its rights and carry out its obligations hereunder and under the other Transaction Documents solely with a view to furthering its own best interests and does not have, and does not expect to have, any form of joint profit motive with any other Person.The Owner Trustee and the Owner Participant shall not be required to share any Rent to which they are entitled under the Facility Lease, or the residual value of the Undivided Interest or the Real Property Interest, with any other Person.The Owner Trustee and the Owner Participant are not under the control of nor shall they be deemed to be under the control of any other Person having any interest in Unit 2, and shall not be the agent of or have a right or power to bind any such Person (other than the Owner Participant as regards the Owner Trustee)without its express written consent.The Owner Trustee (on behalf of the wner Participant) and the Owner Participant (on its own behalf)have and at all times shall retain the right separately to take or dispose of the Undivided Interest and the Real Property Interest.subject only to the rights of the Lessee and the Loan Participant under the Transaction Documents.
The Owner Trustee and the Owner Participant accordingly do not intend to create any form of partnership or joint venture with any other Person by virtue of the transactions contemplated hereby or by anv the Transaction Documents.
In the event that it is determined.
contrary to the intent of the 0 Trustee and the Owner Participant, that, for purposes of the Code or any other income tax law, a f of partnership or joint venture exists between the Owner Trustee or the Owner Participant and any'ther Person, the Owner Trustee and the Owner Participant hereby elect to the extent permitted by law (i)not to have the partnership provisions of the Code or such other income tax law apply to any of the transactions contemplated'ereby or by any of the Transaction Documents and (ii)to be treated solely as owning the Undivided Interest and the Real Property Interest.(c)Governing Latv.This Participation Agreement 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.(d)Amendments, Supplements, etc.Neither this Participation Agreement nor any of the terms hereof may be amended, supplemented, waived or modiBed orally, but only by an instrument in writing signed by the party against which enforcement of such change is sought.(e)Headings.The headings of the sections and paragraphs of this Participation Agreement have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof.(f)Bankruptcy of Owner Participant.
If (a)the Owner Participant or the Owner Trustee becomes a debtor subject to the reorganization provisions of the Bankruptcy Code, or any successor provision, (b)pursuant to such reorganization provisions the Owner Participant or the Owner Trustee is required, by reason of the Owner Participant being held to have recourse liability directly or indirectly to the Holder of any Note or the Indenture Trustee, to make payment on account of any amount payable as principal or interest on such Note and (c)such Holder or the Indenture Trus actually receives any Excess Amount which reflects any payment by the Owner Participant on acc of clause (b)of this Section,'then such Holder or the Indenture Trustee, as the case may be, promptly refund to the Owner Participant such Excess Amount.For purposes of this Section,"Excess Amount" means the amount by which such payment exceeds the amount which would have been received on or prior to the date of'such payment by such Holder or the Indenture Trustee if the Owner Participant or the Owner Trustee had not become subject to the recourse liability referred to in clause (b)of this Section.Nothing contained in this Section shall prevent such Holder or the Indenture Trustee from enforcing any personal recourse obligation (and retaining the proceeds thereof)of the Owner Participant expressly provided for-under this Participation Agreement.(g)Entire Agreement.
This Participation Agreement and Exhibits, the other Transaction Docu-ments and the Financing Documents supersede all prior agreements, written or oral, between or among any of the parties hereto relating to the transactions contemplated hereby and thereby and each of the parties hereto represents and warrants to the others that this Participation Agreement and the other Transaction Documents and the Financing Documents constitute the entire agreement among the parties relating to the transactions contemplated hereby and thereby.(h)Publicity.
Each party hereto agrees that it will not issue or release for external publication any article or advertising or publicity matter relating to the transactions contemplated hereby or any s'imilar transaction and mentioning or implying the identity of the Owner Participant without the prior written consent of the Owner Participant; provided, however, that the Owner Participant agrees that such written consent shall not be required if such issue or release is required by Applicable Law.
IN WITNESS WHEREOF.the parties hereto have each caused this Participation Agreement to be duly executed by their respective ofRcers thereunto duly authorized as of the dates set forth below.CHRYSLER FINANCIAL CORPORATION'y:
Date: P.-tt.-s~EL PASO FUNDING CORPORATION By: Date: Vice President j Q r EL PASO ELECTRIC COMPANY By: Vice President Date: THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee By: ssistan Date: FIRST CITY NATIONAL BANK OF HOUSTON, in its individual capacity and as Indentur Trustee By: Date:
, 0 Schedule 1 EL PASO ELECTRIC CO~IPANY PALO VERDE.NUCLEAR GENERATING STATION UNIT 2 NOTICE OF CLOSING Pursuant to Section 5(a)of the Participation Agreement.
dated as of December 1.1986 (the Participation Agreement), among Chrysler Financial Corporation.
as Owner Participant.
El Paso Funding Corporation, as Loan Participant, The First National Bank of Boston.as Owner Trustee.First City National Bank of Houston, as Indenture Trustee, and El Paso Electric Company (El Paso).El Paso hereby gives notice of a Closing to occur at 10:00 am.on December.1986.The Closing will be held at the oSces of (i)Purchase Price is the amount specified in Schedule 2 as the"Purchase Price.-(ii)Real Estate Investment is the amount set forth in Schedule 2 as the"Real Estate Investment.(iii)Based upon information supplied to El Paso.Estiinated Transaction Expenses are<<n aggregate of 8.Instructions with respect to payment of such Estiinated Transaction Expenses are attached hereto.(iv)Payment of the Purchase Price and the acquisition price of the Real Property Interest shall be made as provided in the Participation Agreement.
Capitalized terms used herein and not otherwise specifically defined herein shall have the meanings set forth in Appendix A to the Participation Agreement.
IN WITNESS WHEREOF, El Paso has executed this Notice of Closing this day of Deceniber.
1986.EL PASO ELECTRIC COMPANY By: Vice President
 
Schedule 2 PRICING ASSUMPTIONS Basic Rent.Casualty Value.Special Casualty Value, Enhanced Casualty Value.Termination Value ,md Special Termination Value.as to be set forth in the Facility Lease as it will be originally executed.will be computed on the basis of the following pricing assumptions:
Closing Date.Loan Percentage.
Investment Percentage Lessor Note Rate Basic Lease Term (years)..Initial Series Note Amortization Schedule..Interim Rent.Rent Structure First Basic Rent Payment..Owner Participant's Tax Rate Transaction Expenses (funded by the Owner Participant and expressed as a%of Purchase Price).Purchase Price Real Estate Irivestment December 18, 1986 80.00%20.00%Notes due 1992=8.20%;Notes due 1997=9.20%;and Notes due 2010=10.50%26.79 years See Schedule 2A attached hereto Zero(0.0)(i.e., None)Semi-annual payments in advance July 2, 1987 46%for year ending December 1, 1986;39.950685%
for year ending December 31, 1987;and 34%thereafter 2.5%$95,500,000
$49,203.78 I-4'I Schecule 2A S'I'Xl'I'.Xll'.)
'I')I'.()AX I: II.KSI'.I'I'.Bhl A'Vl'.BA(:I'.
I.II'I'.I4.1(Ps4l Yl'.Alibi DISVI i')'I'.I)IX Vl'.B(:I'.XTA(:I'S
()I'()TAI..QiSI".I
(:0!i'I')ale
(/2/1987 I/O/198S I/2/1988 I/2/1989 7/2/1989 I/2/1990 7/2/1990 I/2/1991 7/2/1991 I/2/1992 7/2/1992 I/2/1993 7/2/1993 I/2/1994 7/2/1994 I/2/1995 7/2/'1995 I/2/1996 7/2/1996 I/2/1997 7/2/1997 I/2/1998 7/2/1998 I/2/1999 7/'2/1999 I/2/2000 7/2/2000 I/2/2OOI 7/2/2001 I/2/2OO2 7/2/2002 I/2/2003 7/2/2003 I/2/2OO4 7/')/')004 I/2/2005 7/2/2005 I/2/2006 7/2/2006 I/2/2007 7/2/2007 I/2/2008 7/2/2008 I/2/2009 7/2/2009 I/2/2010 7/2/2010 I/2/2011 7/2/2011 I/')/"012 7/2/2012 I/2/2013 Totals l)ehl Service 4.3344197 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.711')7 (9 4.7112779 4.7112779 4.7112779 4.7112(79 4.711')779 4.5546301 4.0121715 4.1292456'3.9587159 4.0869729 3.9042132 4.0417861'3.8459111 3.9934419 3.7835352 3.9417198 3.7168008 3.8863836 4.0331598 4.7112779 4.7112779 4.7112779 4.7112779 4.7112779 4.71127?9 4.7112779 4.7112779 4.7112779 1.0775732 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 207.3502940 Peineip: I 0.0000000 O.G896513 0.7179270 0.7473620 0.7780038 O.SO99O2O 0.8431080 0.8776754 0.9136601 0.9511202 0.9901161 1.0307109 1.0781235 I.I')77172 1.1795922 1.2338535 1.2906107 1.3499788 1.4120778 1.4770334 1.5449770 1.6160459 1.7008883 1.63353 (2 1.1768393 1.3556975 1.2563419 1.4505568 1.3439513 1.5520817 1.4376910 1.6607006 1.5379807 1.7769092 1.6452780 1.9012379 2.1478291 2.9387081 3.0929903 3.2553723 3.4262794 3.6061590 3.7954824 3.9947452 4.2044693 4.4252040 1.0238225 0.0000000 0.0000000-0.0000000 0.0000000 0.0000000 Inlereil 4.3344197 4.0216266 3.9933509 3.96391o9 3.9332740 3.9013759 3.8681699 3.8336024 3.7976178 3.7601577 3.7211618 3.680'5670 3.6331543 3.5835606 3.5316856 3.4774244 3.4206671 3.3612990 3.2992OOO 3.2342444 3.1663009 3.0952319 3.0103895 2.921O929 2.8353322 2.7735481 2.7023740 2.6364161 2.5602618 2 4897044 2.4082201 2.3327413 2.2455545 2.1648106 2.0715228 1.9851457 1.8853307 1.7725697 1.6182875 1.4559055 1.2849985 1.1051188 0.9157955 0.7165327 0.5068085 0.2860739 0.0537507'.0000000 0.0000000 0.0000000 0.0000000 0.0000000 127.3502940 80.0000000 Balance 80.0000000 79.3103487 78.5924217 77.S450597 77.0670559 76.2571539 75.4140459 74.536370.5 7'3.6227104 ii').6715902 71.6814741 70.6507633 69.572639 I 68.4449225 67.2653303 66.0314768 64.7408661 63.3908873 G1.97S8094 G0.5017760 58.9567990 57.3407531 55.G398648
.54.0063276 5''488'3 51.4737908 50.2174489 48.7668921
'.4229407 45.8708590 44.4331680 42.7724674 41.2344867 39.4575775 37.8122)99'5.9110616 33.7632325 30.8245244 27.7315341 24.4761617 21.0498824 17.4437234 13.6482410 9.6534958 5.4490264 1.0238225 0.0000000 0.0000000 0.0000000 0.0000000'.0000000 0.0000000 Bale 8.20000 8.20000 8.20000 8.20000 S.20000 8.20000 8.20000 8.70000 8,20000 8.20000 9.20000 9.20000 9.20000 9.20000 9.20000 9.20000 9.20000 9.20000 9.20000 9.20000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 10.50000 l)ehl Bale 8.20000 9.20000 10.50000 II'LIC I el'nl.I'vel apl'.nan l.il'c.l)nl lllnl.91530'8470 7.93489 5.75410 18.05005 8.32330 Weighted Average Deb Blended Debt Rate (IR llalnrily 5.00000 10.00000 23.00000 t Rate=10.34275 R)=10.26217 (nina la lice~Pi~i: I 8.3185a59 12.724 G751 58.9567990
 
Schedule 3 RECORDATIONS AND FILINGS~~art I.Recordations in Respect of the Sale of, and the Owner Trustee's Title to, the Undivided Interest and the Real Property Interest.A.County Recorder, Maricopa County, Arizona: (i)Deed;(ii)Bill of Sale;(iii)Assignment and Assumption;(iv)Facility Lease;(v)Indenture;(vi)Mortgage Releases;and (vii)Financing Statement Change Forms UCC-2.B.Secretary of State, Arizona: (i)Financing Statement Change Forms UCC-2.Part II.UCC-1 Financing Statements.
A.County Recorder, Maricopa County, Arizona: (i)A Bnancing statement on form UCC-1 naming El Paso, as lessee, the Owner Trustee, as lessor, and the Indenture Trustee, as assignee of the Owner Trustee, in respect of the Facility Lease;(ii)A financing statement on form UCC-1 naming the Owner Trustee, as debtor, and the Indenture Trustee, as secured party, in respect of the Lease Indenture Estate;and (iii)A Bnancing statement on form UCC-1 naming the Loan Participant, as debtor, and the Collateral Trust Trustee, as secured party, in respect of the Pledged Property (as defined in the Collateral Trust Indenture).
B.Secretary of State, Arizona: (i)Two Bnancing statements on form UCC-1, each naming El Paso, as lessee, the Owner Trustee, as lessor, and the Indenture Trustee, as assignee of the Owner Trustee, in respect of the rents under the Facility Lease;(ii)A Bnancing statement on form UCC-1 naming the Owner Trustee, as debtor, and the Indenture Trustee, as secured party, in respect of the Lease Indenture Estate;(iii)A Bnancing statement on form UCC-1 naming the Loan Participant, as debtor, and the Collateral Trust Trustee, as secured party, in respect of the Pledged Property (as defined in the Collateral Trust Indenture);
and C.Secretary of State, Texas: (i)A financing statement on form UCC-1 naming El Paso, as lessee, the Owner Trustee, as lessor, in respect of the Facility Lease;(ii)A financing statement on form UCC-1 naming the Indenture Trustee, as assignee of the Owner Trustee, in respect of the Facility Lease: and
<iii)A fiiiancing statement on form UCC-I naniiiig the Owner Trustee.as debtor.and tlie lntle>>ture Trustee.as secured party.in respect of the Lease indenture Estate.D, WIassachusetts/state and local A financing statement on form UCC-I naming the Owner Trustee.;is debtor.an<indenture Trustee.as secured party.in resp'ect to the Lease Intlenture Estate.Part III, Utility Filings-Twas Secretary of State Filing of the Facility Leases as protective Alings and the Wlortgage Releases, Exhibit A to Participation Agreeinent BILL OF SALE AND ASSIGNMENT dated as of from to EL PASO ELECTRIC COMPANY BILL OF SALE AND ASSIGNMENT, dated as of.from y a corporation (the Owner pant), to EL PASO ELECTRIC COMPANY.a Texas corporation (El Paso).W IT iN ES S ETH: Paltlci-i WHEREAS, pursuant to Section 7(b)(4)of the Participation Agreement dated as of December 1.1986 among[a predecessor of]the Owner Participant, El Paso Funding Corporation.
as Loan Participant, The First National Bank of Boston, in its individual capacity and as Owner Trustee, First City National Bank of Houston, in its individual capacity and as Indenture Trustee and El Paso, as Lessee (the Participation Agreement), the Owner Participant desires to sell and El Paso desires to buy the Assigned Property (as hereinafter defined);NOW, THEREFORE, in consideration of the premises and of other good and valuable considera-tion, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SEcrloN 1.01.For purposes hereof, capitalized terms used herein shall have the meanings assigned to such terms in the Participation Agreement.
ARTICLE II AssIGNMENT OF TRUsT EsTATE SEcrIoN 2.01.Assignment.
Owner Participant does hereby grant, bargain, convey, sell, as transfer and set over to El Paso, on an as is, where is basis, free and clear of Owner Participant's but otherwise without recourse, representation or warranty, express or implied, of any nai whatsoever, all Owner Participant's right, title and interest in, to and under the Trust Estate except Owner Participant's right to receive Excepted Payments (the Assigned Property)[, subject to Owner Participant's security interest in, and general lien upon, all the right, title and interest of El Paso, as successor Owner Participant, in, to and under the Assigned Property'].
The disclaimer of representa-tions and warranties set forth in the second sentence of Section 6(b)of the Facility Lease is hereby incorporated herein as fully as if set forth at this place.[Notwithstanding the foregoing transfer and assignment of the Assigned Property to El Paso, the obligation of El Paso to make the payments provided in Section[insert applicable section: 9(c), 9(d), 13(c)or 16]of the Facility Lease[Section 10(b)(3)(xvii)of the Participation Agreement)(together with interest thereon in accordance with Section 3(b)of the Facility Lease)(or to make other payments in a like amount)shall not be deemed to be canceled or discharged but shall continue until all such amounts are so received by'Owner Participant pursuant to the provisions of Section 7(b)(4)of the Participation Agreement.']
[The Owner Participant hereby acknowledges receipt of 5 representing payment in full of all amounts due to the Owner Participant under Section[insert applicable section: 9(c), 9(d), 13(c)or 16]of the Facility Lease[Section 10(b)(3)(xvii)of the Participation Agreement.'
'To be inserted if on the date of the transfer the Owner Participant has not received under Section 5.2 of the Indenture the payments provided for in Section 9(c), 9(d), 13(c)or 16 of the Facility Lease or Section 10(b)(3)(xvii)or" the Participation Agreement, as the case may be.'o be inserted if on the date of the transfer the Owner Participant has received the payments provided for in Section 9(c), 9(d), 13(c)or 16 of the Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement, as the case may be.A-2 ARf i<LE ttt Erl'I'.(.I'lvi:.XL'ss OF Tll.i~sl'i'.u Sl:.i'I'u>i
'3.0i.Ejfecticenesi of Transfer.The transfer of the Assigned Property shall beconie eifective without further action upon the execution and delivery by the Owner Particip;int to El Paso of this Bill of Sale iuid Assignnient;intl the furnishing of a counterpart of this Bill of Sale<<nd Assignnient to the Owner Trustee.ARTICLE IV Si:.<rrn>x 4.01.Successors and Assigns.This Bill of Sale and Assignment shall be binding upon the Owner Participant and its successors and shall inure to the benefit of El Paso and its successors and assigns.Si:.<xnii 4.02.Governing Laic.This Bill of Sale and Assignment shall be governed by and construed and enforced in accordance with the law oF the State of New York.IN WITNESS WHEREOF.the undersigned has caused this Bill of Sale and Assignment to be duly executed;is of the day and year written above.By:Title.A-'3 pl'I Exhibit 8 to Participation Agreenient AFFIDAVIT OF TRUSTEE THE FIRST NATIONAL BANK OF BOSTON.as Owner Trustee under that certain Trust Agreement dated as of December 1.1986 with CHRYSLER FINANCIAL CORPORATION The undersigned.
being a duly authorized representative of The First National Bank of Boston.a national banking association.
as Trustee under the above-captioned Trust Agreement (the Trust Agreement), does hereby affirm and acknowledge that The First National Bank of Boston.as Trustee.holds legal title to certain real (and other)property on behalf of a certain beneficiary.
such property and beneficiary being more particularly described in that certain Deed recorded December.1986.as instrument No.86-.records of Maricopa County.Arizona: being further described in that certain Deed and Bill of Sale recorded December, 1986.as instrument No.86-.recortls of Maricopa County.Arizonm being further described in that certain Assignment.
Assuniption and Further Agreement recorded December, 1986, as instrument No.86-.recortls of Maricopa County.Arizona: and being further described in that certain Deed and Assignnient of Beneficial ,Interest dated as of December 1, 1986, and that certain related Amendetl Affidavit of Trustee:executed by Title USA Company of Arizona as Trustee of its Trust No.530 anti recorded December , 1986, as instrument No.86-, records of Maricopa County, Arizona: the property descrip-tions and beneficiary disclosures contained in or incorporated into each of said instruments being incorporated herein by this reference as if'fully set forth herein.A certain change in ownership of the beneficial interest in the Trust Agreement has occurred since the recordation of the above-described instruments.
As now reflected in the records of The First National Bank of Boston, the sole beneficiary of the Trust Agreement is: El Paso Electric Company 303 North Oregon Street El Paso, Texas 79901 A copy of the Trust Agreement is available for inspection at the olfices of The First National Bank of Boston, 100 Federal Street, Boston, Massachusetts 02110.DATED THIS day of[l.THE FIRST NATIONAL BANK OF BOSTON.not in its individual capacity, but solely as Owner Trustee under the Trust Agreement dated as of December 1, 1986, with By:
0 Appendix A DEFINITION OF TERIIS 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 clefined 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 such amendment.
Adrhtionnl Bonds shall mean Bonds in addition to the Initial Series Bonds.Additional Equity Investment shall have the meaning set forth in Section 8 (f)of the Facility Lease.Additional Notes shall have the meaning set forth in the recitals to the Indenture.
which~~~~~~Additional Notes shall be issued, if at all, pursuant to Section 3.5 of'he Indenture.
APlinte, 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 term"control" (including the correlative meanings of the terms"controlled by" and-under common control uith"), 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-Tnx Basis shall mean, with respect to any payment received or deemed to have been received or accrued 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 current credits or current deductions arising therefrom and computed at the highest marginal statutory tax rates)resulting from the receipt (actual or constructive) or accrual 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 or accrued.Agency Period shall have the meaning set forth in Section 7.01 of the Assignment and Assumption.
Aggregate Liability shall have the meaning assigned in the Price-Anderson Act.as in efFect as of the Closing Date;provided that if the Price-Anderson Act shall be amended to expand the meaning of the term"aggregate liability," the term-Aggregate Liability" shall be similarly expanded.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 Pnrticiyants shall have the meaning assigned to the word"Participant" under the ANPP Participation Agreement.
A-1 ANPP Participation Agreement'hall mean the Arizona Nuclear Power Project Participat>on Agreement, dated as of August 23, 1973, among APS, Salt River, Southern California, PNM, El Paso, SCPPA and LADWP.ANPP Project Agr'eements shall mean the ANPP Participation Agreement and the other Project Agreements (as such term is defined in the ANPP Participation Agreement).
ANPP Su:itchynrd shall mean the ANPP High Voltage Switchyard located at the PVNGS Site, the ownership, construction, operation and maintenance of which are governed by the ANPP High Voltage Switchyard Participation Agreement executed as of August 20, 1981 (APS Contract No.2252-419,00), the parties to which are APS, PNM, Silt River, El Paso, LADWP and Southern California.
Applicable Late shall mean all applicable" laws, statutes, treaties, rules, codes, ordinances, regula-tions, permits>certificates.
orders, interpretations, licenses and permits of any Governmental Authority 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).
Applicable Unit 2 Percentage shall mean 2.183647%with respect to property in Unit 2 not constituting Common Facilities and 0.727881%with respect to Common Facilities.
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, amount or determina-tion then the subject of an appraisal.
If either the Lessor or the Lessee, as the case may be, shall determine that a value, period, amount or determination to be determined under the Facility Le, any other Transaction Document cannot be timely established by mutual agreement, such part appoint its appraiser and deliver a written notice thereof to the other party.Such other party 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, amount or determination 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 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 more disparate from the middle determination by more than twice the amount 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 contem-plated by any provision of any Transaction Document shall be divided equally between the Lessor and the Lessee (except pursuant to Section 13(c), 14 (a)or 16 of the Facility Lease or Sec-tion 10(b)(3)(xvii)of the Participation Agreement, which shall be paid solely by the Lessee).APS shall mean Arizona Public Service Company, an Arizona corporation.
Arizona Public Utility Act shall mean Chapter 2, Title 40, Arizona Revised Statutes.Assigned Payments, shall, have the meaning set forth in Section 2.1 (1)of the Indenture.
Assignment and.Assumption shall mean the Assignment, Assumption and Further Agreement, dated as of December 1, 1986, between El Paso and the Owner Trustee.A-2 Assi nugent of Beneficial Interest shall mean the Deed and Assignment of Beneficial Interest under Title USA Company of Arizona Trust No.530.dated as of the Closing Date.fron>El Paso to the Owner Trustee.Assumption Agreement shall mean the AssumptionAgreement of El Paso 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.Authorized OJJ'teer shall mean.with respect to the Indenture Trustee.any oificer of the Indenture Trustee or any other Person who shall be duly authorized by appropriate corporate action on the part of the Indenture Trustee to authenticate a Note and shall mean.with respect to the Owner Trustee.any oificer of the Owner Trustee who shall be duly authorized by appropriate corporate action to execute any Transaction Document.Bankruptcy Code shall mean the Bankruptcy Reform Act of 1978.as amended, and any law with respect to bankruptcy, insolvency or reorganization successor thereto.Basic Lease Term shall mean the initial term of the Facility Lease.which shall begin on the Closing Date and end on October I, 2013, unless earlier terminated as provided in the Facility Lease.Basic Rent shall have the meaning set forth in Section 3 (a)of the Facility Lease.Basic Rent Payment Dates shall mean and include July 2, 1987.and each January 2 and July 2 of each year thereafter, ending July 2, 2013, and, if the Lessee shall elect the Renewal Term.each October I and April I of each year during such Renewal Term.commencing October I.2013 and ending six months before the last day of the Renewal Term.Bill of Sale shall mean the Deed and Bill of Sale.dated as of the Closing Date.between El Paso and the Owner Trustee.Bonds shall mean all bonds.notes and other evidences of indebtedness from time to time issued and outstanding under the Collateral Trust Indenture, including, u:ithout limitation, the Initial Series Bonds.the Releveraging Bonds, the Refunding Bonds and any other Additional Bonds.Bond Supplemental Indenture shall mean the Series 1986A Bond Supplemental Indenture dated as of December I, 1986, among El Paso, the Loan Participant and the Collateral Trust Trustee.supplementing the Collateral Trust Indenture and providing, among other things.for the issuance of the Initial Series Bonds.BONY shall mean The Bank of New York and its successors and assigns.Business Day shall mean any day other than a Saturday or Sunday or other day on which banks in El Paso or Houston, Texas.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 replacement of any such property with other property, irrespective of whether (i)such replacement property constitutes an enlargement or betterment of the property which it replaces, (ii)the cost of such addition, betterment, enlargement or replacement is or may be capitalized, or not 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, as built, and (b)any alteration, modification, addition or improvement to Unit 2, other than original, substitute or replacement parts incorporated into Unit 2.Cash Available for Investment shall mean (i)until December 31.1987.the excess of cash and teniporary cash investments not segregated for other purposes (including redemption of Debt)over cash construction requirements needed for the ensuing 12-month period and (ii)thereafter.
zero.A-3 Casualty Value, as of any date of determination thereof, shall mean (i)during the Basic Lease Term, the percentage of Facility Cost set forth opposite the date in Schedule 1 to the Facility Lease immediately succeeding such date of determination (or, if such date is speci6ed in Schedule 1 to the Facility Lease.such date), and (ii)during the Renewal Term, the amount 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 monthly steps over the period from such date to the License Expiration Date.Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstand-ing, 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, under any circumstances and in any event, in an amount at least sufBcient 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.Change in Tax Law shall have the meaning set forth in Section 3 (d)of the Facility Lease.Chrysler Financial Corporation shall mean Chrysler, Financial Corporation, a Michigan corporation.
Chief Financial Ofhcer shall mean the person designated by the Board of Directors of El Paso as the chief Bnancial ofBcer of El Paso.Claims shall mean liabilities, obligations, losses, damages, Taxes (other than Taxes on income), 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 costs of investigation) of any kind and nature whatsoever without any limitation as to amount.Closing shall mean the proceedings which occur on the Closing Date, as contemplated by t e Participation Agreement.
Closing Date shall mean December 18, 1986.Code shall mean the Internal Revenue Code of 1986, as amended, or any successor law.Collateral Trust Indenture shall mean the Collateral Trust Indenture, dated as of August 1, 1986, among El Paso, the Loan Participant and the Collateral Trust Trustee.Collateral Trust Indenture Supplement shall mean a supplement to the Collateral Trust Indenture.
4 Collateral Trust Trustee shall mean First City National Bank of Houston, not in its individual capacity, but solely as Collateral Trust Trustee under the Collateral Trust Indenture, and each successor trustee thereunder.
Common Faciltttes shall mean all PVNGS common facilities, as set forth in Section B of Exhibit B to the Bill of Sale, other than.excluded common facilities as set forth in Section B of Exhibit B to the Bill of Sale.Consolidated Capitalization shall mean the total of capital and surplus plus the principal amount of indebtedness for borrowed money which matures more than one year after the date as of which Consolidated Capitalization is being determined, all as shown on a consolidated balance sheet of the Lessee.Coverage Ratio shall mean the ratio of (x)consolidated net earnings before income taxes (excluding 100%(50%until July 1, 1989)of the allowance for funds used during construction (net of deferred taxes))increased by the pro forma earnings on Cash Available for Investment (calcula the prevailing 90-day treasury bill rate)for the twelve-month period ending on a date no later tha days prior to the date.as of which Coverage Ratio is being determined to (y)total interest and le e payments that will be payable by the Lessee and.its subsidiaries (whether consolidated or unconsoli-dated)during the twelve-month period following the date as of which Coverage Ratio is being A-4 deter'mined, excluding (i)lease payments to the Rio Grande Resources Trust, (ii)lease payments under any short-term operating lease of computers, oRce equipment or the like, (iii)interest on Debt which has been legally defeased or for the payment of which funds have been segregated in es'crow and (iv)interest on Debt maturing one year or less from the date of incurrence thereof.Cure Option shall have the meaning set forth in Section 16(e)of the Facility Lease.Debt shall mean (a)secured or unsecured indebtedness for borrowed money or for the deferred purchase price of property or evidenced by notes, bonds or other instruments, (b)obligatioris as lessee under capital leases, (c)the present value of obligations as lessee under other leases the remaining term of which (including options to renew)is more than one year, in each case discounted to present value as of the respective dates on which such obligations are due at the rate per annum borne by the debt placed in conjunction with such lease or, if no such debt was placed, at the Lessee's marginal cost of debt at the time such lease was entered into, (d)obligations secured by any Lien existing on any property owned or held by a Person, whether or not such Person has assumed or become liable for the obligations secured thereby, and (e)obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of)indebtedness or obligations of others of the kinds referred to in clauses (a), (b), (c)and (d)above.For purposes of the foregoing, there shall be excluded, except as used in Section 15 of the Facility Lease, obligations under any operating lease of computers, once equipment or the like, the original term of which (including options to renew)is less than Bve years, and obligations under any lease from the Rio Grande Resources Trust.Decommissioning shall mean the decommissioning and retirement from service of Unit 2, and the~~related possession, maintenance and disposal of material, radioactive or otherwise, used in or produced by or relating to Unit 2, including, without limitation, (i)placement and maintenance in a state of protective storage, (ii)in-place entombment and maintenance, (iii)dismantlement, (iv)removal, decontamination and disposition of equipment and Bxtures, (v)razing, (vi)removal and disposition of debris related to Unit 2 from the PVNGS Site, (vii)restoration of the PVNGS Site related to Unit 2 for unrestricted use, (viii)any other actions relating to decommissioning and retirement from service required by the NRC and (ix)all activities undertaken incident to the implementation thereof.Decommissioning Cost shall mean the Applicable Unit 2 Percentage of costs, liabilities and expenses relating or allocable to, or incurred in connection with, Decommissioning, including compliance with the Lessee's obligations under Section 10(b)(3)(xi)of the Participation Agreement.
Decommissioning Trust Agreement shall mean the Decommissioning Trust Agreement to be entered into among the Owner Trustee, El Paso and the Decommissioning Trustee.Decommissioning Trustee shall mean First City National Bank of El Paso, a national banking association, as trustee under the Decommissioning Trust Agreement, and each successor trustee under such Agreement.
Decommissioning Trust Fund shall mean the trust fund established and maintained under and pursuant to the Decommissioning Trust Agreement.
Deed shall mean the Deed, dated as of the Closing Date, from El Paso to the Owner Trustee.Deemed Loss Event shall mean any of the following events (unless and until waived in writing by the Owner Participant):
(1)Utility Regulation.
If at any time from and including the Closing Date and before the Lease Termination Date, the Lessor or the Owner Participant, by reason of the acquisition or ownership of the Undivided Interest or the Real Property Interest or any part thereof by the Lessor (or any bene6cial interest therein by the Owner Participant) or the lease of the Undivided Interest to the Lessee or any of, the other transactions contemplated by the Transaction Documents, 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, a A-5 public utility or a holding company under any Applicable Law or as a consequence of any Governmental Action, and the efFect thereof on the Lessor or the Owner Participant would be, in the sole judgment of the Owner Participant, acting on the advice of counsel, adverse, except that if the Lessee, at its sole cost and expense, is contesting diligently and in good faith any Governmen-tal Action which would otherwise constitute a Deemed Loss Event under this clause (1), such Deemed Loss Event shall be deemed not to have occurred so long as in the sole judgment of the Owner Participant (i)such contest does not involve any danger of the foreclosure, sale, forfeiture or loss of, or the creation of any Lien on, the Undivided Interest, the Real Property Interest or any part thereof or any interest therein, (ii)such contest does not adversely a6'ect the Undivided Interest or the Real Property Interest or any part thereof or any other property, assets or rights of the Lessor or the Owner Participant or the Lien of the Indenture thereon, (iii)-the Lessee shall have furnished the Owner Participant with an opinion of independent counsel satisfactory to the Owner Participant to the efFect that (a)there exists a reasonable basis for contesting such determination and (b)in the case of any action arising from'or related to the Lessor or the Owner Participant under the Holding Company Act, it is more likely than not that.the Lessee will successfully contest such determination without the need for any appeal, (iv)such determination shall be efFectively stayed or withdrawn during such contest (and shall not in the sole judgment of the Owner Participant be subject to retroactive application at the conclusion of such contest)in a manner satisfactory to the Owner Participant, and the Owner Participant shall have determined in its sole judgment that such contest and the Lessor's continued ownership of the Undivided Interest and the Real Property Interest during the pendency of such contest will not adversely'ffect its business or the business of any of its Affiliates, and (v)the Lessee shall have indemnified the Lessor and the Owner Participant in a manner satisfactory to the Owner Participant for any liability or loss which either may incur;it being understood, hou'euer, that the term 0 Participant as used in this clause (1)does not include any Transferee who at'the time of trans an entity which is subject to regulation as an electric utility, public utility or a holding compa y under Applicable Law or Governmental Action., (2)Change in Applicable Late, Any change in, or new interpretation by a Governmental Authority having jurisdiction relating to, Applicable Law, including, u:ithout limitation, the Price-Anderson Act, the Atomic Energy Act, the Nuclear Waste Act or the regulations of the NRC, in each case as in effect on the Closing Date, or any other significant development, as a result of which, in the opinion of independent counsel to the Owner Participant (i)the Aggregate Liability for a single Nuclear Incident of all Persons Indemnified is increased;(ii)the Aggregate Liability for a single Nuclear Incident of all Persons Indemnified exceeds the amount of Financial Protection required with respect to a single Nuclear Facility.under Applicable Law and available at the time of such Nuclear Incident;(iii)(a)the amount of Primary Financial Protection required with respect to a single Nuclear Facility under Applicable Law is increased, whether or not the total amount of Financial Protection required with respect to a single Nuclear Facility is increased, (b)the amount of Financial Protection required with respect to a single Nuclear Facility under Applicable Law is increased (including, but not limited to, an increase in the amount of retrospective premiums payable under the Retrospective Rating Plan),'or (c)the amount of retrospective premiums payable under the Retrospective Rating Plan in any one year with respect to two or more Nuclear Incidents is increased;(iv)the provisions of the penultimate sentence of Section 170b.of the Atomic Energy Act, 10.C.F.R.Section 140.2R or 10 C.F.R.Section 140.92 shall be modified or changed in any in*aterial respect;(v)the Lessor or the Owner Participant may become liable or responsible in any capacity (including, without limitation, through assessments imposed by a Governmental Authority) for payments owed in respect of the Nuclear Waste Fund (as such term is used in Section 302 of the Nuclear Waste Act)or in respect of the handling or disposal of nuclear waste, decontamination, storage, transportation or safe ing of radioactive or hazardous materials or any other obligation in the nature of the fore (vi)the Lessor, the Owner Participant or the Lessee may be prohibited from asserting any n protection or defense available under Applicable Law as of.the Closing Date with respect to civil A-6 or criminal actions brought in connection with a Nuclear Incident (inclndin<~, ieithont linn'mention.
through an expansion of the waiver of defenses provision under subsection lan.of the Atomic Energy Act): (vii)there shall be expressly created a new cause of action whereby any Person who pays or ivill pay retrospective premiums under the Retrospective Rating Plan or other assessn>ents required under Applicable Law may recover the amount of such payments from the facility in which a Nuclear Incident occurs or from any Person associated with such facility: (viii)there shall be a third tier or additional level of potential or real liability (including assessments imposed by a Governmental Authority) with respect to a Nuclear Facility: (ix)there shall be<<ny type of claim.liability or expense (otlier than the costs of investigating and settling claims and defending suits for damage)excluded from the limitation of liability established by the Price-Anderson Act (through modification of the definitions of"aggregate liability,-"persons indemnified.--nuclear incident-or otherwise) or excluded (or the funding or payment thereof deferred)under insurance or other Financial Protection required under Applicable Law as in effect on the Closing Date.except to the extent and in the amount expressly excluded or deferred pursuant to Applicable Law as in eff'ect on the Closing Date: or (x)the Lessor or the Owner Participant may be exposed, during the Lease Term or after the Lease Termination Date to any other incr'eased real or potential liability (inclmling, u:ithont limitation, through assessments imposed by a Governmental Authority) with respect to a Nuclear Incident or otherwise relating to the operation of PVNGS or the transactions contemplated by the Participation Agreement:
prouided, bouc<<er.that no such change.interpreta-tion or significant development shall constitute a Deemed Loss Event if and for so long as such hange.interpretation or significant development meets all the conditions constituting a Safe arbor Change.For purposes of this clause (2), the requirement or existence of insurance, etrospective premiums, indemnities (whether by the Lessee or any other Person)or other forms f Financial Protection (similar or dissimilar to the foregoing) shall not be deemed to eliminate or iegate any exposure of the Lessor or the Owner Participant to real or potential increased liability.
c H (3)Insurance.
The Lessee shall not be in compliance with Section 10 of the Facility Lease.(4)License.Any expiration, revocation, suspension.
amendment or interpretation by any Governmental Authority of the License or any other change in Applicable Law or Governmental Action.as a result of which.prior to the Lease Termination Date.either the Lessor or the Owner Participant is or might (i)be required to be or become a licensee under the Atomic Energy Act with respect to Unit 2 or (ii)be subject to the obligations or liabilities imposed as of the Closing Date (or thereafter) on licensees under the Atomic Energy Act with respect to Unit 2 or (iii)be otherwise subject to significant regulation.
(5)Multiple Incidents, The occurrence (i)of two or more incidents (including incidents occurring outside the United States of America), in each case at any Nuclear Facility or Facilities using a Combustion Engineering pressurized water reactor nuclear steam supply system, or another nuclear steam supply system of comparable design or comparable components, the failure of which Combustion Engineering pressurized water reactor nuclear steam supply system or other nuclear steam supply systein of comparable design or comparable components results in (x)a discharge or dispersal of radioactive material off-site when, as a result of an event comprised of one or more related happenings, radioactive material is released from its intended place of confinement, in amounts off'-site, or causing radiation levels olf-site, which result in off-site surface radiation levels measured over a contiguous or non-contiguous area of 100 square meters of (A)alpha particles from transuranic isotopes in excess of.35 microcuries per square meter, (B)alpha particles from all other isotopes in excess of 3.5 microcuries per square meter or (C)either beta or gamma particles in excess of 4 millirads per hour as measured at a height of one centimeter (measured through not more than"r milligrams per square centimeter of total absorber).
proriderI, hou:ecer, that (I)if the level of radiation constituting an Extraordinary Nuclear Occurrence is reduced by the NRC from those set forth herein, then the levels set forth herein shall be reduced equivalently or (II)if alternative criteria for determining an Extraordinary Nuclear Occurrence are adopted by the NRC.then the criteria set forth herein shall be modified to be consistent with A-7 the criteria established by the NRC.or (y)(A)the radiation level in the containment vesse measured by the average of two high range radiation monitors in the top half of such containment vessel (or if only one such monitor is operating at such time.such monitor)averaged over one hour equals or exceeds 1,000 rad per hour;or (B)any measure of radioactivity in the primary coolant system shall exceed by 1,000 times the limiting conditions for operation specified in the technical specifications for Unit 2 (as in effect on the Closing Date): or (z)damage to off-site property, including, without limitation, costs for decontamination, in amounts in excess of$15,000,000;(ii)within a Bve-year period of three or more incidents, of the type and severity described in subclause (i)(x).(y)or (z)above, at any Nuclear Facility or Facilities (including incidents occurring outside the United States of America).(6)Illegality; Exercise of Bights and Bemedies.Any change in Applicable Law or any Governmental Action the efFect of which is or might be (i)to make any of the transactions contemplated by the Transaction Documents unauthorized, illegal or otherwise contrary to Applicable Law, (ii)to impede the exercise by the Lessor or the Owner Participant of any right or remedy under any Transaction Document relating to the assertion of claims for Rent or monetary damages, (iii)to cause the Lessor or the Owner Participant to be or become liable in any capacity in respect of Decommissioning, including, coithout limitation, all or any portion of the Termination Obligation (as defined in the ANPP Participation Agreement), or (iv)to constitute an assertion to the efFect that (a)the exercise by the Lessor or the Owner Participant of any right (irrespective of the event giving rise to such right)under any Transaction Document would constitute impermis-sible control over Unit 2 or the licensees of Unit 2, other than an assertion consistent with the second sentence of Section 184 of the Atomic Energy Act and the NRC's regulations thereunder, including, u;ithout limitation, 10 C.F.R.Section 50.81, as now in efFect or (b)the acquisition or.transfer of the Undivided Interest was in violation of, or otherwise contrary to, Applicable (7)Badiation Level.Except as a result of controlled movement of spent fuel into or the spent fuel storage facility for Unit 1 or 3, the radiation level in the fuel building above either such storage facility, as measured by a valid radiation measuring instrument located in such building above either such storage facility, shall be more than 1,000 times the average of the previous Bve readings of such measuring instruments over a period of not less than 24 hours.Default shall mean an event or condition which, with the giving of notice or lapse of time, or'both, would constitute an Event of Default.Directive shall mean an instrument in writing executed in accordance with the terms and provisions of the Indenture by the Holders, or their duly authorized agents or attorneys-in-fact, representing a Majority in Interest of Holders of Notes, directing the Indenture Trustee to take or refrain from taking the action specified in such instrument.
Early Payment Obligation shall mean the obligation of the Lessee to pay to the Lessor the amount specified in the Brst sentence of Section 9(c)or the third sentence of Section 9(d)of the Facility Lease.Economic Useful Life shall mean that period commencing on the date as of which the determina-tion 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 it can reasonably be anticipated that Unit 2 will no longer be useful to, and usable by, the ANPP Participants as a facility for the generation of electric power or Unit 2 is no longer an economic and commercially practical and feasible 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, whichever is expected to occur earlier.For the purpose of det'ermining Economic UseFul Life, all relevant factors shall be taken into account (as such factors obtain on the date of determination and as such factors are reasonably anticipated to obtain in the future), including all relevant contractual and other arrangements, Governmental Actions, physical and other aspec Unit 2.market conditions and technological developments.
El Paso shall mean El Paso Electric Company, a Texas corporation.
A-8 El Paso Net Worth shall mean the consolidated common stockholders equity of El Paso and any successor, as shown in its audited financial statement as of December 31 of the most recent year.Eligible Bank shall mean a commercial bank or trust company in the nature of a bank (a Letter of Crerlit Bank)not related to the Owner Participant or the Lessee at the time of issuance of any Letter of Credit which shall be (i)Bank of New York, so long as its long-term unsecured debt securities or deposits are rated at least Baal by Moody's, (ii)any domestic Letter of Credit Bank (w)whose long-term unsecured debt securities at the time of issuance of any Letter of Credit are rated Aa3 by Moody's.(x)whose stockholders'quity is at least 81.5 billion in 1986 U.S.dollars.(y)whose total assets are at least 330 billion in 1986 U.S.dollars, and (z)which is approved by the Owner Participant (such approval not to be unreasonably withheld), and such bank shall continue to be an Eligible Bank so long as its long-term unsecured'debt securities or deposits are rated at least Baal by Moody's, or (iii)a United States branch or agency'of a foreign bank approved by the Owner Participant.
in its sole and absolute discretion.
Enhanced Casualty Value, as of any date of determination thereof, shall mean the percentage of Facility Cost set forth opposite the date in Schedule 5 to the Facility Lease immediately succeeding such date of determination (or, if such date of determination is specified in such Schedule 5, such date).Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstanding, Enhanced Casualty Value shall be, when added to all other amounts which the Lessee is required to pay under Section 10(b)(3)(xvii) of the Participation Agreement, under any circumstances and in any event, in an amount at least sulHcient 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.Equity Portion of Rent shall mean (i)in the case of any payment of Basic Rent, the amount of Basic Rent payable under the Facility Lease reduced by the principal and interest then due and payable on the Notes.(ii)in the case of any payment of Casualty Value, Special Casualty Value, Enhanced Casualty Value, Termination Value or Special Termination Value, the amount thereof reduced by the principal amount of and accrued and unpaid interest (since the Basic Rent Payment Date immediately preceding the date of payment)on the Outstanding Notes or (iii)in the case of any payment of Supplemental Rent not described in (ii)above, the amount thereof payable to the Owner Participant.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.Estimated Transaction Expenses shall have the meaning set forth in Section 5(a)of the Participa-tion Agreement.
Ecent of Default shall have the meaning set forth in Section 15 of the Facility Lease.Euent of Loss shall mean any of the following events: (a)a Final Shutdown, (b)a Requisition of Title or (c)a Requisition of Use for a period which exceeds five years or ends on or after the last day of the Lease Term (including any elected Renewal Term).Excepted Patjrnents shall mean (i)all payments of Supplemental Rent, other than payments by the Lessee (x)of Casualty Value paid pursuant to Section 16 of the Facility Lease or Termination Value or (y)of indemnity payments to which either the Loan Participant or any Indemnitee other than the Owner Trustee or the Owner Participant (or the respective successors, assigns, agents, ofBcers, directors or employees of the Owner Trustee or the Owner Participant) is entitled, (ii)any amounts payable under any Transaction Document to reimburse the Lessor or the Owner Participant (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 or by the Lessee in the case of the Special Transfer, (iv)so long as no Indenture Event of Default shall have occurred and be continuing, all payments of Basic Rent, Casualty Value, Termination Value, Enhanced Casualty Value, Special Termination Value or Special Casualty Value in excess of amounts then due A-9 and owing in respect of the principal of and premium.if any.and interest on all Notes Outstandin a>>y ins<<rance proceeds with respect to an Event of Loss in excess of amou>>ts then due a>>d owing in respect of'he principal of and premiuni.if any.and interest on all Notes Outstanding, (vi)any i>>s>>rance proceeds (or payments with respect to risks self-insured) under liability policies.(vii)any amount payable p>>rsuant to the Letter of Credit or the Letter of Credit Agreement and (viii)any payi>>e>>ts in respect of interest to the exte>>t attributable to payments rei'erred to in clauses (i)through (vii)above.Excess Amount shall have the meaning set forth in Section 19(f)of the Participation Agreement.
Existin~Mortgages shall mean the Indenture of Mortgage dated as of October 1.1946.between El Paso a>>d State Street Trust Conipariy (now State Street Bank and Trust Company).as Trustee.and the Indenture of Mortgage dated as of'une 1, 1981.between El Paso and First City National Bank of El Paso.as Trustee.Extension Letter shall mean the Extension Letter dated December 18.1986 and addressed to the Collateral Trust Trustee by the parties to'the Participation Agreement.
Extraordinary Nuclear Occurrence shall have the meaning assigned in Section 11 of the Atomic Energy Act and the related NRC regulations (10 C.F.R.$$140.84 and 140.85)as in effect as of the Closing Date.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 December 1.1986.between El P s Lessee.and the Owner Trustee.as Lessor.Fair Marl'et Rental Value or Fair Market Sales Value of any property or service shall mean the value.which shall not in any event be less than zero, of such property or service for lease or sale determined on the basis of an arm'-length transaction for cash between an informed and willing lessee or purchaser (under no compulsion to lease or purchase)and an informed and willing lessor or seller (under no compulsion to lease or sell), and shall take into account (except when used in Section 16(a)of'he Facility Lease)the existence of the Decommissioning Trust Fund.the Second Fund.if any.and the Lessee's obligations under Section 10(b)(3)(xi)of the Participation Agreement 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 (or the ground lease referred to in Section 10(b)(3)(xiv)of the Participation Agreement, as appropriate), but shall be without regard to any rights of the Lessee (including any renewal options)under the Facility Lease.Except pursuant to Section 16(a)of the Facility Lease or 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 tlie Facility Lease and the other Transaction Documents and the ANPP Participation Agreement, and (ii)the Lessee or El Paso, 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 advance.FCNB shall mean First City National Bank of Houston, a national banking associatio'n.
Federal Pou:er Act shall mean the Federal Power Act, as amended.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<<>>y successor agency.
FEHC Order shall mean the Order issued by the FERC on July 16.1986 (Docket No.EC86-18-000) as siipplemented by the letter dated November 14, 1986 from the Chief Accountant of the FERC (in Docket No.ES8r-8-000).
Final S/nitr/oun shall mean the earliest 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: (2)(x)the suspension of the License or that portion oF the License which permits operation of Unit 2.which suspension remains in eff'ect for three consecutive calendar months: (y)any order of or direction (or series of orders or directions) by the NRC or any other Governmental Authority that Unit 2 suspend operations for reasons of radiological health and safety for a Period exceeding 24 months: or (z)any cessation of operation of Unit 2 for a period of 24 months if the resumption of operations requires the concurrence of, the NRC or any other Governmental Authority:
(3)the permanent or temporary cessation of operation of Unit 1, 2 or 3 as a result of a Nuclear Incident at Unit I, 2 or 3 (or'if such Unit is not in operation immediately prior to the occurrence of such Nuclear Incident.the failure to resume operation thereof as a result of such Nuclear Incident)if (A)the Period of such cessation or failure equals or exceeds twenty-four consecutive calendar months, or (B)such Nuclear Incident causes the radiation level in the containment vessel of such Unit.as measured by the average of two high range radiation monitors in such containment vessel of such Unit (or if only one such monitor is operating at such time.such monitor)over one hour to equal or exceed'200 rad per hour: prorided.houecer.that this subsection (B)shall not apply in respect of a Nuclear Incident arising solely from a fuel handling accident: (4)(i)the occurrence of a Nuclear Incident at Unit 1.2 or 3 causing (A)substantial injury or death to any person on or off the PVNGS Site or (B)a discharge or dispersal of-source.""special nuclear material" or"byproduct material" (as defined in the Atomic Energy Act)from its intended place of confinement in amounts off the PVNGS Site or causing radiation levels olf 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, 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 (ii)the occurrence at PVNGS of a discharge or dispersal of radioactive material when, as a result of an event comprised of one or more related happenings.
radioactive material is released from its intended place of confinement in amounts off-site resulting in an aggregate cost of decontamination estimated to be in excess of$10,000.000; (5)the declaration by the Operating Agent of a site area emergency set forth in the PVNGS Emergency Plan for any reason other than a drill or false alarm;(6)except as a result of controlled movement of spent fuel into or within the spent fuel storage facility for Unit 2, the radiation level in the fuel building above such storage facility.as measured by a radiation measuring instrument located in such building above such storage facility.shall be more than 1.000 times the average of the previous five readings of such measuring instrument over a period of not less than 24 hours: (7)destruction of Unit 2.or damage to 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 a e within eighteen calendar months of such damage or destruction (or prior to such earlier date as of which one or more other ANPP Participants shall agree to restore or reconstruct any damaged portion of Unit 2 in accordance with Section 16.2 of the ANPP Participation Agreement) to restore or reconstruct Unit 2 to completion prior to the day sixty calendar months after the date of such agreement and (B)thereafter to complete the restoration-and reconstruction of Unit 2 within a period of sixty calendar months after the date of such agreement.
but in no event later than the end of the Lease Term, provided that no Final Shutdown shall be deemed to have occurred pursuant to this clause (7)if and so long as Unit 2 is in operation at a rated core power level of a least 1900 megawatts thermal;or (8)the operation of Unit 2 at a net rated capacity below 630 megawatts electric.or the non-operation of Unit 2, by reason of the fact that its net rated capacity is below 630 megawatts electric, or any combination thereof, for any reason other than as a result of damage to Unit 2.For purposes of this definition.
a Final Shutdown in consequence of the occurrence of an event described in clause (4)shall be deemed to have occurred immediately upon the occurrence of any of the following: (i)the water level within the primary coolant vessel shall decline to a level which is three feet above the nuclear core, (ii)the water level within the spent fuel storage facility shall decline to a level which is three feet above the top of any fuel which has been in the reactor core within the prior 12 months, (iii)the pressure within the primary coolant system shall decrease by in excess of 1000 pounds per square inch in a period of less than 5 minutes or (iv)the departure from nucleate boiling ratio shall be less than 0.9;and a Bnal shutdown in consequence of the occurrence of an event described in clause (6)shall be deemed to have occurred immediately if the water level is three feet above any fuel which has been in the reacto within the prior 12 months.Financing Documents shall mean the Collateral Trust Indenture, the Bond Supplemental Inden-ture, the Extension Letter and the Underwriting Agreement.
Financial Protection shall have the meaning assigned in the Price-Anderson Act, as in effect as of the Closing Date;provided that if the Price-Anderson Act shall be amended to expand the meaning of the term"Bnancial protection," the term"Financial Protection" shall be similarly expanded.HUB shall mean The First National Bank of Boston, in its individual capacity, and its successors and assigns.Form U-7D shall mean the certificate to be Bled 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.Generattng Unit shall mean Unit 1, 2 or 3 or any of the other Generating Units (as such term is defined in tho,ANPP Participation Agreement) constituting PVNGS.Ceneratiom 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 El Paso as the ANPP Participant with respect to its 15.8%interest in Unit 2, (ii)when used in reference I to the Undivided Interest, shall mean the Generation Entitlement Share attributable to a 2.183647%undivided interest in Unit 2, and (iii)when used in Section 19 of the Facility Lease, shall refer to all Generating Units at PVNGS.Governmental Action shall mean all authorizations, consents, approvals, waivers, exceptions, variances, orders, licenses, exemptions, publications, flings, notices to and declarations of or wit Governmental Authority (other than routine reporting requirements the failure to comply with will not affect the validity or enforceability of any of the Transaction Documents or have a m 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 liniitation.
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.Goccrnmental Authority shall mean any Federal.state.county.municipal.
foreign.international.
regio>>;il or other governmental authority, agency.board, body.instrumentalit'y or court.Holrlers shall mean the holders of the Notes or the Bonds.as the context may require.Holding Company Act shall mean the Public Utility Holding Company Act of 1935.as amended.Indemnitee shall mean the Owner Participant.
the Owner Trustee.FiVB.the Loan Participant.
First City iVational Bank of Houston.the Indenture Trustee.the Paying Agent.the Banks.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 AIRliate of any of the foregoing and the respective successors.
assigns, agents.ofRcers.directors or employees of the foregoing.
excluding, however, any ANPP Participant other than the Owner Trustee or the Owner Participant.
Indenture shall mean the Trust Indenture, Mortgage.Security Agreement and Assignment of Rents.dated as of December 1, 1986, between the Owner Trustee and First City National Bank of Houston.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 speci6ed in Section 6.2 of the Indenture Inrlentnre Trustee shall mean First City National Bank of Houston.a national banking association.
not in its individual capacity.but solely as Indenture Trustee under the Indenture and each successor trustee and co-trustee thereunder.
Indenture Trustees 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 or the Financing Documents.
Indenture Triistees Once shall mean the oflice of the Indenture Trustee located at First City Financial Center, 1301 Fannin Street, 2lst Floor, Houston, Texas 77002.or such other oflice as may be designated by the Indenture Trustee to the Owner Trustee and each Holder of a iVote Outstanding under the Indenture.
Inflation Index shall mean such annual percentage adjustment in the aggregate amount payable with respect to all Nuclear Facilities under the Retrospective Rating Plan based upon a percentage change in the consumer price index or such other measure as may be provided from time to time in the Price-Anderson Act, as amended from time to time.Initial Serfes Bonds shall mean the Lease Obligation Bonds.Series 1986A of the Loan Participant issued.authenticated and delivered under the Collateral Trust Indenture, as heretofore supplemented and amended and as supplemented by the Bond Supplemental Indenture.
'nitial Series Notes shall mean the nonrecourse promissory notes, substantially in the form of Exhibits A-1.A-2 and A-3 to the Indenture, to be issued by the Owner Trustee and authenticated by the Indenture Trustee on the Closing Date to Ilnance a portion of the Purchase Price.Inuestment shall have the meaning set forth in Section 3(a)of the Participation Agreement.
Incestment Company Act shall mean the Investment Company.Act of 1940.as amended.Inrestment Percentage shall mean the percentage identi6ed as such in Schedule 2 to the Participa-tion Agreement.
IBS shall mean the Internal Revenue Service of the United States Department of the Treasu or any successor agency.Issuing Ban/c shall have the meaning set forth in Section 10(b)(3)(xvii) of the Participation Agreement.
L4DLVP 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 Tenn 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 occurr'ing by reason of a termination or expiration of the Lease Term).Lessee shall mean El Paso Electric Company, a Texas corporation, and its successors and assigns, as Lessee under the Facility Lease and as party to the other Transaction Documents and Financing Documents to which it is a signatory.
Lessee Bequest 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 its successors and assigns.Lessors Interest shall have the meaning set forth in Section 8(c)(3)of the Participation Agreement.
Lessor's Liens or Ou:ner Tnu'tees Liens shall mean Liens against the Trust Estate or the Indenture Estate (other than Permitted Liens, except"Lessor's Liens" and-Owner Participant's Li s'eferred to in clause (vi)of the de6nition thereof)for which the Lessee is not responsible and which result from acts of, or any failure to act by, or as a result of claims against, FNB or the Lessor, unrelated to the ownership of the Undivided Interest or the Real Property Interest, the administration of the Trust Estate'or the transactions contemplated by the Transaction Documents or the Financing Documents.
Letter of Credit shall have the meaning set forth in Section 10(b)(3)(xvii)of the Participation Agreement.
Letter of Credit Agreement shall mean the Letter of Credit and Security Agreement dated as of December 1, 1986 between El Paso and BONY.License shall mean NRC Facility Operating License No.NPF-51, issued April 24, 1986 (supersed-ing NRC Facility Operating License No.NPF-46, issued on December 9, 1985), as the same may be amended, modiBed, extended, renewed or superseded from time to time.License Amendment shall mean the Amendment, dated on or about December 10, 1986, amending the License and approving the transactions contemplated by the Participation Agreement and the Facility Lease., License Expiration Date shall mean December 9, 2025, or such later or earlier date as 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 Bling of, or agreement to give, any Bna 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 El Paso Funding Corporation, a Delaware corporation.
Loan Percentage shall mean the percentage identi6ed as such in Schedule 2 to the Participation Agreement.
.11ajority 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 shall mean (i)Arizona Nuclear Power Project (ANPP)Participation Agreement among APS, Salt River Project Agricultural Improvement and Power District.Public Service Company of New Mexico, El Paso Electric Company, Southern California Edison Company, Southern California Public Power Authority, and Los Angles Department of Water and Power, dated August 23.1973, as amended, (ii)Nuclear Fuel Contract between ANPP and Combustion Engineering, Inc.(CE).dated as of August 20, 1973, (iii)Nuclear Steam Supply Contract between APS and CE, dated as of August 20, 1973, (iv)Turbine Generator Contract between APS and General Electric Company, dated as of March 21, 1974, as amended, (v)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, (vi)Contract between APS and Westinghouse Electric Corporation for fuel fabrication services for reload of batches of nuclear fuel, dated August 7, 1974, as amended, (vii)Agreement for the Sale and Purchase of Waste Water EHluent between the City of Tolleson, APS, and Salt River, dated June 12, 1981, as amended.(viii)Agreement for Construction of ANPP between Bechtel Power Corporation (Bechtel)and APS dated January 15, 1973, (ix)Agreement for Engineering and Procurement Services between APS and Bechtel, dated January 15, 1973, (x)Option and Purchase of EIIluent among the Cities of Phoenix, Glendale, Mesa, Tempe, and Scottsdale, the Town of Youngtown, APS, and Salt River, dated April 23, 1973, (xi)Agreement for Conversion Services between Allied Chemical Corporation and APS, dated November 17, 1975, as amended, (xii)Uranium Concentrate Sales Agreement between Energy Fuels Exploration Company and APS.dated as of December 1, 1983.(xiii)Uranium Concentrate Sales Agreement between Energy Fuels Exploration Company and APS, dated as of October 23, 1981, as amended, (xiv)Agreement for Sale of Uranium Concentrates between Path6nder Mines Corporation and APS, dated December 1, 1983, and (xv)Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste between USA and APS, dated July 21.1984.Mnximum Aggregate Loss shall be computed and applied in respect of Unit 2, including all interests therein, and with respect to each calendar year shall mean the sum of retrospective premiums, if any, payable during such year under the Retrospective Rating Plan with respect to any Nuclear Incident which shall have occurred prior to the date of such calculation.
Maximum Option Period shall mean the period, in no event ending after the earlier to occur of the License Expiration Date and October 1, 2026, (i)at the end of-which the residual value of the Undivided Interest (without regard to inBation or deQation from the Closing Date and taking into account the existence and efFect of the Assignment and Assumption, the ANPP Project Agreements and the License)shall be at least equal to 20%of Facility Cost, (ii)which, when added to the Basic Lease Term, does not exceed 80%of the economic useful life of the Undivided Interest from the Closing Date and (iii)at the end of which, taking into account the existence and efFect of the Assignment and Assumption, the ANPP Project Agreements and the License, the use of the Undivided Interest by any User (in a transaction pursuant to which the Owner Participant could realize the amount referred to in clause (i)above)is feasible from an engineering and economic point of view and is commercially reasonable.
Unless the period, as computed in accordance with the preceding sentence, shall end on an April 1 or October 1 of any year, the Bnal date of the Maximum Option Period shall be the Bnal April 1 or October 1 in the period, as so computed.h/oody's shall mean Moody's Investors Service, Inc..~lortgoge Releases shall mean the releases of liens dated December 15, 1986, under and with respect to the Existing Mortgages.
<Vet Economic Return shall mean (i)the after-tax book yield, (ii)the total after-tax book earnings over the Lease Term, (iii)ninety percent of the after-tax book earnings for each of the Brst eight years of the Lease Term and (iv)the total after-tax book earnings over the Brst eight years of the Lease Term.in each case originally expected by the Owner Participant with respect to the Undivided Interest, utilizing the assumptions, including without limitation, the Pricing Assumptions and Tax Assumptions, originally used by the Owner Participant in the initial computation of Basic Rent, Casualty Value, Special Casualty Value, Enhanced Casualty Value, Special Termination Value and Termination Value, it being understood that when there is an adjustment to preserve Net Economic Return each of the elements described in the foregoing clauses (i)through (iv)must be preserved at a level at least as great as that originally anticipated.
<Vet EVorth shall mean the total of common stock, nonredeemable preferred stock and capital surplus and retained earnings.as shown on a consolidated balance sheet of the Lessee or pro forma consolidated balance sheet of the Surviving Lessee, as the case may be, prepared on the basis of, generally accepted accounting principles consistently applied.New Mexico Order shall mean the order issued by the NMPSC on July 16, 1986, in Case No.2032, as amended by the Amended Order issued on November 14, 1986 in Case No.2032.Nero 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.Non-Burdensome Regulation shall mean (i)regulation to which the Owner Participant or the Owner Trustee is otherwise subject by reason of its lease Bnancing or other activities unrelated e transactions contemplated by the Transaction Documents, (ii)ministerial regulatory requir which do not impose limitations or regulatory requirements on the business or activities of the r 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 or the Real Property 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 hot 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 Notes and each Releveraging Note, any Refunding Notes and any other Additional Notes.Notice of Ckeing shall have the meaning set forth in Section 5(a)of the Participation Agreement.
NRC shall mean the Nuclear Regulatory Commission of the United States of America or any successor agency.Nuclear Aggregate Liability shall mean the amount of Aggregate Liability for a single Nuclear Incident of all Persons IndemniBed, as determined in accordance with the Price-Anderson Act, as amended from time to time.V Nuclear Facility shall mean a facility designed for producing substantial amounts of electricity and having a rated capacity of 100,000 electrical kilowatts or more.Nuclear Incident shall have the meaning assigned in the Price-Anderson Act, as in e6'ect as of the Closing Date;provided that if the Price-Anderson'Act shall be amended to expand the deBni"nuclear incident,',.'he term"Nuclear Incident" shall be similarly expanded.Nuclear Waste Act shall mean the Nuclear Waste Policy Act of 1982, as amended, or any comparable successor law.
OPcers'ertificnte shall mean a certificate signed by the President or any Vice President and by the Treasurer.
any Assistant Treasurer.
the Secretary or any Assistant Secretary of the Person with respect to which such term is used.Operating Agent shall have the meaning assigned thereto in the ANPP Participation Agreement.
Outstanding, when used with respect to the Notes.shall mean.as of the date of determination.
all such Notes theretofore issued.authenticated and delivered under the Indenture.
except (a)Notes theretofore cancelled by the Indenture Trustee or delivered to the Indenture Trustee for cancellation.(b)Notes or portions thereof for the payment of which the Indenture Trustee holds (and has notified the holders thereof that it holds)in trust for that purpose an amount sufRcient 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 sufRcient to make full payment of such obligations when due has been deposited with the pledgee of such Notes for the purpose of holding such amount in trust for the payment of such obligations in accordance with the indenture or agreement under which such obligations are secured and (d)Notes in exchange for.or in lieu of.which other Notes have been issued.authenticated and delivered pursuant to the Indenture:
prouided, hou.ecer.that any Note owned by the Lessee or any AIRliate thereof shall be disregarded and deemed not to be Outstanding for the purpose of any Directive.
Ocerdue Interest Hnte 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.Ou:ner Participant shall mean Chrysler Financial Corporation, and its successors and assigns in~~~accordance with the Trust Agreement and the Participation Agreement.
Ou:ner Pnrticipnnt's Liens shall mean Liens against the Trust Estate or the Lease Indenture Estate (other than Permitted Liens.except-Lessor's Liens" and"Owner Participant's Liens-referred to in clause (vi)of the definition thereof)for which the Lessee is not responsible and which result from acts of.or any Iailure 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.
Ouner Trustee shall mean The First National Bank of Boston, a national banking association.
not in its individual capacity, but solely as Owner Trustee under the Trust Agreement.
and each successor as trustee.separate trustee and co-trustee thereunder.
Participation Agreement shall mean the Participation Agreement, dated as of December 1.1986.among the Owner Trustee, the Indenture Trustee, the Loan Participant.
the Owner Participant and El Paso.Paying Agent shall mean Mellon Trust Company, and any successor Paying Agent under the Indenture.
Paying Agent's Once shall mean the address in New York, N.Y.of any Paying Agent under the Indenture, or the address in New York, N.Y., of any successor Paying Agent under the Indenture.
Penalty Rate shall mean 2%per annum in excess of the Prime Rate.Period shall mean the length of time for which an action or event is stated or otherwise known at its inception to be in existence (determined by the terms of such action or event or the surrounding circumstances).
or is expected at its inception to be in existence as determined by an independent nuclear engineering consultant or firm having expertise in the area of nuclear electric generating plants designated by Lessor and Lessee within 10 days after either shall request such designation (which Lessor or Lessee may do at any time after such action or event occurs)or, if Lessor and Lessee are unable to agree on such consultant or firm within such 10-day period.designated by the American Arbitration Association.
or any organization successor thereto.within 7 days after either Lessor or Lessee shall request such organization so to do (which Lessor or Lessee may do at any time after the expiration oF such 10-day period).Such consultant or firm shall render its determination within 14<<fter its designation.
which determination shall be final.binding and conclusive on Lessor and Lessee.The fees and expenses of such consultant or firm shall be shared, equally by Lessor and Lessee.Pprinitted 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 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 Mortgages on the leasehold estate under the Facility Lease: (iv)Liens for taxes on the Undivided Interest or the PVNGS Site 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.any part thereof or interest therein, (y)interfere with the use.possession or disposition of the Undivided Interest.or any part thereof or interest therein.or (z)impair payment oF Rent: (v)inchoate materialmen's.
mechanics'.
workmen', repairmen's.
employees'.
carriers'.
ware-housemen's.
or other like Liens arising in the ordinary course of business for PVNGS.and not delinquent: (vi)Lessor's Liens, Owner Participant's Liens and Indenture Trustee's Liens: (vii)choate Liens that have been bonded for the full amount in dispute or as to which other security arrangements
-satisfactory to the Lessor shall have been made and which are being contested diligently by the-appropriate party in good faith and by appropriate proceedings so long as such proceedings shall not violate clause (x), (y)or (z)of clause (iv)above;(viii)choate Liens of any of the types described in clause (v)above that have been bonded for the full amount in dispute or as to which other security arrangements satisfactory to the Lessor 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 d accounting practice and (B)there shall have been secured a stay of execution pending such app proceeding for review.so long as such appeal or proceeding shall not violate clause (x).(y)or 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)under the ANPP Participation Agreement or any other ANPP Project Agreement and (xii)Liens on the undivided ownership interests in Unit 2 owned by the ANPP Participants and other Persons (other than the Lessee).Person shall mean any individual, partnership, corporation, trust.unincorporated association or joint venture, government or any department or agency thereof.or any other entity.Persons Indemnified shall have the meaning assigned in the Price-Anderson Act.as in eff'ect as of the Closing Date, provided that if the Price-Anderson Act shall be amended to expand the meaning of the term-persons indemnified," the term"Persons Indemnified" shall be similarly expanded.PNM shall mean Public Service Company of New Mexico, a New Mexico corporation.
Price-Anderson Act shall mean the Price-Anderson Act, Pub.L.No.85-256, 71 Stat.576 (1957), as amended to the Closing Date (except as expressly otherwise.
provided).
Price-Anderson Change shall mean any change in, or new interpretation by a Governmental Authority relating to, Applicable Law, including, without limitation, the Price-Anderson Act or the Atomic Energy Act.the Nuclear Waste Act or the regulations of the NRC, in each case as in effect on the Closing Date.Pricing Assumptions shall mean the pricing assumptions set forth in Schedule 2 to the Participation Agreement.
Primary Financial Protection shall mean Financial Protection required to be maintained by Nuclear Facility under Applicable Law.except for such amounts required to be maintained under a Retrospective Rating Plan.
Prinie Rate shall mean the rate of interest publicly announced from time to time by Chemical~i Baiik.a New York banking corporation.
at its principal office in New York City as its prime or base le>>ili>>g rate.Any change in the Prime Rate shall be efFective on the date such change in the Prime'ate is announced.
Project.tInnn<er shall have the meaning assigned thereto in the ANPP Participation Agreement.
Prudent Utility Practice shall mean, at a particular time.those practices.
methods and acts as are in accordance with standards of prudence applicable to the electric utility industry which would have beeii expected to accomplish the desired result at the lowest reasonable cost consistent witli reliability.
safety and expedition.
Pnrelinse Documents shall mean the Bill of Sale.the Deed.the Assignment of Beneficial Interest a>>d 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.Purclinse Price shall have the meaning set forth in Section 4(a)of the Participation Agreement.
PKXCS shall mean the Arizona Nuclear Power Project.as that term is defined in the ANPP Participation Agreement.
~PVYCS Site shall mean the interest in Title USA Trust No.530 and the real property described in Exhibit A to the Bill of Sale.Real Estnte Inoestment shall have the meaning set forth in Section 3(a)of the Participation Agreement.
Real Property Interest shall mean the interest of the Lessor in the PVNCS Site created by the Assignnient of Beneficial Interest and the Deed or.if applicable.
created by the ground lease referreil to in Section 10(b)(3)(xiv)of the Participation Agreement.
Reasonable Basis for a position shall exist if tax counsel may properly advise reporting such position on a tax return in accordance with Formal Opinion 85-352 issued by the Standing Committee on Ethics and Professional Responsibility of the American Bar Association.
Refiinding Bonds shall mean the Loan Participant's lease obligation bonds, if any.to be issued.authenticated and delivered under the Collateral Trust Indenture.
as supplemented by the Refunding Supplemental Indenture, as referred to in Section 2(d)of the Participation Agreement.
Refiinrling Date shall mean the date of issuance of the Refunding Bonds.Refimding Loan shall'have the meaning set forth in Section 2(d)of the Participation Agreement.
Refimding Notes shall mean the nonrecourse promissory notes, if any, to be issued by the Owner Trustee and authenticated by the Indenture Trustee on the Refunding Date to refund the Initial Series Notes and each Releveraging Note theretofore issued.Refimding Registration Statement shall mean the registration statement on Form S-3.including all exhibits and all documents incorporated in the Refunding Registration Statement by reference, to be filed with the SEC under the Securities Act in connection with the ofFer.issue and sale of the Refunding Bonds.lg Refiinding Supplemental Indenture shall mean the Refunding Bond Supplemental Indenture.
if any.among El Paso.the Loan Participant and the Collateral Trust.Trustee.supplementing the Collateral Trust Indenture and providing, among other things, for the issuance of the Refunding Bonds.Registration Stntement shall mean the registration statement on Form S-3, including all exhibits and all ilocuments incorporated in the Registration Statement by reference.
filed with the SEC (Registra-tion No.33-10317)under the Securities Act in connection with the ofFer.issue and sale of the Initial Series Bonds.
Releceraging Amount shall mean (i)the initial principal amount of each series of Releverag g Bonds.or (ii)the initial principal amount of the Refunding Bon<ls to the extent such amount is in excess of the Initial Series Bonds being refunded.but only in an amount equal to the amount that the related Refunding Note exceeds the aggregate amount of the Initial Series Votes and any Releveraging Notes theretofore issued.Releceraging Bonds shall mean a series of securities issued.authenticated and delivered under the Collateral Trust Indenture.
part of the proceeds of which is used to refund to the Owner Participant a portion of its Investment.
Releceraging Date shall mean the date of issuance of Releveraging Bonds.Relereraging Loan shall have the meaning set forth in Section 2(c)of the Participation Agreement.
Releceraging
<Vote shall mean a non-recourse promissory note or notes.substantially in the form of the Initial Series Notes or.if the Refunding Date shall have occurred.the Refunding Note or Notes.to be issued by the Owner Trustee and authenticated by the Indenture Trustee on the Releveraging Date to refund to the Owner Participant a portion of the Investment.
Reneu.al Term shall have the meaning set forth in Section 12 of the Facility Lease.Rent shall m'ean Basic Rent and Supplemental Rent.Requisition of Title shall mean any circumstance or event in consequence of which Unit 2 or the Undivided Interest (or all or any portion of the Real Property Interest the loss of which would significantly interfere with the use of Unit 2 or th'e Undivided Interest)shall be condemned or seized or title thereto shall be requisitioned or taken by any Governmental Authority under power eminent domain or otherwise and all administrative or judicial appeals opposing such condemn.seizure or taking shall have been exhausted or the period for such appeal shall have expired.so lo such appeals are undertaken in good faith and are being diligently pursued.Requisition of Use shall mean any circumstance or event (other than a Requisition of Title)in consequence of which the use of Unit 2 or the Undivided Interest (or all or any portion of the Real Property Interest the loss of which would significantly interfere with 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.
Responsible Ogeer 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 ofBcer who in the normal perform-'nce ofhis operational responsibility would have knowledge of such matter and the r'equirements with respect thereto.Retained Assets shall mean (i)the Lessee's interest in PVNGS other than the Undivided Interest and the Real Property Interest, (ii)Severable Capital Improvements title to an 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 and the Real Property Interest)to which the Lessee becomes entitled in consequence of Section 16.2 or 23.5 of the ANPP Participation Agreement (except as otherwise provided in Section 5(a)or 19 of the Facility Lease).Retrospeetiue Rating Plan shall mean the industry retrospective rating plan established pursuant to the Price-Anderson Act, or any successor or similar plan established under Applicable Law.Safe Harbor Change shall mean the first Substantial Amendment enacted after the Closing Date.if.,upon the eff'ective date of such Substantial Amendment and at all times thereafter (as shall determined from time to time), as a result of such Substantial Amendment.
in the opinic intlependent counsel to the Owner Participant.(i)Nuclear Aggregate Liability shall not exceed e (a)the amount of Financial Protection required to be maintained by each Nuclear Facility with respect to a single.Nuclear Incident or (b)(x)on-the date of enactment S7 billion.regardless of the A-20 number of Nuclear Facilities then in service.and (y)at all times thereafter
$7 billion as adjusted for the iiumber of Nuclear Facilities then in service multiplied by the Inflation Index.if any: (ii)commencing as of December 31 of any year in which Nuclear Aggregate Liability is equal to or exceeds$7 billion.El Paso Net Worth shall be equal to or greater than.075 times Nuclear Aggregate Liability:
prorided, hou'ecer, that if El Paso Net Worth shall be less than.075 times Nuclear Aggregate Liability.
then the Substantial Amendment shall no longer constitute a Safe Harbor Change only if.in the year following the year for which the computation was made, El Paso Net Worth shall not equal or exceed.075 times Nuclear Aggregate Liability computed for such following year: (iii)the amount of Primary Financial Protection available from commercial insurance underwriters on terms substantially equivalent (in the reasonable opinion of the Owner Participant) to the terms in eff'ect on the Closing Date under Applicable Law and required to be maintained by licensees with respect to any single Nuclear Facility shall be at least equal to the amount required under Applicable Law (which amount shall not exceed$500 million): (iv)Maximum Aggregate Loss per year shall not exceed (x)$25 million or (y)commencing as of December 31 of any year in which Nuclear Aggregate Liability is equal to or greater than$7 billion.$25 million multiplied by the Inflation Index.if any: (v)the provisions of the penultimate sentence of Section 170b, of the Atomic Energy Act, 10 C.F.R.$140.22.and 10 C.F.R.)140.92 (as such regulation and form of indemnity agreement relate to the guarantee of the NRC of defaults by licensees under the Retrospective Rating Plan)as in effect on the Closing Date.shall not have been amended or modified in any material respect: (vi)the NRC shall be required to fulfill payment obligations when due from a licensee liable for damage arising out of or related to a Nuclear Incident in the event that the payment obligations of such licensee in any calendar year exceed the amount payable by such licensee in respect of such Nuclear Facility in such year under the Retrospective Rating Plan: prouided, hou:ever, that the NRC shall be entitled to reimbursement through the Retrospective Rating Plan as such payments are made over time: (vii)neither the Lessee nor any other Persons Indemnified will be required to waive the defense of the statute of limitations (existing under any Applicable Law)with respect to a Nuclear Incident (except an Extraordinary Nuclear Occurrence);
with respect to an Extraordinary Nuclear Occurrence such defense shall be waived only as to suits instituted within 30 years after the date the Extraordinary Nuclear Occurrence which is the subject of the suit takes place or within a prescribed number of years from the date on which the claimant first knew, or reasonably could have known, of his injury or damage and the cause thereof: (viii)neither the Lessor nor the Owner Participant shall be exposed to any increased real or potential liability (including assessments imposed by a Governmental Authority) with respect to activities authorized by the Nuclear Waste Act;(ix)none of the results contemplated in subclauses (vii)and (ix)of clause (2)in the definition of Deemed Loss Event shall have occurred: and (x)(a)neither the Lessor nor the Owner Participant shall, in the opinion of independent counsel to the Owner Participant delivered within six months of such Substantial Amendment, be exposed to any other material increase in its real or potential liability with respect to a Nuclear Incident, either before, on or after the Lease Termination Date, except for liability arising with respect to a Nuclear Incident which takes place after the Lessor or the Owner Participant, as the case may be.becomes a licensee of the NRC, and (b)neither the Lessor, the Owner Participant nor the Lessee shall be prohibited from asserting any other right, protection or defense available under Applicable Law as in eff'ect on the Closing Date other than those rights, protections and defenses which are waived'pursuant to this definition of Safe Harbor Change;provided, however, that an expansion of the waiver of defenses provision of subsection 170n.(1)of the Atomic Energy Act so that such waivers are applicable with respect to an Extraordinary Nuclear Occurrence arising out of or resulting from or occurring in the course of (a)transportation of source material, byproduct material, or special nuclear material to or from any facility licensed under Section 53, 63 or 81 of the Atomic Energy Act, (b)activities undertaken by the Secretary, including, but not limited to, activities related to the storage or disposal of high-level radioactive waste or (c)the construction.
possession or operation of any facility licensed under Section 53.63 or 81 of the Atomic Energy Act, shall not be deemed to expose the Lessor, the Owner Participant or the Lessee to any increased real or potential liability.
A-21 Sale Proceeds shall mean.with respect to any sale of the Undivided Interest and the Real Pro Interest by the Lessor to any Person other than the Lessee.the gross proceeds of s<<ch sale payable in cash.less all costs and expenses whatsoever incurred by the Lessor and the Owner Participant in connection therewith.
Salt Ricer 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.Second Fund shall have the meaning set forth in Section 10(b)(3)(xi) of the Participation Agreement.
Secretary shall mean the Secretary of Energy.Section 6(c)Application shall mean the Loan Participant's Application for an Order under Section 6(c)of the Investment Company Act of 1940 Exempting El Paso Funding Corporation from All Provisions of such Act, as filed with the SEC on April ll.1986, and as amended by Amendment No.1 thereto dated July 11.1986.Securities Act shall mean the Securities Act of 1933, as amended.Securities Exchange Act shall mean the Securities Exchange Act ot'934.as amended.Se<<erable, when used with respect to any Capital Improvement.
shall mean any Capital Imp ment which can be readily removed from Unit 2 without materially damaging Unit 2 or materia y diminishing or impairing the value, utility or condition of Unit 2.Southern California shall mean Southern California Edison Company, a California corporation.
Special Casualty Value, as of any date of determination thereof, shall mean (i)during the Basic Lease Term.the percentage of Facility Cost set forth opposite the date in Schedule 2 to the Facility Lease immediately succeeding such date of determination (or, if such date of determination is specified in Schedule 2 to the Facility Lease, such date), and (ii)during the Renewal Term.the amount 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 monthly steps over the period from such date to the License Expiration Date.Anything contained in the Participation Agreement or 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, under any circumstances and in any event, in an amount at least sufBcient 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.Special Termination Value, as of any date, shall mean the percentage of Facility Cost set forth opposite such date in Schedule 4 to the Facility Lease.Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstanding, Special Termination Value shall be, when added to all other amounts which the Lessee is required to pay under Section 13(c)of the Facility Lease.under any circumstances and in any event, in an amount at least sufBcient to pay in full, as of any date specified on Schedule 4 to the Facility Lease, the aggregate unpaid princ'ipal amount of all Notes Outstanding at the close ofbu'siness on such date, together with accrued and unpaid inte on such Notes.Special Transfer shall have the meaning set forth in Section 7(b)(4)of the Participate Agreement.'
2>>
Substantial Amendment shall mean any amendment to the Price-Anderson Act or the Atomic Energy Act which would constitute a Deemed Loss Event under clause (2)of the definition of'eenied Loss Event.Supplemental Financing shall mean a financing of the Supplemental Financing Amount of Capital Improv@nents made pursuant to Section 8(f)of the Facility Lease.Supplemental Financing Amount shall mean the Applicable Unit 2 Percentage of the cost of a Capital Improvement which equals (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 anv~Supplemental Rent shall have the meaning set forth in Section 3(b)of the Facility Lease.Surciuing Lessee shall have the meaning set forth in Section 10(b)(3)(ii) of the Participation Agreement.
Taxes 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.excise, gross income.gross receipts, sales, use.property, personal and real.tangible and intangible, and stamp taxes), levies, imposts, duties, charges.assessments.
or withholdings of any nature whatsoever, general or specific, ordinary or extraordinary, together with any and all penalties.
fines.additions to tax and interest thereon.Tnx Assumptions shall mean the assumptions set forth in Section 13(c)of the Participation Agreement with respect to the Federal income tax consequences of the transactions contemplated by the Participation Agreement.
Tax Reform Act of 1986 shall mean Pub.L.No.99-514, the Tax Reform Act of 1986.Termination Date shall have the meaning set forth in Section 14(a)of the Facility Lease.Termination Euent 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.Terminntion Obligation shall have the meaning set forth in Section 15.10.2 of the ANPP Participa-tion Agreement (or any comparable successor provision).
Termination Value, as of any Basic Rent Payment Date.shall mean the percentage of Facility Cost set forth opposite such date in Schedule 3 to the Facility Lease.Anything contained in the Participation Agreement or 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.Texas Public Utility Regulatory Act shall mean the Texas Public Utility Regulatory Act of 1975, as amended, or any comparable successor law.Transaction Documents shall mean the Participation Agreement, the Facility Lease, the Trust Agreement, the Indenture.
the Extension Letter, the Decommissioning Trust Agreement.
the Mort-gage Releases, the Assignment and Assumption, the Purchase Documents, the Letter of Credit, the Letter of Credit Agreement and the Notes.Trnnsaction 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.the Real Property Interest, and the Assignment and Assumption on an"as is, u:here 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 A-23 I representations and warranties in a manner comparable to that set forth in the second sentence of Section 6(b)of the Facility Lease), together wtth 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 Deed (or the ground lease referred to in Section 10(b)(3)(xiv)of the Participation Agreement, as the cwe may be)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.
Twist shall mean the trust created by the Trust Agreement.
Tnsst Agreement shall mean the Trust Agreement, dated as of December 1, 1986, between Chrysler Financial Corporation and FNB.Trust Estate shall have the meaning set forth in Section 2.03 of the Trust Agreement.
Trust Indenture Act shall mean the Trust Indenture Act of 1939, as amended.Trustee's Expenses shall mean any and all liabilities, obligations, costs, compensation, fees', expenses and disbursements (including, without limitation, legal fees and expenses)of any kind and nature~whatsoever (other than such amounts as are included in Transaction Expenses)which may be imposed on, incurred by or asserted against the Indentttre Trustee or any of its agents, servants or representa-tives, 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 the Lease Indenture Estate or the action or inaction of the Indenture Trustee r the Indenture; proutded, hoteeeer, that such amounts shall not include any Taxes or any expressly excluded from the Lessee's indemnity obligations pursuant to Section 13(a)or 13(b)e Participation Agreement.
UCC or Uniform Commercial Code shall mean the Uniform Commercial Code as in effect in any applicable jurisdiction.
Undenuriting Agreement shall mean the agreement executed by the Loan Participant, El Paso, Smith Barney, Harris Upham h Co.Incorporated and PaineWebber Incorporated (acting either as underwriters or representatives of the underwriters named therein)relating to the purchase, sale and delivery of the Initial Series Bonds.Undivided Interest shall mean a 2.183647%undivided interest in Unit 2 (other than the Retained Assets described in clauses (ii)and (iii)of the definition of such term and other than the portion of Unit 2 described as excluded from the transfer pursuant to the Bill of Sale in Section A of Exhibit B thereto), including, except where expressly stated to the contrary, the related Generation Entitlement Share attributable to a 2.183647%undivided interest in Unit 2.Undioided Interest Indenture Supplement shall mean the supplement to the Indenture, substantially in the form of Exhibit C thereto.Uniform System of Accounts shall mean the Uniform System of Accounts prescribed for Public Utilities and Licensees subject to the provisions of the Federal Power Act (Class A and Class B), 18 C.F.R.101, as in e8ect on the date of execution of the Participation Agreement, as amended or modified from time to time after such date.Unit I shall mean the 1,270 megawatt unit, commonly known as Unit 1, and one-third of the Common Facilities at the Palo Verde Nuclear Generating Station.Unit 2, shall mean the 1,270 megawatt unit, commonly known as Unit 2, and one-third ie Common Facilities at the Palo Verde Nuclear Generating Station, all as more fully described in Exhibit B to the Bill of Sale, together with all Capital Improvements thereto.A-24 Unit 3 shall mean the 1,270 megawatt unit.commonly known as Unit 3, and one-third of the Common Facilities at the Palo Verde Nuclear Generating Station.Unit 2 Retained Assets shall mean (i)all resident fuel assemblies, equipment and personal property constituting part of the Generating Unit (as de6ned in the ANPP Participation Agreement) designated as Palo Verde Nuclear Generating Station (other than common facilities) owned by the Lessee but excluded from Unit 2 as set forth in Section A of Exhibit B to the Bill of Sale and (ii)a one-third interest in all equipment and personal and real property constituting PVNGS common facilities under the ANPP Participation Agreement owned by the Lessee but excluded from the Common Facilities as set forth in Section B of Exhibit B to the Bill of Sale.User shall mean a Person unrelated to El Paso (within the meaning of section 318 of the Code)possessing the Undivided Interest after the Lease Termination Date.A-25 0
TRUST AGREEMENT dated as of December 1, 1986 between CHRYSLER FINANCIAL CORPORATION, as Owner Participant and THE FIRST NATIONAL BANK OF BOSTON, as Owner Trnstee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities
 
TABLE OF CONTENTS Sl:.<.'I'i<
>i 1.0l.Definitions ARTICLE I DEFIYITiois Si<i><>i 2.()l.Si:.<Ii<>i'.0'.SE<;n<>x 2.03.ARTICLE II AI:1'II<)I<<TY T()Exi'.(t'TI'.A%I)PEIIF()I(xi VA ill()I'8 DO(:t'ilF'ATS:
RATII)I(:ATI()(5'(I)C()(I<<<IXI KTI()X: DI'.(:I.AIIA I'l()N ()I'iii irl'Y Ti<<:.0'a'ii:.ii T>>i S I'I'.I A>ithority to Execlite ai>(l Perfnri>>V;irio>is Doc>li>><.'i>ts.
R;itific;itio>>;i>>d Coi>fir>>mtioi)
Declaration of Trust by the Owner Trustee SI:<rl'I<)N 3.01.SE<:n<>i.'3.02.ARTICLE III PAY%<<'.4'I'S Payments f'rom Trust Estate Only Method of Payme>>t Si:.<'i'i<>x 4.0I.Distribiitioi)s ARTICLE IV Dls'I'I ill>I'I'I<>MS SI:,<'I'I<>i 5.0l.SI'.<'I'I<>N 5.02.SI:.(",I'I<
>x 5.03.Sl:.<.-ri(>i 5.04.Sl:.<.-n(>x i.05.Sl:.<;n<)i 5.06.ARTICLE V DuT<<:s oF Ti<<: OwiE<<TII(sTI:.I'otice of Certain Events.Action iipon Instructions
.Indem>>ification
.>Vo Duties Except as Specified in Trust Agreement or Instructions
.No Action Except Under Specified Docunients or Ii)structio>>s.....
Absence of Duties Sl:.<'I'I<>i 6).OI.Si:<ii<>i (i.l)'.Sl<,'I'I<>i 6,().3.SI:<."I'I<
IN 6.04.Si:,(;n<>x 6.05.Si:.<;i I<>i t).06.ARTICLE VI Tlli'.O)vol'.n Tn(Irn:.I:.Accepta>>ce of Trust and Duties F>>r>>isl>i>>g of'oc>>i>>e>>ts No Representations or Warra>>ties;)s to tlie U>>(livi(le(l I>>tercst.th<<lie;>I Property I>>terest.Unit 2 or Documei)ts V<o Segregation of'oneys: iVo Interest Reliance: Advice of'ounsel Not Acting in Individual Capacity.Si<I'I<>i 7.0f'I:.<.'I'i<
>i 7.02 ARTICLE VII I%I)l<xlx<<<I<
YI'I<>b ()I'<<I'.Owbl'.>>Tlii s n:.i:.II)Till:.Ou'xi:.u P)lrl'I<'Ii
~)i'I'he Ow>>er Particip;ii>t to In(le>>>i>if'y the Owl>er Tnistee....
Compensation and Expenses.
TABLE OF CONTENTS*(Continued)
ARTICLE VIII TERMINATION OF TRUST AGREEMENT SEGTloN 8.01.Termination of Trust Agreement SEcrIoN 8.02.Termination at Option of the Owner Participant 6 6 ARTICLE IX SUccEssoR OwNER TRUsTEEs, Co-OwNER TRUsTEEs AivD SEPARATE OwNER TRUsTEEs SEcrIov 9.01.Resignation of the Owner Trustee;Appointment of Successor.............
SEcTIoN 9.02.Co-Trustees and Separate Trustees SECTION SECTION ARTICLE X P SUPPLEMENTS AND AMENDMENTS 10.01.Supplements and Amendments 10.02.Limitation on Amendments SECTION 11.01 SECTION 11.02 SECTION 11.03 SECTION 11.04 SECTION 11.05 SEcrIoN 11.06 SECTION 11.07 SEcrIoN 11.08 SEcrroN 11.09 SECTION 11.10 SECTION 11.11 SEcrIoN 11.12 SECTION 11.13 SECTION 11.14 SCHEDULE I ARTICLE XI MISCELLANEOUS No Legal Title to Trust Estate in the Owner Participant Sale of Undivided Interest and/or Real Property Interest by the Owner Trustee is Binding Limitations on Rights of Others Notices Severability Limitation on the Owner Participant's Liability.Separate Counterparts Successors and Assigns Transfer of Interests.
Headings Governing Law Administration of Trust Performance by the Owner Participant.
Conflict with Transaction Documents Section 15.6.1 Lessor's Certiflcate 8 8 8 9 9 9 9 9 9 11
~~~~~i TRUST AGREEWIEVT TRUST AGREEMENT, dated as of December 1, 1986, between CHRYSLER FINANCIAL COR-PORATION (the"Owner Participant")and THE FIRST iVATIONAL BAiVK OF BOSTON, a national banking association (the"Owner Trustee").WITN ESSETH: WHEREAS.the Owner Participant desires to acquire the Undivided Interest and the Real Property Interest through the Trust created hereby: and WHEREAS.The First National Bank of Boston is willing to act as Owner Trustee and to accept the Tnist created hereby: NOW.THEREFORE.
in consideration of'he mutual<<greer>>ents herei>>containell mid otlier gooil a>>d valuable co>>sideratio>>.
receipt of'hich is hereby acknowleilge<l.
tile p;irties hereto;igrc<<as follows: ARTICLE I DEFINITIONS SEGTloN 1.01.Definitions.
All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in Appendix A to the Participation Agreement dated as of December 1.1986, among the parties hereto and others.References in this Agreement to articles.sections, paragraphs and clauses are to articles.sections.paragraphs a>><l clauses of tliis Agree>>i<<>>it iinless otherwise indicated.
ARTICLE II AUTllolilTY To ExEcUTE hND PERFoRSI VARIQUs DocUSIENTs:
RATIFIOATIoN AND CoNFIRSIATI()N DECLARATION OF TRUST BY THE OWNER TRUSTEE SECTION 2.01.Authority to Execute and Perform Various Documents.
The Owner Participant hereby authorizes and directs the Owner Trustee (i)to execute and deliver each Traiisactio>>
Document to which the Owner Trustee is to be a party and to execute and issue and request the Indenture Trustee to authenticate and deliver the Initial Series Note (each such Transaction Document, including the Initial Series Note, to be in the form approved by the Owner Participant).(ii)to execute and deliver all other agreements, instruments and certiFicates contemplated by the documents referred to in clause (i), (iii)to take whatever action shall be required to be taken by the Owner Trustee by the terms of, and exercise its rights and perform its duties under, each of the documents.
agreements, instruments and certificates referred to in clauses (i)and (ii)above as set forth in such documents, agreements, instruments and certificates and (iv)subject to the terms of this Agreement.
to take such other action in connection with the foregoing as the Owner Participaiit may from time to time direct.SEcTloN 2.02.Ratification and Confinnatio>>.
By certificate dated December Z.1986 (the"Section 15.6.1 Certificate"), the Owner Trustee confirmed the matters required to be co>>firnied on the part of ii lessor in a sale and leaseback transaction under Section 15.6.1 of the ANPP Participation Agreer>>ent, a copy of which certificate is attached hereto as Schedule I.The Owner Participant.
by its execution and delivery of this Agreement, ratifies and confirms the execution and delivery by the Owner Trustee of the Section 15.6.1 Certificate.
SEcTION 2.03.Declaration of Tnist by the Ou:ner Trustee.The Owner Trustee hereby declares that it will hold all estate.right.title and interest of'he Owner Trustee iii and to the U>>divided 1>>terest.the Real Property Interest.the Transaction Documents and any other property co>>tributed y the Owner Participant, including without limitation all amounts of Rent.insurance proceeds and requisition.
inde>>>>>ity or other payments of'ny kind.but specifically excludi>>g;ii>y Exceptc<l Pavments (collectively, the-Trust Estate-), upon the trusts set forth herein a>>(l for the use benefit of the Owner Participant.
ARTICLE III PAYx>>,"YTS S>x">'u>~'3.0L Pay>>>ents from Trust Estate Only.All payments to be>>>a(le by the Ovv>>er Tr>istce u>>der this Agreement shall be made only from the income and proceeds fron>the Tnist Estate<<ii<l only to the extent that the Owner Trustee shall have received income or proceeds froi>>the Tnist Estate to make such payments in accordance with the terms hereof.except as specifically provi<le(l i>>Sectio>>6.0l.The Owner Participant agrees that it will look solely to the i>>coi>>e a>>(l procee(ls frn>>i tl><.Tnist Est;ite to the extei>t avaih>ble for p;>y>>ient;is herein pro)i(le<I a>><l tl><<t.except;is spe<ifi<v>lit pn)vi(le(l li<.rei>>.the Ow>>er Tnistcc slmll>iot be liable to tl><.'w>>cr P;irticii);>i>t f<)>':<<>y;<<>><)>>>><i p;iy;ible iiii(ler tl>is Agreenie>it
<<i>(l shall>>ot be subject to<<>>y liability iiii(lcr tl>is Agr<c>>><.>>t.
Si:i'>'u)x.'3.02.,lletl>orl of Passu>e>>t.
All amoiints payable to the Owner Particip;<<>t piirsim>>t t<>tl>is Agree>i>ei>t slmll be paid or c;>iised to be pai(l by the Ow>>er Triistcc to tli<.Ovviicr P;irticip;iiit.
>>r its non>i>>ee.by crediting the amount to be distributed to the Owiier Particip;iiit to;iii acco>>iit maintained by the Owner Participant with the Owner Trustee in imr>>e<liately avaih>ble f'>>>ids or by transferring such amount in immediately available funds to a banking institution with b;iiik wire tra>>sfer facilities for the account of the Owner Participant.
as instructed fro>>i tii>>e to tinie by tl><.'w>>er Particip;i>it.
ARTICLE IV Dis niii>i'n<>%4 S<:<:>'u)x 4.0L Distributions.
Subject to the ten>>s and require>>ieiits of tlie Tr;i>>sactio>>
D>ments.<<ll payments and amounts received by or on behalf of the Ow>>er Tnistee sli<<ll be distribil't<.(l forthwith<<pon receipt in the following order of priority: first.so>>iuch of s>icli p;iynie>>t or;i>>ioi>>it;is sh;>ll be required to pay or reimburse the Owner Trustee for atty fees or expeiiscs (i>>chi<liii
'easonable
<<ttorney's fees a>>d expenses)not otherwise paid or rei>>>b<<rse<l to tl>e Owi>er Tnistcc;is to which the Owner Trustee is entitled to be paid or reimbursed hereuiider shall be ret<<i>>ed by tlie Owner Trustee: and.second.the balance.if any.of such payment or amoiint re>>iai>>ing tl>ereaftcr sli:ill be distributed to the Owner Participant.
ARTICLE V DvTII"i<)I'>ll: OwNI:,><Tii<>r>'>:,>:.
Si:.<"i'i<>v~.OL Notice of Certain Euents.In the event the Owner Tnistce sliall h<<vc k>>owlc(l c<)f;>iiy Dcl'iiiilt.
Eve>it of Def<<>lt.I>>(le>>ture Defii<<lt.Ii>(lei>tiire Eve>>t<)t'efi>i>lt.
Ev<<i>t<)I'<)ss I>>.Deen>e(l Loss Evei>t.the Owner Trustee sh;ill give prompt writte>>iiotice tliereot'o tl>c Ovv>><<r Particip:>>it.
the Lessee.the Loan Participant and the Indenture Trustee<<>>less s<<ch Deli<<ilt.Eve>>t<)f Defu>lt.Ii>(lei>t<<re Default.Indenture Event of Default.Event of Loss or Dee>>ie<l Loss Evc>>t ii<)loi>ger exists before the giving of such notice.Subject to the provisioiis of Sectioii 5.03.tlie Ow>><<r Trustee sh;ill tak;or refrain from taking such action.not inconsiste:>t with the provisions ot'lie Transaction Documents.
with respect thereto as the Owner Participant shall direct by written i>>structio>>
to the Owner Trustee.If the Owner Trustee',sh;>11 have given the Owner P<<rticip:int vvrittcii>>otice of<<>>y event<<nd shall not have received written instructions
<<s above provi<le(l ivitl>i>>:)0 (l<<is:>ft<'r I>>i>ili>>g iiotice ol'<<ch event to the Owner Participant.
the Ovv>>er Tnistee i>>;iy.siil)ject t<>tli<<pn)visio>>s oi'he Trai>saction Docu>>>ents.
take or refrain froii>t:iki>>g s<<ch;ictioi>.
b<<t sliall be I>l><no duty to.<<nd shall have no liability for its failure or refusal to.take or refrain from taking a>>y;ic ivith respect thereto as the Owner Trustee shall deem advisable a>>d in the best interests ol'he Ow>>er~~~Participant.
For all purposes of this Agreement.
in the absence of actual knowledge oF a>>ofRcer ii>the corporate tr<<st division of the Owner Trustee.the Owner Trustee shall not be deemed to have knowledge of a>>y Default, Event of Default, Indenture Default.Indenture Event of Default.Event of'oss or Dee>>ie<l Loss Event unless the Owner Trustee receives written notice thereof given by or o>>behalf of the Owner Participant.
the Lessee.the Loan Participant.
the Inde>>t<<re Trustee or ai>y Holder of a iVote.Sr'.<')'r<>i 5.02.Action rrt)on In)trrrctions.
S<<bject to the terms of Sections 5.01;>r>d~.0:3.<<po>>tli<<written instructions of the Owner Participant, the Owner Trustee will take or refrai>>Fron>taki)>g s<<cli action or;ictions.
not inco>>sistent with the provisions of the Transaction Doc<<i>>ents.
as i>>;iy b<<specified in such instructions.
Sr x'i'ii>i 5.0'3.1))de)>>)>i ficati<>>>.
Tl>e Ow>>er Tnistee sh;>ll>>ot be re<1<<ire(l to t;ik>>>>r r<<I'r;>i>>I'n>i>>t;>kir>g a>>y a<<tior>i>ii(ler tliis Agree>>ieiit or;iiiy otlier Tr;i)>s;>etio>>
Dociii>><<iit
(<>th<<r tli;iii tl><<;i<<ti<>>lb sp<<cili<<<l iii tl><<first se>>teiice'ol'Sectioii
.~.01}<<i>less tlie Owiier Tr<<st<<<<sliall h;>v<<l><<<<<<i<<<l<<<<>>>i(i<<l by the Lessee or.if the Owner Trustee reasonably believes such i>>dei>>iiity to be iii;i<le(iiiatc.
by tll<.Owi>er Participant.
i>>n>a>>ner a>>d fon>>reasoi>ably satisfactory to the Owner Tnistee.;<<.';>i>>st:<<>i liability.
I'ee.cost or expe>>se (i)icliidi>>g reasoiiable attor>>eys fees:iiid<<xp<<iis<<s}
ivl>i<<l>>>>:>>
h<<incurred or charged in connection therewith, other than's<<ch as niay result froni the willt'<<1 misco>>d<<ct or gross negligence of the Owner Trustee: and.if the Owner Participa>>t shall h;ive directed the Owner Trustee to take or refrain from taking any action un(ler any Tra>>sactio>>
Document.the Owner Participant agrees to furnish sirch inderniiity by a writtei><<r>derti>ki>>>.
of i>>(le>>>i>ificatio>>
ai)d.in;>ddition.
to pay tl>e re:isoi>able coi>>pei>s;itioii of tl>c Oiv>><<r Tr<<st<<<<I'<)r tl><services perfon>>ed or to be perfor>>>ed by it p<<rs<<a>>t to s<<cli<lircctioii.
Tli<<Owiicr Tr<<st<<<<sli;>ll
>>i>t be re<I>iired to t;ike;>>>y;ictiori ii>><ler any Tr>iisactioii Doc>i)i>eiit il'th<<Ow>><<r Tnist<<<<sli:ill r<<;>s>>r>>;l>li<i<<ten>>i>>e.
or sh;ill 1>;)ve been a(lvise(l by coii>>sel.that s>ich action is lik<<ly to r<<siilt i>>p<<rs<>>i:il li;>I>ilitx Ior which tl>e Owner Tnistee h;>s l>ot beer>;<<>d will i>ot be a(le(I>i;it<<ly i>>(l<<ri>r>ifi<<(l
<>r i>><<<>>>tr';>>'i t>>tl>>en>>s hereoF or of;>i>y docu>>>ent coiitei>>phited hereby to wliicl>tlie Ow>><<r Triist<<<is;i I);>rti<>r is otherwise contrarv to law.Sr:.<")'u>i 5.04.No Duties Except as St)ecijie<f in Trrrvt A~~recure>>t o)b>strrrctio)>v.
Tli<<Ow>><<r Trustee shall>>ot have any duty or obligation to mar<<rge.control.iise.i>>;ike;>i>y payiiie>>t il>I'<<si)<<ct>>I'.register.record.ins<<re.inspect.sell.dispose of or otherwise<leal with the U>>divi<led I>>terest.tl><<R<<;il Property Interest or any other part of the Trust Estate, or to otherwise take or refrai>>fro>>i taki>>g;i>>y action under or i>>connection with any document contemplated hereby to wliicl>tlie Ow>>er Tnist<<<<is a party.except as expressly provided by the terms of this Agreement or in writtei>i>>stnictioi>s I'roi)>tl)e Owner Participa>>t received pursuant to Section 5.0I or 5.02: and>>o i>>>plied d<<ties or oblig;>tin>>s sl>all be read into this Agreement against the Owner Trustee.The Owner Tnistee>>evertheless agrees that it will.in its i>>dividual capacity and at its own cost and expense.pro>>iptly take<<ll<<etio>>as iii;iy b<<i>ecessary to discharge a>>y Lessor's Liens arising by, through or iin<ler it oii;ir>y p;irt ol'l><<Tr<<st Estate.S>'>'I'>>~x 5.<)5.l'o Action Exec})t Un<le)'t)eciJ)e<l Doc)rare>>tr'r l>>vt)'rrrli<>)>z.
Tli<<O>vii<<r Tnist<<<;igrees tli;it it will not nia>>;ige.control.use.sell.dispose ol'r otlierwise (le;il witli tli<<U)i<liii<l<<<l I>>tercst.tl>e Real Property Interest or any other part of the Tr<<st Est;ite except (i);is re<I<<ir<<<l by tl><<ternis oi'he Trar)s:>etio>>
Docun>eiits.(ii)in accordance with the powers gr;iiite(l to.or tli<<;i<<tli>>rity coi>ferre<l
<<poi>.the Owner Trustee pursuant to this Agreement or (iii)in;record;i>>ce with tlie<<xpr<<!i!i terms hereof'or with written instructions from the Owner Participant pursuant to Sectio>.~.OI or.~,0).S)l<")'r<>i B.OG.Absence of Dr)ties.Except in accordance'ith written i>>stnictio>>s I'iir>>isl><<l piirs<<:i>>t to Sectioiis 5.01 and 5.02.;>r>d without lin>itatio>>
of'he generality of Sectioi>5.04.tl><<Ow>><<r Tniste<<sli:>ll i>ot have;>i>y (l<<ty to (i)file.record or deposit<<iiy Tr;i>>sactio>>
Dociii>>e>>t or;<<>i<>tli<<r~~i<lo<<iiiii<.iit.
or to i>>;>iiit;iiii any such fili>g, recordirig or deposit or to refile.rerecor<l or redeposit:iiiy ich doc<<ine>>t.(ii)obtain insurance on the Undivided Interest or the Real Property Interest or eifect or maintain any such insurance, other than to receive and forward to the Owner Participant any notices, policies, certificates or binders furnished to the Owner Trustee pursuant to the Facility (iii)maintain Unit 2.the Undivided Interest or the Real Property Interest, (iv)pay or discharge Tax or any Lien owing with respect to or assessed or levied against any part of the Trust Estate, except as provided in the last sentence of Section 5.04, other than to receive and forward notice of such Tax or Lien to the Owner Participant, (v)confirm.verify, investigate or inquire into the failure to receive any reports or financial statements of the Lessee, (vi)inspect Unit 2 at any time or ascertain or inquire as to the performance or observance of any of the covenants of the Lessee or any other Person under any Transaction Document with respect to the Undivided Interest, the Real Property Interest or Unit 2 or (vii)manage, control, use, sell, dispose of or otherwise deal with the Undivided Interest.the Real Property Interest or Unit 2 or any part thereof or any other part of the Trust Estate.except as provided in Section 5.05.ARTICLE VI THE OWNER TRUSTEE SECTION 6.0L Acceptance of Triist and Duties.The Owner Trustee accepts the trusts hereby created and agrees to perform the same, but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Trust Estate upon the terms of this Agreement.
The Owner Trustee shall not be answerable or accountable under any circumstances, except for (i)its own willful misconduct or gross negligence, (ii)the inaccuracy of any of its representations or warranties contained in Section 6.03 or under Section 8(a)of the Participation Agreement given expressly in its individual capacity, (iii)its failure to perform obliga-tions expressly undertaken by it in the last sentence of Section 5.04 of this Agreement or in Section 8(b)of the Participation Agreement or (iv)Taxes based on or measured by any fees.comniissions or compensation received by it for acting as trustee in connection with any of the traiisacti.
contemplated by the Transaction Documents.
SECTioN 6.02.Furnishing of Documents.
The, Owner Trustee will furnish to the Owner Partici-pant, promptly upon receipt thereof, duplicates or copies of all reports, notices.requests.deniands.opinions, certificates, financial statements and any other writings furnished to the Owner Trustee hereunder or under the Transaction Documents, unless by the express terms of any Transaction Document a copy of the same is required to be furnished by some other Person directly to the Owner Participant, or the Owner Trustee shall have determined that the same has already been furnished to the Owner Participant.
SECTION 6.03.No Representations or Warranties as to the Undivided Interest, the Real Property Interest, Unit 2 or Documents.
The Owner Trustee makes (i)NO REPRESENTATION OR WAR-RANTY AS TO THE TITLE, VALUE, CONDITION, DESIGN, OPERATION, MERCHAiVTABILITY OR FITNESS FOR USE OF THE UNDIVIDED INTEREST, THE REAL PROPERTY INTEREST.UiNIT 2 OR ANY OTHER REPRESENTATION OR WARRANTY.EXPRESS OR IMPLIED.WITH RESPECT TO THE UNDIVIDED INTEREST.THE REAL PROPERTY INTEREST OR UNIT 2 WHATSOEVER.
except that the Owner Trustee hereby represents, warrants and covenants to the Owner Participant that it will comply with the last sentence of Section 5.04, and (ii)no representation or warranty as to the validity or enforceability of any Transaction Document or as to the correctness of any statement made by any Person other than the Owner Trustee, contained in any thereof, and except that the Owne Trustee represents, warrants and covenants to the Owner Participant that this Agreement has been, and each of such other documents which contemplates execution thereof by the Owner Trustee has been or will be.executed and delivered by its officers who are.or will be.duly authorized to execute and deliver such documents on its behalf.SECTIoN 6.04.iVo Segregation of 51oneysi iVo Interest.Except as otherwise provided herein or iii any of the Transaction Documents, moneys received by the Owner Trustee hereunder need no segregated in any manner.except to the extent required by law.and may be deposited under general conditions as mny be prescribed by law.and,the Owner Trustee sh;ill not be li;ible for;i>>y~~interest thereon, except as may be agreed to by the Owner Trustee.S<:,<w<<)x 6.05.Reliance;Advice of Counsel.The Owner Trustee shnll not incur any liability to a>>y Persori in;icti>>g upon any signnture.
instrument, notice.resolution.
request.consent.order.certificate.
report.opiiiio>>.bond or other document or paper believed by it to be genuine nnd believed by it in good fnith to be signed by the proper party or parties.The Owner Trustee mny accept n certified copy of a resolution of'he board of directors or other governing body of any corporate pnrty;is concl<<sivi.'vi(lence that such resoliition has been<l<<ly ndopted by such body a>>d thnt the same is i>>fiill force;>>id elfect.As to any fnct or mntter the nian>>er of ascertainnient of which is>>ot specific:illy prescrib<<<l herein.the Owner Trustee may for all purposes hereof rely on a>>Officers'ertific;ite ol'he relev;<<it party as to such lact or matter, and such certificate shall constitute full protection to the O(viier Trustee for any action tnken or omitted to be taken by it in goo<I faith in relin>>ce thereon.I>>tli<<<<(l>>iiiiistr;itio>>
ot'he tr<<sts here<>>)der.
the Oiv>>er Tr<<stee>>iay execiite;iiiy ot'lie tr>>st>><)r I)<)a<<rs ll<,'rcol';i>>(l perfon>>its powers;i>><l diities here<<ii(ler (lirectly or throi<<li;<<.'<<>>ts or attor>><<ys a<<<l>>>>ii co>>s<<lt with co<<iisel.acco<<>>ta>>ts n>><l other skilled Persons to be select<<<l;iii<l
<<i>>ploy<<<I by it.;i>><l tli<<Owner Trustee shnll not be liable for anything done.s<<ff'ered or oi>>itted in goo<I faitli by it iii nccor<l;iiice with the a<lvice or opiiiio>>within the scope of siicli Perso>>'s co>>ip<<t<<>>(c of;i>>y sii<<li co<<nsel.;iccountaiits or other skilled Persons a>>d iiot contrary to this Agree>>ieiit.
SF<v<()N 6.06.Not Acting in Individual Capacity.Except as provided in this Article VI.i>>accepting the trusts hereby crented the Owner Trustee acts solely ns trustee hereun<ler an(l not iii its individual cnpncity: nnd all Persons having any claim against the Owner Trustee by re:iso)i of'li<<trnnsactio>>s co>>te>>iplnted by the Transaction Doc<<i>>ents shall look oiily to tlie Tr<<st Est;ite (or a p;irt thereof.as the case may be)for pnyment or satisfaction thereof.except:is specific:illy provi(le<I i>>tliis Article VI and except to the extent tlie Owner Triistee shnll otherwise n<<rce iii;iiiy Tr;iiis;i<<ti<)ii Dociii>>e>>t to whicli it is;i p;irty.ARTICLE VII INI)l:.)IN<I'<(".AT<<)i OF YIIR OwNI:.I<T>><'sTF<:.
BY Till'.Owx<:.I<PA>>TI<:II's)il St:.<,"rl<)x 7.01.Tlie Oicner Participant to Inde)>>>>ifig the Ou>>er Trustee.The Owiier Parti<<ipa>>t agrees to nssunie liability for.and to indemnify and hold harmless the Owner Tr<istee a>><l FYiB.iii it>>individual capacity.agninst and from, any and all Claims which mny be imposed o>>.inc<<rre<l l>y<)r asserted at any time ngainst the Owner Trustee (arid not indemnifiie(l by the Lessee withiii:i rensonnble time after demand therefor)in any way relating to or arisiiig o<<t of the Tr<<st Estate.:>>iy ol'he properties included therein.the administration of the Tr<<st Estate or any;ictio>>
or i>>aetio>>of tli<<Ow>>er Trustee hereunder or under the Transaction Documents.
except only th:it the Ow>>er Parti<<i-pn>>t shall not be required to indemnify the Owner Trustee for Clainis nrisi>>g or resiilti>>g froi>>aiiy of the mntters described in the last sentences of Sections 5.04 and 6.0I.The iii(lei>>iiities co<it;ii>><<(l i>>tliis Section 7.0I sliall s<<rvive the termination of this Agreement.
S<:.i'i'ii~i.O'Co>><pe)isation and Expe)use~.
Tlie Owiier Tr<ist<<<<sliall r<<<<<<ii<<;is<<<)i>>i)<<>>sati>>>>
I'>>r its services I)ere<<iider such ordinnry fees iis are fair.re>>so>>able a>><l ciisto>>i;iry I'or tli<<p<<rfuri>>:<<i<<<<.<)t'uch services;ind as may heretofore and from time to time herealter be;igree(l
<<po>>betsv<<<<>>tli<<Ow>>er P;irticipaiit:iiid the Owner Trustee.The Owner Trustee sh;ill be eiititlc(l to be r<<iiiibiirs<<<l I'<<r its reiisoimble expe>>ses hereunder;ind to be coiiipe>>sated reaso>>'ibly tor;iiiy extr;ior(liii;iry s<<rsi<<<<s're>>dered hereuiider.
ARTICLE VIII TEI\i>>v<<<T>c)c<<
'oF TRl:sT Ac:l>EEx>EYT S><err><)x
'S.OL Tennin(>tion of Trust Agreement.
This Agreement a>>d the trusts created he shall terminate and the Trust Estate shall.subject to the Participatio>>
Agreen>e>>t.
the Inclenture ai><l Article IV of this Agreement.
be distributed to the Owner Participant.
a>>cl this Agreement shall be of>>o further force or effect.upon the earlier of (i)the sale or other final clisposition by the Oiv>>er Trustee of all property constituting part of the Trust Estate and the final distributio>>
by the Oiv>>er Trustee of all moneys or other property or proceeds constituting part of the Trust Estate in accorda>><<e with the terms oF Article IV ancl (ii))I years less one clay after the death of the last survivor of;ill of tl>e desce>>clants living on the date of this Agreement oF Joseph P.Ken>>eely.father of President Johri F.Ke>>>>eely.but if any such rights.privileges or options shall be or beco>>ie valid uiicler Applicable Lani for;i p<<rio(l s<<bs<<q<<e>>t to the'1st;iniiivers cry of the de;ith of s<<cl>hist siirvivor (or.<<itl>c)>>t lii>>itiii~tl><<!<<<<>>erality of the 1'oregoing.
il'egislatioii sh;ill beconie eH'c.<<tiv<<provi(li>><<
1'or tli<<i:>li<liti
<)>p<<rniitting tlic ell'ective gr;i>>t of s<<ch rights.privileges acid optioiis for;i p<<rio<l iii gross<<x<<<<<<liii
<tl><period for which such rights, privileges and options are hereinabove stated to exte>>cl;iiicl be v;>ii(1).t1>eii siich right's.privileges or options shall>>ot terminate as aforesaid biit shall ext<<>>cl tn;iiul c<)iitil>l>L it)ell'ect.bi>t oiily if siich iio>>ten>iiiuitioi>;i>>d extension shall the>i bc v;ili(l iiii<l<<r Applic;il)l<<L;>w.
>iiitil such time as the same shall, under Applicable Law.cease to be valid.SE<a'><)i'.02.
Termination c>t Option of the Ou:ner Participant.
Notwithsta>>cling Section 8.01.this Agreement and the trusts created hereby shall terminiite and the Tn>st Estate shall be clistrib<<t<<cl to the Owner Participant.
a>>d this Agreeme>>t shall be of>>o fiirther force;iiicl
<<lfc.ct.<<po>>the el<<<<tin>>ot the Owner Participaiit by notice to the Ow>>er Trustee.if such>>otice sli;ill b<<;i<<coiiip;i>>i<<cl l>i tli<<written agreeme>>t of the Owner Particip;int ass<<>>ii>>g<<II the obligatioiis of t)ie Ow>ier Tnist<<c.iiiich.r or coi>teniphite(l by the Transactioi>
Doc>i>i><<>its;i>>d;ill oth<<r obli<!;itic)>is c)l'li<.Ou'>><<r Triist<<<i>i<<iirred by it;is triistec I>ere>i>>cler:
proc:i(lnl.
I>o>crrc>;
tlmt>io sii<<h<<l<<<<ti()ii sli;ill l)<<<<ll'c ctiw<<<<iitil<i>the lien ot the Iiidei)t<<re o>>the Le;ise Iii(lc.iitiire Estate lias b<<<<ii r<<l<<;isc.cl.(ii)1'iill t);>i>>><<>>t
<>f prii>cipal of a>>d premium, if any, and i>>terest on the Notes has bee>i iiiaclc.;>>id (iii)a>>y lic.ii u>Trust Estate heretofore created pursuant to Section 7(b)(4)of the Participation Agree>>ie>>t termi>>atecl.
Such written agreement shall be.reasonably satisfactory iii fon>>;<<id s<<bstaiic<<
t<)tli<<Owner Trustee and shall release the Ow>>er Trustee from all further obligatio>>s ol'l>c Oiv>><<r Tnist<<<<hereu>>der and under the agreements and other instruments mentioiied i>>the prececlii>g s<<iit<<>><<<<.
ARTICLE IX So<:(:i:is<)u Ocvi>:.>>Tucson:.i:
i, C<)-<)wi>>:.c Tuiin:i:.i Ki1I>>SE>'>>AT>'.
Ocv'.i>'.u T>>c'sT>'.>:s t 1)<<Sl'.<."I'll)'i 9.0l.Re<i<<n<>tion of the Ou:ner Trustee>Appointnirnt of S>cree<so>'.(a)Tlie Ocv>><<r Tnistee may resign at any time without cause by giviiig at le;ist:30<lays'rior writte>>>>c)ti<<<<
t>>tli<<Ow>>er Participa>>t.
the.l>>clenture Trustee;<<id the Lessee.such resig>>:itin>>
to b<<<<lf<<ctiv<<<)ii tli<<>i<<<<c'.pt;ill<<c.'f;ipi)ollltl>>elit bv;>Sllccessoi'W>lcr t>'<<ste<<llll(l<<r S<.'<<tloll 9.01 (I)).Ill:i<1<litic)li.
t ll<<Osv>>er Particip;int nmy at;>ny tin>e rei>>ove tl>e Owner Trustee ivitl>or ivitl>o>>t<<;<<is<<by;i>>
i>>stn<<>><<iit i>>writing cleliverecl to tlie Owner Trustee.such re>>ioval to be effective iipo>>the;iccept:>>ice.
<)t'ippoi>>t>>)e>>t by;>successor owiier trustee under Section 9.0l (b).In c;ise of the resig>>;itioii
>>r r<<>><<)v:>I of the Owner Trustee.the Owner Participa>>t i>>ay appoint a successor owiier tnistce by;iii i>>stn>>>><<>>t signed by the Owner Participant.
If a successor owner trustee shall not have beeii;ippoi>>ted svitlii>>'30 days after the giving of written notice of such resignation or the delivery of the written instnime>>t with respect to such re>>>oval.the Owner Trustee or the Owner Participa>>t i>>ay;ipply to;>>iy<<o<<rt of coi>>pete>>t jurisdiction to;ippoi>>t a successor owner trustee to;ict u>>til such ti>>ie.if:iiiy.;is;i sl>ccessol'll>ill ll>1've bee>>ili)poi>>teel aiicl sh;ill liave accepted its appoi>>t>>><<>>t as al)c)'<<<prc)i i<l<<cl.A i>)siiccessor owner trustee so;ippoi>>ted by such court shall in>>>>ecli;itely;iiid ssitlioiit f<<rtl><<r i><<
superseded by any successor owner trustee appointed as above provicled within one yenr f'ro>>i tlie (late of the appointment by such court.(b)Any successor owner trustee.however appointed.
shall execute and cleliver to the predecessor Owner Tntstee an instrument accepting such appointment.
and thereupon such successor osv>>er trttstee.withoiit ftirther act.shnll become vested with all the estates.properties.
rights.powers.duties a>id tntsts of'he predecessor Owner Trustee in the trusts liereunder with like effect as if origin:illy ii;tniecl an Osv>>er Trustee herein: but nevertheless.
upon the written request of'st>eh siiccessor owiier tntstee.siicli predecessor Owner Trustee shall execute nnd deliver a>>instrument tra>>sferriitg to siicli siiccessor ow>>er trustee.upon the trusts hereiii expressecl.
all the estntes.properties.
rights.powers.duties niicl trusts of'such predecessor Owner Trustee.ancl such predecessor Owner Tr<<stee shall<liily assign.transfer.deliver and pay over to such successor owner trustee all inoneys or other property theii held by such preclecessor Gwner Trustee upon the trttsts herein expressecl.(c)Aiiy sii<<cessor owi>er tntstee.however;ippoitited.
sl>;ill b<<a b;i>>k or tr>)>>t coi>>p;i>>y it><<<)rp<>-
r;it<<<l;it><l
<loi>>g b<<sine>>s withiii tl>e Ut>ite(l States of'i>>eric;i a>>(l l>avit>g;t coitil)iii<<l
<<:ipit;>I:i>><l siirpltis of;tt lenst 850.000.000.
if there be such an institution willi>>g.;ible nttd leg;illy qiialifli<<(l t<)perfon>>the diities oF Owner Trttstee hereiinder
<<pon reasonable or ciistoi>>ary teri>>s.(d)Ai)y corporatioii into which the Owi>er Trustee o)ay be>>>erged or coiiv<<rt<<cl or witli tvl>icl>it may be consolidated, or any corporation resttlting from any merger.conversion or co>>solidatio>>
to which the Owner Trustee shall be a party, or any corporation to which substantially;tll the corporate trust business of the Owner Trustee mny be transferrecl.
shall.subject to the ten>is of Section 9.01(c).be the Owner Trustee iinder this Agreei>)ent withoiit further act.St:.<->i<)~
9.02.Co-Trt<stees
<t>><f Sep<t)'ate Trt<stees.
Whenever the Owtier Tr>iste<<or tli<<O)v>><<r P;trticip;i>>t sh;ill dee>>i it>>ecess;iry or pnt(le>>t it>or(ler citl>er to co>>fori>>t<);iny htw>>f;i>>y jiiri>><li<<ti<)ii it>wl>ich:ill or;i>>y part of the Trttst Est;itc sl>;ill l)e sitii;>teel or to>>i;ik<<;iriy
<<I;ti>>i>>r I)>i>>u;t>>y>>>>it a itli respect to the Tntst Estate.tlte Notes or;t>>y Tr;ii>s;tctioii Dn<<>>i>>ctit.
i)r tli<<O>v>><<i'r>>>>t<<<<<>r th<~wi>er P;trticip;i>>t sh;ill be;tdvised by co<<i>sel satist'iictory to it tli;it it is so ii<<<<<<>>>>;iry
<)r pr<<<l<<>>t.thi~wner Trustee and the Owner Participant shall execute and deliver a>>agree>>ient supple>>ient;il hereto and nil other instruments nnd agreements.
and shall take all other action necessnry or proper to coiistit<<te one or more Persons (aod the Owner Trustee>>>ay nppoint o>>e or i>>ore of'its ofRcers)<<itli<r as co-trustee or co-trustees jointly with the Owner Trustee of all or any p;irt of'he Tntst Estate.or;is sepnrnte trustee or separate trustees of all or nny pnrt of the Trust Estate.a>>cl to vest iii such Persoi>s.in such capacity.such title to the Trust Estate or any part thereof ancl such rights or cliities;is i>>;iy b<<iiecessary or desirable.
all for such period and under such terms and coiiditio>>s;>s:ire s;itisf'<i<<tory t<)the Owner Trustee nnd the Owner Participant.
In case any co-tr<<stee or sep;ir;ite tr>tstee sl>;ill<li<<.becoi>>e i>>cap;ible of acting, resign or be removed.the title to the Trust Est;tte;iii<1;tll rigl>ts;<<i<t
<l<<ti<<>>of such co-trustee or separate trustee shall.so far as permitted by lnw.vest in a>id be exercise<1 by th>>Owner Tntstee.without the appointment of n successor to such co-trustee or sepnr;tte trtistee.ARTICLE X S<" I'I'l.l:.tll:.X't 4.RXI)Ax>I:Nl)xll:.X't's St:.<'<t<>i 10.01.S<<pple>>tents an<I A>>>et>(f>)>e)>ts.
At the written request of tlie Owi>er P;trti<<ip:>t>t.
tl>is Agre<'Ill<'l>t silt>ll be aniended by a written it>strttttteot sigtied by tlie Otvt>er Tn>>>t<<<<'>ii(l tl><<Oui><<r Particip;>>>t.
biit if i>>the.opinion of the Owner Trustee aoy instromeiit reqtiired to b>>so<<x<<<<iit<<(l adversely atf'ects any right, duty or liability of, or immunity or it abet>>nity in favor of: it u>>cler tltis Ai;reement or any of the documents contemplated hereby to which it is n pnrty.or wo<<ld cause or resiilt i>>:iiiy conflic with or breach of'any terms.conditions or provisio>>s of'.or def'iiiilt
<<>>cl<<r.its<<It;irter (lociii>iei)ts or by-laws or;tny dociiitieiit cootei)ipl;>ted hereby to whicli it is;t p:irty.th<.'~v>><<>'r>ist<<e i>>ay ii>its sole discretion decli>>e to execiite s<<cli it>stntt>lent.
<<t>l<.'ss it>>li;ill li;iv<h<<<<i>i)rovicied ni>i>>de>>toity satist'actory to the Owner Trustee by the Owner Participa>>t.
S):.<;)'u>i 10.02.Lin)itation on A>>>en<I)ne>)ta iVotwithstandi>>g Section 10.01.the Oiv>>er Tr<<st<<<<sh;ill not execute any amendnient which might result in the trusts created hereunder being termin;ited (I)without the consent of the Indenture Trustee.prior to the release of the lien of the Indentur the Lease I>>de>>ture Estate or prior to the payment in full of the principal of and premium.if;u)i iiiterest on th<<Votes or (ii)without the consent of'the holder thereof.prior to the terminatioii of;<<>y lieii created pursuant to Section"r(b)(4)of the Participation Agreement.
ARTICLE XI Mls<n:.I.I.A Y t;()t'>>S):.<.)'u>i 11.01.No Legal Title to Trust Estate in the Ou:ner Participant.
The Owner Participa>>t slmll i)ot have legal title to any part of'he Trust Estate.Vio transf'er.
by operation of law or othcrivis<<.
oi;i>>y riglit.title or i>>terest of the Owner Particip;i>>t i>>;i>>(l to tli<<Tr<<st Est;)te nr li<<re)i>><l<<r sli;ill op<<r;it<<to tcn>>i>>;)tc this Agreenic>>t or tlie tr<<sts herc<<>>(ler or<<>>titl<<;i>>y s)ic<<<<ssor or tr:)>>st<r<<<<t<>;iii;i<<co<<>>tiiig or to the tr;i>>sfer to it of legal title to aiiy part oi'lie Tr<<st Estat<<.Sl'.<")'l<>h 11.02.Sa/e of Unrfiui<fc<f Enter<<st anrllor Real Prop<<>ting Interrupt bi/lhr Ou'n<'>1'>'<>el<<
iv l3in<li>>.A>>y sale or otl)er coiiveyance of the U>>(livi<led Interest.or Real Prop<<rty 1>>t<<r<.st<>r;<<>i p;irt thereof or aiiy assignrne>>t of'rights un<ler the Assignment and Ass<<niptioii by tlie Ow>>er T)<<stce made pursuant to the terms of this Agreement or any other Transaction Document shall bi)id the Owner Participant and shall be effective to transfer and convey all right.title a>>d interest of'lie Owner Trustee and the Owner Participant in aiid to the Undivided Interest.the Re;il Property I>>ter<<st or aiiy part thereof: or such rights<<n<ler the Assignment a>>d Assiii>>ptio>>.;is tlic cas<<>>iay l><<.V<>piircli;iser or other gra>>tee shall be reqiiire<l to inq<<ire as to the authoriz;)tio>>.
iieccssity.
<<xpc<li<<>><<i or reg<<hirity of'iich sale or convey;i>>ce or as to thc<<pplic;itin>>
of;>>iy s;ilc or otl)cr pix><<<<<<<1>>
with respect thereto by the Owner Tr<<stee.Sl'.<'I'>>>x 11.03.Li>nitatio>)e on Ri<<hts of Otl)c>')'.)Votl)i>>g iii tliis Agre<<i>><<i>t.
u'h<<th<<r<<xpl'<'s'>>)plied.shall be construed to give to;<<)y Perso>>other th;iii tt)e Owi)er Tr<<st<<e>>ii<1 tli<<O<Participant any legal or equitable right.remedy or claim under or in respect of this Agreenie>>t..
cove>>ants.
conditions or provisions contained herein or the Trust Estate.all of which;)rc;i>><l sli;)ll l><co>>strued to be for the sole and exclusive benefit of'he Owner Tr<<stee a>>d tlie Ow>><<r P;irticip;i>>t.
S)'.<w)<>i 11.04.Notices.Unless otherwise expressly specified or permitted by the teri>>s lier<of.all notices hereunder shall be given as provided in the Participatio>>
Agreeiiie>>t.
S):.<a'u>i II.O.).Se<;erability.
Any provision of this Agreement which is prohibited or<<>><<>>for<<<-
able i>>;iny jurisdiction shall.as to such jurisdiction.
be ineffective to the exte>>t of's<<ch proliil>iti<>ii
<>r<<iie>>forceability without invalidating the remaining provisions hereof.;ii)d;i>>y s<<cli proliil>itio>>
<>r une>>f'orceability in any jurisdiction shall not invalidate or render<<ne>>forceable siich provisio>>i>>a>>y other jurisdiction.
Si:.<)')<>x 11.06.Limitation on the Ou:ner Participant's Liabi(itg.
The Ow>>cr P;irticip;i>>t sl);)11>>ot h;)i<<;<<)y lial>ility f'r the perfor>>);u)ce of this Agree))ie))t except:is cxpr<<ssly s<<t I'(>rtli h<<r<~ii>.Si:.<')>>>i 11.07.Sepa>atc Counterparts.
This Agreement m;iy be execiited by tlie p;irtics li<<r<<t<>i>>sep;irate coiinterparts.
each of which when so executed and delivered sh;ill be ai)nrigi>>;il.
b<<t:ill s<<<<li coi>>iterparts sh;ill together co>>stitute b<<t one anti the sa>>ie I>>str<<>>)e>>t.
S)'<r)'i<>i 11.08.Successors an<I A>>igns.All covenants and agreeme>>ts contai>>ed hereiii sli;ill b<<binding upon.and inure to the benefit of, the Owner Trustee and its successors and assigns and the Owner Participant a>><l its successors and assigns.all as herein provided.Any reqiiest.notice.<lir<<<<tin)i.
coiis<<iit.
waiver or other instrument or aetio>>by the Owner Participaiit sh;ill biiid tlie s<<<<cess<>rs;i>><l
;issigiis oi'he Ow>>er Particip;i>>t.
SECTION 11.09.Transfer of Interests.
Subject to the provisions of Section 15 of the Participation Agreement, the Owner Participant may assign, convey or otherwise transfer all or any part of its right.title and interest in and to this Agreement and the Trust Estate.In case of any such assignment.
conveyance or transfer of less than all of the interest of the Owner Participant.(i)the transferor and transferee or transferees shall be severally obligated with respect to the indemnification obligations imposed under Section 7.01 in accordance with the interest held by each of them and (ii)appropriate amendments shall be made to this Agreement to provide for the situation in which there is more than one Owner Participant as may be agreed to by the transferor and transferee or transferees and consented to by the Owner Trustee.No such assignment.
conveyance or transfer shall violate any provision of Applicable Law or create a relationship which would be in violation thereof.The Owner Trustee shall not be on notice of or otherwise be bound by any such assignment, conveyance or transfer until it shall have received an executed counterpart of the instrument of such assignment.
conveyance or transfer.SEcTioN 11.10.HearIings.
The headings of the various Articles nnd Sections hereiii;ire for convenience of reference only and shall not define or limit any of the terms or provisions hereof.SEn'ioN 11.11.Couerning Lau:.This Agreement shall in nil respects be goverried by.nnd construed in accordance with, the laws of the State of New York.including nil nintters of construction.
validity and performance, except to the extent that, pursuant to the laws of the State of Arizona.the laws of such State are mandatorily applicable hereto.SEGTloN 11.12.Ahninistration of Trust.The principal place of administration oF the Trust shnll be in Boston, Massachusetts.
SECTlON 11.13.Perfonnance by the Ou:ner Participant.
Any obligation of the Owner Trustee hereunder or under any Transaction Document or other document conteniplnted herein ni;iy be performed by the Owner Participant and any such performnnce shall>>ot lie construed ns n revoc;itio>>
of the trusts created hereby.SECTIQN 11.14.ConjIict iaith Transaction Documents.
If this Agreement (or any instructions given by the Owner Participant pursuant hereto)shall require that any action be taken with respect to any matter and any other Transaction Document (or nny instructions duly giveii in nccordaiice with the terms thereof)shall require that a difFerent action be taken with respect to such matter.and such actions shall be mutually exclusive, the provisions oF such other Transaction Document.in respect thereof, shall control.
e IN WITNESS WHEREOF, the parties hereto have caused this hgreement to be duly executed by their respective ofBcers thereunto duly authorized, as of the day and year arst above written.J CHRYSLER FINhNCIAL CORPO TION f By Ps/THE FIB&'hTIONhL BhNK OF BOSTON By hssistant Vice President
 
IN WITNESS WHEREOF, the parties hereto have caused this hgreement to be duly executed by their respective ofBcers thereunto duly authorized, as of the day and year Brst above written.CHRYSLER FINANCIAL CORPORATION By THE FIRST NATIONAL BANK OF BOSTON By Assistant Vice Pre
 
Schedule I SECTION 15.6.1 LESSOR'S CERTIFICATE EL PASO UNIT 2/1986-6 The undersigned.
being a duly elected, qualified and acting Assistant Vice President of THE FIRST NATIONAL BANK OF BOSTON, a national banking association
("FNB").hereby certifies.
for and on behalf of FiVB.as follows: 1.Ref'erence is made to (i)the Arizona Nuclear Power Project Participatio>>
Agreerneiit.
dated as of August 23, 1973, as amended (the"ANPP Participation Agreement").and (ii)the sale and leaseback transaction proposed to be entered into by El Paso Electric Company ("El Paso-)on or before December 31, 1986, with respect to Palo Verde Nuclear Ge>>erati>>g Station ("PVNGS")Unit 2 and El Paso's interest therein and in certain PVNGS common facilities relating thereto (the"Proposed El Paso Sale and Leaseback Transaction"): 2.In connection with the Proposed El Paso Sale and Leaseback Transaction, FNB will enter into a Trust Agreement (the"Trust Agreement")with Chrysler Financial Corporation.
constitut-ing FNB the trustee (in such capacity,"Owner Trustee")of a grantor trust (the"Grantor Trust-): thereafter.
the Grantor Trust will acquire from El Paso an undivided ownership interest of up to approximately
%in certain assets constituting part of PVNCS Utiit 2.<<p to;ipproxinmtely
%in certain PVNGS common facilities and up to approximately
%in the PViVCS site:iiitl lease back such interests to El Paso pursuant to a Facility Lease having a primary term of at le;ist%years;and 3.Upon the execution and delivery of the Trust Agreement and upon consummation of the Proposed El Paso Sale and Leaseback Transaction.
FNB, solely in its capacity as Owner Trustee and not otherwise, confirms that, except as provided in Sections 15.2.2., 15.6.4.and 15.10'of'he ANPP Participation Agreement, El Paso shall be and remain the sole-Participant" for all purposes of the ANPP Participation Agreement and the sole representative (with power to bind the Grantor Trust and any mortgagee, trustee and secured party of the Grantor Trust of the type described in Section 15.1.2 of the ANPP Participation Agreement) in all dealings with the other ANPP Participants in relation to the property, rights, titles and interest of El Paso transferred to the Grantor Trust pursuant to the Proposed El Paso Sale and Leaseback Transaction.
WITNESS the signature of the undersigned this day of December, 1986.for'and on behalf of FNB.Martin P.Henry Assistant Vice President 11
 
CERTAIN RICHTS OF THE LESSOR UViDER THIS FACILITY LEASE HAVE BEE.'v'SSIGNED TO.AiVD ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF.FIRST CITY NATIONAL BANK OF HOUSTON.AS INDENTURE TRUSTEE UN'DER A TRUST IVDENTURE.!
IORTCACE.SECURITY AGREE!CLIENT AiVD ASSIGNMENT OF REiVTS DATED AS OF DECE~IBER i.l98G.THIS FACILITY LEASE HAS BEEN EXECUTED IN SEVERAL COUVTERPARTS.
SEE SECTION"2(e)OF THIS FACILITY LEASE FOR INFORlvIATION CONCERNINC THE RIGHTS OF HOLD-ERS OF VARIOUS COUNTERPARTS HEREOF.THIS COUNTERPART IS NOT THE ORICIiVAI.
COUi AFTERPART.
THIS IVSTRU~IEiVT GRANTS A SECURITY INTEREST BY A UTILITY.b<<t only if.contrary to the intention of'he parties.it should be so construed.
This instrument is Ried as a utility security interest as a precautionary matter.3<arilitg<J ense Dated as of December l, l986 between THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Ourner Trustee under a Trust Agreement, dated as of December 1, 1986, with Chrysler Financial Corporation Lessor and EL PASO ELECTRIC COMPANY Lessee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities THIS INSTRUMENT CONTAINS AFTER ACQUIRED PROPERTY PROVISIONS h 0'I TABLE OF CONTENTS SEcnov SEcrIov SECTION SECTION SEcTIoN SEcnoN a b c d 3 b c d e f g 5 b 6 b c Definitions.
Lease of Undivided Interest and Real Property Interest: Term: Personal Property.Lease of Undivided Interest and Real Property Interest Term Personal Property Description Rent;Adjustments to Rent.Basic Rent Supplemental Rent Form of Payment Adjustments to Rent for Change in Tax Law.Adjustments to Rent for Changes in Pricing Assumptions Computation of Adjustments Sulllciency of Basic Rent and Supplemental Rent Net Lease'Return of the Undivided Interest;Disposition Services Return of the Undivided Interest.Disposition Services Warranty of the Lessor Quiet Enjoyment Disclaimer of Other Warranties Enforcement of Certain Warranties Page 1 1 1 3 3 3 o 5 5 6 6 6 6 SECTION SECTION SEGTIQN 8 b c d e f g 9 b c d e f g h I J k Liens Operation and Maintenance; Capital Improvements Operation and Maintenance Inspection
.Capital Improvements Reports.Title to Capital Improvements
.Funding of the Cost of Capital Improvements Useful Life Event of Loss;Deemed Loss Event;Special Transfer for Failure to Maintain, Renew or Replace Letter of Credit Damage or Loss Repair Payment of Casualty Value Payment of Special Casualty Value.Requisition of Use Termination of Lease Term Application of Payments on an Event of Loss.Application of Payments Not Relating to an Event of Loss Dispositions at Time of Default or Event of Default Assumption of Notes: Creation of Lien on Undivided Interest...............
Special Transfer for Failure to Maintain, Renew or Replace Letter Credit....i 7 7 8 8 9 9 10 10 10 11 11 11 12 12 12 12 13 13 13 TABLE OF CONTENTS-(Continued)
SEcTroN SEcrroN SEcTroN SECTION SECTION SECTION SECTION SECTION SECTION SEcrroN SECTION SECTION SECTION 10 b 11 b 12 13 b c 14 b c d 15 16 b c d e 17 18 19 20 21 22 a b c d e f g h I J k Insurance Required Insurance Permitted Insurance Rights to Assign or Sublease.Assignment or Sublease by the Lessee.Assigninent by Lessor as Security for Lessor's Obligations Limited Lease Renewal Notices for Renewal or Purchase;Purchase Options Notices Limited Purchase Option at Expiration of the Lease Term Purchase Option For Change.in Tax Law Termination for Obsolescence Termination Notice.Right of Lessor to Retain Undivided Interest upon Termination Events on the Termination Date.Early Termination Events of Default Remedies.Remedies.No Release Remedies Cumulative Exercise of Other Rights or Remedies Special Cure Right of Lessee.Notices Successors and Assigns.Right to Perform for Lessee Additional Covenants Lease of Real Property Interest Amendments and Miscellaneous.
Amendments in Writing.Survival Severability of Provisions True Lease-Original Lease Governing Law Headings.Concerning the Owner Trustee Disclosure Counterpart Execution.Notice Prior to Exercise of Rights.16 16 16 17 17 17 1(18 18 19 19 19 20 22 22 24 24 74 26 26 26 26 26 26 26 (76 26'7 27 27 TABLE OF CONTENTS-(Continued)
APPEND[X SCHEDULE SCHEDULE SCHEDULE SCHEDULE SCHEDULE SCHEDULE SCHEDULE A De6nitions I Schedule of Casualty Values Schedule of Special Casualty Values:3 Schedule of Termination Values 4 Schedule of Special Termination Values 5 Schedule of Enhanced Casualty Values 6 Description of Real Property Interest 7 Description of Undivided Interest 0'1 e e, FACILITY LEASE FhcII.ITY LEhsE, dated as of December 1.1986 between THE FIRsT NhTIoNAL BhNK QF BosToN.not in its individual capacity.but solely as Owner Trustee under a Trust Agreement.
dated as of December 1.1986.with Chrysler Financial Corporation, as Lessor, and EL Phso ELECTRIC CONIPhNY.a Texas corporation.
as Lessee.WITN ESS ETH: WHEIIEhs.the Lessor owns the Undivided Interest and the Real Property Interest, the Lessee desires to lease the Undivided Interest and the Real Property Interest from the Lessor.and the Lessor is willing to lease the Undivided Interest and the Real Property Interest to the Lessee all on the terms and c'onditions set forth herein;NOw.THEIIEFoRE, in consideration of the premises and of other good and valuable consideration.
receipt and sulRciency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1.Definitions.
For purposes'hereof.
capitalized terms used herein, and not defined herein, shall have the meanings assigned to such terms in Appendix A, as amended from time to time in conjunction with the amendment of this Facility Lease.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 and Real'Property Interest;Tenn;Personal Property.(a)Lease of Undioided Interest and Real Property Interest.Upon the terms and subject to the conditions of this Facility Lease, the Lessor hereby leases to the Lessee, and the Lessee hereby leases from the Lessor.the Undivided Interest and the Real Property Interest.(b)Tenn.The term of this Facility Lease shall begin on December 18.1986, and shall end on the last day of the Lease Term.(c)Personal Property.It is the express intention of the Lessor and the Lessee that title to the Undivided Interest and every portion thereof is severed, and shall be and remain severed.from title to the real estate constituting the PVNCS Site.The Lessor and the Lessee intend that the Undivided Interest'shall constitute personal property to the maximum extent permitted by Applicable Law.(d)Description.
The Real Property Interest is described on Schedule 6 hereto.The Undivided Interest is described on Schedule 7 hereto.SECTION 3.Rent;Adjustments to Rent.(a)Basic Rent.The Lessee shall pay to the Lessor, as basic rent (herein referred to as Basic Rent)for the Undivided Interest, the following amounts: (i)on July 2, 1987 and on each Basic Rent Payment Date thereafter to and including January 2, 2013, an amount equal to 4.6799432%
of Facility Cost;(ii)on July 2, 2013, an amount equal to 9.3399716%
of Facility Cost: (iii)if the Lessee shall elect the Renewal Term, on October 1, 2013, and on each Basic Rent Payment Date thereafter during the Renewal Term, an amount equal to one-half of the average of the last two payments of Basic Rent payable under clause (i)of this Section 3(a).(b)Supp)ernental Rent.The Lessee shall pay the following amounts (herein referred to as Supplemental Rent): (i)when due or, where no due date is specified.
on demand.any amount (other than Basic Rent.Casualty Value.Termination Value.Special Termination Value.Enhanced Casualty 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 and any amount which the Lessor is obligated to pay under Sections 6.9.7.6 or 8 e Indenture: (ii)when due,any amount payable hereunder as Casualty Value.Termination Value.Special Termination Value, Enhanced Casualty 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'qual to (A)the Overdue Interest Rate, on that portion of the payment of Basic Rent or Supplemental Rent distributable pursuant to clause"first" of Section 5.1 or clause"second" of" Section 5.3 of the Indenture (determined prior to the computation of interest on overdue payments referred to in such clauses).and (B)the Penalty Rate.on the balance of any such payment of Basic Rent or Supplemental Rent (including, 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.Drawings under the Letter of Credit shall be deemed to be in satisfaction of the Lessee's obligation to pay the Equity Portion of Rent hereunder to the extent of such drawing.(c)Form of Payment.Subject to Section 11(b), each pa'yment of Rent under this Facility Lease shall be made in immediately available funds no later than 12:00 noon, 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 deter n accordance with Section 17, or at such other address as the Lessor may direct by notice in w o the Lessee, or (B)in the case of Excepted Payments, to such Person as shall be entitled to receive~uch payment at such address as such Person may direct by notice in writing to the Lessee.If the date on which any payment of Rent is due hereunder shall not be a Business Day, the payment otherwise due thereon shall be due and payable'on the preceding Business Day, with the same force and eIFect as if paid on the nominal date provided in this Facility Lease.(d)Adjustments to Rent for Change in Tax Lam Basic Rent and the schedules of Casualty Values, Special Casualty Values, Special Termination Values, Enhanced Casualty Values and Termination Values attached hereto shall be adjusted (upward or downward)to preserve Net Economic Return if there is any change in the Internal Revenue Code of 1954, as amended, as in efFect immediately prior to the enactment of the Tax Reform Act of 1986, or successor legislation enacted by the Ninety-ninth or One Hundredth Congresses (including proposed, temporary or final regulatiohs resulting there-from)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" (herein referred to as a Change in Tax Laco;prooided, however, that, to prevent double counting, to the extent the change in corporate tax rates contained in Section 601 of the Tax Reform Act of 1986 has been taken into account in determining Basic Rent and the values referred to in Section 3(b)(ii), such change will not be considered a Change in Tax Law).Any adjustment under this Section 3(d)shall be made no more frequently than annually.The provisions of this Section 3(d)to the contrary notwithstanding, if any Change in Tax Law is, or becomes, applicable to the transaction contemplated by this Facility Lease in consequence of the transfer of the Owner Participant's beneficial interest in the Trust (whether or not permitted by Section 15 of the Participation Agreement) or if such Change in Tax Law would not have been applicable to such transaction had no such transfer occurred, then no upward or downward 0 adjustment shall be, or be required to be.made pursuant to this Section 3(d), provided, hou:ever, that this paragraph shall not apply to a transfer to an Affiliate of the Owner Participant.(e)Adjustments to Rent for Changes in Pricing Assumptions.
Basic Rent and the schedules of Casualty Values.Special Casualty Values, Termination Values, Enhanced Casualty Values and Special Termination Values attached hereto shall be adjusted (upward or downward)to preserve Net Economic Return if there is any change in the Pricing Assumptions, other than the Pricing Assump-tions relating to taxes, including, without limitation, in respect of (1)the issuance of a Releveraging Note or a Refunding Note or (2)the payment of Transaction Expenses.(f)Computation of Adjustments.
As soon as practicable after the occurrence of an event requiring an adjustment to Basic Rent, and the schedules of Casualty Values, Special Termination Values, Special Casualty Values, Enhanced Casualty Values and Termination Values attached hereto, pursuant to Section 3(d)or (e)or Section 13 of the Participation Agreement, 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)by the Owner Participant's nationally recognized independent public accountants.
in which case such accountants shall either (i)confirm to the Lessee in writing that such revised amounts were computed on a basis consistent with the original calculations, or (ii)compute and provide to the Lessee, the Lessor, the Owner Participant, the Loan Participant and the Indenture Trustee revised amounts and percentages which are on such a basis.The revised amounts and percentages, as so confirmed or computed if applicable, shall be conclusive and binding upon the Lessee, the Lessor and the Owner Participant.
The cost of any such verification shall be borne by the Lessee, unless such accountants shall require an upward or downward adjustment to the revised amounts and percentages originally provided by the Owner Participant which is greater than 10%of the amount of the adjustment to Basic Rent so provided, in which case such cost shall be shared equally by the Owner Participant and the Lessee.Each adjustment pursuant to Section 3(d)or (e)or Section 13 of the Participation Agreement 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 and any related modifications of the Transaction Documents shall satisfy the provisions of applicable accounting requirements and of Revenue Procedure 75-21, Revenue Procedure 75-28 and any other applicable statute, regulation, revenue procedure, revenue ruling or technical information release relating to the subject matter of Revenue Procedure 75-21 or Revenue Procedure 75-28, but, in the case of any upward adjustment, such upward adjustment shall be no less than the adjustment otherwise required pursuant to this Section 3.(g)Sugciency of Basic Rent and Supplemental Rent.Notwithstanding any other provision of this Facility Lease or any other Transaction 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 then due and payable on all Notes and (ii)each payment of Casualty Value, Special Casualty Value, Special Termination Value, Enhanced Casualty Value and Termination Value shall in no event be less (when added to all other amounts required to be paid by the Lessee under this Facility Lease in respect of any Event of Loss or Deemed Loss Event or termination of this Facility Lease)than an amount suificient, as of the date of payment, to pay in full the principal of, and premium, if any, and interest on all Notes Outstanding on and as of such date of payment (taking into account any assumption of the Notes by the Lessee).
Six r'r<>i 4.Yet Lease.This Facility Lease (<<s originally executed and as mo<lifiecl.
supplei>>e>>ted
<<n<l;iiiie>><le<i f'ro>>i ti>>ie to ti>>ie)is;<<>et le:ise a>>d the Lessee hereby acknowledges and<<grees th;it the Lessee's obliga to p;iy<<II Re>>t liereiinder.
and the rights of the Lessor in;i>>d to siich Re>>t.shall be;i<<>>co>><litio>>al;>>id irrevocable
<<nd shall not be atfectecl by<<>>y circunista>>ces of aiiy ch<<.r.irrelrrdirr-, reitlrorrt liaiitation.(i)any set-olf.>ibatement.
counterclaini.
suspension.
recoiipi>>e>>t.
recliictio>>.
<lef'eiise or other right or claim which the Lessee r>>av have<<gainst the Lessor.the Owiier Participant.
the Indenture Trustee.the Collateral Trust Trustee.the Lo;m Participant.'the Operati>>g Agent.<<py A>VPP Participant.
any vendor or manufacturer of any equipment or;issets i>>clucle<l i>>the U>>dividecl Interest.Unit 2.any Capital Improvement.
the Real Property Interest.the PVNCS Site.PVNGS.or<<ny part of'any thereof.or any other Person f'r any reason whatsoever.(ii)a>>y clefect i>>or failure of'he title.mercha>>tability.
condition.
design.compliance with specifications.
operatioii or itness for use of';ill or a>>y part of'he Undivided Interest.Unit 2.any Capital Improvenient.
the Real Property Interest.the PVNGS Site or PVNGS.(iii)any destructioii of.dan>age to.or rei>>oval.;>b;>r>doni>>ent.
shutdown.s<<lvage.scrapping.
requisition.
taking, loss.thef't or<lestructio>>
of';ill or<<iiy part of'he Unclividecl Ii>terest.
Unit 2.any Capital Iniprovement.
the Real Property I>>terest.the-PVV>GS Site or PVNCS.or aiiy i>>terfere>>ce.
i>>terruption or cessatio>>i>>the use or possessio>>
thereof or of the Undivided Interest by the Lessee or by;iny other Person (i>>elrrrli>>, reitlrout li>>iitatio>>.
the Operating Agent or<<>>y other ANPP Participant) for any reason wh;itsoever or of wh;itever cl<<r;ition.(iv)<<ny restriction.
prevention or curtail>>>cut of or interference with<<ny use of<<II or<<>>y part of the U>>clivide<l Interest.Unit 2".;>ny Capital Improveme>>t.
the Real Property Interest.the PViVGS Site or PVNGS.(v)any insolvency.
b<<r>kruptcy.
reorganization or similar proceedi>>g by or rig<<i>>st the Lessee.the Lessor.the Owner Participant.
the Indenture Trustee.the Colliiteral Trust Tr>>stee.the Lo;>>i Participant.
the Operating Agent.any other ANPF Participant or any other Person.(vi)tire i>>valiclity.
illegality or unenforceability of this Facility Lease.any other Transaction Document.,;i>>y Fi>><<>>cing Docunient.
the ANPP Participation Agreement or any other instrument referred to herein or therein or any other inArmity herein or therein or any lack of right.power or authority of the Lessor.the Lessee.the Owner Participant.
the Inclenture Trustee.the Collateral Trust Trustee.the Particip;i>>t or<<ny other Person to enter into this Facility Lease.;iny other Tr;iris<<ction Doc>>i r;any Financi>>g Docume>>t.or any doctrine of'orce rrrajerrre.
i>>ipossibility.
frustration.
I',iilii of co>>sicleration.
or a>>y similar legal or equitable doctrine that the Lessee's obligatioii to p<<y Rent is excusecl, because the Lessee has not received or will not receive the beneAt f'r which the Lessee bargained.
it being the intent of'he Lessee to assume all risks from all causes whatsoever that the Lessee does not receive such benefit.(vii)the breach or failure of'a>>y warranty or representation niacle 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>i>>cler.this Facility Lease, any other Transaction Document.any Financing Document or any ANPP Project Agreement.
or any waiver, action or inaction under or in respect of this Facility Lease.any other Transaction Document, any Financing Document or any ANPP Project Agreement.
or any exercise or non-exercise of any right or remedy under this Facility Lease.any other Transaction Document.any Financing Document or any ANPP Project Agreement.
including, u'itlrorrt li>>iitation.
the exercise of any f'oreclosure or other remedy under the Indenture.
the Collateral Trust Inclenture or this Facility Lease.or the sale of Unit 2.any Capital Improvement.
the Real Property Interest.the Unclivide<l Interest.the PVNCS Site or PVV>CS.or any part thereof or any interest therein.or (ix)a>>y other circumstance or happening whatsoever whether or not similar to any of the f'oregoing.
The Lessee<<cknowle<lges that.by conveying the leaseholcl estate created by this Facility Lease to the Lessee<<>>cl by putting the Lessee in possession of the Undiviclecl Interest and the Real Property I>>terest.the Lessor has performecl all of the Lessor's obligations under<<nd in respect of this Facility Le;ise.except the covenant contained in Section 6(a).The Lessee hereby w;iives.to the exte>>t per>>>ittecl by Applicable Law.a>>y;incl<<II rights which it may>>ow have or which'it<<i>y ti>>ie I>ere:ifter
>>>;iy be co>>ferre<l iipon it.by statiite or otherwise.
to termi>>;ite.
c;incel.quit or s<<rre>><ler this Facility e Le;ise or to ell'ect or el<<i>>i;iny
<liniinutioo or re(I>>etio>>
of Rent p;iy;ible by tlie Lessee lierei>>i(ler.
i>>cludi>><<, ((itliout liuiitatio>>.
the provisions oF Arizona Revised Statutes Section'3Q-:340.If for;iiiy'I re;isoii wEi;itsoever this Facility Le;ise sh;ill be terniioated in wEiole or iii part by operatioii ol'aw or otlierivise.
rxcct)t<<s specific<<lly provided Eiereiii.the Lessee nonetheless agrees to pay to the Lessor or other Persoii eiititle(l thereto an<<niount equal to each iiistallioeot ol'B;isic Reiit;iiid all Siippleiiieiit;il Reiit;it tlie tiiiie siich payment wool(l have becooie due aii(l payable in<<ccor(laiice with the ter>>is liereof li;i(l tliis F;icility Lease not been termiiiated in wEiole or in part.Each pay>>ieot of Reiit oi;i(le by the Lessee hereuo(ler shall be final and the Lessee shall not seek or have any right to recover all or any p;irt of'such payoient from the Lessor or any other Person for any reason whatsoever.
All covenants.
agreenients aiid undertakings of the Lessee herein shall be performed at its cost.expeiise<<nd risk unless expressly otherwise stated.Nothing in this Section 4 or elsewhere shall be construed<<s a gu;iranty by the Lessee of any residual value in the Undivided Interest or the Real Property Interest or as a guar;inty of the Notes or the Bonds.Any provision of Section r (b)(2)or 8(c)of the Participation Agreenient to the contrary notwithstanding, if the Lessee shall fail to make any paymeot ot'Rent to aiiy Person when and as due (taking into<<ccount applicable grace perio(ls).
such Person shall ii<<ve tlie right;it all ti>>ies.to the excl>>sion of the AiVPP Participants.
to (le>>i;io(l.
collect.sue for.e>>t'orce obligatioiis relatiiig to;iiid otherwise obtain<<II;inioiints clue iii respect of such Re>>t.Six'i'uii 5.Return of the U>>divided inter(st: Disposition Services.(ii)Return of tlie Undivided Interest.On the Lease Termio;ition Date.the Lessee will siirreii(ler possessio>>
of the Undivided Interest and the Re;il Property Interest to the Lessor or its designee.At the tii>>e of s>>ch return.(i)the Lessee shall pay or have paid all aniounts clue aiid payable.or to becoioe due an(l payable.by it<<s an ANPP Participa>>t uiider each an(l every ANPP Project Agree>>ie>>t allocable or chargeable (whether or not payable during or al'ter the Lease Ter>>i)to the Uo(livi(le(l Interest or the Real Property In'terest in respect of any period or periods en(liiig oii or prior to the Lease Termination Date (including, u:itliout limitation.
all;irnounts payable with respect to<<ny and all Capital Ioiproveroents to which the Owner Participant has consente(l pursuant to the second sentence of Section 8(c).whether or not implementation thereof has been coniplete<l o>>or prior to tlie Le;ise Terniination Date).an(l (ii)the Undivide(l Interest an(l the Real Property Interest sh;ill be I'ree;io(l cle;ir ol';ill Liens (other than Permitted Lieiis described io clauses (i).(vi).(ix).(x);iii(l (xi)of tlie defiinition of such tern>an(l other than Permitted Liens described in clauses (iv).(v).(vii)iin(l (viii)of the definition of such term if an(l to the extent such Permitte(l Liens are insure(l by a'title iosiirance cooipaoy or bonded or other arrangements.
in each case reasonably satisfactory to the Lessor.have been nude with respect thereto)and in the condition ao(l state oF repair required by Section 8.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 (otiier tluin El Paso)under the ANPP Participation Agreement and such default shall not have been cured by the defaoltini; AiVPP 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 AiVPP 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 Ioregoing clause (i)to the extent.but only to the extent.that the Lessor (or such successor.
assign or transferee) shall have actually received net procee(ls from the sale of power and energy of the defaulting ANPP Participant as a result of the pay'ment made by the Lessee pursuant to the Foregoing clause (i).and.to the extent the Lessor (or such siiccessor.
assign or transferee) shall have received such proceeds.the aniount to be reimburs(id to the Lessee pursuant to this clause (ii)shall include interest at the Prime Rate from the date ol'any p<<ynient by the Lessee pursuant to the foregoing clause (i)through the date of reimbursenient of'such;ioioii>>t piirsu;>>it to this clause (ii).(b)Dist)osition Services.The Lessee agrees that if it does oot exercise its option to renew or piirch;ise;is provi(le(l in Sections 12<<n(l I'3.respectively.
theii during the I:ist thirty-six nioiitlis of the Le:ise Ter>>i.tlie Lessee will F>>lly cooperate with the I.essor iii co>>i)ection with the Lessor's eiforts to le;ise or dispose of tlie Undivided I>>terest aiid the Real Property f>>terest.iiicliidiiig u>>iiig tlie Lessee'reaso>><<ble efforts to lease or dispose of the Undivided Interest<<>>d the Real Property I>>terest.Tlie Lessor<<grees to reii>>burse the Lessee for reasonable out-of-pocket costs aiid expeiises of tlie Lessee i>>curred<<t the request of the Lessor or the Owner Participa>>t in co>>nection with such coop;i>>d such eil'orts.Si:,i r>>ix (i.Warra>>ty of tlie Lessor.'(a)Quiet E>>joy>>ient.
The Lessor warrants that until the Lease Terniination Date.if the Lessee is iii co>>ipli;iiice with e'icli'ind every material term a>>d provision of this Facility Lease;iiid e;ich other Tra>>saction Docunient to be complied with by the Lessee.the Lessee's use;i>>'<l possessioii of Unit 2.i>>cludi>>g the Undivided Interest.shall not be interrupted by the Lessor or any Persoii clainiing by.through or under the Lessor.and their respective successors and assigns.(b)Diselai>>ier of Other Warranties.
The.warranty set forth in'Section 6(a)is i>>lieu of<<II other w<<rra>>ties of the Lessor or the Owner Participant.
whether written.oral or iniplied.with respect to this Facilitv Lease.Unit.a>>y C ipital Improvement.
the Real Property Interest.PVNCS or the PVNCS Site.As;u>>o>>g the Ow>>er Participant.
the Loan Participant.
the Indenture Trustee.the Colliiteral Trust Trustee.the Lessor a>>d the Lessee.execution by the Lessee of this F;icility Le;ise slmll be , co>>elusive proof of the compliance of Unit 2 (includi>>g any Capital Iniprove>>ie>>t).
tlie U>>divi<le<l I>>terest;iiid the Real Property Interest with all requirements of this Facility Lease.;iiid the Lessee<<ck>>owledges aiid'igrees that (i)NEITHER THE LESSOR NOR THE OWNER PABTICIPAiVT IS A MAiVUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND AiVD (ii)THE LESSOR LEASES AiVD THE LESSEE TAKES THE UNDIVIDED INTEREST AND THE REAL PROPERTY INTEREST.AND SHALL TAKE EACH CAPITAL IMPROVEMENT.
AND AiVY PART THEREOF.AS IS AND WHERE IS.and neither the Lessor nor the Owner Participant shall be deemed to have i>><<de.a>>d THE LESSOR AiVD THE OWNER PARTICIPANT EACH HEREBY DISCLAIMS.
AiVY OTHER REPRE-SENTATION'OR WARRANTY.EITHER EXPRESS OR IMPLIED.AS TO AiVY!vIATTER WHATSO-EVER.INCLUDING.
WITHOUT LIMITATION.
THE DESIGN OR CONDITION OF UNIT 2.AiVY CAPITAL IMPROVEMENT.
THE UNDIVIDED INTEREST.THE REAL PROPERTY INTEREST E PVNGS SITE OR PVNCS.OR AiVY PART THEREOF.THE tIERCHANTA8ILIT)
THEREOF FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO UNIT 2.AiVY CAPITAL IMP MENT.THE UiVDIVIDED INTEREST.THE REAL PROPERTY INTEREST.THE PVVCS SITE OR PVNCS.OR ANY PART THEREOF.THE QUALITY OF THE WIATERIAL OR WORKXIAiVSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS.
FREEDO!v1 FRO51 PATEiVT OR'RADEMARK INFRINGEMENT OR THE ABSENCE OF ANY LATENT OR OTHER DEFECTS.WHETHER OR NOT DISCOVERABLE, NOR SHALL THE LESSOR OR THE OWNER PARTICI-PANT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDINC LIABILITY IN TORT.STRICT OR OTHERWISE), it being agreed that all such risks.as among the Owner Participant.
the Loan Participant, the Collateral Trust Trustee, the Indenture Trustee.the Lessor and the Lessee.are to be borne by the Lessee.The provisions of this Section 6(b)have been negotiated.
and.except to the extent otherwise expressly provided in Section 6(a).the foregoing provisio>>s are i>>tended 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 (inc1<i<Iing any Capital Improvement).
the Undivided f>>terest.the Re;il Property Interest, PVNGS or the PVNGS Site that may arise pursuant to any law now or hereai'ter in eH'ect.or otherwise.(c)E>>force>>ient of Certain Warranties.
The Lessor authorizes the Lessee (directly or through;ige>>ts.i>>clu<li>>g the Operating Agent), at the Lessee's expense.to assert for the Lessors account.diiri>>g the Lease Term.all of Lessor's rights (if any)under any applicable wiirranty and any other cl<<i>>is (uiider this Facility Lease or any Purchase Document)that the Lessee or the Lessor niay have<<gai>>st<<>>v vendor or manufacturer with respect to Unit 2 (inclu<Iin<>
anv Capital Iniprovement) or the U>><livi<le<l Iiiterest.:ind the Lessor agrees to cooperate.
at the Lessee's expe>>se.with the Lessee<<>>d ttie Operatiiig Ageiit i>>;issertiiig siich rights.A>>y<<>>iou>>t receivible (withoiit regir<l to;iiiy right of setoff'or otl>er siniihir right of any Person against the Lessee)by the Lessee<<s p<<y>>ie>>t u>>der;iii) s<<cli w<<rr<<>>ty or other cl<<i>>i<<gai>>st any vendor or manufacturer (or.if such warranty or clai>>i rel<<tes to the Uiidivided I>>terest<<>>d the Retained Assets.the portio>>of such received ai>>ouot;ippropriately allocable to tl>e U>>divided Interest)shall be<<pplied in accordance with Sectioiis 9(g).(Ii)<<ii<l (i).Sl i'niis.Liens Tlie Lessee will>>ot directly or indirectly create.incur.assunie or per>>>it to exist iiny Lie>>except Pen>>itte<l Lie>>s o>>or with respect to the U>>divided Interest.the Real Property I>>terest.the Lessor's title thereto or y>>y i>>terest of the Lessor or Lessee therein (and the Lessee will pro>>iptly.
at its ow>>expense.take such action as may be necessary duly to discharge any Lien except Permitted Liens).Six n<>x S.Operation an(i.~faintenance:
Capital luiproce>>ients.
(a)Operation an(l il(aintenance.
The Lessee agrees that it will or will cause the Operating Agent to (A)>>i<<i>>tai>>
U>>it 2 i>>such condition that Unit 2 will lmve the cap;icity<<iid functio>>al;ibility to perfor>>i.o>><<cooti>>iiiiig basis.ordinary wear an<I tear excepted.in normal con>>iierci<<l operatioii.
the f'u>>etio>>s I'or wliich it was designed.(B)operate.service.maintain and repair Unit 2<<>>d repl<<ce<<II>>ecess iry or usef'ul p<<rts<<nd components thereof so that the condition aiid operatiiig efficie>>cy will be niaintai>>e<l
<<iid preserved.
ordinary wear and tear excepted.in all material respects i>><<ccorda>>ce with (I)Pnident Utility Practice f'r items of similar size and nature.(2)such operating sta>><lar<ls
<<s slmll be required to take advantage of and enforce all available warranties and (S)the terms uid coiiditio>>s of:ill i>>sura>>ce policies niai>>t<<ined in effect at<<ny time with respect thereto.(C)use.possess.oper;ite<<>>d inaiiitain Unit 2 io compliance with all material applicable Cover>>>>>e>>tal Actioiis (includi>>g the Lice>>se)affecting PVNGS or Unit 2 or the use.possessign.
operation a>>d mainten<<nce thereof<<n<l (D)otherwise act in accordance with the standards set f'orth in the ANPP Participation Agreei>>ent.
The Lessee will comply with all its obligations under Applicable Law alfecti>>g U>>it'.tlie Undivided Interest.PVNCS.the Real Property Interest and the PVNCS Site.and the use.operation<<nd niaintenance thereof.The Lessee agrees to (i)exercise its rights under the AiVPP Particip<<tio>>
Agree>>ie>>t so that there will always be<<n Operati>>g Agent u>><ler the AiVPP Participation Agreeme>>t<<iid (ii)iiiai>>tai>>
it>f'ull force<<nd effect a license froni the NRC adequ;ite to possess the U>>divided I>>terest a>>d the Real Property Interest u>>der the circumstances conteniplated by the AiVPP Participa-tion Agreement.
The Lessee will keep and maintain proper books and records (i)relatiiig to<<II Operating Funds (as'<lefined in the ANPP Participation Agreemeot) provided by it to the Operati>>g Agent under the ANPP Participation Agreement and (ii)relating to the application of such Operati>>g F>>nds to the operation and maintenance of Unit 2 and the acquisition, construction and installation of Capital Improvements, in each such case upon receipt of the requisite inf'ormation from the Operating Agent.all in accordance with the Uniform System of Accounts.The Lessor shall not be obliged in any w<<y to maintain.<<lter.repair, rebuild or replace Unit 2, any Capital Improvement.
the Real Property Interest or the Undivided Interest.or any part thereof.or, except as provided in Section S(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.the Owner Participant.
the Indenture Trustee<<n<l the Collateral Trust Tnistee slmll have the right to inspect PVNCS (subject, in each event.to the AiVPP Participation Agreei>>e>>t.
Applicable Law and applicable confidentiality undertakings and procedures established by the Operating Agent)at their expense.The Lessor and the Owner Participant shall have the right to inspect.at their expense.the books end records of the Lessee relating to PViVCS.a>><l nmke copies of;iiid extracts therefroni (subject as aforesaid) and may.at their expense.discuss the Lessee's<<ffairs.fiimiices;iiid;iccouiits with its executive officers.<<II at such times;ind as ofte>><<s i>>ay be re<<so>>ably reqiieste<I.
None of the Lessor.the Owner Participant.
the Indentiire Trustee<<>><I the Collateral Trust Tr>>stee sli;ill h<<ve aiiy (l<<ty whatsoever to>>i;ike a>>y i>>spectio>>
or i>>quiry ref'erred to iii this Sectioii 8(b);i>><l sh;ill>>ot iiicur<<ny li;ibility or obligation by re;ison of>>ot>>i<<ki>>g;iiiy sucli i>>spectio>>
or I liqill f y.(c)Capital lniproce>>ie>>ts.
To the exte>>t that Applicable L'iw or, Prudent Utility Practice re es th:it;i C;ipit;il lniprovei>>ent be made to Unit".the Lessee sh'ill c;iuse such Capital I>>iproveiiie
>>i;i<le i>>;iccor<l;iiice with the ANPP Participation Agreement:
prooided.jiou.'eccr, th;it>>othi>>g is seiite>>ce sli;ill be dee>>ied to increase the Lessee's obligations under the ANPP Participation Agree->>ieiit.Ii';iii<l to tlie extent required by the ANPP Participation Agreement.
the Lessee slmll.;it its sole expe>>se.pro>>iptlv participate in the making of any Capital Improvement to Unit'.without the writte>>coiisent of the Lessor.the Lessee will not perniit any Capital Improvement to be made<luri>>g the last three years of the Lease Term unless (i)such Capital Improvement is reasonably expected to be conipleted prior to the e>>d of the Lease Term.as determined by an independent engineer re;isonably acceptable to the Lessee and the Lessor.(ii)arrangements for the payment thereof s<<tisfactory to the Owner Participant have been made and (iii)the Lessee is committed to pay the cost thereof'whether or not completed prior to the end of the Lease Term)in a manner satisfactory to the Ow>>er Participant.
Of the net proceeds of (i)any sale or other disposition of property rei>>oved froi>>Unit 2 receivable (without regard to any right of setoH'or other similar right oF a>>y Person against the Lessee)by..or credited to the accou>>t of.the Lessee in accordance with the ANPP Particip;itio>>
Agree>>ie>>t
<<>>d (ii)any insurance proceeds receivable (without regard to any right of setoif or other si>>iilar right of<<>>y Person against the Lessee)For the account of the Lessor or the Lessee in respect of the loss or<lestructio>>
of.or damageor casualty to.any such property.the Applicable U>>it Perce>>tage oF such<<niount shall be applied as provided in Sectio>>9(g).(h)or (i).;is the case>>mv be.A>>Applicable Unit 2 Percentage of property at any time removed from U>>it 2 shall remain the property of the Lessor.>>o matter where located.until such time as a Capital Improvement constituting a replaceiiient of such property shall have been installed in Unit 2 or such removed property has bee>>disposed of'by the Operating Agent in accordance with the ANPP Participation Agreement.
Simultane-ously with such disposition by the Operating Agent.title to aii undivided interest equal to the Applicable Unit 2 Percentage in the removed property shall vest in the Person designated by the Operatiiig Agent.Free'ind clear of any and all claims or rights of the Lessor.Unless p;iragraph F Section 8(e)sh;ill be<<pplic;ible.
iipo>>the incorporation of a C'ipital Ii>>proveme>>t in U>>it 2.t further<<ct.(i)title to i>>u>>divi<led interest equal to the Applicable Unit 2 Perce>>t;ige i>>such<<I I>>iprovement sh;ill vest in the Lessor<<>>d (ii)such undivided interest i>>such Capital I>>iprovei>>e>>t shall beconie subject to this Facility Lease and be deemed to be part of the Undivided Interest For all purpo'ses hereof to the same extent that the Lessor had a like undivided interest in the property originally incorporated or installed in Unit 2.The Lessee warrants and agrees th;it the Lessor's interest in;ill Capital Improvements shall be free and clear of all Liens.except Permitted Lie>>s described in clauses (ii).(iii)and (xii)of the deAnition thereof.(d)Reports.To the extent permissible, the Lessee shall prepare and Ale in timely Fashio>>.or.where the Lessor shall be required to Ale, the Lessee shall prepare and deliver to the Lessor within a reasonable time prior to the date for Aling, any reports with respect to Unit 2.the Undivided I>>terest or the condition or operation thereof that shall be required to be fled with any Governmental Authority.
On or before March I of each year (commencing March I, 198r)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.C;ipit;il 1>>iprovei>>ent (or related group of Capital Improvements) made during the period froni the d;ite hereof to December'31.1986, in the case of the Arst such report.or during the period from an<1, the e>>d 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 I in each year (co>>imenci>>g March I.1987)a>>d at such other times as the Lessor or the Owner Participant shall reasonably request in writing.the Lessee will report i>>writing to the Lessor with respect to (i)the most recent an>>iial capital expenditure budget siibiiiitted bv the Operatiiig Agent to the L'essee in accordance witli tlie ANPP Participatioii Ai:ree>>ie>>t
<<>>d (ii)the current plans (if any)which tlie Lessee may h;ive I'r the fi>>a>>ci>>g of the sai>>e iiiuler Sectioii 8(t').
(e)Title to Capital hnproueinents.
Title to an undivided interest equal to the Applicable Unit~Percentage in each Capital Improvement'to Unit 2 shall vest as follows: (1)in the case of each Nonseverable Capital Improvement.
whether or not the Lessor shall'ave 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 incorporate/
or installed in Unit 2.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)an Applicable Unit 2 Percentage 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)the Applicable Unit 2 Percentage of the cost of such Capital Improvement.
the Lessee shall retain title to such undivided interest equal to the Applicable Unit 2 Percentage in such Capital Improvement.
Immediately upon title to such an undivided interest equal to the Applicable Unit 2 Percentage in any Capital Improvement vesting in the Lessor pursuant to paragraph (1)or paragraph (2)of this Section 8(e), such undivided interest in such Capital Improvement shall.without further act, become subject to this Facility Lease and be deemed part of the Undivided Interest and Unit 2 for all purposes hereof.(f)Funding of the Cost of Capital linprovernents.
Before placing in service any Capital Improve-ment to Unit 2 the cost of which exceeds$50,000,000 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, or arranging the financing of, an Applicable Unit 2 Percentage 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 (a>>Additionnl Equity Incestment) 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, an Applicable Unit 2 Percentage of the cost of such Capital Improvement, the Lessee may cause the Lessor to issue.if and to the extent permitted by the Indenture, to one or more Persons (other than any Person afBliated with the Lessee within the meaning of Section 318 of the Code)Additional Notes (such issuance of Notes being hereinafter referred, to as a Supplemental Financing) and to use the proceeds thereof to pay such percentage of the cost of such Capital Improvement, subject, however', to the 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, if any, in any calendar year shall equal or exceed 13.820551%
of$10,000,000;(iii)the Lessee may include in any request for a Supplemental Financing only Capital Improvements not previously financed in any Supplemental Financing and which have been installed or affixed no earlier than three calendar years before the beginning of'the calendar year in which such Supplemental Financing occurs;(iv)the total amount of all Supplemental Financings during the Basic Lease Term shall not exceed 13.820551%
of$200,000,000;(v)unless waived by the Owner Participant.
the Bonds shall.at the time of such Supplemen-tal Financing, be rated at least"investment grade," as determined by Standard R Poor's Corporation or Moody's Investors Service, Inc.or, if neither of such rating organizations shall rate the Bonds at the time, by any nationally recognized rating organiz'ation in the United States of America: (vi)the sum of the Supplemental Financing Amount and any Additional Equity Inve t shall not exceed that portion of the cost of Capital Improvements which.when financ constitute an addition to the Owner Participant's basis under Section 1012 or 1016 of the e: (vii)in the opinion of independent tax counsel to the Owner Participant.
such Supplemental Financing shall not result in any adverse tax efFect upon the Owner Participant.
and the Owner Participant and the Lessee shall hqve agreed upon the amount and manner of payment of any indemnity payable by the Lessee as a consequence of such Supplemental Financing;(viii)in the opinion of the Owner Participant, such Supplemental Financing shall not result in any material adverse efFect on the Owner Participant's financial or accounting position: (ix)the Additional Notes shall have a final maturity date no later than July 2.2013: (x)the Lessee shall have made such representations and warranties and covenants regarding the tax characteristics of the Lessor's undivided interest in each Capital Improvement financed in a Supplemental Financing as the Owner Participant shall have reasonably requested and Section 13(c)of the Participation Agreement shall have been appropriately modified: (xi)appropriate adjustments to Basic Rent and the schedules of Casualty Values.Special Casualty Values, Termination Values.Enhanced Casualty Values and Special Termination Values shall have been agreed to by the Owner Participant to support the amortization of the Additional Notes issued in respect of such Supplemental Financing and to preserve Net Economic Return: (xii)the Lessee shall have paid 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;(xiii)no Default or Event of Default shall have occurred and be continuing and no Ev Loss shall have occurred or Deemed Loss Event shall have been declared: and (xiv)the Lessee shall hyve entered 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.(g)Usefisl Life.If the Lessee shall not theretofore have exercised its purchase option under Section 13(b), then, (i)if the Lessee shall not theretofore have exercised its renewal option pursuant to Section 12, on April 1, 2012, the Lessee shall initiate the Appraisal Procedure to determine the remaining Economic Useful Life of Unit 2 as of April 1, 2013, and (ii)if the Lessee shall have exercised its renewal option pursuant to Section 12, on the Basic Rent Payment Date occurring one year prior to the end of the Renewal Term, 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 either such determination of remaining Economic Useful Life is made no later than six months prior to the end of the Lease Term.SEcrtov 9.Ecent of Loss;Deemed Loss Event;Special Transfer for Failure to maintain, Renew or Replace Letter of Credit.(a)Damage or Loss.In the event that Section 16.2 of the ANPP Participation Agreement (as in elfect on the date hereof)shall become applicable, or an Event of Loss or Requisition of Use shall occur.or Unit 2 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 Owher Participant.
10 (b)Repair.The Lessee shall pro'mptly make any'and all payments required of the Lessee under'he provisions of the AiVPP Participation Agreement relating to damage or destruction or the like to Unit 2 or any portion thereof: provided, hou:ever, 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 hereoA concerning repairs to or reconstruction of Unit 2.(c)Payraent of Casualty Value.On the date following the occurrence of an Event of Loss on which the Owner Participant delivers to the Lessee a written notice specifying such Event of Loss (it being understood that the Owner Participant is obligated under Section r (b)(5)of the Participation Agreement to attempt to draw on the Letter of Credit.if any.to the extent provided therein), the Lessee shall pay to the Lessor an amount equal to the excess of (x)Casualty Value, determined as of the date such payment is due, over (y)the unpaid principal amount of.and accrued interest since the last preceding Basic Rent Payment Date on, the iVotes outstanding on such date, after giving efFect to the payment.if any, of the principal installment due and payable and paid in respect of the iVotes on such date.If the Lessee shall have made such payment and shall have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture.
the Lessor shall.so long as no Default or Event of Default shall have occurred and be continuing (and at any time after the occurrence of an Event of Loss the Lessor may)(i)if Section 16.2 of the ANPP Participation Agreement (as in elFect on the date hereof)shall be applicable and the Lesse'e shall have declined, but one or more of the other AiVPP 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 an Applicable Unit 2 Percentage of the"salvage value" purchase price receivable (without regard to any right of setoff.or other similar right of any Person against the Lessee)by the Lessee;or (ii)in all other cases.Transfer the Undivided Interest and the Real Property Interest to the Lessee.If the Lessee shall have made such payment but shall not)uive assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture, the Owner Participant shall effect the Special Transfer, in ichich case, iaithont fiirther act on 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, payable on each Basic Rent Payment Date thereafter.
equal to the aggregate amount of principal, premium, if any, and accrued interest then payable on all Notes then Outstanding, and (ii)this Facility Lease shall become a security agreement for all purposes of Applicable Law.(d)Payment of Special Casualty Value.If events giving rise to a Deemed Loss Event (without regard to any declaration thereof)shall occur, the party hereto having knowledge thereof shall promptly notify the other party of the occurrence thereof.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, which the Owner Participant shall do, to the extent practicable, within 90 days after it shall have actual knowledge of the relevant event.On the date such notice is delivered (it being understood that the Owner Participant is obligated under Section 7(b)(5)of the Participation Agreement to attempt to draw on the Letter of Credit, if any, to the extent provided therein), the Lessee shall pay to the Lessor an amount equal to the excess of (x)Special Casualty Value, determined as of the date such payment is due, over (y)the unpaid principal amount of, and accrued interest since the last preceding Basic Rent Payment Date on.the Notes outstanding on such date, after giving efFect to the payment, if any, of the principal installment due and payable and paid in respect of the Notes on such date.If the Lessee shall have made such payment and shall have assumed all obligations and liabilities of the Owner Trustee iinder the Indenture and the Notes pursuant to Section 3.9(b)of'he Indenture.
the Lessor shall, so long as no Default or Event of Default shall have occurred and be continuing (and at any time after the occurrence of a Deemed Loss Event the Lessor may), Transfer the Undivided Interest and the Real Property Interest to the Lessee.If the Lessee shall have made such*payment but shall not-have" assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture.
the Owner Participant shall effect the Special Tran uhich case.uithout further act on the part of the Lessor or the Lessee.(i)the obligation of the Le pay lurther Basic Rent shall be reduced to an amount.payable on each Basic Rent Payment ate thereafter.
equal to the aggregate amount of principal, premium, if any, and accrued interest then payable on all Notes Outstanding, and (ii)this Facility Lease shall become a security agreement for all purposes of Applicable Law.(e)Requisition of Use.In the case of a Requisition of Use not constituting an Event of Loss, this Facility Lease shall continue, and each and every obligation of the Lessee hereunder and under each Transaction Document shall remain, in full force and effect.So long as no Default or Event of Default shall have occurred and be continuing, the Lessee shall be entitled to all sums received by reason of any such Requisition of Use for the period ending on the Lease Termination Date.and the Lessor shall be entitled to all sums received by reason of any such Requisition of Use for the period after the Lease Termination Date.(f)Termination of Lease Term.Upon (but only upon)a Transfer by the Lessor pursuant to Section 9(c)or 9(d)of-this Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement to the Lessee and payment by the Lessee of the amounts speci6ed therein, the Lease Term shall end and the Lessee's obligation to pay Basic Rent after such Transfer shall cease: provided, hotvever, that the Lessee shall continue to be required to make all payments of Supplemental Rent as and when due.In all other cases, the Lease Term shall continue and this Facility Lease shall remain in full force and effect.(g)Application of Payments on an Event of Loss.Any payments receivable.(without regard to any right of setoff or other similar right of any Person against the Lessee)at any time by the Lessor or the Lessee (other than insurance placed by the Owner Trustee or the Owner Participant pursuant to Section 10(b))from any Governmental Authority, insurer or other Person (except the Lessee 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 t e.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 pu'rpose, clause (y)of the Brst sentence thereof)shall be applied in reduction of the Lessee's obligation'to pay such amount if not already paid by the Lessee or, if already paid by the Lessee, shall be applied to reimburse the Lessee for its payment of such amount;and (iii)the balance, if any, of such payments (including any"salvage value" referred to in clause (i)of Section 9(c))shall, in the case of payments from insurance carried by or on behalf of the Lessee, be paid to the Lessee or, in the case of any other payment, be divided between the Lessor and the Lessee as their interests,may appear.(h)Application of Payments Not Relating to an Event of Loss.Payments receivable (without regard to any right of setoff or similar right of any Person against the Lessee)at any time by the Lessor or the Lessee (other than insurance placed by the Owner Trustee or the Owner Participant pursuant to Section 10(b))from any Governmental Authority, insurer or other Person with respect to any event giving rise to an amount referred to in the second sentence of Section 6(c)or the fourth sentence of Section 8(c), destruction, damage, loss, condemnation, con6scation, theft or seizure of or requisition of title to Unit 2 or the Undivided Interest or the Real Property Interest or any requisition of use of Unit 2 or the Undivided Interest or the Real Property Interest or any part of any thereof, in each case not constituting an Event of Loss.shall be applied first to reimburse the Lessee for all amounts expended by it pursuant to Section 9(b)and second the balance.if any.of such payments shall.in the case of payments from insurance carried by or on behalf of the Lessee.be paid to the Lessee or.in the case of any other payments.be divided between the Lessor and the Lessee as their interests may appear.(i)Dispositions at Time of Defaiilt or Event of Default.Notwithstanding the foregoing provisions of this Section 9.if a Default or 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 Default or 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 iVotes;Creation of Lien on Undivided Interest.In connection with an Event of Loss.a Deemed Loss Event.the e'xercise of the Cure Option or the exercise of the Lessee's purchase options pursuant to Section 13(c)of this Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement.(i)the Lessee agrees to use its best efforts to comply with the conditions set forth in Section.'3.9(b)of the Indenture and.failing such compliance, agrees to accept the Special Transfer.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 Owner Participant efFects the Special Transfer, the Lessor will execute and deliver the Undivided Interest Indenture Supplement.(k)Special Transfer for Failure to iMaintain, Renew or Replace Letter of Credit.If the Lessee shall have made all payments required pursuant to its option to purchase under Section 10(b)(3)(xvii)of the Participation Agreement but shall not have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture.
the Owner Participant shall eH'ect the Special Transfer, in winch case, witliout fiirtlier act on the part of tlie Lessor or the Lessee, (i)the obligation of the Lessee to pay further Basic Rent shall be reduced to an amount.payable on each Basic Rent Payment Date thereafter, 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.SECTIN 10.Insurance (a)Required Insurance.
The Lessee will cause the Operating Agent to carry and maintain at least the following insuiance coverage with respect to the Undivided Interest and the Real Property Interest, in each case with insurers of recognized responsibility, in such form as shall be satisfactory to the Owner Participant.
(1)Non-Nuclear Insurance.(i)The Lessee shall maintain"all risk" property insurance covering physical loss with respect to Unit 2 in such amounts and with such other terms as are required by or are in accordance with Prudent Utility Practice, but in no event shall such amounts be less than the estimated maximum probable loss in respect of such property.Any insurance carried in accordance with this Section 10(a)(1)(i)shall be endorsed to provide that: (A)losses shall be adjusted and paid as provided in Section 10(a)(4): (B)(i)the Lessor and the Owner.Participant (the Additional Insureds)are in-cluded as additional insureds, as their interests may appear, and (ii)any obligation imposed upon the insured (including, without limitation, the liability to pay premiums)shall be the sole obligatioii of the Lessee and not that of any Additional Insured: 13 (C)the respect>ve interests of the Additional Insureds shall not be invalidated by any breach of any warranties by the ANPP Participants contained in such policies: (D)the insurer thereunder waives all rights of subrogation against the Ad al Insureds with respect to their respective interests in Unit 2: (E)such insurarice shill be primary'without right of contribution of any ocher insurance carried by or on behalf of any Additional Insured with respect to its interest in Unit 2: and (F)if such insurance is'cancelled for any reason whatsoever including non-payment of premium or any substantial change is made in the coverage which affects the interest of the Additional Insureds, (1)such cancellation or change shall not be effective as to the A'dditional Insureds for 30 days after receipt by The First National Bank of Boston.as Owner Trustee and agent, of written notice from such insurer of such cancellation or change, and (2)the Lessee will use its best efforts to cause such insurer to deliver a certiffcate with respect to such cancellation or change to the Owner Participant and the Indenture Trustee..~(ii)The'Lessee shall maintain bodily injury and property damage liability insurance (including product liability, completed operations and personal injury insurance) covering claims arising out of the'ownership, operation, maintenance, condition or use of Unit 2 or the PVNGS Site.The amount and other terms of such insurance shall be in accordance with the higher of Prudent Utility Practice and the ANPP Participation Agreement, but such limits shall in no event be less than$25,000,000 per occurrence combined bodily injury and property damage.Su'ch insurance may include deductible amounts not to exceed$2,000.000.
Any'nsurance carried in accordance with this Section 10(a)(1)(ii) shall be endorsed as provided in paragraphs (B), (C), (D), (E)and (F)of Section 10(a)(1)(i), except that the term"Additional Insureds" wherever it appears shall include the Lessor, the Owner Partici-pant and all Indemnitees.
(2)Nuclear Insurance.(i)The Lessee shall maintain nuclear property insurance in amounts and with such other terms as are required by or are in accordance with the highest of (a)Applicable Law, (b)the ANPP Participation Agreement and (c)Prudent Utility Practice;provided, ho>eever, that such insurance shall at all times be maintained in amounts at least equal to the maximum nuclear property insurance available.on commercially reasonable terms.The coverage-afforded by such nuclear property insurance in respect of any loss at PVNGS and available for any loss at Unit 2, either (A)shall at all times be at least equal to$750 million regardless of any suspension, termination, amendment, supplement or reduction of such insurance for any reason (including by reason of a Nuclear Incident)or (B)so long as (1)Unit 2 is in, or is in a procedure which will result in, a state of cold shutdown in accordance with Prudent Utility Practice and (2)the Brst mortgage bonds of the Lessee shall have an investment grade rating (x)by two nationally accepted rating agencies if such Brst mortgage bonds are rated by two nationally accepted rating agencies or (y)by one nationally accepted rating agency if such erst mortgage bonds are only rated by one nationally accepted rating agency, will be, reinstated to be equal to at least$750 million within 180 days of any suspension, termination, amendment, supplement or reduction of such insurance for any reason (including by reason of a Nuclear Incident).
Such insurance may include'eductible amounts not to exceed$2,000,000.
Any insurance carried in accordance with this Section 10(a)(2)(i) shall be endorsed by the insurer as provided in paragraphs (A), (B), (D), (E)and (F)of Section 10(a)(1)(i).(ii)The Lessee shall maintain the maximum nuclear liability insurance in amounts and such other terms as required by or in accordance with the highest of (a)Applicable Law.(b)14 the ANPP Participation Agreement, (c), Prudent'tility Practice and (d)the maximum nuclear liability insurance available on commercially reasonable terms.but in any ecent in such amounts and containing such other terms as to cover the"aggregate liability" for a single"nuclear incident" of all"persons indemnified" (as such terms are used in the Atomic Energy Act)and in connection with the ownership, maintenance, condition or use of Unit 2 and the PVNGS Site.The Lessee shall also maintain supplier's and transporter's insurance in amounts consistent with Prudent Utility Practice.The Lessee shall maintain nuclear liability insurance pursuant to this Section 10(a)(2)(ii), whether or not the Lease Termination Date shall have occurred.until notified by the Owner Participant that neither the Lessor nor the Owner Participant has any further real or potential liability in connection with the ownership.
operation, maintenance, condition or use of Unit 2 or the PVNGS Site;provided that after Decommissioning has been completed the Lessee shall not be required to maintain nuclear liability insurance for more than 30 years.Any insurance carried in accordance with this Section 10(a)(2)(ii)shall be endorsed as provided in paragraphs (B), (D), (E)and (F)of Section 10(a)(I)(i).(iii)The Lessee shall, or shall cause the Operating Agent to.use its best efforts at all times to obtain the endorsement referred to in paragraph (C)of Section 10(a)(I)(i)on all insurance referred to in thi's Section 10(a)(2), and shall cause such endorsement to be obtained if and to the extent it is available to any other owner or operator of a nuclear generating unit.(3)Annual Reports and Certificates.
The Lessee shall, on or before March I of each year, commencing March I, 1987, furnish to the Lessor and the Owner Participant (A)a report signed by the broker or brokers for the PVNGS insurance (or if insurance is placed directly by the Operating Agent, a report signed by the Operating Agent which will include a copy of the certificate of insurance signed by the carrier, which certificate shall indicate that all endorsements required by this Section 10 are applicable)(i)describing in detail the insurance then maintained by the ANPP Participants with respect to PVNGS, (ii)stating that no premiums are then delinquent, and (iii)stating that insurance maintained is in accordance with (I)the ANPP Participation Agreement and (2)this Section 10 (B)a report signed by the broker or.brokers for the Lessee's insurance (or if insurance is placed directly by the Lessee, a report signed by the Lessee which will include a copy of the certificate of insurance signed by the carrier, which certificate shall indicate that all endorsements required by this Section 10 are applicable) showing the separate insurance, if any, then maintained by the Lessee with respect to its interest in PVNGS and stating that no premiums under such insurance are delinquent;(C)a certificate signed by the Lessee stating that the insurance maintained by the ANPP Participants and by the Lessee, identified on the reports to be delivered pursuant to clauses (A)and (B), is in accordance with Prudent Utility Practice within the nuclear industry, the ANPP Participation Agreement and this Section 10;and (D)upon the request of the Lessor or the Owner Participant, copies (to the extent permitted by the issuers of such policies)of policies so maintained.
Any report by an insurance broker with respect to clause (A)(iii)(I)of this paragraph 3 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.(4)Proceeds.All insurance proceeds paid in respect of or pursuant to paragraphs (I)and (2)above shall (i)be applied as provided in Section 9(g), (h)or (i).as the case may be, and (ii)be adjusted with the insurance companies or otherwise collected, including the filing of appropriate proceedings, by the Operating Agent in accordance with the ANPP Participation Agreement, subject, hou:ever.to any priority allocations of such proceeds to decontamination and debris removal set forth in the insurance policies or required under Applicable Law.If the Operating 15 Agent.as trustee.shall become the loss payee.under any policy of insurance constituting"Project.Insurance," as such term is defined in the ANPP Participation Agreement.
then the Lessor and the Owner Participant shall be made beneficiaries of the trust arrangement under which the Operating Agent acts as trustee.(b)Pcruiitted Insurance.
Nothing in this Section 10 shall prohibit the Lessee from placing 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).iVothing 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 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).SEcrtoN 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 (except as permitted by Section 10(b)(3)(ii)of the Participation Agreement), its leasehold interest under this Facility Lease in the Undivided Interest or the Real Property Interest, except that the Lessee may assign its leasehold interest under'this Facility Lease in the Undivided Interest and 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 the other Transaction Documents and Financing Documents shall be guaranteed by El Paso pursuant to a valid and enforceable guarantee containing appropriate covenants of El Paso and otherwise satisfactory in form and substance to the Owner Participant in its absolute discretion.
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 or the Real Property Interest or any interest therein, except to the extent re'pursuant to the ANPP Participation Agreement (as in efFect on the date hereof)or as ex permitted by the provisions of this Facility Lease (including, icithout limitation, the first sente if this Section 11(a))or any other Transaction Document.(b)Assignment by Lessor as Security for Lessor's Obligations.
To secure the indebtedness evidenced by the Notes, the Lessor will assign to the Indenture Trustee (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 and to the terms of the Indenture, (b)agrees to pay directly to the Indenture Trustee at such office in New York, N.Y.of Mellon Trust Company or of such other bank or trust company in New York, iV.Y., all as the Indenture Trustee shall specify in writing to the Lessee (so long as the lien of the Indenture has not been satisfied and discharged and the Lessor is obligated thereunder), all amounts of Rent (other,.than'Excepted Payments)due or to become due to the Lessor that shall be required to be paid to the Indenture Trustee pursuant to the Indenture, (c)agrees that the right of the Indenture Trustee to any such payments shall be absolute and unconditional and shall not be afFected by any circumstances whatsoever, including, toithout limitation, those circumstances set;forth in Section 4, and (d)agrees that, to the'extent provided in the Indenture and until the Indenture is discharged in accordance with its terms, the Indenture Trustee shall have all the rights of the Lessor hereunder with respect to Assigned Payments as if the Indenture Trustee had originally been named herein as the Lessor.SEcTIQN 12.Limited 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, no Event of Loss 16 0 shall have occurred and no Deemed Loss Event shall have been declared.all iVotes shall have been paid in full and the Lessee shall be concurrently renewing the term of all.other leases of interests in Unit 2 then leased by it as lessee (other than leases that are not leases for federal tax purposes).
the Lessee shall have the right to renew the term of this Facility Lease for a period (the Reneu:al Tenn)con>mencing October 1.2013.and ending, at the option of the Lessee (which option shall be exercised at the tinie of.and set forth in.the notice pursuant to Section 13(a)).on either October 1.2017 or the final day of the Maximum Option'Period.
during which Basic Rent shall be payable as provided in Section 3(a)(iii)and Section 21.Secrtow 13.Notices for Reneiaal or Purchase;Purchase Options.(a)Notices.In order to exercise the renewal option permitted by Section 12 or the purchase option permitted by Section 13(b), the Lessee shall give to the Lessor written notice of such election not later than three years nor earlier than five years prior to the expiration of the Basic Lease Term or.in the case of such purchase option.the Basic Lease Term or, if elected, the Renewal Term.Any such election shall be irrevocable as to the Lessee.but shall not be binding on the Lessor if.on the date of such notice.a Default or an Event of Default shall have occurred and be continuing or an Event of Loss shall have occurred or Deemed Loss Event shall have been declared.Promptly after receipt by the Lessor of any such notice, (i)in case the renewal option has been elected..the Maximum Option Period shall be determined by the Appraisal Procedure or (ii)in case either the renew'al option or the purchase option has been elected, the Lessee and the Owner Participant shall agre&upon the Fair Market Sales Value of the Undivided Interest and the Heal 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 Fair Market Sales Value shall be determined by the Appraisal'Procedure.(b)Limited Purchase Option at Expiration'of the Lease Term.(i)Subject to the notice require-ments set forth in Section 13(a), unless an Event of Default shall have occurred and be continuing or an Event of Loss shall have occurred or a Deemed Loss Event shall have been declared, if all iVotes shall have been paid in full and the Lessee shall be concurrently purchasing all interests in Unit 2 then leased by it as lessee (other than leases that are not leases for federal tax purposes).
the Lessee shall have the right to purchase the Undivided Interest and the Real Property Interest on the date of the expiration of the Basic Lease Term or the Renewal Term (if elected)for a purchase price equal to the Fair Market Sales Value thereof.(ii)If the Lessee shill have elected to purchase the Undivided Interest and the Real Property Interest pursuant to Section 13(a), payment by the Lessee of the purchase price therefor shall be made in immediately available funds, whereupon the Lessor shall Transfer the Undivided Interest and the Real Property Interest to the Lessee.(c)Purchase Option for Change in Tax Laic.(i)If the Owner Participant shall notify the Lessee pursuant to Section 3(f)that, as the result of the adjustments to Basic Rent required pursuant to Section 3(d), the aggregate Basic Rent payable pursuant to Sections 3(a)(i)and (ii)(without regard to any adjustment required by Section 3(e))is greater than 110,percent of the amount of aggregate Basic Rent that would be payable absent such adjustment, then, upon written irrevocable notice given by the Lessee to the Owner Participant (the Exercise Notice)not later than 60 days after such Owner Participant's notice pursuant to Section 3(f), but in no event after September 30, 1989, the Lessee may purchase the Undivided Interest and the Real Property Interest.Such purchase shall occur on the next succeeding date specified in Schedule 4 hereto occurring riot earlier than 90 days after the date of the Exercise iVotice.for an amount equal to the sum of (A)the greater of the Fair Market Sales Value of the Undivided Interest and the Real Property Interest (determined as of the date on which such purchase by the Lessee occurs by agreement of the Owner Participant and the Lessee.or, if they shall fail to agree within 15 days after the giving of the Exercise Notice, by the Appraisal Procedure) and the Special Termination Value (as adjusted pursuant to Section 3(d)and/or 3(e))specified for such date in Schedule 4 hereto.minus the unpaid principal amount of.and (if such Special Termination Value is greater than or equal to such Fair Market Sales Value)accrued interest since the 17 last preceding Basic Rent Payment'Date on.the iVotes Outstanding on such date.'and (B)Basic Rent'after adjustment pursuant to Section 3(d))accrued and unpaid with respect to the period prior to the date of such purchase (the Exercise Price).(ii)If the Lessee shall have elected to purchase the Undivided Interest and the Real ty Interest pursuant to this Section 13(c).the Lessee shall pay the Exercise Price in imm'ly available fiinds.If the Lessee shall fail to pay the full amount of the Exercise Price on the date specified in this Section 13(c).the Lessee shall no longer have any purchase right pursuant to this Section 13(c)and this Facility Lease shall remain in effect, taking into account the adjustments
'rovided for under Section 3(d).(iii)If the Lessee shall have elected to purchase the Undivided Interest and the Real Property Interest pursuant to this Section 13(c), shall have made th'e payment required by this Section 13(c)and shall have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the iVotes pursuant to Section 3.9(b)of the Indenture, the Lessor shall.so long as no Default or Event of Default shall have oc'curred and be continuing, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared.Transfer the Undivided Interest and the Real Property Interest to the Lessee.If the Lessee shall have made such payment but shall not have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture.
the Owner Participant shall effect the Special Transfer, in which case, without further act on the part of the Lessor or the Lessee.(A)the obligation of the Lessee to pay'further Basic Rent shall be reduced to an amount, payable on each Basic Rent Payment Date thereafter.
equal to the aggregate amount of principal, premium.if any, and accrued interest then payable on all Notes Outstanding, and (B)this Facility Lease shall become a security agreement for all purposes of Applicable Law.(iv)The amount of Basic Rent has been calculated on the assumption that the estimated tax payments to be made by the Owner Participant on the estimated tax payment dates after the Closing Date will reflect the benefit of the occurrence of the Undivided Interest being placed in service by the Lessor in December 1986.If the Lessee shall exercise the purchase option under this Section 13(c), then.upon demand by the Owner Participant, the.Lessee shall pay to the Owner Participant.
in addition to the Exercise Price, an amount which, on an After-Tax Basis.shall be equal to the't., penalties and additions to tax, if any.payable by the Owner Participant or any AfRliate of'esulting from any underpayment of estimated taxes, if any, that was caused by assuming t i.the Undivided Interest would be placed in service by the Lessor in December 1986.and that such purchase would not occur.The computation of the amount of such interest.penalties and additions to, tax shall be subject to the verification procedure set forth in Section 3(f).(v)The Lessee shall have no right to purchase under this Section 13(c)if the Lessor or the Owner Participant has provided notice to the Lessee on or prior to 15 days after the date of the Exercise Notice that it has waived the increase of the amount of aggregate Basic Rent payable pursuant to Sections 3(a)(i)and (ii)as a result of an adjustment required pursuant to Section 3(d)to the extent such adjustment would require the aggregate Basic Rent payable to exceed 110%of the amount that would have been payable absent such adjustment.
Sacrtoiv 14.Termination for Obsolescence.(a)Termination Notice.Unless a'efault or an Event of Default shall have occurred and be continuing or an Event of Loss shall have occurred or a Deemed Loss Event shall have been declared., the Lessee shall have the option (provided that the Lessee shall have delivered to the Lessor an Officers'ertificate to the effect that the Lessee's Board of Directors has adopted and there is in effect'.a resolution determining that Unit 2 is surplus to the Lessee or economically obsolete, which determination shall be concurred in by an independent engineer selected jointly by the Lessee and.the Owner Participant (or selected by the Appraisal Procedure if the Lessee and the Owner Participant shall be unable to agree upon such'n engineer within 30 days following the delivery of'uch OfRcers'ertificate) and provided that the Lessee shall be simultaneously disposing of all other interests in Unit 2 leased by it pursuant to leases (other than finance leases for accounting purposes)).on at least one year's=and not more than 2 years'rior written notice (a Ter>nination Notice)to the 18 Lessor.the Owner Participant and the Indenture Trustee (which notice shall be irrevocable).
to terminate this Facility Lease on any Basic Rent Payment Date (the Termination Date)after January 2.a f 199 d'or to January 2 201L 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 Un ivi e Interest and the Real Property Interest.The Lessor shall also have the right to obtain such cash bids, either directly or through agents other than the Lessee.The Lessee shall certify to the Lessor within ten days after the Lessee's receipt of each bid (and, in any event, prior to the Termination Date)the amount and terms thereof and the name and address of the Person (which shall not be the Lessee or, any AIBliate of the Lessee, or any agent of either thereof)submitting such bid.(b)Right of Lessor to Retain Undivided Interest upon Termination.
The Lessor may elect to retain, rather than sell, the Undivided Interest and the Real Property Interest by giving notice to the Lessee: and the Indenture Trustee prior to the Termination Date.It shall be a condition precedent to the Lessor's right to retain the Undivided Interest and the Real Property Interest that on or prior to the Termination Date the Lessor shall have paid (or made provision for payment)to the Indenture Trustee the unpaid principal amount of all Notes Outstanding on such date and all premium.if any.and interest accrued and unpaid on the date of payment.If the Lessor elects to retain the Undivided Interest and the Real Property Interest pursuant to this Section 14(b), the Lessee shall pay to the Lessor on the Termination Date the Basic Rent and any other Rent due or accrued, as the case may be.to and including the Termination Date, together with an amount equal to the excess, if any, of the Termination Value as of the Termination Date over the highest bona Bde offer received pursuant to Section 14(a).(c)Events on the Termination Date.If the Lessor has not elected to retain the Undivided Interest>'nd the Real Property Interest as provided in Section 14(b), on the Termination Date the Lessor sha ll"" (but only upon receipt of the sale price and all additional payments speci6ed 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 ASliate of the Lessee, or any agent of either thereof)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, houever, 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 the excess, if any, of the Termination Value as of the Termination Date over the<-net sale price of the Undivided Interest and the Real Property Interest and 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 for any period after the Termination Date.shall cease and the Basic Lease Term shall end on the Termination Date, but the obligations of the Lessee to pay Supplemental Rent when and as due 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 and the Lessee shall not thereafter be entitled to deliver another Termination iVotice.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 certiiled by the Lessee to the Lessor or obtained by the Lessor, against receipt of the payments provided for herein.(d)Early Termination.
If the Lessee shall fail to exercise its renewal option or purchase option within the time provided by Section 13(a), the Lessor shall have the option, on any Basic Rent Payment Date thereafter, on at least 60 days prior written notice (an Early Termination notice)to the 19 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 iVotice may be revoked by the Lessor at any time on or prior to the Early Termination Date if any purchaser from or lessee of the Lessor shall fail to fulfill its obligation to purchase or lease on the Early Termination Date.r prior to the Early Termination Date.the Lessor shall pay (or make provision for payment)Indenture Trustee the unpaid principal amount of all iVotes outstanding on such date and all preni m.if any.and interest accrued and unpaid on the date of payment.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.whereupon the obligation of the Lessee to pay any Basic Rent for any period after the Early Termination Date shall cease and the Lease Term shall end, but the obligations of the Lessee to pay Supplemental Rent when and as due shall continue in full force and efFect and shall not be impaired by reason of any such termination.
SecrtoN 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 eH'ected by operation of law, or be pursuant to or in compliance with any Applicable Law or Governmental Action): (i)the Lessee shall fail to make.or cause to be made.(x)payment of Casualty Value.Special Casualty Value or Termination Value when due or payment due pursuant to exercise of the Cure Option when due (unless such amount shall have been wholly satisfied by a drawing under the Letter of Credit), (y)any payment of Basic Rent within 5 Business Days after the"same shall become due or (z)any payment of Supplemental Rent (other than Casualty Value, Special Casualty Value.Termination Value.Special Termination 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 (unless such amount shall have been wholly satisfied by a drawing under the Letter of Credit and the maximum drawing amount under the Letter of Credit shall have been rein within three Business Days of such drawing): provided, hoivever, that in respect of Early P, Obligations.
an Event of Default shall not be deemed to occur until the Lessee shall have faii o make.or cause to be made, payment thereof (i)in the case of an Early Payment Obligation in respect of Section 9(c), on the Basic Rent Payment Date next following the occurrence of an Event of Loss (the last day of the Lease Ter'm being deemed a Basic Rent Payment Date for this purpose)or (ii)in the case of an Early Payment Obligation in respect of Section 9(d), the next date specified in Schedule 2 hereto following the date that written notice of a Deemed Loss Event has been delivered (or if such notice shall be given less than 10 days prior to such next date.on the second succeeding date specified in Schedule 2 hereto following such notice);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),'10(b)
(3)(v), or 10(b)(3)(xi)(but, with respect to the Lessee's obligation to make payments into the Decommissioning Trust Fund and the Second Fund, if any, only after 30 days following the date such payment is due)of the Participation Agreement or Section 7 or'l 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 determi'ned, shall be less than (x)five and one-half years as of April 1, 2013 or (y)three and one-half years as of the date six months prior to the end of the Renewal Term: 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 pe'riod of 15 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"iVotice of Default" hereunder; or 20 (v)the Lessee shall fail to perform or observe any covenant.condition or agreement (otlier tjmn those referred to in clauses (i)through (iv)above)to be performed or observed by it under this Facility Lease (other than Section 10)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 ojDefault" hereunder:
or (vi)any representation or warranty made by the Lessee in this Facility Lease.any other Transaction Document (other than Section 13(c)of the Participation Agreement) or any agreement.
document or certificate delivered by the Lessee in connection herewith or therewith shall prove to have been incorrect in any material respect when any such representation or warranty was made or given and shall remain material and materially incorrect at the time in question: or (vii)the Lessee shall commence a voluntary case or other proceeding seeking liquidation.
reorganization or other relief with respect to itself or its debts under any bankruptcy.
insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee.receiver.liquidator.
custodian or other similar oScial of it or any substantial part of its property.or shall consent to any such relief or to the appointment of or taking of possession by any such official in an involuntary case or other proceeding commenced against it.or shall make a general assignment for the benefit of creditors.
or shall take any corporate action to authorize any of the foregoing; or an involuntary case or other proceeding shall be commenced against the Lessee seeking liquidation.
reorganization or other relief with respect to it or its debts under any bankruptcy.
insolvency or other similar law now or hereafter in efFect or seeking the appointment of a trustee.receiver, liquidator, custodian or other similar official of it or any substantial part of its property.and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of 60 consecutive days: or (viii)final judgment for the payment of money in excess of 83.000.000 shall be rendered against the Lessee and the Lessee shall not have discharged the same or provided for its discharge in accordance with its terms or bonded the same or procured a stay of execution thereof within 60 days from the entry thereof;or (ix)(I)a default by the Lessee under the ANPP Participation Agreement in consequence of which the Lessee's right to receive its Generation Entitlement Share 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 15 Business Days from the giving of such notice without the Lessee having cured such default;provided, bouncer, that for purposes of this clause (2)if the Lessee shall have 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 15 Business Day period shall commence on the date of the final determination of the board of arbitrators under such provision:
or (x)(I)the Lessee shall fail to pay when due (whether by schedule maturity, required prepayment.
acceleration, demand or otherwise) any Debt of the Lessee the principal amount (or equivalent) of which is greater than 810,000,000) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt;or.(2)any other default under any agreement or instrument relating to any such Debt, or any other event.shall occu'r and such Debt shall become due as a result thereof;or (xi)the Lessee shall fail, at any time, (A)to provide or maintain a Letter of Credit which complies with all of the terms and conditions of Section 10(b)(3)(xvii) of the Participation Agreement (unless the Lessee has exercised its purchase option, and paid all amounts due in connection therewith, under Section 10(b)(3)(xvii)of the Participation Agreement), or (B)to provide a renewal or replacement Letter of Credit so complying (I)not less than 30 days 21 prior to the stated expiration date of an existing Letter of Credit, (2)within m~" days after the receipt by the Owner Participant of notice that an existing Letter of Credit will be terminated prior to its stated termination date under circumstances in which at least 30 days'otice h termination is required or (3)concurrently with the receipt by the Lessor of notice n existing Letter of Credit will be terminated prior to its stated termination date under c.n-stances in which less than 30 days'otice of such termination is required.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, to the extent permitted by Applicable Law, exercise one or more of the following remedies as the Lessor in its sole discretion shall elect: (i)the Lessor may declare this Facility Lease to be in default by written notice to such eff'ect given to the Lessee, or may, by notice to the Lessee, rescind or terminate this Facility Lease: (ii)the Lessor may (x)demand that the Lessee, and thereupon the Lessee shall.return possession of the Undivided Interest and the Real Property Interest promptly to the Lessor in the manner and condition required by, and otherwise in accordance with the provisions of.this Facility Lease as if the Undivided Interest and the Real Property Interest were being returned at the end of the Lease Term, and the Lessor shall not be liable for the reimbursement of the Lessee for any costs and expenses incurred by the Lessee in connection therewith or (y)enter upon the PVNGS Site and take immediate possession of (to the exclusion of the Lessee)the Undivided Interest and the Real Property Interest, by summary proceedings or otherwise.
all without liability to the Lessee for or by reason of such entry or taking of possession, whether for the restoration of damage to property caused by such taking or otherwise;(iii)the Lessor may sell the Undivided Interest and the Real Property Interest, or any part thereof, together with any interest of the Lessor under the Assignment and Assumption, at public or private sale, as the Lessor may determine, free and clear of any rights of the Lessee and w't any duty to account to the Lessee with respect to such action or inaction or any procee respect thereto (except to the extent required by clause (v)or (vi)below if the Lessor sha.ct 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 proportion-ately reduced, as the case may be (except to the extent that Basic, Rent is to be included in computations under clause (v)or (vi)below if the Lessor shall elect to exercise its rights thereunder);(iv)the Lessor may hold, keep idle or lease to others all or any part of the Undivided Interest and the Real Property Interest, as the Lessor in its sole discretion may determine, free and clear of any rights of the Lessee and without any duty to account to the Lessee with respect to such action or inaction or for any proceeds with respect to such action or inaction, except that the Lessee's obligation to pay Basic Rent for periods commencing after the Lessee shall have been deprived of=use of the Undivided Interest and the Real Property Interest pursuant to this clause (iv)shall be reduced by an amount equal to the net proceeds, if any, received by the Lessor from leasing the Undivided Interest and the Real Property Interest to any Person other than the Lessee for the same periods or any portion thereof;(v)except in the case of an Event of Default specified in c!ause (iii)of Section 15, the Lessor may, whether or not the Lessor shall have exercised or shall thereafter at any time exercise its r'ights 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 speci such notice plav whichever of the following amounts the Lessor, in its sole discretion.
shall specify in such notice.together with interest on such amount at the higher of the Overdue Interest Rate and the Penalty Rate from the Basic Rent Payment Date specified in such notice to the date of, actual payment: (A)an amount equal to the excess, if any, of Casualty Value.computed as of the Basic Rent Payn>ent Date specified in such notice, ouer 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 semiannually to present value as of the Basic Rent Payment Date specified in such notice at a rate of 12%per annum;or (B)in amount equal to the excess, if any, of such Casualty Value over 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;or (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 semiannually at a rate of 10%per annum, ooer (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 semiannually at a rate of 10%per annum;or (D)an amount equal to the highest of (X)such Casualty Value, (Y)such discounted Fair Market Rental Value and (Z)such Fair Market Sales Value and.in this event, upon full payment by the Lessee of all sums due hereunder, the Lessor shall.at its option.either Transfer the Undivided Interest and the Real Property Interest to the Lessee or promptly sell the Undivided Interest and the Real Property Interest and pay over to the Lessee the net proceeds thereof up to the amount set forth in (X), (Y)or (Z)above actually paid by the Lessee to the Lessor;(vii)in the case of an Event of Default specified in clause (iii)of Section 15, the Lessor may demand, by written notice to the Lessee specifying a payment date which shall be the last Basic Rent Payment Date of the Lease Term, that the Lessee pay to.the Lessor, and the Lessee shall pay to the Lessor, on such Basic Rent 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 equal to the Fair Market Sales Value (without including in such value the availability of the Decommissioning Trust Fund and the Second Fund, if any, or the benefit to the Lessor of the Lessee's obligations under Section 10(b)(3)(xi)of the Participation Agreement) oF the Undivided ined on the basis of the then actual condition of Interest and the Real Property Interest (determ 23 (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, may, if it shall so elect, but not in the case of an Event of Default specified in clause (iii)of Section 15, demand that the Lessee pay to the Lessor and the Lessee shall pay to the Lessor on the date of such sale, as liquidated damages for loss of a bargain and not as a penalty (in lieu of Basic Rent due for periods commencing after the next Basic Rent Payment Date following the date of such sale), any unpaid Basic Rent due through such Basic Rent Payment Date, plus the amount of any difFerence between the Sale Proceeds and Casualty Value, computed as of such Basic Rent Payment Date, together with interest at the higher of the Overdue Interest Rate and the Penalty Rate on the amount of such Rent and such deficiency from the date of such sale until the date of actual payment; Unit 2)determined as of such Basic Rent Payment Date.together with interest on such amount at the higher of the Overdue Interest Rate and the Penalty Rate from the Basic Rent Payment Date specified in such notice to the date of actual payment.and upon receipt of such payme'he Lessor shall Transfer to the Lessee the Undivided Interest and the Real Property Intere (b)No Release.iVo rescission or termination of this Facility Lease.in whole or in part.or repossession of the Undivided Interest and the Real Property Interest or exercise of any remedy under Section 16(a)shall, except as specifically provided therein, relieve the Lessee of any of its liabilities and obligations hereunder.
In addition, the Lessee shall be liable.except as otherwise provided above.for any and all unpaid Rent due hereunder before, after or during the exercise of any oF the foregoing remedies, including all reasonable legal fees and other costs and expenses incurred by the Lessor.the Owner Participant and the Indenture Trustee 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 and 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 Cumulatiue.
No remedy under Section 16(a)is intended to be exclusive.
but each shall be cumulative and in addition to any other remedy provided under Section 16(a)or otherwise available to the Lessor at law or in equity.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 the occurrence of any of the contingencies set forth herein shall not constitute a waiver of 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 e Heal Property Interest in mitigation of the Lessor's damages as set forth in Section 16(a)or whi otherwise limit or modify any of the Lessor's rights and remedies provided in this Section 16.(d)Exercise of Other Rights or Remedies.In addition to all other rights and remedies provided in this Section 16.the Lessor may exercise any other right or remedy that may be available to it under Applicable Law or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof.(e)Special Cure Right of Lessee.If a Notice of Default is given under clause (iv)of Section 15, the Lessee may, on or prior to the occurrence of an Event of Default resulting therefrom, give written notice to the Lessor stating that the Lessee has elected to exercise the option (the Cure Option)provided in this Section 16(e), which election shall be irrevocable as to the Lessee.Promptly after the.giving of such notice, the Lessee and the Owner Participant shall agree upon the Fair Market Sales Value of the Undivided Interest and the Real Property Interest or, if they shall be unable so to agree within one month after the date of the Lessee's notice, such value shall be determined by the Appraisal Procedure.
On the Basic Rent Payment Date next following the date that such Fair Market Sales Value shall have been determined, the Lessee shall pay to the Lessor 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 ouer (ii)the.unpaid principal amount of, and (if such Casualty Value is greater than or equal to such Fair Market Sales Value)accrued interest since the last preceding Basic Rent Payment Date on, the Notes Outstanding on such date after giving effect to the payment.if any, of the principal installment due and payable and paid in respect of the Notes on such date.If the Lessee shall have made such payment and shall have assumed all 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 Heal Property Interest to the Lessee.If the Lessee shall have made such payment but shall not have assumed all obligations and liabilities of the Owner Trustee und he Indenture and the Notes pursuant to Section 3.9(b)of the Indenture.
the Owner Participant shall efFect the Special Transfer.in u:hich case, Ioitho<<t further act on the part of the Lessoror the Lessee, (i)the obligation of the Lessee to pay further Basic Rent shall be reduced to an am'ount.payable on each~~Basic Rent Payment Date thereafter.
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.addressed as provided in the Participation Agreement.
All such communications and not'ices 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 warran-ties, 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 shall fail to make any payment to be made by it under any ANPP Project Agreement, or'shall fail to perform or comply with any of its other agreements contained in.any ANPP Project Agreement.
either the Lessor or the Owner Participant may.but shall not be obligated to (i)to the extent not prohibited by Applicable Law, tender such payment.or (ii)to the extent not prohibited by Applicable Law and.in the case of the ANPP Project Agreements, to the extent not expressly prohibited thereby, efFect such performance or compliance, and the amount of such payment and the amount of all costs and expenses (including, without limitation.
attorneys'nd other professionals'ees 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 higher of the Overdue Interest Rate and 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 Participation Agreement) to receive the Generation Entitlement Share of the Lessee under the ANPP Participation Agreement (not limited to Unit 2), with each contributor to receive a percentage of such Generation Entitlement Share equal to the percentage of the cure contributed thereby.SECTION 20.Addition'al 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, which provisions are incorporated herein by this reference as fully as if set forth in full at this place.The Lessee agrees to comply with its covenants and agreements set forth in Sections 10(b), 14 and 16 of the Participation Agreement and Articles III.IV, V, VI and VII of the Assignment and Assumption, which covenants and agreements are incorporated herein by this reference as fully as if set forth in full at this place.SECTION 2L Lease of Real Property Interest.Pursuant to the Deed and the Assignment of Beneficial Interest, the Lessee has sold to the Lessor the Real Property Interest.The Lessor hereby grants to the Lessee a leasehold interest in the Real Property Interest.such leasehold to be coterminous with the lease of the Undivided Interest hereunder and to be at a rent per annum equal to 12%of the Real Estate Investment payable by the Lessee to the Lessor in arrears in equal semiannual installments on each Basic Rent Payment Date during the Lease Term.SEcrION 22.Amendments anrl.lliscellaneows.(a)AnIenchnents in writing.The terms of this Facility Lease may not be waived.altered.mou ed.amended.supplemented or terminated in any manner whatsoever except by written instrument signed bv the Lessor and the Lessee.(b)Survival.(I)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, IO(a)(2)(ii), 16.19 and 20 shall survive the expiration or termination of this Facility Lease.The modification by law of any statute of limitations or the waiver or'extension of any 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 Indemnitee.(c)Severability of Provisions.
Any provision of this Facility Lease which may be prohibit or unenforceable in any jurisdiction shall.as to such jurisdiction, be ineffective to the extent prohibition or unenforceability without invalidating the remaining provisions hereof or there any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenf'Urce-able such provision in any other jurisdiction.
To the extent permitted by Applicable Law.the Lessee hereby waives any provision of law which renders any provision hereof prohibited or unenforceable in any respect.(d)True Lease.This Facility Lease shall constitute an agreement of lease and nothing herein 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"THls CQUNTERPART Is THE ORIclNAl CoumsRI wRv" and containing the receipt of the Indenture Trustee thereon shall be the Original of this Facility Lease.No security interest in this Facility Lease may be created through the transfer or possession of any counterpart other than the Original.(f)Governing Law.This Facility Lease.shall be governed by and construed in accordance with the law of the State of New York, except to the extent that pursuant to the law of the State of Arizona the law of the State of Arizona is mandatorily applicable hereto.(g)Headings.The division of this Facility Lease into sections, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Facility Lease.(h)Concerning the Owner TrIIstee.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 nuule on the part of the Owner Trustee are made and intended not as personal represent, 76 warranties.
undertakings
'and agreements by or for the purpose or with the intention of binding FiVB 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'ereunder by or shall at any time be enforceable against FViB 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)DiscIosure.
Pursuant to Arizona Revised Statutes Section 33-401.the beneficiary of the Trust Agreement is Chrysler Financial Corporation.
a Michigan corporation.
whose address is Greenwich Office Park I.Greenwich, Connecticut 06836, Attention:
Leasing and Investment Services.A copy of the Trust Agreement is.available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston.Massachjussetts 02110.Attention:
Corporate Trust Division.\(j)Counterpnrt 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.
'k)Notice Prior to Exercise of Rights.Before sending any notice or otherwise exercising any right with respect to any of its rights referred to in Section 12, 13(b).13(c)or 14(a), the Lessee shall give notice to the Owner Participant of any facts known to the Lessee with respect to any possible Event of Loss or Deemed Loss Event.and the Lessee shall have no right to exercise any of its rights referred to in Section 12.13(b).13(c)or 14 until 15 days after receipt of such notice, by the Owner Participant.
0 I IN WITNEss WHEREQF, each of the parties hereto has caused this Facility Lease to be duly executed in New York, New York by an ofBcer thereunto duly authorized.
THE FIRsT NhTIoNhL BhNK oF BosTQN, not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of Decem-ber 1, 1986, with Chrysler Financial Corporation By Assistant Vice Pr'EL PASO ELECTRIC COMPhNY Vice President 0
I~(II~~~I I~~~~I~~I~~~~~~~~~~~t~~~I I I~I~I~~~I e l~I I y The foregoing instrument was acknowledged before me this/~re day of December.1986 by tV)t (.t ii(J.f<~)<i i.the Vice President of'Ei.P~s()EL''ntr.Coitv.).iy.
a Texas corporation.
on beh (if oi sai(l corpor.)t)o)).
/7 Votary Public DAVID A.SPIV'otary Public, State oi New Tait No.31W93468 Qualified in New Yorlr County Coraidssion Expires March 30, IS/7-0 STATE OF NEW YORK ss COUNTY OF Nem YORK t~~~The foregoing instrument wns acknowledged before me this/g4 dny of December.tggg by MARTtV P.HE>RY.an Assistant Vice President of THE FtRST NzTtONwL Bw4K OF BosTON.a national banking association.
on behalf of the banking association as trustee under that certain Trust Agreement.
dated as of December, I, 1986, with Chrysler Financial Corporation.
Notary Public Dna)A.SHVAK Notary public, State of Nwt Yart No.314693468 Qualified ln Now York CountT.ommkssion Expkrgks March 3O'30
 
SCHEDI:LE I TO FACILITY LEASE SCHEDULE OF CASUALTY VALL'ES Date 2 JUL 1987 AUG 1987 2 SEP 1987 2 OCT 1987 2 NOV 1987 2 DEC 1987 2 JAN 1988 2 FEB 1988 2 MAR 1988 2 APR 1988 2 MAY 1988 2 JUN 1988 2 JUL 1988 2 AUG I'988 2 SEP!988 2 OCT 1988 2 NOV 1988 2.DEC 1988 2 JAN 1939 2 FEB 1989 2 MAR 1989 2 APR 1989 2 MAY 1989 2 JUN 1989 2 JUL 1989 2 AUG 1989 2 SEP 198$2 OCT 1989 2 NOV 1989 2 DEC 1989 2 JAN 19'98 2 FEB 19982 MAR 1998 2 APR 1998 2 MAY 1998 2 JUN 1998 JUL 1998 2 AUG I'998 2 SEP 1998'OCT 1998 2 NOV 1998 2 DEC 1998 2 JAN 1991 2 FEB 1991 MAR 1991 2 APR 1991 2 MAY 1991 Percentage of Facility Caal 118.17813 186.42859'87.36144 188.27268 189.18618 118.18197 188.43551 184.62699 185.58834 186 36592 187.22199.188.879S7 188.92817 185.89332 185.94817 186 77738 187.61626 188.45682 189.28769 185.43511 186.26488 187.88964 187.98769 188.72728 189.53932'185.66755 186.47721 187.27928 188.88278 188.88774 189.68585 185.79825 186.59281 I87.38473 188.16988.188.95475.189.73279 185.82638 186.68118.
187.36831 188.13665 1.88.98622.189.66886 185.74511 186.58328 187.25866 188.88638 2 JAN 2 FEB 2 MAR 2 APR 2 MAY Z JUN 1995 1995 1995 1995 1995 1995 Date 2 JUN 1991 2 JUL 1991 2 AUG 1991~SEP 1991 2 OCT 1991 2 NOV 1991 2 DEC 1991 2 JAN 1992 2 FEB 1992 2 MAR 1992 2 APR 1992 2 MAY 1992 2 JUN 1992 2 JUL 1992 2 AUG 1992 2 SEP 1992~OCT 1992 2 NOV 1992 2 DEC 1992 2 JAN 199 2 FEB 1993 2 MAR 1993 2 APR 1993 2 MAY 1993 2 JUN 1993 2 JUL 1993 2 AUG 1993 2 SEP 1993 2 OCT 1993 2 NOV 1993 2 DEC 1993 2 JAN 1994 2 FEB 1994 2 MAR 1994 2 APR 1994 2 MAY 1994 2 JUN 1994 2 JUL 1994 2 AUG 1994 2 SEP 1994 2 OCT 1994 2 NOV 1994 2 DEC 1994 Percentage of Facility Get 188.75528 t 89~49638 185.55223 186.28914 187.81828 187.74848 188.47958 189.28279 t85.24854 185.95916 186.67488 187.38378 188.89368 188.79678 184.81388 185.51181 186.28296 186.89486 187.587~8 188 27333 184.27191 184.95113 185.62769 186.29755 186 96883 187.63177 183.68775 184.26424., 184.91393 185.56412 186.21482..186.85867 182.81427 183.45828 184.88346 184.78993 185.3.677....185.95684 I 181.88811 182.49965 183.18435 183.78938 184.31451.184.91283 188.82181 181.41893 181.99787 182.57977 183.16261 SCHEDULE 1 TO FACILITY LEASE SCHEDULE OF CASUALTY VALUES 2 SEP 2 OCT 1395 1995 2 NOV 1995 2 DEC 1935 2 JAN 1936 2 FEB 1996 2 MAR 1'336 2 APR 2 MAY 2 JUN 1996 1996 2 JUL 1996 2 AUG 1996 2 SEP 1936 2 OCT 2 NOV 2 DEC 2.JAN 1936 1996 1996 1397 2 FEB 1337 2 MAR 1397 2 APR 2 NAY 2 JUN 1937 1997 1997 2 JUL 1997 2 AUG 1997 2 SEP 1397 2 OCT 2 NOV 1997 1997 2 DEC 1997 2 JAN 1338 2 FEB l398 2 MAR 1'398 2 APR 1998 2 NAY l 398 2 JUN 19'38 2 JUL 1398 2 AUG 2 SEP 1998 1938 2 OCT 1998 2 NOV 1398 2 DEC 1998 2 JAN 1999 2 FEB 1999 2 MAR 1399 2 APR 2 NAY 1999 1999 2 JUN 1999-2 JUL 1999 Date 2 JUL 1395 2 AUG 1335 Percentage of Facility Coat 183.74558 39.63873 188.211'37 188.78534 181.35884.181.93249 182.58628 98.38979.98.35339 99.51714 188.88102 186.64585 1 0 l.28923 97.68266 97.63618 38.18985 98.74367 99.29763 99.85175 35.71463 96.25759 96.88872 97.34488..97.88743~8.43182 94.28284 94.81477 95.34685 95.87989.96.41158...96.94487 92.78273 93.38158 93.82156 94.34549 94.86962 95.39765 91.23111 91.74476 92.26235 92.78823 93.29848 93.82854 89.64549 98.1M66 98.65776 91.16917 91.68892.92".19782" Date 2 AUG 1999 2 SEP 1999 2 OCT 1999 2 NOV 1999 2 DEC 1999 2 JAN 2888 2 FEB ZM8 2 MAR 2888 2 RPR ZM8 2 NAY 8%8 2 JLN BN8 2 UL ZM8 2 AUG 2888 2 SEP 2888 2 JAN 2881 2 FEB Zeei 2 MAR ZM1 Klml..";2 NAY 2981'.~8+JLN: 2881 2 JUL 2881 2 RUG BN1 2 SEP 2Ml~,8'CT.f881
,i.",.2;.HOV 2961-':8>>lKC':29ei'>>
2 JAN Zee2 2 FEB 2882 2 PiAR Zee2:PPNFKF.t".," P',le'26e2 I~JQ4.26B2 2 JUL 29B2 2 AUG PS'SEP 29e2''2 AKT Zee2 ,~2,NR Zee2 2."DEC Zee2 2 JAN~2 FEB 2963 2 MAR Zee3 2 APR 8883 2 WY ZiM3 2 JLN 8883 2 JUL 2M3 2 AUG 2683.Percentage of Facility Ceca 88.81349 88.51828 89.81121 89.51257.99.61427 98.52832 86.32684 86.81362 87, 3liR49 87.79599 88+28987 88.78842 84.58594 85.86373 85.54615 86.82893 86.51218 86.99993 82.78687 83.25489 83.72357 84.19881 84.67286 85.15272 S8.93689 81.38776 81.85839 82 31343~82.77688 83.24533 79'1144 79.45786 79.98678 86.36887 88.81549 81;27549 77.83142 77.46769 77.9e9c?8 78.35131 78 79388 79.24166 74.98568 75.48989":"m"'72.87451 SCHEDULE I TO FACILITY LEASE SCHEDULE OF CASUALTY VALUES Date 2 SEP c083 2 OCT 2M3 2 NOV 2883 c DEC 2883 JAN 2884 c.FEB 2884 2 MAR 2884 2 APR 2884 2 MAY 2884 2 JUN c884 2 JUL 2884 2 AUG 2884 2 SEP 2884 2 OCT 2884 2 NOV 2884 2 DEC 2884 2 JAN'85 2 FEB 2885~MAR 2885 2 APR 2885 2 MAY 288S 2 JUN 288S 2 JUL c885 2 AUG 2885 2 SEP 2885 2 OCT 2885 2 NOV 288S 2 DEC 2885 2 JAN c886 2 FEB 2886 2 MAR 2886 2 APR 2886 2 MAY 2886 2 JUN 2888 JUL:.".88 2 AUG 288c6 2 SEP.'86 2 OCT 2886'2 NOV 2886 2 DEC 2888 2 JAN 2887 2 FEB 2887 2 MAR 2887 2 APR 2887 2 MAY 2887 2 JUN 2887 2 JUL 2887 2 AUG 2887 2 SEP 2887 Percentage of Faeiiity Coat 73.28881 73.78722 74.12691 74.54718 74.9738S 78.69342 71.89419 71.497?5 71.98744 72.31767 72.73489 68.44297 6S.e3227 69.22769 69.62364 78.82813 78.42281 66.11812 66.49 87 66.87263 67.25798 67.6439IZ 68.836S2 63.72144 64.88686 64.45892 64.83161.65.28492.65.58494 61.26835 61.61648, 61.97586 62.34274 62.71843 63.88S61 S8.75585 59.18532 59.46317 S9.82199 68 18178 68.S4924 56.28973 56.55124 56.89678 57.25883 57.68687 57.96991 53.62556 53.96243 Date 2 OCT 2887 2 NOV 2887 2 DEC 2887 JAN 2888 FEB 2888 MAR 2888 APR 2888 MAY 2888 JUN 2888 L c888 G c888 P 2888 OCT 2888 NOV 2888 DEC 2888 JAN 2889 FEB 2889 MAR c889 APR 2889 MAY 2889 JUN 2889 2 2 2 2 2 2 JU 2 AU 2 EE 2 2 2 2 2 2 2 2 c.JUL 2889 AUG c889 2 SEP 2889 2 OCT 2889 2 NOV 2889 2 DEC 2889 2 JAN 2818 2 FEB 2818 2 MAR 2818 2 APR 2818 2 MAY 2818 2 JUN 2818 2 JUL 2818 2 AUG 2818 2 SEP 2818 2 OCT 2818'NOV 2818 2 DEC 2818 2 JAN 2811 2 FEB 2811 2 MAR 2811 2 APR 2811 2 MAY 2811 Z JUN 2811 2 JUL 2811 2 AUG 2811 2 SEP 2811 2 OCT 2811 Percent of Facility Cas<84.888!54.65496.SS.88329 55.6843*51.88885 51.3 711 51.67896 52.81456.52.5988 Sc.71498 48.35914 , 48.68587 49.82898 49.35875 49.69848 58.84816 45.68568 46.88498 46.33884 46.666c.6 47 88466 47.5435 42.99825 43.38842 43.63882 43.97886 44.38456 44.65864 48.28137 48.59464 48.91468 41.24714 ,41.58249, 41.938S5 37.54252 37.83696 38.14382 38.45333 38.76553 39.89838 34.67229.,34.93645 35.28726 35.49832 35.77581 36.87369 31.62852 31.86528 3Z.11396 Q hr yp)t7.r SCHEDULE OF CASUALTY VALUES SCHEDULE 1 TO FAC1uTY LEASE'ate 2 NOV 2811 2 DEC 2811 2 JAN 2812 2 FEB 2812 2 MAR 2812 2 APR 2812 2 NAY 2812 2 JUN 2812 2 JUL 2812 2 AUG 2812 2 SEP 2812 2 OCT 2812 2 NOV 2812 2 DEC 2812 2 JAN 2813 2 FEB 2813 2 NAR 2813 2 APR 2813 2 NAY 2813 2 JUN 2813 2 JUL 2813 2 AUG 2813 2 SEP 281"'OCT 2813 Percentage of Facility Cost 32.36475.32.61765.32.88264 28.48427 28;68758 28.81682 29.83782 29.26865 29.49527 24.98624 2S.15853 25.34213 ,25.52722 25.71381.25.91184 21.36588 21.58888 21.64132 21.79758 21, 9S491.22.12828 19.93887 28.87299 20.00000 Date Percentage of Facility Coil'r ysl SCHEDULE?TO FACILITY LEASE SCHEDULE OF SPECIAL CASUALTY VALUES2 JUL 1987 2 AUG 1987 2 SEP 1987 2 OCT 1987 2 NOV 1987 2 DEC 1987 2 JAN 1988 2 FEB 1'388 2 MAR 1988 2 APR 1988 2 MAY 1988 2 JUN 1988 2 JUL 1988 2 AUG 1988 2 SEP 1'388 2 OCT 1988 2 NOV 1988 2 DEC 1988 2 JAN 1989 2 FEB 1989 2 MAR 1989 2 APR 1989 2 MAY 1989 2 JUN 1989 2 JUL 198'3 2 AUG 1989 2 SEP 1989 2 OCT 1989 2 NOV 1989.2 DEC 1989 2 JAN 1998 2 FEB 1998 2 MAR 1998 2 APR 1998 2 MAY 1998 2 JUN 1998 2 JUL 1998 2 AUG 1998 2 SEP 1998 2 OCT 1998 2 NOV 1998 2 DEC 1998 2 JAN 1991 2 FEB 1991 2 MAR 1991 2 APR 1991 2 MAY 1991 Percentage
.nf Foeiiity C I 119.19464 186.42218 187.33172 188.22148 189.11298 118.88646 188.34292 184.51516 185.36895 186.21551 187.85328 187.89255 188.72295 184.8699P.185.69827 186.51772 187.33855 188..16877 188.97483 185.18355 185.91434 186.72189 187.52246 188.32438 189.11912 185.22988 186.82188 186.88667 187.59271 188.37994 189.16887 185.25M4..186.83271 186 88784 187.57434 188.3M72, 189.18482 185.18862 185.93828 186.68865"187.44889 188.19252 188.93778 184.99882 185.73915 186.47768 187.28897 Dole 2 JUN 1991 2 JUL'991 2 AUG 1991 2 SEP 1991 2 OCT 1991 2 NOV 1991 1 2 DED 1991 2 JAN 1992 2 FEB 1'3'32 2 MAR 19'32 2 APR 1992 2 MAY 199-2 JUN 1992 2 JUL 1992 2 AUG 199-2 SEP 1'392 2 OCT 1'392 P.NOV 1'992 2 DEC 1992 2 JAN 1993 2 FEB 1993 2 MAR 1'3'93 2 APR 1993 2 MAY 1993 2 JUN 1'393 2 JUL 1993 2 AUG 1993 2 SEP 19'3 2 OCT 1993 2 NOV 1993 2 DEC 1993 2 JAN 1994 2 FEB 1994 2 MAR 1994 1 2 RPR 1994 j 2 MAY 1994 2 JUN 1994 2 JUL 1994 2 AUG 1994 2 SEP 1994'OCT 1994 2 NOV 1994 2 DEC 1994 2 JAN 1995 2 FEB 1'395 P MAR 1995 2 APR 1995 2 MAY 1995 2 JUN 19'35 Percenloge of Facility CV4(187.94~1~8 188.66629 184.78599 185.42646 186.13974 186.85379 187.56861 188.2761'3 184.29884 185.88857 185.78826 186.39376 187.88792 187.77585 183.77767 184.46885 185.13616 185.81283 186.49887 187.16899 183.14449 183.88846 184.46998 185.12513 185.78882 186.43826 182.39188 183.8336a 183.66928 184.~8523 184.94154 185.57152 181.51318 182.13495 182.75413 183.36718 183.9883P 184.58727 188.58531 181.18358.'81.69537 i 182.28738'82P.87953.
183.46636 99.36377 99.94123.188.51878 181.89644 181.67419-SCHEDUI.E?
TO FACILITY LEASE SCHEDULE OF SPECIAL CASUALTY VALUES Date-JUL 1995 2 AUG 1995 2 SEP 1995 2 OCT 1995 2 NOV 1995 Z DEC 1995 2 JAN 1996 2 FEB 19'36 2 LIAR 1996 2 APR 1996 2 MAY 1996 2 JUN 1996 2 JUL 1996 2 AUG 1996 2 SEP 1996 2 OCT 1996 2 NOV 1996 2 DEC 1996'2 JAN 1997 P.FEB 1997 2 MAR 1997 2 APR 1997 2 NAY 1997 P.JUN 1997 2 JUL 1'397 2 AUG 1997 2 SEP 1997 2 OCT 1997 2 NOV 1997 2 DEC 1997 2 JAN 1998 2 FEB 19'38 2 NAR 1998 2 APR 1998 2 MAY 1998 2 JUN 1998 2 JUL 1998 2 AUG 1998 2 SEP 1998 2 OCT 1998 2 NOV 1'398 2 DEC 1998 2 JAN 1999 2 FEB 1999 2 NAR 1999 P.APR 19'39 2 NAY 19'99 2 JUN 1999 2 JUL" 1999'" Percentage
.of facility~t 182.25285 98.14886'38478811 99.27626'39.84452 188.41288 188.98135 96.85951 97.41772 97.97684 98.53447 99.89381'39.65165 95.51951'96.86743 96.61546 97.16368 97.7118S 98.26822 94.11738 94.65445 95.19178 95.7Z988 ,96, 26657.96.88418 92.64998 93.17585.93.78183 94.22794 94.75417..95.Z8852 91.11292 g), 62539.92.13798 92.65878 93.16355..93, 67685'9.49545 89.99414 98.49628 98.99859'1.58187 92.88784 87.81613 88.38532.88.79615 89.29878 89.78561 98.28427 Dote 2 AUG 1999 2 SEP 19'9'9 2 OCT 1999 2 NOV 1'9'9'9 2 DEC.1999.2 JAN 2888 2 FEB 2888 P.MAR P888'APR 2888 2 NAY 2888 2 JUN 2888 2 JUL 2888 2 AUG 2888 P.SEP 2888 2 OCT 2088 2 NOV 2888 2 DEC c888 2 JAN P881 2 FEB 2881 2 MAR 2881 P APR 2881 2 MAY 2881 2 JUN 2881 2 JUL 2881 2 AUG 2881 2 SEP 2881 2 OCT'881 2 NOV 2881 2 DEC 2881 2 JAN 2882 2 FEB 2882 2 NAR 2882 2 APR 2882 2 NAY 2882 2 JUN 2882 2 JUL 2882 2 AUG ZOOP 2 SEP 2882 2 OCT 2882 2 NOV 2882 2 DEC ZOOR 2 JAN 2883 2 FEB 2883 2 MAR 2883 2 APR 2883 2 NAY 2883 2 JUN 2883 2 JUL 2883 2 AUG 2883.Percentage of F'neil ity Co t 86.884IF4 86.56392 87.84758 87'3144 88.81558 88'8338 84.29232 84.76138 85.23221 85.78712 86.18225 86.66148 82.44849 82 89961 83.36288 83.82628 84 28981 84.75752 88.52496 88.97c53 81.42281 81.8758.82.3299 82.78842 78.54526.78 98223 79.42355 79.86518 88 38688 88.75386 76.49755.?6.92217.77.34885 77.78828 7P';21181 78.64814 744 38138 74.79462 75.21268 75.63$R Q,6.84938.76.47P.48 72.19245 72.59258 72.99491 73.48225?3.88'38 74.222 69.9384c SCHEDULE 9 TO FACILITY LEASE SCHEDULE OF SPECIAL CASUALTY VALUES DalL 6 SEP 2883 2 OCT 2883 2 NOV 2883 2 DEC 2883 2 JAN c884 2 FEB 2884 2 NAR c884 2 APR 2884 2 MAY 2 JUN 2884 2884 2 JUL 2884 2 AUG 2884~SEP 2884 2 OCT 2884 2 NOV 2884 2 DEC 2884 JAN 2885 2 FEB 2885 NAR c885 2 APR 2 NAY JUN 2885 2885 2885 2 JUL 2885 2 AUG 2885 2 SEP 2885 2 OCT 2885 Z NOV 2885 2 DEC 2885 2 JAN 2 FEB 2 NAR 2886 2886 2886 2 APR 2886 2 MAY 2886 2 JUN 2886 2 APR 2887 2 NAY 2887 2 JUN 2887 2 JUL c887 2 AUG 2887 SEP 2887 2 JUL 2886 2 AUG 2886 2 SEP~886 2 OCT 2886 2 NOV 2886 2 DEC 2886 2 JAN 2887 2 FEB 2887 2 NAR 2887 Percentage
.nf Facility C~t 78.31846 78.71151 71.28483 71.49841 71.89784 67.59883 67.96488 68.34112 68.72282 69.18481 69.49222 65.17322 65.5" 419 65.98862 66.26735 66.63435.67.88677 62.67262 63.81865 63.36721 63.72155 64.87628 64.43668 68.89824 68.42384 68.76334 61.18318 61~44336 61.78948 57.43853 57.75ZBB 58.87632 58.48712 58.73841 59.87624 54.78799 55.82822 55.33986 55.65851.558.97856 56.38528 51.92466 52.22466 52.52883 52.83882 53.15838 53.46943 49.87986 49.37187 Date 2 OCT 2887 2 NOV 2887 2 DEC 2887 2 JAN c888 2 FEB 2888 2 MAR 2888 2 ApR 2888 , 2 MAY 2888 2 JUN 2888 2 JUL 2888 2 AUG 2888 2 SEP 2888 2 OCT 2888 2 NOV 2888 2 DEC 2888 2 JAN 2889 2 FEB 2889 2 NAR 2889 2 APR 2889 2 MAY 2889 2 JUN 2889 2 JUL 2889 2 AUG 2889 2 SEP 2889 2 OCT 2889 2 NOV 2889 2 DEC 2889 2 JAN 2818 2 FEB 2818 Z NAR 2818 2 APR 2818 2 NAY 2818 2 JUN 28f8 2 JUL 2818 2 AUG 2818 2 SEP 2828 2 OCT 2828 Z NGV 2820 2 DEC 2818 2 JAN 2811 2 FEB 2811 2 NAR 2811'APR 2812 2 MAY 2811 2 JUN 2811 2 JUL 2811 2 AUG 2811 2 SEP 2811 2 OCT 2811 Percentage of Facility.C 49.66966 49.96953 58.27814 SB.S784e 46.17665 46.45583 46.73982 47.83868 47.32346 47.62488 43.21473 43.48588 43.76553 44.846S4 44.32883 44.61988 48.19888 48.45745 48.72161 48.9'9546 41.27882 41.55596 37.12663 37.37887 37.64188 37.98485~8.17843 38.44'682'4.88546 34.24671 34.49348 34.75122 35.82876'5.28137 38.81968 31.83958 31.27813 31.58268~J 2.73692.31.98289 27.48961 27.67855 27.87297 28.'87794 28.28453 28.58179 23.98115 24.14278 24.31252 SCHEDULE 2 TO FACILITY LEASE SCHEDULE OF SPECIAL CASUALTY VALUES Date..2 NOV 2811 2 DEC 2811 2 JAN 2812 2 FEB 2812 2 LIAR 2812 2 APR 2812 2 NAY 2812 2 JUN 2812 2 JUL 2812 2 AUG c812 2 SEP 812 2 OCT c812 P.NOV 2812 2 DEC c81P.2 JAN 281~2 FEB 2813 2 WAR 2813 2 APR 2813 2 NAY 2813 2 JUN 2813 2 JUL 2813 2 AUG 2813 2 SEP 2813~OCT 2813 Percentace nf Facility C~t P4.48466 24.65815 24.84282 28.28772 28'1438 28.54586 28.68743.28.83889 28.98285 16-39718 16.49214 16.59688 16.78223.16.88843 16.92443 12.38614 12.36828 12.43866 12.49985 12 56958 12.64638 18.37852 18.43585/d.ddsc Date Percen tape of Facility C w SCHEDULE 3 TO SCIL'ITY LEASE SCHEDULE OF TER~IIi fATIOi I'ALUES Bric Rent Payment Drl 4 Percentage af Facility, Coat Bavic Rent Pavmcnt Percentage uC Facility~JAN Ma 88.58338 2 JUL-888 86.66148 2 JAN 2881 84.75752 2 JUL 1997 76.88418 2 JUL 2881 82.78842 2 JAN 1998 95.28852 2 JAN 2882 7 88.75 86 2 JUL 1998 I 93-67685 2 JUL 2882 78 64814 2 JAN 1999 92.88784 2 JAN 2883 76.47248 L'UL 1999 98.28427 ,2 JUL-883 SCHEDULE 3 TO FACILITY LEASE 8aiic R<<nt Payment Date Percentaite
~f FaciBty Co t Mic Rent Payment Date SCHEDULE OF TERiIIlVATION VALUES~'ercentalte uf Facility Ci<<t 2 JAN 2884 71.89784 2 JAN 2888 58.57848 2 JUL 2884 69.49222 2 JUL'a888 47.62488 2 JAN 2885 67.88677 2 JAN 2889 44.61988 2 JUL,2885 64.4366B 2 JUL 2889 41.5559 2 JAN 2886 61.78948 2 JAN 2818 38.44681 r JUL R886 59.87624~JUL 2818 35.28137 2 JAN 2887 56.38528 2 JAN 2811'1'8289 2 JUL 2887 53.46943 2 JUL 2811 28.5817 C 4r l/Slur SCHEDULE q" TO FACIL'ITY LEASE SCHEDULE OF SPECIAL TEB~IINATIOltt VALUESDate 2 JUL 1987 2 AUG 1987 2 SEP 1987 2 OCT 1987.~~JCV-1987.2 DEC 1987 2 JAN 1'388"--FEB.29M.2 itiAR 1988 2 APR 1988.22QY.1.988.2 JUN 1988 2 JUL 1988 2 AUG, 1'388., 2 SEP 1'988 2 OCT 1988 2 NOV.1988 2 DEC 1988 2 JAN 1989 2 FEB.1989.2 MAR 1989 2 APR 1989~~.MAY.2989.2 JUN 1'989 2 JUL 1989 2&UG..1989 2 SEP 1'38'3 2 OCT 198'3~~NOV~989 2 DEC 1'989=JAN 1998 2 FEB 1998 2 MAR 1998 2-APR 1998.2.lAY 19'38 2 JUN"398 iUL i"38 2 AUG 1'3'38'SEP 1998 2 OCT 1'398 2 NOV 1998 2 DEC 1'3'38 jAN t"91 1'ag]2.'lAR 1'391 2 4PR 1991 ,"tAY 1991 Percentage uf Facility C.<198.9l 87R 185.12987 186.8.89S 186.91214 187.79515 188.68882 187.88781 183.17132 184.81632 184.85484 185.68291 186.51322 187.33461 183.47258.184.29171 185.18197 185.91354 186.72644 187.53832 183.65848 184.45178 185.24968 186.84863 186.83278 187.61785 183.71879 184.58884 185.27576*186.85179 186.82895 187.59894 183.68451 184.45118 185.21589 185.97198 186.72989 187.48864 183.54663 184.29353 18S.83323 185.77385 186.51538 187.24967 183.29888 184.82898 184.75617 185.47628 Date 2 JUN 1'391~gUG 1991 2 SEP 1991 OCT 1991 2 DEC 1991 1 JAN 1992 Percentage uf Facility 186.19719 186.91887 182.93918 183.64882 184.34967~185.85281 185.75586 186.43814 C hr)zjc' 0 0 SCHEDULE 5'TO FACILITY LEASE SCHEDULE PF E>HANCED CASUALTY VALT.ES Da(e 2 JUL I'987 2 AUG 1987 2 SEP 1987 2 OCT 1987 2 NOV 1987 2 DEC I'987 2 JAN 1988 Z FEB 1988 2 NAR 1988 2 APR 1988 2 NAY 198S 2 JUN 1988 JUL 1988'AUG 1988 2 SEP I'388 2 OCT 1988 2 NOV 1988 2 DEC 1988 2 JAN 1989 2 FEB 1989 2 NAR 1989 2 APR 1989 2 NAY 1989 8 JUN 1989 2 JUL 1989 2 AUG 1989 2 SEP 1989 Z OCT 1989 2 NOV 1989 2 DEC 1989 2 JAN 199B 2 FEB 1998 2 NAR 19'9B 2 APR 19'9B 2 NAY 199B 2 JUN 199B 2 JUL 1998 2 AUG 199B 2 SEP I99B 2 OCT 199B 2 NOV 199B 2 DEC 199B 2 JAN 1991 2 FEB 1991 2 NAR I'991 Z APR 1991 2 MAY 1991 Percentatte of Facility ,.C i 115.17818 111.42859 112.36144 113.27268 114.18618 115.1B197 113.43551 I B9.62699 g I B.5BB34 111.36592 112.22199..I 13..879S7 113.92817 I I B.B9332 I I B.94817 111.77738 112.61626.1139 45682.114.28769 118943511 111.264BS 112.88964 112.9B769 1.13.72728 114.53932 IIB.66755'.1.1..47721..
112.27928 1139 88278 113..88774
.114.68585 I IB.79825 111.$928)112.38473 I)39 169BS 113..95475 114.73279 118.82638.111.6B118 112.36831 113.13665 M3.W622 114.66886 IIB.74511 111.5B328 112.25866 113.88638 Date 2 JUN 1991 2 JUL 1991 2 AUG 1991 2 SEP 1991 2 OCT 1991 2 NOV 1991 2 DEC 1991 2 JAN 1992 2 FEB 1992 2 MAR 1992 2 APR j,992 2 l%Y 1992 2 JW 1992 2 JUL 1992 2 AUG 1992 2.SEP 199c?2 OCT 1992 Z NN 199c?2 DEC 1992 Z JAN 1993 2 FEB 1993 2 l%R 1993;Z APR 1993;8 IOY 1993"'8"'9%3 2 JQ 1993 2 AUG 1993 2 SEP 1993;,R lKT':.1993
",I;.%V 1893''S4KC i%53 2 JAN 1994 2 FEB 1994 2 NAR 1994 TiRRCBR~2 le 1994 2 JQI 1994 2 JUL 1994 2 AUG 1994 2 SEP 1994 2 le)994 2 ICN)994 2 DEC)994 2 JAN 1995 2 FEB 1995 2 NAR 1995 2 APR 1995 2 l%Y 1995 2 JLN 1995 Percentage of Facility C i 118.75589 114.4963B I I B.55223 111.28914 112.B182S 112.7484B 113.47958 114.28279 11B.Z4B54 I I B.95916 111.67488 112.38378 113.B936B 113.7967B 189.S1388 118.51181 111.ZB296 111.89486 3&~58~.113.27333 I B9.27191 I B9.95113 I le.62769 111.29755~%$9 112.63177 I BS.68775 IB'~6~4..t198 91393 i)89 56412 48/111.85867 I B7.S1427 188.45888 189.88346 189.7B993~~6ZL I IB.95684 I B6.88811 187.4~5)M IB435 106 7B93B ERR'k&51 189.91283 I B5.82181 19~19%.'I6.99787 187.57977 19 Lail.Q 4 r.1f 5[Cr SCHEDULE o TO FACILITY LEASE Date 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 DEC 2 JAN 2 FEB 2 MAR 2 APR 2 MAY 2 JUN 1995 1995 1995 1995 1995 1995 1996 1996 1996 1996 1996 1996.2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 DEC 2 JAN 2 FEB 2 MAR 1996 1996 1996 1996 1996 1996'997 1997 1997 2 APR 1997 2 MAY 1997 2 JUN 1997 2 JUL 2 AUG 2 SEP 1997 1997 1997 2 OCT 1997 2 NOV 1997 Z DEC 1997 2 JAN 2 FEB 2 MAR 1998 1998 1998 2 APR 1998 2 NAY 1998 2 JUN 1998 2 JUL 1998 2 AUG 1998 2 SEP 1998 2 OCT 1998 2 NOV 1998 2 DEC 1998 2 JAN 1999 2 FEB 1999 2 NAR 1'999 2 APR 1999 2 NAY.1999 2 JUN 1999 2 JUL 1999 Pereentatt<<
of Facility C129t 1888 74558 184.63873 185.21197 185.?8534 186.35884 186.93249 187.58628 183.38979 183.95339 184.51714 185.88182 185.64585 186.28923 182.88266 182.63618 183.18985 1838 74367 184.29763 184.85175 188.71463 181.25759 181.88872 182.344ee.182.88743 183+43182 99.28284 99.81477 188.34685 188.87989 ,181.41158.181.94487 97.78273 98..38158.
98.82156 99.34549...99.86962.188.39765 96.23111.96.74476 97.26235 97..78823~9.29848.98.82854 94.64549.95.15866 95.65776 96.16917.96.68892 97.19782 Dale 2 AUG 1999 2 SEP 1999 2 OCT 1999 2 NOV 1999 2 DEC 1999 2 JAN 2888 2 FEB 2888 2 NAR 2888 2 APR*2888 2 NAY Mee 2 JUN 2888 2 JUL 2888 2 AUG 2888 2 EEP 2888 2 DCT 2888 Z NOV 2888 2 DEC 2888 2 JAN 2881 2 FEB 2881 2 NAR Mel 2 APR 2881 2 NAY 2881 2 JUN 2881 2 JUL 2881 2 AUG 2881 2 SEP 2881 2 OCT 2881 2 NOV 2881 2 DEC 2881 2 JAN M82 2 FEB 2882 2 NAR 2882 2 APR 2882 2 NAY 2882 2-JUN M82 2 JUL 2882 2 AUG 2882 2 SEP 2882 2 OCT 2882 2 NOV 2882 2 DEC M82 2 JAN M83 2 FEB 2883 2 NAR 2883 2 APR 2883 2 MAY 2883 2 JUN 2883 2 JUL 2883 2 AUG 2883 SCHEDULE OF E>HA.'iCED CASUALTY VALUES 11 Percentage of facility C I 93.81349 93.51828 94P 81121 94.51257 95.81427 95.52832 91.32684 91.81362 92.38249 92.79599 93.28987 93.78842 89.58594 98.86373 98.54615 91.82893 91.51218 91.99993 87.78687 88.25489 88.72357 89.19881 89.6728 98.1527 85.93889 86.38776 86.85839 87.31343 ,87..77688 88.24533 84.81144 84.45786.84.98678 85.36887..85.81549.86.27549 82.83142..82.46769.82.98928 83.35131 83.79388.84.24166 79.98568 888 48989 88.83679 81.26941 81.78251 82.14139 77.8745 t g~ple~
SCHEDULE 5'O FACILITY LEASE SCHEDULE OF E.'iHA.iCED CASUALTY VALUES Date 2 SEP 2883 2 OCT 2883 2 NOV 2883 2 DEC 2883 2 JAN 2884 2 FEB 2884 2 MAR 2884 2 APR 2884 2 MAY 2884 2 JUN 2884 2 JUL M84 2 AUG M84 2 SEP 2884 2 OCT 2884 2 NOV 2884 P DEC 2884 2 JAN 2885 2 FEB 2885 2 NAR 2885 2 APR 2885 2 NAY 2885 2 JUN 2885 2 JUL 2885 2 AUG 2885 2 EEP 2885 2 OCT 2885 2 NOV 2885 2 DEC M85 2 JRN 2886 P.FEB 2886 R NAA 2886 2 APA 2886 2 MAY 2886 2 JUN R886 2 JUL 886 2 AUG 2886 2 SEP 2886 2 OCT 2886 2 NOV 2886 2 DEC 2886 2 JAN 2887 2 FEB 2887 2 NAR M87'APR P887 2 NAY 2887 2 JUN 2887 2 JUL 2887 2 AUG 2887 2 SEP 2887 Percen tatte of Facility Cent 78.28881 788 78722 79.12691.79.54718 79.97385 75.69342 76.89419 76.49775 76.98744 77.31767.77.73489 73.44297 73.83227 74.22769 74.62364 75.82813, 75.42281!71.11812: 71.49387.71.87263: 72.25798 72..6439P 73.83652 68.72144 69.88686.69.45892 69.83161..78.2849'8.
58494 66.26835 66.61648 66.97586 67.34274 6/.71844 68.88561 63.75585 64.1853Z, 64.46317;64.82199!~5.18179[, 65>>54924I 61.28973l.,61.5512/61.8967BI 62.2588al 62.6868$62.96991 58.62556l 58.96243'ate 2 OCT 2887 2 NOV 2887 2 DEC 2887 2 JAN 2888 2 FEB 2888 2 NAR 2888 2 APR 2888 2 MAY 2888 2 JUN 2888 2 JUL 2888 2 AUG 2888 2 SEP 2888 2 OCT 2888 2 NOV 2888 2 DEC Z888 2 JAN 2889 2 FEB 2889 2 NAR 2889~RPR 2889 2 NAY Peeg 2 JUN Zeeg 2 JUL 2889 2 AUG 2889 2 SEP 2889 2 ocT 2889 Z NOV 2889?DEC 2889 2 JAN 2818 2 FEB 2818 2 NAR 2818~APR 2818 2 NAY 2818 2 JUN 2818 2 JUL 2818 2 AUG 2818 2 SEP 2818 2 OCT 2818 2 NOV 2818 2 DEC 2818 2 JAN 2811 2 FEB 2811 2 NAR 2811"2 APR 2811 2 NAY 2811 2 JUN Mll JUL 2811 AUG 2811 2 SEP 2811 2 OCT 2811 54.35875 54.69848 55.84816 58.68568 51.88498 51.33884 51.66626.52.88466 52.35435 47.99825 48.38842 48.63882 48.97886 49.38456 49.65864 45.28137 45.59464 45.91468 46.24714 46.58249 46.93855 42.54252 42 83696 438 14382 43.45333 43.76553 44.89838 39.67229 39.93645 48.28726 4e.49e32 48.77581 41.87369 36.6Z852 36.86528 37.11396 Percen tatte af Facility C 58.38681 59.65496.68.88329 6e.36e43 56.88885.56.33711 56.67896 57.81456 57.35988 57.71498 53.35914 53.68587 54.82898 SCHEDULE 5 TO FACILITY LEASE SCHEDULE OF ENHANCED CASUALTY VALUES D~lv 2 NOV 2811 2 DEC 2811 2 JAN 2812 2 FEB 2812 2 MAR 2812 i 2 APR 2812 2 MAY 2812 2 JUN 2812 2 JUL, 2812 2 AUG 2812 2 SEP 2812 2 OCT 2812 2 NOV 2812 2 DEC 2812 2 JAN 2813 2 FEB 2813 2 MAR 2813 2 APR 2813 2 MAY 2813 2 JUN 2813 2 JUL 2813 2 AUG 2813 2 SEP 2813 OCT 2813 Percentatte of Faciliti C 37.3647>37.61765 g7.88264 33.48427 33.68758 33.81682 34.83782 34.6865 z4.49527 29.98624 8.15853 38.34213.8.52722 38.71381 38.91184 26..6588 26.58888 26.64132 26.79758 26.95491 27.12828 24.93887 25.87299 z,5.00000 Dale Percentatt of Facifitv Cuit SCHEDL LE 6 TO FACILITY LEASE DESCRIPTION OF REAL PROPERTY IVTEREST The Reiil Property Interest'onsists of a.727881%undivided interest in the following:
I.Pvics Pr i~T SiTE PwncEr.No.1: Lot Four (4): the Southwest quarter of the iVorthwest quarter: and the West half of the Southwest quarter.all in Section Two (2), Township One (1)South.Range Six (6)%Vest of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PwRcEr.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.Pwnccr.iVo.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.Pa,acEI.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.PAncEt.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 iVorthwest quarter of Section 27.P~ncEL No.6: The Southeast quarter of Section Twenty-eight (28).Township One (1)North.Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona: EXCEPT 50%of all oil.gas and other mineral deposits and geothermal resources recovered from or developed on the property, as reserved in instrument recorded May 10, 1974 in Docket 10647.page 136.PhncEt.No.7: The East half of Section Thirty-three (33).Township One (1)North.Range Six (6)KVest of the Gila and Salt River Base and Meridian.Maricopa County.Arizona.PisncEt.No.S: 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.P~ncEL No.9: The West half of Section Thirty-Bve (35), Township One (1)North.Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PwncEt.No.10: The Southeast quarter of Section Nine (9), Township One (I)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona: EXCEPT the iVorthwest quarter thereof.PwacEt.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.P~acEr.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 apd Meridian, Maricopa County.Arizona.more particularly described as follows: BEGINNING at the Southeast corner of the said East h'alf of the Southwest quarter of Section 23: thence West, an assumed bearing along the South line of the said East half of the Southwest quarter of Section 23.for a distance of 762.04 feet: thence North 0 degrees 03 minutes 39 seconds West: parallel to the East line of the said East half of the Southwest quarter of Section 23.for a distance of 1946.46 feet to a point on the South right-of-way line of the 200 foot wide HASSAYAMPA-SALOME HIGHWAY.as recorded in Book 12 of Road Maps.page S2.
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 East.along said North right-of-way line for a distance of 892.17'eet to a point on the said East line of the East half Southwest quarter of Section 23: thence South 0 degrees 03 minutes 39 seconds East.alo l East line for a distance of 234.15 feet to a point on the said South right-of-way line: t ce 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 52.Maricopa County Records.Parcel No.13: The North half of the South half of the Northwest quarter of the Northwest quarter of Section Ten (10), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian.Maricopa County.Arizona.II.HAS'SAYASIPA PUSIPINC STATIOiV Ai/D EFFLUENT PlPELlibE 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 15.19r5.as amended.but excluding therefrom all improvements.
III.Mlsl.'ELl-hiilEoUs REAl.PRoPERTY INTEREsTs Those ANPP Project Agreements (as defined in the ANPP Participation Agreement), other than 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 waster efiluent to PVNCS 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 Partic'greement).
SCHEDULE 7 TO FACILITY LEASE DESCRIPTION OF UNDIVIDED INTEREST A.A 2.183647%undivided interest in Unit 2 of the Palo Verde Nuclear Generating Station (PVNGS).located in Maricopa County.Arizona, approximately 55 miles west of the City of Phoenix.Arizona.and approximately 16 miles west of the City of Buckeye.Arizona.consisting of: Unit 2 Combustion Engineering"System 80" pressurized water reactor nuclear steam supply system (the NSSS).The NSSS is comprised of a reactor vessel containing 241 fuel assemblies with approximately 100 tons of enriched uranium (fuel assemblies.
however, are not part of Unit 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 iVSSS is 3800!vfW.II.Unit 2 GE TC6F-43, 1800 RPM tandem-compound.
six flow, reheat turbine-generator including turbine.generator, moisture separator-reheater, exciter.controls.and auxil-iary subsystems.
The turbine-generator is conductor cooled and rated at L554!vIVA at 24.000 V, 3 phase, 60 Hz.1.5 in Hg ABS back pressure, and approximately 1.363 MW maximum gross electric output.III.Unit 2 146 ft.inside diameter.steel-lined, pre-stressed concrete cylindrical contain-ment building with a hemispherical dome designed for 60 psig.The containment building houses the reactor system.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 essen-tial 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 other equipment.
VIII.Unit 2 internal communication systems, including associated interconnections and computer data links.Bt;v Ex<:r.t:o<M;:
1.Nuclear fuel for Unit 2, including spare fuel assemblies, and nuclear waste.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 stepup transformers and standby equipment and systems).IV.Oil and diesel fuel inventories (Unit 2).
4 k 1 I B.A 0.27SSI%undivided interest in all PViVGS common'acilities.
IYCLLDI v'G BL'T ROT LI.iIITED TO: Surveillance systems.including associated radioactive monitoring systems and>>ient.KVater treatment facilities and transport systems for supply of waste water eHluent.III.Related storage facilities and equipment (excluding Warehouses).
Bt'v ExcLt:otic:
I.iVuclear fuel.including spare fuel assemblies, and nuclear waste.II.Electrical power facilities including Construction Switchyard and all transmission and AiVPP 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 interconnec-tions and computer data links.VIII.Parking lot improvements.
road improvements.
site improvements.
fencing and dikes IX.Spare parts (Common Facilities).
X.Simulator.
XI.Oil and diesel fuel inventories.
XII.Evaporation Pond.XIII.Guard house.XIV.Coating facility.XV.Fire pump house.XVI.Radiation Instrument calibration lab.XVII.Service building.XVIII.Water treatment building.h XIX.Shooting range.XX..WRF operations building.XXI.Warehouses.
XXII.Real Property, beneficial interest in Title USA Company of Arizona Trust 530.and Project Agreement interests described in Schedule 6.
C~'1 115k 31TLIL 11illl L,'iBOL'ILQBQL', SL'1 1H'ii31 AQL L'1'lllL'lit MlLl A99igl11MBf Of CL'1119 Dated as of December', 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 December 1, 1986, with Chrysler Financial Corporation and FIRST CITY NATIONAL BANK OF HOUSTON, as Indenture Trustee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities 0
."jig i i'I li TABLE OF COIVTE>TS Pa'e SE(ITI()Y, SE(;I I()Y.SE(."nOY, SECTIOY 1.1 1.2 1.3 1.4 ARTICLE I CDYsTIIUcTIoii', GovEIIYlbi'c LAi'v, IivTEIIPRETATIoiv AYD DEFIYITIoYs Governing Law.Hemlings and Table of Contents.Definitions:
Construction of References Disclosure of Beneficiaries SEcTIQY 2.1 SEcTIQY 2.2 SEcnoiv 2.3 SEcrlo Y 2.4 ARTICLE II SECUnn>Grant of Security Interest;Mortgage'ayments Under the Facility Lease.Release of Lien on Lease Indenture Estate Power of Attorney.5 SEcTIoiv SEcnov SEcnov SECTIOV SECTION'(."I'ION.(:TIOX SE(no Y SE(:Tlo Y SEcTIO Y.SEcnoN SEcnov ARTICLE III IssUE, ExEGUTIoiv, AUTHENTlcATloN, Foll)I AND REclsTIIATIQY oF NoTEs 3.1 3.2 3.3 3.4 Limitation on Notes.Execution of Notes.Effect of Certificate of Authentication
.Creation of the Initial Series'Notes; Aggregate Principal Amount, Dating and Terms.Additional Notes.Security for and Parity of Notes Source of Payments Limited Place and Xfediunr of Payment Prepayment of Notes;Assumption by Lessee;Notice of Assumption or Prepayment
.3.10 Mutilated, Destroyed, Lost or Stolen Notes.3.11 Allocation of Principal and Interest 3.12 Certain Adjustments to Amortization Schedules of Initial Series Notes.6 6 6 6 8 8 9 9 10 10 11 SEcTlov SECTloiV SEcTIO Y, SEcTIov SEcTIov S ECTIoiV SEOTlo Y SECTION, SEcTIO Y, ARTICLE IV REclsTIIATIoiv, TIIAivsFEII, Excfl*ivcE>
CAvcELLATIoiv AYiD OwYEIIsIIIP oF NoTEs 4.1 Register of Notes.4.2 Registration of Transfer or Exchange of Notes.4.3 Cancellation of Notes 4.4, Limitation on Timing of Registration of Notes.4.5 Restrictions on Transfer Resulting from Federal Securities Laws;Legend 4.6 Charges upon Transfer or Exchange of Notes 4.7, Inspection of Register'of Notes.4.8 Ownership of Notes 4.9 Paying Agent 11 11 12 12 12 1i)1 l7 13 TABLE OF COiNTENTS-(Continued)
SFCTION 5.1 SE(+ION 5.2 SEC'f ION 5.3 S ECTloiN 5.4 SECTION 5.5 SECTIoiV 5.6 SECTIoiV 5.7 ARTICL'E V.REGEIPT, DlsTnlIIUTION AND APPLlcATloN oF INcoxlE AND PRocEEDs FRoxl THE LEAsE IivDEi4TUBE EsTATE Basic Bent and Interest on Overdue Installments of Basic Rent......
Amounts Received as Result of Event of Loss, Deemed Loss Event, Exercise of Options to Terminate, Exercise of Cure Option.......Amounts Received After, or Held at Time of, Indenture Event of Default under Section 6.2.................
Amounts Received for Which Provision is Made in a Transaction Document.Amounts Received for Which No Provision is Made.Payments to Owner Trustee.Excepted Payments14 15 15 15 15 SECTIoi4 SEn IoN SECTION SECTIoi4 SEnlov SEn IoN S LOTION SE(ITB)N SE(ZION S E(:TION SEn loN ARTICLE VI REPREsENTATIQNs>
WABBANTIEs Ai4D CovENANTs oF 0'rvNER TRUsTEE;EYEi4Ts oF DEFAULT;RESIEDIEs oF THE INDEi4TURE TRUsTEE 6.1 Representations, Warranties and Covenants of Owner Trustee...........
6.2 Indenture Events of Default.6.3 Enforcement of Remedies.6.4 Specific Remedies;Enforcement of Claims Without Possession of Notes..6.5 Rights and Remedies Cumulative...................
6.6 Restoration of.Rights and Remedies.6.7 Waiver of Past Defaults 6.S Right of Owner Trustee to Pay Rent: Note Purchase: Substitute Lessee...6.9 Further Assurances, 6.10 Bight of Indenture Trustee to Perform Coverrants, etc..6.11 Certain Other Bights of the Owner Trustee 16 16 17 17 18 18)2P 20 SECTION SECTION S ECTIoiV SECTION SECTIoiV SE(+ION ARTICLE VII CEIITAIN DUTIEs oF THE OwNEB TRUsTEE AND THE INDEvTUBE TRUsTEE 7.1 Duties in Respect of Events of Default, Deemed Loss Events and Events of Loss;Acceleration of iMaturity.7.2 Duties in Respect of Matters Specified in Directive.7.3 Indemnification'.4 Limitations on Duties;Discharge of Certain Liens Resulting from Claims Against Indenture Trustee..........."...........................
7.5 Restrictions on Dealing with Lease Indenture Estate 7.6 Filing of Financing Statements and Continuation Statements
.........,.
i)p 21 21 2a:JO cc SEn lov S 1 SEn Iov 8.2 SEnloN S.3 SEcTloN 8.4 ARTICLE VIII CoivcERNINO THE OwNER TRUsTEE AND THE INDENTURE TRUsTEE Acceptance of Trusts;Standard of Care iVo Duties of Maintenance, Etc.Representations and'warranties of Indenture Trustee and the Owner Trustee.Moneys Held in Trust;iNon-Segregation of'Moneys.
I)3 23 g3 23 e cTIAN 8.5 X:TION 8.6 ECTION 8.7 SErrTIoN$.$SEcTIoN 8.9 SEcTIoN 8.10 SEcTIoiv 8.11 TABLE OF COiNTEiNTS
-(Continued)
Reliance on Writings, Use of Agents, Etc Indenture Trustee to Act Solely as Trustee.Limitation on Rights Against Registered Holders, the Owner Trustee or Lease Indenture Estate Investment of Certain Payments Held by the Indenture Trustee.........No Responsibility for Recitals, etc.Indenture Trustee May Engage in Certain Transactions Construction of Ambiguous Provisions Pace 2$1$ARTICLE LX SvccEssoII TIIvsTEEs SEcTIoN 9.1 Resignation and Removal of Indenture Trustee;Appointment of Successor..25 ARTICLE X SUPPLEvIENTs AivD AvlEivDSIEivTs To THls INDENTUIIE AND OTHER DocvvIENTs SEcTIov 10.1 SECTIoiV 10.2 C."I II.)N 10.5 r SEcTIov 10.3 SECTIoN 10.4 Supplements, Amendments and Modifications to This Indenture Without Consent of Holders of Notes.Supplements and Amendments to this Indenture and the Facility Lease With Consent of Holders of Notes Certain Limitations on Supplements and Amendments Directive Need Not Specify Particular Form of Supplement or Amendment Trustee to Furnish Copies of Supplement or AUIe>>dineiIt 26 7w I 7$1$SEOTIoN 11.1 SEcTIoN IL2 SEOTIoN 11.3 SECTION llA SEcTION 11.5 SEcTION 11.6 SEOTrov 11.7 SEcTION 11.8 SEGTIQN 11.9 SEcTrov 11.10 SEcTION 11.11 SEcnoN 11.12 SEOTIoN 11.13 ARTICLE XI MISCELLANEOUS Moneys for Payments in Respect of Notes to be Held in Trust...Disposition of Moneys Held for Payments of Notes Transfers Not to Affect Indenture or Trusts.Binding Effect of Sale of Lease Indenture Estate Limitation as to Enforcement of Rights, Remedies and Claims...Notices Separability of Proc isions Benefit of Parties, Successors and Assigns Survival of Representations and Warranties.
Bankruptcy of the Owner Trustee.Bankruptcy of the Owner Participant
.Counterpart Execution Dating of Indenture 78 28 28 28 19 29 79 29 i79'79 30 30 30 Exhibit A-1-Form of Initial Series Note (Due 1992)Exhibit A-2-Form of Initial Series Note (Due 1997)Exhibit A-3-Form of Initial Series Note (Due 2011)Exhibit B-Assumption Agreement Exhibit C-Undivided Interest Supplemental Indenture Appendix A-Definitions
 
TRUST INDENTURE, XIORTGAGE, SECURITY AGREEXIEVT AiVD ASSIGiVMENT OF RENTS dated as of December 1, 1986, between THE FIRsT NATIoNAI.BANK oF BosToN, a national anking association, not in its individual capacity, but solely as trustee under a Trust Agreement dated of December 1, 1986 between FNB (whose address is 100 Federal Street, Boston, Massachusetts 2110)and Chrysler Financial Corporation, and FIRsT Crn NATioNAI.BANK oF HoUsToN, a national banking association, whose address is First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002.WITNESSETH:
WHEREAS, the Owner Trustee has entered into a Participation Agreement, dated as of Decem-ber 1, 1986 among the Owner Participant, El Paso Funding Corporation, a Delaware corporation, El Paso Electric Company, a Texas corporation (El Paso), and the Indenture Trustee;WHEREAS, the Owner Trustee, acting on behalf of the Owner Participant, pursuant to the Trust Agreement and the Participation Agreement, intends to purchase the Undivided Interest and the Real Property Interest from El Paso and lease the Undivided Inter'est and the Real Property Interest to El Paso pursuant to the Facility Lease;WHEREAs, in order to Bnance a portion of the Purchase Price of the Undivided Interest, the Owner Trustee desires to issue its promissory notes hereunder with such promissory notes to be substantially in the form of Exhibits A-l, A-2 and A-3 hereto;WHEREAs, in the circumstances contemplated by Sections 2(c), 2(d)and 2(e)of the Particip'a'tion Agreement, the Owner Trustee may desire to finance a greater portion of the Purchase Price of the Undivided Interest than the portion financed from the proceeds of the Initial Series Notes (but in no event in an amount in excess of 80%of said Purchase Price)and in connection therewith to issue its promissory note or notes or to change the amortization of any Notes;WHEREAs, in order to finance all or a portion of the Supplemental Financing Amount of Capital nprovements and to refund Notes of any series previously issued, the Owner Trustee may desire to issue additional promissory notes hereunder (together with the Releveraging iVotes and the Refunding Notes, the Additional Notes)secured on a pari passu basis with other Notes Outstanding from time to"time;WHEREAs, in order to secure the obligations referred to herein, the Owner Trustee desires to grant to the Indenture Trustee the security interest herein provided and the parties hereto desire that this Indenture be regarded as a"security agreement" and as a"Bnancing statement" for such security agreement under the Uniform Commercial Code;No~v, THEREFQRE, in consideration of the premises, of the acceptance by the Indenture Trustee of the trusts hereby created and of other good and valuable consideration, the receipt and sufBciency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I CONSTRUCTION, GOVERNING LMV, INTERPRETATION AND DEFINITIONS SECTION 1.1.Governing Laiv.This Indenture (i)is being executed and delivered in the State of New York, (ii)shall be deemed to be a contract made in such State and (iii)for all purposes shall be construed in accordance with and governed by the laws of the State of iVew York, except to the extent to which the laws of the State of rizona are mandatorily applicable hereto.
SEcrION 1.2.Headings and Table of Contents.The division of this Indenture into articles and sections, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not afFect the co'nstruction or interpretation of this Indenture.
SEGTIoN 1.3.Deftnitions; Construction of References.
In this Indenture, unless the context otherwise requires: (a)the term this Indenture means this instrument together with all exhibits, appendices and schedules hereto as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto pursuant to the provisions hereof;(b)all references in this instrument t'o designated Articles, Sections and other subdivisions are to designated Articles, Sections and other subdivisions of this.instrument unless otherwise indicated;(c)all accounting terms:not otherwise defined herein shall have the meanings assigned to them in accordance with generally accepted accounting principles;(d)capitalized terms used herein which are not otherwise defined herein shall have'the meanings set forth in Appendix A hereto, and the rules of construction set forth in Appendix A hereto shall be applicable hereto;and (e)to the extent difFerent from Appendix A hereto, the definitions of Deemed Loss Event, Event of Loss, Economic Useful Life and Final Shutdown (including for purposes of such definitions all defined terms contained in or relating to any of such definitions) shall have the respective meanings set forth in or appended to the Facility Lease as amended from time to time in accordance with its terms.'ECTION L4.Disclosure of Beneficiaries.
Pursuant to Arizona Revised Statutes Section 33-401, (i)the beneficiary of the Trust Agreeme Chrysler Financial Corporation, a Michigan corporation, whose address is Greenwich Office Pa Greenwich, Connecticut 06836, Attention:
Leasing and Investment Services and (ii)the beneficiary ot this Indenture is the Holder of the Notes, El Paso Funding Corporation, whose address is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and, by pledge and assignment, First City National Bank of Houston, as trustee under the Collateral Trust Indenture,*whose address is First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002: Attention:
Corporate Trust Department.
Copies of the Trust Agreement and th'is Indenture are available for inspection at the Indenture Trustee's office.ARTICLE II SECURITY'ECTION 2.1.Grant of Security Interest;Mortgage.As security for the due and punctual payment of the principal of and premium, if any, and interest'n the Notes according to their respective terms and efFect and the performance and observance by the Owner Trustee of all the covenants and agreements made by it or on its behalf in the Notes, the Participation Agreement and this Indenture, the Owner Trustee does by its execution and delivery hereof hereby grant a security iriterest in and grant, bargain, convey, warrant, assign, transfer, mortgage, pledge and set over unto the Indenture Trustee, and'o its successors and assigns in trust, the following (the Lease Indenture Estate): (1)all right, title and interest of the Owner Trustee in, to and under the Facility Lease recorded December, 1986 as Instrument No., records of Maricopa County', Arizona;to the extent,,and only to the extent, constituting Rent (including, without limitation, Basic Rent, payments of Casualty Value, Termination Value and Special Casualty Value, and payments under and pursuant to Sections 13(c)and 16 of the Facility Lease)(the Assigned Payments), together with all rights, powers and remedies on the part of the Owner Trustee arising under the Facility Lease to demand, collect or receive the Assigned Payments;(2)all moneys and securities deposited or required to be deposited with the Indenture Trustee pursuant to any term of this Indenture and held or required to be held by the Indenture Trustee hereunder; (3)all profits, revenues and other income of all property from time to time subjected to the lien of this Indenture, and all right, title and interest of every nature whatsoever of the Owner Trustee in and to the same and every part thereof;(4)all right, title and interest of the Owner Trustee in and to any right to restitution from the Lessee in respect of any determination of invalidity of the Facility Lease;and (5)all proceeds of the foregoing; but excluding, hou:ever, from the Lease Indenture Estate any and all Excepted Payments;and subject, hou:ever, to (i)the terms and provisions of this Indenture and (ii)the rights of the Lessee under the Facility Lease.To the extent that any portion of the Lease Indenture Estate constitutes fixtures or real property, this Indenture constitutes a realty mortgage and an assignment of rents with respect to all such items of real property and in addition to all other rights or remedies set forth in this Indenture, the'ndenture Trustee shall have, to the extent not inconsistent with this Indenture, all of the rights, remedies and benefits of a mortgagee of real property under Applicable Law, including, without limitation, the rights and remedies pursuant to Arizona Revised Statutes$33-702.B and the Owner rustee shall be deemed a mortgagor with respect to such items.TO HAVE AND TO HOLD all the aforesaid properties, rights and interests unto the Indenture Trustee, its successors and assigns forever, but in trusf, nevertheless, for the use and purposes and with.the power and authority and subject to the terms and conditions mentioned and set forth in this.Indenture.
UPON CONDITION that, unless and until an Indenture Event of Default shall have occurred and be continuing, the Owner Trustee shall be permitted, to the exclusion of the Indenture Trustee, to possess and use the Lease Indenture Estate and exercise all rights with respect thereto and, without limitation of the foregoing, the Owner Trustee may exercise all of its rights under the Facility Lease to the same extent as if its right, title and interest therein had not been assigned to the Indenture Trustee to the extent set forth above, except that the Indenture Trustee shall receive all payments of Assigned Payments and all moneys and securities required to,be held by or deposited with the Indenture Trustee hereunder.
It is expressly agreed that, anything herein contained to the contrary notwithstanding, the Owner Trustee shall remain obligated to the Lessee under the Facility Lease to perform all of the Owner Trustee's obligations thereunder in accordance with and pursuant to the terms and provisions thereof, and the Indenture Trustee shall not be required or obligated in any manner, except as expressly provided herein, to perform or fulfill any obligations of the Owner Trustee under the Facility Lease or to make any payment, or to make any inquiry as to the nature or sufBciency of any payment received by it, or to present or file any claim, or to take any action to collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.The Owner Trustee hereby warrants and represents that it has not assigned or pledged any of its ight, title or interest in and to the Lease Indenture Estate to anyone other than the Indenture Trustee.
Sccnox 2.2.Payments Under the Facility Lease The Facility Lease provides that (i)all payments constituting Assigned Payments shall be made to the Indenture Trustee at such ofBce in New York, N.Y.of Mellon Trust Company.or of such ot bank or trust company in New York, N.Y., all as the Indenture Trustee shall specify in writing to Lessee, (ii)all other payments other than Excepted Payments shall be made to the Lessor at suc address as the Lessor may direct by not'ice in writing to the Lessee, and (iii)all Excepted Payments shall be made to the Person entitled to receive such payments.The Owner Trustee agrees that.so long as any Notes shall be Outstanding hereunder, all payments described in clause (i)above shall be, directed to be made to the Indenture Trustee or in accordance with the Indenture Trustee's instruction and that if it should receive any such payments or any proceeds for or with respect to the Lease Indenture Estate or otherwise constituting part of the Lease Indenture Estate, it will promptly forward such payments to the Indenture Trustee or in accordance with the Indenture Trustee's instructions.
The Indenture Trustee agrees to apply payments from time to time received by it (from the Lessee, the Owner Trustee or otherwise) with respect to the Lease Indenture Estate in the manner provided in Section 3.11 and Article V.SEGTloiv 2.3.Release of Lien on Lease Indenture Estate (a)Upon receiving evidence satisfactory to the Indenture Trustee that (i)it has received.or provision has been made in accordance with paragraph (c)of this Section 2.3 for, full payment of all principal of and premium, if any, and interest on the Notes and any other sums payable to the Indenture Trustee and the Holders of the Notes under this Indenture or the Facility Lease, and (ii)all Trustee's Expenses shall have been paid in full or provision satisfactory to the Indenture Trustee.shall have been made for such payment, (A)the security interest and all other estate and rights granted by this Indenture shall cease and become null and void and all of the property, rights and interests included in the Lease, Indenture Estate shall revert to and revest in the Owner Trustee u:ithout any other act or fornialitg u:hatsoecer, and (B)the Indenture Trustee shall, at the request of the Owner Trustee.execute and deliver the Owner Trustee such termination statements, releases or other instruments presented to the Indenture Trustee by or at the direction of the Owner Trustee as shall be requisite to evidence the satisfaction and discharge of this Indenture and the lien hereby created with respect to the Lease Indenture Estate, to release or reconvey to the Owner Trustee or as directed by the Owner Trustee all the Lease Indenture Estate, freed and discharged from the provisions herein contained with respect thereto, and to release the Owner Trustee from its covenants herein contained.(b)Upon receipt by the Indenture Trustee of the Assumption Agreement and other documents and opinions described in Section 3.9(b), (i)the security interest and all other estate and rights granted by this Indenture by or on behalf of the Owner Trustee shall cease and become null and void and all of the property, rights and interests included in the Lease Indenture Es'tate shall revert to and revest in the Owner-Trustee without any other act or formality whatsoever and (ii)the Indenture Trustee shall, at the request of the Owner Trustee, execute and deliver to the Owner.Trustee such termiriation statements, releases or other instruments presented to the Indenture Trustee by or at the direction of the Owner Trustee as shall be requisite to evidence the satisfaction and discharge of this Indenture as to the Owner Trustee and the lien hereby created-with respect to the Lease Indenture Estate, to release or reconvey to the Owner Trustee or as directed by the, Owner Trustee all the Lease Indenture Estate, freed and discharged from the provisions herein contained'with respect thereto, and to release the Owner Trustee from its covenants herein contained.(c)Any Note shall,-prior to the maturity or redemption date thereof, be premed to have been paid within the meaning and with the efFect expressed in this Section 2.3(c)if (i)there shall have been deposited with the Indenture Trustee either moneys in an.amount which shall.be sufficient, or direct obligations of or obligations the principal of and interest on which are unconditionalb
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guaranteed by the United States of America or certificates of an ownership interest in the principal of or interest on obligations of or guaranteed as to principal and interest by the United States of America.(Federal Securities), in each case which shall not contain provisions permitting the redemption thereof the option of the issuer, the principal of and the interest on which when due.and without anv investment thereof.will provide moneys in an amount which shall be sufficient, together with the moneys, if any, deposited with or held by the Indenture Trustee at the same time (such sufficiency to be established by the delivery to the Indenture Trustee of a certificate of an independent public accountant), to pay when due the principal of and premium, if any, and interest due and to become due on said Note on and prior to the redemption date or maturity date thereof, as the case may be, and (ii)in the event said Note does not mature or is not to be redeemed within the next 4o days, the Indenture Trustee shall have been given irrevocable instructions to give.as soon as practicable.
a notice to the registered Holder of such Note that the deposit required by subclause (i)above has been made with the Indenture Trustee and that said Note is deemed to have been paid in accordance with this Section 2.3(c)and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of and premium, if any, and interest on said Note.Neither the Federal Securities nor moneys deposited with the Indenture Trustee pursuant to this Section 2.3(c)or principal or interest payments on any such Federal Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any, and interest on said Note;provided, howeoer, that any cash received from such principal or interest payments on such Federal Securities deposited with the Indenture Trustee shall be reinvested pursuant to Section 8,8 in Federal Securities.'t such time as any Note shall'be deemed paid as aforesaid, it shall no longer be secured by or entitled to the benefits of the Lease Indenture Estate or this Indenture, except that such Note shall be entitled to the benefits of the portions of the Lease Indenture Estate described in Granting Clauses (2), (3)and (5), to the extent such portions relate to such moneys or Federal Securities deposited with the Indenture Trustee.t (d)So long as any Note as to which this Indenture has been discharged remains unpaid, this Indenture shall continue in effect with respect to such Note solely with respect to rights of registration transfer, exchange or replacement of such Note, rights to receive payment of the principal thereof I premium.if any, and interest thereon in accordance with the terms of this Indenture froni such eposited funds or the proceeds of or interest on such Federal Securities and the correlative rights and responsibilities of the Indenture Trustee;provided, howeuer, that following such discharge, no claim for payment of principal of or premium, if any, or interest on such Note shall be made against the Owner Trustee or the Lease Indenture Estate other than as provided in this Section;prouided fiirther, that the Owner Trustee, following such discharge, shall be released from any further duties or obligations under this Indenture and, except as expressly provided therein, any other.Transaction Document.SEn'toi 2.4.Po<eer of Attorney.Subject to the other terms of this Indenture, the Owner Trustee hereby appoints.effective whenever an Indent@re Event of Default shall have occurred and be continuing, the Indenture Trustee the Owner Trustee's attorney-in-fact, irrevocably, with full power of substitution, to collect, ask, require, demand, receive and give acquittance for any and all moneys and claims for moneys due and to become due to the Owner Trustee under or arising out of the Lease Indenture Estate, to endorse any checks or other instruments or orders in connection therewith, and to take any action (including the filing of financing statements or other documents) or institute any proceedings which the Indenture Trustee may deem to be necessary or appropriate to protect and preserve the interest of the Indenture Trustee in the Lease Indenture Estate.Prior to any exercise by it (acting as attorney in fact for the Owner Trustee)of the powers, authority.
or rights granted by this Section 2.4, t)ie Indenture Trustee will give three BusinessDays'rior written notice to the Owner Trustee and the Owner Participant.
ARTICLE III Issi.'i'..
EXEAT;i:TloYi, AU Till'.YTICATIQY, Folixl AND REGlsTRATIQY oF NQTEs Si:(Tu)i 3.1.Liinitation on iVotes.No Notes may be issued under the provisions of, or become secured by, this Indenture except in;iccordance with the provisions of this Article III.iVo Note shall be issued in an original principal amount of less than$150.000.Si'.<+los 3.2.Execution of Notes.All Notes shall be manually executed on behalf of the Owner Trustee by, one of its Responsible OfBcers.In case any Responsible OScer of the Owner Trustee who shall have executed any of the Notes shall cease to be such a Responsible OIBcer before such Notes so executed shall have been authenticated by the Indenture Trustee and delivered or disposed of by the Owner Trustee, such Notes nevertheless may be authenticated and delivered or disposed of as tliough theiperson who executed such Notes had not ceased to be such a Responsible OfBcer of the Owner Trustee;and any Note may be executed on behalf of the Owner Trustee by such person as, at the actual time of execution of such Note, shall be a Responsible OfBcer of the Owner Trustee, although at the date of such Note any such person was not such a Responsible OScer.SEm lo Y.3.3.Egect of Certificate of Authentication.
Only such iVotes as shall bear thereon a certificate of authentication substantially in the following form manually executed by the Indenture Trustee shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose.Such certificate of authentication of the Indenture Trustee upon any Note executed by the Owner Trustee shall be conclusive evidence that the iVote so authenticated was duly issued.authenticated and delivered under this Indenture:
This Note is one of the series of Notes referred to therein and in the within-nientioned lndenti FIRST CITY NATIONAL BANK OF HOUSTON as Indenture Trustee, By: Allillol'IZC(l OIBCL'I'San'los 3A.Creation of the Initial Series Notes;Aggregate Principal Amount, Dating and Terms (a)There is hereby created and established a separate series of Notes of the Owner Trustee designated: "Nonrecourse Proniissory Note, Initial Series," which, will be substantially in the forms of Exhibits A-1, A-2 and A-3 hereto, and are herein referred to as the"Initial Series Notes." (b)Subject to the provisions of Section 3.10, the aggregate'principal amount of the Initial Series Notes issued by the Owner Trustee and authenticated and delivered by the Indenture Trustee I hereunder shall not exceed$76,400,000.(c)The Initial Series iVotes shall'be executed and issued by the Owner Trustee and authenticated and delivered by the Indenture Trustee on the date'and to the Person specified by the Owner Trustee in its request and authorization for issuance, shall be dated the date specified by the Owner Trustee in its request and authorization for issuance, and shall be in the form of registered Notes, registered in the name of the Person designated in the Owner Trustee's request and authorization for issuance or its re~zistered assigns.6 (d)The Initial Series iVotes shall bear interest on the principal amounts thereof from time to time Outstanding from the date thereof until paid at the rates of interest set forth in the forms of the Initial eries Notes.The principal amounts of the Initial Series Notes shall be payable as set forth in the hedules of Principal Payments attached thereto.Interest on the Initial Series Notes shall be due and ayable on the dates specified in the forms of the Initial Series Notes.SEGTIQN 3.5.Additional iVotes (1)Subject to Section 3.6, Additional Notes of the Owner Trustee may be issued under and secured by this Indenture, at any time or from time to time, in addition to the Initial Series Notes and subject to the conditions hereinafter provided in this Section, for cash in the amount of the original principal amount of such Additional Notes, for the purpose of (i)refunding any previously issued series of iVotes, in whole or in part and/or (ii)providing funds for the payment of all or any portion of the Supplemental Financing Amount relating to Capital Improvements made or installed from time to time pursuant to the Facility Lease and/or (iii)providing funds to be paid to the Owner Trustee in the event of a partial return of the Investment to the Owner Trustee as contemplated by Section 2(c)or 2(d)of the Participation Agreement; provided, however, that in the case of Notes issued for the purposes set forth in clause (i)or (iii)of this Section 3.5(1), no Note shall be issued by the Owner Trustee pursuant to this Section 3.5 unless Section 2(c)and/or 2(d)of the Participation Agreement (if applicable) shall have been complied with.(2)Before any Additional Notes shall be issued under the provisions of this Section 3.5, the Owner Trustee shall have received from the Owner Participant, and delivered'to the Indenture Trustee not less than 10 nor more than 30 days prior to the proposed date of issuance of such"Additional Notes as set forth in the below-mentioned request and authorization, a request and authorization to issue Additional Notes, which request and authorization shall include<joe amount of such Additional Notes, the date of issuance of such Additional Notes and details with r'espect thereto vhich are not inconsistent with this Section.Additional Notes shall have a designation so as to tinguish such Additional Notes from the Initial Series Notes but otherwise shall be substantially ilar in terms to the Initial Series Notes, shall specify maturity date, rank pari passu with all iVotes then Outstanding, be dated their respective dates of authentication, bear interest at such rates (which.may be fixed or Boating)as shall be indicated in the aforementioned request and authorization, andshall be stated to be payable by their terms not later than the last day of the Basic Lease Term.(3)Except as to any difFerences in the maturity dates and amortization schedules of the Additional Notes or the rate or rates of interest thereon and the date or dates such interest'is payable or the provisions for redemption with respect thereto, if any, such Additional Notes shall be on a parity with, and shall be entitled to the same benefits and security of this Indenture as, other Notes issued pursuant'to the terms hereof.(4)The terms, conditions and designations of such Additional Notes (which shall be consistent with this Indenture) shall be set forth in an indenture supplemental to this Indenture executed by the Owrier Trustee and the Indenture Trustee.Such Additional Notes shall be executed as provided in Section 3.2 and deposited with the Indenture Trustee for authentication, but before such Additional Notes shall be authenticated and delivered by the Indenture Trustee there shall be filed with the Indenture Trustee, in addition to the other documents and certificates required by this Section 3.5, the following, all of which shall be dated as of the date of the supplemental indenture: (a)a copy of such supplemental indenture (which shall include the form of such series of Notes in respect thereof);
(b)such additional documents, certificates and opinions as shall be reasonably requested by, and acceptable to, the Owner Trustee and the Indenture Trustee;(c)a request and authorization to the Indenture Trustee by or on behalf of the Ow Trustee to authenticate and deliver such Additional Notes to or upon the order of the Person Persons noted in such request at the address set forth therein, and in such principal amounts as are stated therein, upon payment to the Indenture Trustee, but for the account of the Owner Trustee, of the sum or sums specified in such request and authorization; and (d)an opinion of counsel to the eH'ect that the conditions precedent required under this Indenture for the issuance of such Additional Notes have been complied with.When the documents referred to in the foregoing clauses (a)through (d)above shall have been Bled with the Indenture Trustee and when the Additional Notes described in the above-mentioned order and authorization shall have been executed and authenticated as required by this Indenture, the Indenture Trustee shall deliver such Additional Notes in the manner described in clause (c)above, but only upon payment to the Indenture Trustee of the sum or sums specified in such request and authorization.
SECI'ION 3.6.Security for and Parity of Notes.All Notes issued and Outstanding hereunder shall rank on a parity with each other and shall as to each other be secured equally and ratably by this Indenture,-without preference, priority or distinction of any thereof over any other by reason of difFerence in time of issuance or otherwise.
SECTION 3.7.Source of Payments Limited.All payments to be made by the Owner Trustee under this Indenture or on the Notes shall be made only from the Lease Indenture Estate and the Trust Estate.Each Holder of a Note, by'cceptance of such Note, and the Indenture Trustee agree that they will look solely to the Trust Es and the income and proceeds from the Lease Indenture Estate to the extent available for distribute to such Holder or the Indenture Trustee as herein provided and that neither the Owner Participant nor, except as expressly provided in this Indenture, the Owner Trustee nor the Indenture Trustee, shall be personally liable to such Holder of a Note or the Indenture Trustee, as the case may be, for any amounts payable hereunder or under such'ote;provided, however, that in the event that the Lessee shall assume all the obligations and liabilities of the Owner Trustee hereunder and under the Notes pursuant to Section 3.9(b), then all payments to be made under this Indenture and the Notes shall be made only from payments made by the Lessee under the Notes in accordance with the Assumption Agreement referred to in Section 3.9(b)and each Holder of a Note and the Indenture Trustee agree that in such event they will look solely to the Lessee for such payment.Nothing herein contained shall be interpreted as afFecting the duties and obligations of the Indenture'rustee set forth in Section 7.4.In furtherance of the foregoing, to the fullest extent permitted by law, each Holder of a Note (and each assignee of such Person), by its acceptance thereof, and the Indenture Trustee agree, as a condition to the Notes being secured under this Indenture, that neither such Holder nor the Indenture Trustee will exercise any statutory right to negate the agreements set forth in this Section 3.7.
SEcYiow 3.8.Place and hfedium of Payment.The principal of and premium, if any, and interest on each iVote shall be payable at the Indenture ustee's OSce in immediately available funds in such coin or currency of the United States of erica as at the time of payment shall be legal tender for the payment of public and private debts.i otwithstanding the foregoing or any provision in any Note to the contrary, if so requested by the Holder of any Note, by written notice to the Indenture Trustee, all amounts (other than the final payment)payable with respect to such obligation shall be paid by crediting the amount to be distributed to such Holder to an account maintained by such Holder with the Indenture Trustee or by the Indenture Trustee's transferring such amount by wire, with such wire transfer.to be initiated by such time as'to permit, to the extent practicable, oral confirmation thereof (specifying the wire number)to be given no later than 1:00 p.m.Houston time on the date scheduled for payment, but only to the extent of funds available for such wire transfer, to such other bank in the United States having wire transfer facilities, including a Federal Reserve Bank, as shall have been specified in such notice, for credit to the account of such Holder maintained at such bank, any such credit or transfer pursuant to this Section 3.8 to be in immediately available funds, without any presentment or surrender of such Note.Final payment of any such Note shall be made only against surrender of such Note at the Indenture Trustee's OfBce.SECflON 3.9.Prepayment of Notes;Assumption by Lessee;Notice of Assumption or Prepayment.(a)Notes shall be subject to prepayment (other than through application of the installment payments on such Notes)from time to time only as provided in this Indenture and as otherwise specifically provided, with respect to Notes of a particular series, in such Notes.(b)In the event of the occurrence of an Event of Loss, declaration of a Deemed Loss Event, exercise of the Cure Option, exercise of the purchase option provided in Section 13(c)of the Facility Lease or exercise of the purchase option provided in Section 10(b)(3)(xvii) of the Participation Agreement, and upon receipt by the Indenture Trustee of the documents listed below, (i)all the bligations and liabilities of the Owner Trustee hereunder and under the i bootes (including payments accrued interest)shall be assumed by the Lessee, and (ii)the Owner Trustee shall be released and charged without further act or formality whatsoever from all obligations and liabilities hereunder and under the Notes: (1)a duly executed Assumption Agreement substantially in the form of Exhibit B hereto;(2)an opinion of counsel addressed to the Indenture Trustee and the Holders of the Outstanding Notes, to the efFect that the conditions precedent required by this Indenture for such assumption have been complied with, that the Assumption Agreement has been duly authorized, executed and delivered on behalf of the Lessee, that no Governmental Action is necessary or required in connection therewith (or if any such Governmental Action is necessary or required, that the same has been duly obtained and is in full force and effect), and that the Assumption Agreement is a legal, valid and binding agreement and obligation of the Lessee, enforceable in accordance with its terms (except as limited by bankruptcy, insolvency or similar laws of general application aIFecting the enforcement of creditors'ights generally and equitable principles);
(3)copies of all Governmental Actions referred to in such opinion;(4)an indenture supplemental to this Indenture which shall, among other things, if the Lessee shall so request, grant to the Indenture Trustee a Lien on all of the Owner Trustee's right, title and interest in and to the Undivided Interest and the Real Property Interest, which supplemental indenture shall, in either case, confirm the release of the Owner Trustee and the Lease Indenture Estate thereby efFected and may contain provisions appropriately amending references to the Facility Lease in this Indenture; (5)a certificate of a Responsible OIBcer of the Lessee stating that, to the best of his knowledge, (i)the conditions precedent required by this Indenture for such assumption have been complied with, (ii)no Indenture Event of Default has occurred and is continuing, (iii)such assumption is permitted by the provisions of the Lessee's Articles of Incorporation and By-Laws 9 and (iv)the Lessee is not insolvent within the meaning of any applicable preferential transfer.fraudulent conveyance or bankruptcy law;and (G)a certificate of a Responsible Officer of the Owner Trustee stating that.to the best of knowledge, no Indenture Event of Default has occurred and is continuing.(c)The Notes shall be prepaid on the date of the termination of the Facility Lease pursuant to Section 14(b)or 14(d)thereof at a price equal to their outstanding principal amount.preinium.if any.and accrued interest to, but not including, the date of prepayment.(d)Notice of any assumption or prepayment of iVotes shall be given to the registered Holders of the iVotes which have been assumed or are to be prepaid (and any assignee of a registered Holcler which has given the Indenture Trustee written notice of such assignment) as promptly as practicable after the Indenture Trustee is notified thereof, and, in the event of the exercise by the Lessee or the Owner Trustee, as the case may be, of its option to terminate the Facility Lease pursuant to Section 14(b)or 14(d)thereof, in no event less than 30 days before the date fixed for prepayment (provided the Indenture Trustee receives such notification at least three Business Days before such 30th day).(e)If the assumption described in paragraph (b)above has not occurred, then, as required by Section 9(j)of the Facility Lease, not less than 2 Business Days prior to any Special Transfer, the Owner Trustee will execute and deliver to the Indenture Trustee an Undivided Interest Indenture Supplement substantially in the form of Exhibit C hereto.SEcrtov 3.10.Mutilated, Destroyed, Lost or Stolen Notes.If any Note shall become mutilated or shall be destroyed, lost or stolen, the Owner Trustee shall.upon the written request of the Holder of such Note, execute, and the Indenture Trustee shall authenticate and deliver in replaceinent thereof, a new iVote, payable in the same original princi aniount and dated the same date and of the same series as the Note so mutilated.
destroyed.
lost stolen.The Intlenture Trustee shall make a notation on each new iVote of the amount of all payinen of principal theretofore made on the iVote so mutilated, destroyed, lost or stolen and the date to which interest on such old iVote has been paid.If the Note being replaced has been mutilated, such iVote shall be delivered to the Indenture Trustee who shall then deliver a certificate of destruction of the type required by Section 4.3.If the Note being replaced has been destroyed, lost or stolen, the Holder of such Note shall furnish to the Lessee, the Owner Trustee and the Indenture Trustee a bond or surety agreement of such Holder as shall be satisfactory to them to save the Lessee.the Owner Trustee, the Indenture Trustee, the Trust Estate and the Lease Indenture Estate harmless from any loss, however remote, including claims for principal of, and premium, if any, and interest on the.purportedly destroyed, lost or stolen Note, together with evidence satisfactory to the Lessee, the Owner Trustee and the Indenture Trustee of the destruction, loss or theft of such Note and of the ownership thereof;provided, liou:ever, that if the Holder of such iVote is the Collateral Trust Trustee, the unsecured written undertaking of the Collateral Trust Trustee, in its individual capa'city, shall be sufficient indemnity for purposes of this Section.SEAT!oY 3.11.Allocation of Principal and Interest.In the case of each Note, each payment of principal thereof and interest thereon shall be applied, first, to the payment of accrued but unpaid interest on such Note (as well as any interest on overdue principal or, to the extent permitted by law, interest)to the date of such payment, second, to the payment of the principal amount of, and premium, if any, on such iVote then due (including any overdue installment of principal) thereunder and third, the balance, if any, remaining thereafter, to the balance of the payment of the principal amount of, and premium, if any, on such Note.0 SECTIOv 3.12.Certain Adjustments to Amorti=ation Scfredules of Initial Series iVotes.The schedules of principal amortization attached to the Initial Series iVotes may be adjusted at the'scretion of the Owner Trustee at one time prior to June 30.1990: provided, lrou:er;er, that no such'ustment shall be made by the Owner Trustee which will increase or reduce the average life of a'y ated maturity of principal of the Initial.Series Notes (calculated in accordance with generally accepted financial practice from the date of initial issuance)by more than six months: prouidedfrrrtlrer, lrorcecer; such adjustment only may be made in connection with an adjustment to Basic Rent pursuant to Section 3(d)of the Facility Lease.If the Owner Trustee shall elect to make the foregoing adjustment, the Owner Trustee shall deliver to the Indenture Trustee and to the Lessee at least 60 days prior to the first payment date (specified on the schedules thereto)proposed to be affected by such adjustment, a certificate of the Owner Trustee (x)stating that the Owner Trustee has elected to make such adjustment, (y)setting forth the revised schedules of principal amortization and (z)attaching calculations showing that the average life of the Initial Series Notes will not be reduced or increased except as permitted by this Section 3.12.The Indenture Trustee may rely on such Owner Trustee certificate and shall have no duty with respect to the calculations referred to in the foregoing clause (z).ARTICLE IV REcisTIIATIoN, TRANsFEII, ExcHAYIGE, CAYGELLATIov AND OwvaERsHIP OF NQTEs SECTIOv 4.1.Register of Notes The Indenture Trustee on behalf of the Owner Trustee shall maintain at the Indenture Trustee's office a register for the purpose of registration, and registration of transfer and exchange, of the rVotes by series and in which shall be entered the names and addresses of the owners of such iVotes and the principal amounts of the iVotes owned by them.respectively.
g SE<vrov 4.2.Registration of Transfer or Exclrange of~Votes.A Holder of a Note intending to register the transfer of any Outstanding iNote hekl by such Holder (including any transfer in the form of a pledge or assignment) or to exchange any Outstanding Note held by such Holder for a new Note or Notes of the same series*may surrender such Outstanding Note at the Indenture Trustee's Office, together with the written request of such Holder, or of its attorney duly authorized in writing, in each case with signatures guaranteed, for the registration of such Note in the name of any pledgee or assignee (in the case of a transfer in the form of a pledge or assignment) or for the issuance of a new Note or iVotes of the same series, specifying the authorized
<lenornirmtion or denominations of any new Viote or Notes to be issued and the name and address of the Person or Persons in whose name or names the Note or Notes are to be registered (either as pledgee or assignee or as owner).Promptly upon receipt by the Indenture Trustee of the foregoing and satisfaction of the requirements of Sections 4.5 and 4.6, the Indenture-Trustee shall register such iVote or Notes in the name or names'of the Person or Persons as shall be specified in the written request and, in the case in which a new Note or Notes are to be issued, the Owner Trustee shall execute and the Indenture Trustee shall authenticate and deliver such new Note or iVotes of the same series, in the same aggregate principal amount and dated the same date as the Outstanding Note surrendered.
in such authorized denomination or denominations as shall be specified in the written request.The Indenture Trustee shall make a notation on each new Note of the amount of all payments of principal theretofore made on the old Note or iVotes in exchange or transfer for which any new Note has been issued and the date to which interest on such old iVote or Notes has been paid.11 SEcnoi 4.3.Cancellation of iVotes.All iVotes surrendered to the Indenture Trustee for payment in full.prepayment in full or registration oF transfer or exchange shall be cancelled by it: and no Notes shall be issued in lieu ther except as expressly permitted by this Indenture.
The Indenture Trustee shall destroy cancelled V held by it in a manner satisfactory to the Owner Trustee and deliver a certificate of destruction to t Owner Trustee.If the Owner Trustee shall acquire any of the iVotes, such acquisition shall not operate as a retlemption of or the satisfaction oF the indebtedness represented by such Notes unless arid iintil the same shall be delivered to the Indenture Trustee for cancellation.
SEGTIO.'4 4.4.Limitation on Timing of Registration of Notes.The Indenture Trustee shall not be required to register transfers or exchanges of iVotes on any date fixed for the payment or prepayment of principal of or interest on the Notes or during the fifteen days preceding any such date.SEcnox 4.5.Restrictions on Transfer Resulting from Federal Securities Lau:s;Legend.If not prohibited by the Securities Act, each Note shall be delivered to the initial Holder thereof without registration of such Note under the Securities Act and without qualification of this Indenture under the Trust Indenture Act.Prior to any transfer of any Note, in whole or in part, to any Person other than the Collateral Trust Trustee, the Holder thereof shall furnish to the Lessee,'the Indenture Trustee and the Owner Trustee an opinion of counsel, which opinion and which counsel shall be reasonably satisfactory to the Indenture Trustee, the Owner Trustee and the Lessee, to the effect that such transfer will not violate the registration provisions of the Securities Act or require qualification of this Indenture under the Trust Indenture Act, and all Notes issued hereunder shall be endorsed with a legend which shall read substantially as follows: T lie iVote has not been registered under the Securities Act of 1933 and inaij not be transferred,.sold or overed for sale in uiolation of siicfi Act.SEcviox 4.G.Charges upon Transfer or Exchange of Notes.As a further condition to registration of transfer or exchange of any iVote, the Indenture Trustee and the Owner Trustee may charge the Holder thereof for any stamp taxes or governmental charges required to be paid with respect to such registration of transfer or exchange.SECTION 4.7.Inspection of Register of Notes.E The register of the Holders of the Notes referred to in Section 4.1 shall at all reasonable tiines be open for inspection by any Holder of a Note.Upon request by any Holder of a Note, or the Owner Trustee or the Lessee, the Indenture Trustee shall furnish such Person.at the expense of such Person, with a list of the names and addresses of all Holders of Notes entered on the register kept by the Indenture Trustee indicating the series, principal amount and number of each Note held by each such Holder.SEn ios 4.8.Oionership of iVotes.(a)Prior to due presentment for registration of transfer of any Note, the Owner Trustee and the Indenture Trustee may deem and treat the Holder of record of such Note as the absolute owner of such Note for'he purpose of receiving payment of all amounts payable with respect to such Note and for all other purposes, and neither the Owner Trustee nor the Indenture Trustee shall be affected by any notice to the contrary.(b)The Owner Trustee and the Indenture Trustee may, in their discretion, treat the Holder of record of any Note as the, owner thereof without actual production of such iVote for any purpose hereunder<
except as provided in the last sentence of Section 3.8.
, (c)Neither the Owner Trustee nor the Indenture Trustee shall be bound to take notice of or carry out the execution of any trust in respect of any iVote, and may register the transfer oF the same on the direction of the Holder of record thereof, whether named as trustee or otherwise.
as though h Holder were the beneficial owner thereof.(d)The receipt by the Holder of record of any Note of any payment of principal.
premium or interest shall be a good discharge to the Owner Trustee and the Indenture Trustee for the same and neitlier the Owner Trustee nor the Indenture Trustee shall be bound to inquire into the title of any such Holder.SECTION 4.9.Paying Agent.The Owner Trustee agrees at all times to have in effect a Paying Agent which shall be a bank or trust company in rVew York, N.Y., as agent for purposes of making payments on the iVotes.Mellon Trust Company has initially been appointed as the Paying Agent.The Paying Agent may not be replaced without the consent of the Indenture Trustee, which consent shall not be unreasonably withheld.The Indenture Trustee will notify the Collateral Trust Trustee of the name and address of any replacement Paying Agent.The making by the Paying Agent of any payment required to be made by the Indenture Trustee pursuant to Article III shall be deemed to be a payment by the Indenture Trustee for the purposes of Article III.ARTICLE V REGEIPT, DisTRIiriiTIQN AND APPLIGATIQN oF INcoxIE AND PRocEEDs FRoxI THE LEAsE INDENTURE EsTATE SECTION 5.1.Basic Rent anrI Interest on Ouerdrre InstatIrnents of Basic Rent.Except as otherwise provided in Section 5.3 or 5.7 and the fourth sentence of Section 6.S(a), each ment of Basic Rent, as well as any payment of Supplemental Rent representing interest on overd<<e tallments of Basic Rent, received by the Intlenture Tr<<stee at any time.shall be distributetl by the Indenture Trustee in the following order of priority: first, so much of sirch payment as shall be required to pay in full the aggregate amount of the payment or payments of principal and/or interest (as well as any interest on overdue principal or, to the extent permitted by law, interest)then due and unpaid on all Notes shall be distributed to the Holders of the Notes ratably, without priority of one over the other, in the proportion that the aggregate amount of such payment or payments then due and unpaid on all iVotes held by each such Holder on such date bears to the aggregate amount of such payment or payments then due and unpaid on all Notes Outstandin'g on such date, without priority of interest over principal or principal over interest;and second, the balance, if any, of such payment remaining thereafter shall be distributed, concurrently with any distribution pursuant to clausefirst hereof, to the Owner Trustee or as the Owner Trustee may direct.If there shall not otherwise have been distributed
~os:,pn'y date (or within any applicable period of grace), pursuant to this Section 5.1, the full amount then distributable pursuant to clause first of this Section 5.1, the Indenture Tr'ustee shall distribute other'ayments of the character referred to in Sections'5.4 and 5.5 then held by it or thereafter received by it, except as otherwise provided in Section 5.3, to the Holders of all Notes to the extent necessary to'enable it to make all the distributions then due pursuant to such clause first;prouided tfiat to the extent any distribution is made from amounts held pursuant to Section 5.4 and the Lessee subsequently makes the payment of Basic Rent or Supplemental Rent in respect of which such distribution was made, such payment of Basic Rent or Supplemental Rent shall, unless a Default or, Event of Default shall have occurred and be continuing, be applied to the purpose for which such amount held'pursuant to Section 5.4 had been held, srrbject, in all cases, to the terms of Section 5.4.-The portion of each such payment made to the Indenture Trustee which is to be distributed by the Indenture Tr'ustee in payment of iVotes shall be applied in accordance with Section 3.11.Any payment received by the Indenture Trustee pursuant to Section 6.S shall be distributed to the Holders of the'3 1v'Notes, ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due and unpaid on all Notes held by each such Holder bears to the aggregate amount of the payments then due and unpaid on all Notes Outstanding.
Amounts distribu by the Indenture Trustee pursuant to this Section 5.1 shall be distributed as promptly as practic.after such amounts are actually received by the Indenture Trustee;in the event the Indenture Trust shall be directed to make payments to the Holder of any Note by wire transfer in accordance with Section 3.8, any amounts received by the Indenture Trustee after 1:00 p.m., Houston time, may be so distributed on the following Business Day.SEGTIQN 5.2.Amounts Received as Result of Event of Loss, Deemed Loss Event, Exercise of Options to Terminate, Exercise of Cure Option.If an Event of Loss shall occur or Deemed Loss Event shall be declared or the Lessee shall exercise the Cure Option or the Lessee shall exercise its purchase option under Section 13(c)of the Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement, and if either the Assumption Agreement or the Undivided Interest Indenture Supplement shall have been executed and delivered, any amounts of Casualty Value, Special Casualty Value, Enhanced Casualty Value, Special Termination Value or Fair Market Sales Value received or held by the Indenture Trustee in respect of such Event of Loss or Deemed Loss Event or exercise of the Cure Option or such purchase option shall be distributed forthwith to the Owner Participant.
If the Lessee or the Owner Trustee, as the case may be, shall exercise its option to terminate the Facility Lease pursuant to Section 14 thereof, then there shall be prepaid, on the date payments or proceeds with respect thereto are received by the Indenture Trustee (or as soon thereafter as practicable) under Section 14 of the Facility Lease, the unpaid principal amount of all Notes, together with the premium, if any, and all accrued but unpaid interest thereon to the date of such prepayment.
Notice of such prepayment shall be given as provided in Section 3.9(d)and may provide that it is subject to receipt of funds for such prepayment.
Except as otherwise provided in Section 5.3 or 5.7, any payments received and amounts realized by the Indenture Trustee upon exercise of the Lessee's or the Owner Trustee's option to terminate Facility Lease under Section 14 thereof shall in each case be distributed on the date of prepaymen provided in clauses first, second andfifth of Section 5.3.SEGTIoN 5.3.Amounts Received After, or Held at Time of, Indenture Event of Default under Section 6.2.Except as otherwise provided in Section 5.7, all payments received and amounts realized by the Indenture Trustee in respect of the Lease Indenture Estate (including any amounts realized by the Indenture Trustee from the exercise of any remedies pursuant to the Facility Lease or Article VI of this Indenture) after an Indenture Event of Default referred to in Section 6.2 shall have occurred and be continuing and the Notes have been accelerated pursuant to Section 7.1, as well as all payments thereafter received or amounts then held by the Indenture Trustee as part of the Lease Indenture Estate, shall be distributed by the Indenture Trustee in the following order of priority: erst, so much of such payments or amounts as shall be required to reimburse the Indenture Trustee for any Trustee's Expenses (to the extent not previously reimbursed) and to pay the reasonable remuneration of the Indenture Trustee, shall be applied by the Indenture Trustee to such reimbursement and payment;second, so much of such payments or amounts remaining as shall be required to pay in full the aggregate unpaid principal amount of all Notes, together with premium, if any, plus accrued but unpaid interest (as well as interest on overdue principal and, to the extent permitted by law, on overdue interest)thereon to the date of distribution, shall be distributed to the Holders of such Notes and in case the aggregate amount so to be distributed shall be insufBcient to pay all such Notes in full as aforesaid, then ratably, without priority of one over the other, in the proportion that the aggregate unpaid principal amount of all such Notes held by each such Holder, together with premium, if any, plus accrued but unpaid interest thereon to the date of distribution bears 14 the aggregate unpaid principal amount of all Notes, together with premium.if any, plus accrued but unpaid interest thereon to the date of distribution; third, so much of such payments or amounts remaining as shall be required to pay the present or former Holders of the Notes the amounts payable to them as Indemnitees (to the extent not previouslv reimbursed) shall be distributed to such Holders: and in case the aggregate amount so to be paid to all such Holders in accordance with this clause third shall be insufficient to pay all such amounts as aforesaid, then ratably, without priority of one over the other.iii the proportioii that the amount of such indemnity or other payments to which such Person is entitled bears to the aggregate amount of such indemnity or other payments to which all such Persons are entitled: fourth, the balance, if any, of such payments or amounts remaining shall be applied to the payment of any other indebtedness at the time due and owing to the Indenture Trustee or the Holders of the Notes which this Indenture by its terms secures;and fifth, the balance,'if any, of such payments or amounts remaining thereafter shall be distributed to or upon the direction of the Owner Trustee.SEcl'lON 5.4.Amounts Received for which Provision is Made in a Transaction Document Except as otherwise provided in Section 5.1, 5.3 or 5.7, any payments received by the Indenture Trustee in respect of the Lease Indenture Estate for which provision as to the application thereof is made in a Transaction Document shall be applied to the purpose for which such payment was made in.'accordance with the terms of such Transaction Document, as determined in the first instance from'-:.instructions or other information accompanying such payment or otherwise in accordance with': instructions from the payor of such payments.I'P SEcvio Y, 5.5.Amounts Received for which No Provision is Made.Except as otherwise provided in Section 5.1, 5.3 or 5.7.any payments received and any aniouiits alized by the Indenture Trustee in respect of the Lease In<lenture Estate (a)for which iio provisioii as to the application thereof is made in a Transaction Document or elsewhere in this Article V'hall be held by the Indenture Trustee as part of the Lease Indenture Estate,'and (b)to the extent received or realized at any time after payment in full of the principal of and premium, if any, and interest on all the'Notes, as well as any other amounts remaining as part of the Lease Indenture Estate after payment in"full of the principal of and premium, if any, and interest on all the Notes, shall be distributed by the Indenture Trustee in the order of priority set forth in Section 5.3 (omitting clause second thereof).San'ioY, 5.6.Payments to Ou:ner Trustee.Unless otherwise directed by the Owner Trustee, all payments to be made to the Owner Trustee hereunder shall be made to the Owner Participant by wire transfer of immediately available funds as soon as practicable but in any event no later than the close, of business on the date of'eceipt (assuming the Indenture Trustee ('at the ofHce of any bank or trust company in iNew York, N.Y.specified by the Indenture Trustee in accordance with Section 11(b)of the Facility Lease)has received such funds prior to 12:30 p.m., New York time, on the same day), to such account at such bank or trust company as the Owner Participant shall from time to time designate in writing to the Indenture Trustee.SEn'toe 5.7.Excepted Payments.Anything in this Article V or elsewhere in this Indenture to the contrary notwithstanding, any Excepted Payment received at any time by the Indenture Trustee shall be distributed as promptly as practicable to the Person entitled to receive such Payment (such entitlement to be conclusively determined by reference to payment instructions from such Person);
ARTICLE VI REPIIEsENTATIoYs, WVARIIAYTIEs AAD CovEYANTs oF'wYEII TRUsTEE;EvEYTs oF DEFAULY;RESIEDIEs oF THE Ii~DENTUIIE TRUSTEE SEn'Inx 6.1.Representations, warranties and Covenants of Ou;ner Trustee.the and!~The Owner Trustee hereby covenants and agrees that (i)it will duly and punctuallv pav principal of, and premium, if any, and interest on, the Notes in accordance with the terms thereof this Indenture, (ii)it will not pledge, create a security interest in or mortgage.so long as this Indenture shall remain in efFect, any of its estate, right, title or interest in and to the Lease Indenture Estate or otherwise constituting part of the Trust Estate, to anyone other than the Indenture Trustee.(iii)so long as this Indenture shall remain in eH'ect, it will not purchase or agree to purchase any property or asset other than the Undivided Interest and the Real Property Interest and other than as contemplated by the Transaction Documents, (iv)it will not, except with the prior written concur-rence of the Indenture Trustee or as expressly provided in or permitted by, this Indenture, or with respect to the Trust Agreement.
or any property not constituting part of the Lease Indenture Estate, take any action which would result in an impairment of any Note or the obligation of the Lessee to pay any amount under the Facility.Lease which is part of the Lease Indenture Estate (not in any event including in respect of Excepted Payments)or any of the other rights or security created or eH'ected thereby, or (v)issue, or incur any obligation in respect of, indebtedness for borrowed money except for its obligations in respect of Notes.A signed copy of any amendment or supplement to the Trust Agreement shall be delivered by the Owner Trustee to the Indenture Trustee and the Lessee.This Indenture and the Lease Indenture Estate shall not be affected by any action taken under or in respect of the Trust Agreement except as otherwise provided in.or permitted by this Indenture.
The Owner Trustee may resign as Owner Trustee, appoint a successor Owner Trustee and take all necessary and proper action to constitute or or more Persons as co-trustee(s) jointly with the Owner Trustee or as separate trustee(s).
al accordance with the terms and conditions of Article LX of the Trust Agreement.
SEn'IoY, 6.2.Indenture Events of Default.(a)any of the Events of Default speciHed in the following clauses of Section 15 of the Facility Lease: (1)clause (i)(y), except a failure of the Lessee to pay any amount which shall constitute an Excepted Payment;(2)clause (i)(x), except a failure of the Lessee to pay any amount which shall constitute an Excepted Payment or except where the Owner Trustee shall not have rescinded or terminated the Facility Lease pursuant to Section 16(a)(i)of the Facility Lease;or (3)clause (vii);or (b)the rescission or termination of, or:the taking of action by the Owner Trustee or the Owner Participant the eH'ect of which would be to rescind or terminate; the Facility Lease, whether pursuant to Section 16(a)(i)of the Facility Lease or otherwise; or (c)any failure by the Lessee to perform and observe Section 10(b)(3)(iii)of the Participation Agreement; or (d)the Owner Trustee shall fail to make any payment in respect of the principal of, or premium, if any, or interest on.the Notes within ten Business Days after the same s)Fall have become due (other than by virtue of any failure by the Lessee to make any payment of Rent therefor);
or 16 The term IndentIIre Event of Default, wherever used herein, shall mean any of the following events (whatever the reason for such Indenture Event of Default and whether it shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(e)the Owner Trustee shall fail to perform or observe any covenant or agreement to be performed or observed by it under Section 6.1, or the Owner Participant shall fail to perform or observe any covenant or agreement to be performed or observed by it under Section 7(b}(1)of the rticipation Agreement, and, in any such case, such failure shall continue for a period of 30 days after tice thereof shall have been given to the Owner Trustee and the Owner Participant and the Lessee by the Indenture Trustee, specifying such failure and requiring it to be remedied.,SF.'rvtoi 6.3.Enforcement of Remedies.(a)In the event that an Indenture Event of Default shall have occurred and be continuing, then and in every such case the Indenture Trustee, subject to paragraph (b)of this Section 6.3 and Section 6.11, may, and when required pursuant to the provisions of Article VII hereof, shall, exercise any or all of the rights and powers and pursue, subject to the rights of the Lessee under the Facility Lease, (x)in the event such Indenture Event of Default is referred to in paragraph (d)or (e)of Section 6.2, any or all of the remedies then available pursuant to this Article VI and Article VII, or (y)in the event such'ndenture Event of Default is referred to in paragraph (a}, (b}or (c}of Section 6.2.any or all of such remedies concurrently with the exercise and pursuit by the Owner Trustee of any or all of the remedies then available to the Owner Trustee under the Facility Lease.(b)Any provisions of the Facility Lease or this Indenture to the contrary notwithstanding, if the Lessee shall fail to pay any Excepted Payment to any Person entitled thereto as and when due.such Person shall have the right at all times, to the exclusion of the Indenture Trustee, to demand, collect, sue for, enforce performance of obligations relating to, or otherwise obtain all amounts due in respect of, such Excepted Payment.SEGTIOv 6A.Speci jc Remedies;Enforcement of Claims without Possession of Notes.Subject to Sections 6.2, 6.3 and 6.11 and the terms of the documents constituting a part of the.Lease Indenture Estate, upon the occurrence and during the continuance of an Indenture Event of efault: (ii)The Indenture Trustee niay, in oNler to enforce the rights of tlie Indenture Trustee and of the olders of the Notes, direct payment to it of all moneys and enforce any agreement or u>><lertaking constituting a part of the Lease Indenture Estate by any action, suit.remedy or proceeding authorized or permitted by this Indenture or by law or by equity, and whether for the specific performance of any'agreement contained herein, or for an injunction against the violation of any of the terms hereof, or in'id of the exercise of any power granted hereby or by Applicable Law, and in addition may sell, assign, transfer and deliver, from time to time to the extent permitted by Applicable Law, all or any part of the Lease Indenture Estate or any interest therein, at any private sale or public auction with or without demand, advertisement or notice (except as herein required or as may be required by Applicable Law)of the date, time and place of sale and any adjournment thereof, for cash or credit or other property, for immediate or future delivery and for such price or prices and on such terms as the Indenture Trustee, in its uncontrolled discretion, may determine, or as may be required by Applicable Law, so long as the Owner Participant and the Owner Trustee are afforded a commercially.
reasonable opportunity to bid for all or such part of the Lease Indenture Estate in connection therewith.
It is agreed that 90 days'otice to the Owner Participant, the Owner Trustee and the Lessee of the date, time and place of any proposed sale by the Indenture Trustee of all or any part of the Lease Indenture Estate or interest therein is reasonable.
The Indenture Trustee may file such proofs of claim and other papers or do'cuments as may be necessary or advisable in order to have the claims of the Indenture Trustee and of the Holders of the Notes asserted or upheld in any bankruptcy, receivership or other judicial proceedings.
'b)Without limiting the foregoing, the Indenture Trustee, its assigns and its legal representa-tives, subject to the rights of the Lessee under the Facility Lease, shall have as to such of the Lease Indenture Estate as is subject to the Uniform Commercial Code or similar law in each relevant'urisdiction all the remedies of a secured party under the Uniform Commercial Code or similar'law in I~such jurisdiction and such further remedies as from time to:time may hereafter be provided in such jurisdiction for a secured party.(c)All rights of action and rights to assert claims under this Indenture or under any of the N may be enforced by the Indenture Trustee without the possession of the Notes at any trial or o proceedings instituted by the Indenture Trustee, and any such trial or other proceedings shall e brought in its own name as trustee of an express trust, and any recovery or judgment shall be for the ratable benefit of the Holders of the Notes as herein provided.In any proceedings brought by the Indenture Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party)the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any such Holders parties to such proceedings.(d)The Indenture Trustee may exercise any other right or remedy that may be available to it under Applicable Law or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof.SEcrto>6.5.Bights and Remedies Cumulatiue.
Subject to Sections 6.2, 6.3 and 6.11, (a)each and every right, power and remedy herein specifically given to the Indenture Trustee under this Iridenture shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient" by the Indenture Trustee, and the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiv'er of the right to exercise at the same time or thereafter any other right, power or remedy, and (b)no delay or omission by the Indenture Trustee in the exercise of any right, power or remedy or in the pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any default on the part of t Owner Participant.
the Owner Trustee or the Lessee or to be an acquiescence therein.Stxmtnx 6.6.Restoration of Rights and Remedies.In case the Indenture Trustee shall have proceeded to enforce any right, power or reinedy under this Indenture by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Indenture Trustee.then and in every such case the Owner Trustee, the Owner Participant, the Indenture Trustee and the Lessee shall be restored to their former positions and rights hereunder with respect to the Lease Indenture Estate, and all rights, powers and remedies of the Indenture Trustee shall continue as if no such proceedings had been taken.SEC:TjoA 6.7.LVaioer of Pnst Defaults.Any past Indenture Default.or Inde'nture Event of Default and its consequences may be waived by the Indenture Trustee, except an Indenture Default or an Indenture Event of Default (i)in the payment of the principal of or interest on any Note, subject to the provisions of Section 7.1, or (ii)in respect of a covenant or provision hereof which, under Section 10.2, cannot be modified or amended without the consent of each Holder of a Note then Outstanding.
Upon any such waiver, such Indenture Default or Indenture Event of Default shall cease to exist, and any other Indenture Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Indenture Default or Indenture Event of Default or impair any right consequent thereon.1S SEn tow 6.8.Right of Ou:ner Trustee to Pay Rent;iVote Purchase;Substitute Lessee.Anything in this Article VI or Article VII to the contrary notwithstanding: (a)An Indenture Event of Default shall be deemed cured if such Indenture Event of Default suits from non-payment of Basic Rent or Supplemental Rent under the Facility Lease.and the Owner Trustee or the Owner Participant shall have paid all principal of and interest on the Notes due (other than by acceleration) on the date such Rent was payable (plus interest on such amount as required hereby)within 15 days after the receipt by the Owner Trustee of notice of such non-payment, such receipt to be evidenced by, among'other things, any notice thereof given to the Owner Trustee in accordance with the notice provisions of the Participation Agreement.
The Owner Trustee or the Owner Participant, upon exercising cure rights under this'paragraph (a), shall not obtain any Lien on any part of the Lease Indenture Estate on account of such payment for the costs and expenses incurred in connection therewith nor, except as expressly provided in the succeeding sentence, shall any claims of the Owner Trustee or the Owner Participant against the Lessee or any other Person for the repayment thereof impair the prior right and security interest of the Indenture Trustee in and to the Lease Indenture Estate.Upon any payment by the Owner Trustee or the Owner Participant pursuant to this Section 6.8, the Owner Trustee or the Owner Participant, as the case may be.shall (to the extent of such payment made by it)be subrogated to the rights of the Indenture Trustee and the Holders of the Notes to receive the payment of Rent with respect to which th'e Owner Trustee or the Owner Participant made such payment and interest on account of such Rent payment being overdue in the manner set forth in the next sentence.If the Indenture Trustee shall thereafter receive such payment of Rent or such interest, the Indenture Trustee shall, notwithstanding the requirements of Section 5.1, on the date such payment is received by the Indenture Trustee, remit such payment of.Rent (to the extent of the payment made by the Owner Trustee or the Owner Participant p'ursuant to'-.'this Section 6.8)and such interest to the Owner Trustee or the Owner Participant, as the case may be."in reimbursement for the funds so advanced by it.(b)Each Holder of a Note agrees, by acceptance thereof, that if the iNotes have been accelerated g irsuant to Section 7.1, and the Owner Trustee.within 30 days after receiving notice froni th>>denture Trustee pursuant to Section 7.1, shall give written notice to the Indenture Trustee of the Owner Trustee's intention to purchase all of the Notes in accordance with this paragraph.
accon>pa-nied by assurances of the Owner Trustee to purchase the iNotes, then, upon receipt within i.0 Business'Days after such notice from the Owner Trustee of an amount equal to the aggregate unpaid principal~amount of and any premium with respect to any unpaid Notes then held by such Holder, together with'accrued but unpaid interest thereon to the date of such receipt (as well as any interest on overdue principal and, to the extent permitted by law, interest), such Holder will forthwith sell, assign, transfer and convey to the Owner Trustee (without recourse or warranty of any kind other than of title to the Notes so conveyed)all of the right, title and interest of such Holder in and to the Lease Indenture Estate, this Indenture and all Notes held by such Holder;prouided, that no such Holder shall be required so to convey unless (1)the Owner Trustee shall have simultaneously tendered payment for all other Notes issued by the Owner Trustee at the time Outstanding pursuant to this paragraph and (2)such conveyance is not in violation of any Applicable Law.(c)Each Holder of a Note further agrees by its acceptance thereof that the Owner Trustee shall have the right, pursuant to Section 16 of the Facility Lease, to terminate the Facility Lease and, in connection therewith.
to arrange for the substitution of another Person as lessee under a new lease substantially similar to the Facility Lease (hereinafter the Substituted Lessee)and, subject to (i)any Indenture Event of Default under paragraphs (d)and (e)of Section 6.2 having been cured by the Owner Trustee and (ii)the Substituted Lessee's assuming all of the obligations of the Lessee under the Facility Lease, the Facility Lease between the Owner Trustee and such Substituted Lessee shall, for all purposes of this Indenture, be deemed to be the Facility Lease subject to the lien of this Indenture.
The Owner Trustee shall use its best efforts to obtain a Substituted Lessee having an assigned credit rating by Standard R Poor's Corporation or Moody's Investors Service, Inc.(or, if either of such organizations shall not rate securities issued by such Substituted Lessee, by any other nationally
 
recognized rating organization in the United States of America)with respect to at least one series of its debt obligations or preferred stock equal to or better than the ratings assigned, immediately prior to such substitution, by such organizations to comparable securities of the Lessee immediately prior such substitution.
but in no event less than the"investment grade" rating assigned by s organizations.
SEcrtnx 6.9 Further Assurances.
Subject to Section 7.6, the Owner Trustee covenants and agrees from time to time to do all such acts and execute all such instruments of further assurance as shall be reasonably requested by the Indenture Trustee for the purpose of fully carrying out and effectuating this Indenture and the intent hereof.SEn'toi 6.10.Bight of Indenture Trustee to Perform Covenants, etc I f the Owner Trustee shall fail to make any payment or perform any act required to be made or performed by it hereunder or under the Facility Lease'or if the Owner Trustee shall fail to release any Lien affecting the Lease Indenture Estate which it is required to release by the terms of this Indenture.
the Indenture Trustee, without notice to or demand upon the Owner Trustee and witho'ut waiving or releasing any obligation or default, may (but shall be under no obligation to)at.any time thereafter make such payment or perform such act for the.account and at the expense of the Lease Indenture Estate.All sums so paid by the Indenture Trustee an/all costs and expenses (including without limitation reasonable fees and expenses of legal counsel and other professionals) so incurred, together with interest thereon from the date of gayzent.or occurrence, shall constitute additional indebtedness secured by this Indenture and shall be.pai3'from the Lease Indenture Estate to the Indenture Trustee on demand.The Indenture Trustee shall not be liable for any damages resulting from any such payment or action unless such damages shall be a consequence of willful misconduct or gross negligence on the part of the Indenture Trustee.SEn'los G.ll.Certain Otltcr Bights of the Oumer Trustee.Notwithstanding any provision to the contrary in this Indenture, the Owner Trustee shall at all times retain, to the exclusion of the Indenture Trustee, all rights of the Owner Trustee to exercise any election or option or to make any decision or determination or to give or receive any notice.consent.waiver or approval or to take any other action under or in respect of the Facility Lease, as well as all rights, powers and remedies on the part of the Owner Trustee, whether arising under the Facility Lease or by statute or at law or in equity or otherwise, arising out of any Default or Event of Default subject, hou:ever, to Section 10.2.Without the prior written consent of the Indenture Trustee.the exercise of any of the aforesaid rights so retained by the Owner Trustee shall not be exercised in such a manner as to (i)reduce the amounts payable by the Lessee under the Facility Lease below the amounts necessary to provide the Owner Trustee with sufBcient moneys to make timely payments in full of amounts due with respect to the principal of and premi'um, if any, and interest on all Notes or (ii)rescind or terminate the Facility Lease pursuant to Section 16 thereof.The Owner Trustee shall~not exercise any other right or remedy'under the Facility Lease the effect of which would be to effect such rescission or termination.
ARTICLE VII CERYAI<v DUTIEs QF THE Owi JER TRUsTEE AivD THE IivDEvYURE TRUsTEE SEcrtov 7.1.Duties in Bespect of Events of Default, Deemed Loss Events and Events of Loss;Acceleration of hlaturi ty.In the event the Owner Trustee shall have actual knowledge of an Indenture Event of Default, an Event of Default.a Deemed Loss Event or an Event of Loss, the Owner Trustee shall give prom 00 written notice thereof to the Owner Participant.
the Lessee and the Indenture Trustee.In the event the Indenture Trustee shall have actual knowledge of an Event of Default, an Indenture Event of efault, a Deemed Loss Event or an Event of Loss, the Indenture Trustee shall give prompt written tice thereof to the Owner Participant, the Owner Trustee, the Lessee and each Holder of a iVote.ibject to the terms of Sections 6.2, 6.3, GA, G.S, 6.11 and 7.3, (a)the Indenture Trustee shall take such action (including the waiver of past Defaults in accordance with Section G.7), or refrain from taking such actiori, with respect to any such Indenture Event of Default, Event of Default.Deemed Loss Event or Event of Loss as the Indenture Trustee shall be instructed by a Directive.(b)if the Indenture Trustee shall not have received instructions as above provided within 20 days after inailing by the Indenture Trustee of notice of such Indenture Event of Default, Event of Default, Deemed Loss Event or Event of Loss to the Persons referred to above, the.Indenture Trustee may, subject to instructions thereafter received pursuant to the preceding sentence, take such action.or refrain from taking such action, but shall be under no duty to take or refrain from taking any action, with respect to such Indenture Event of Default, Event of Default, Deemed Loss Event or Event of Loss as it shall determine advisable in the best interests of the Holders of the iVotes of all series and (c)in the event that an Indenture Event of Default shall have occurred and be continuing, the Indenture Trustee in its discretion may, or upon receipt of a Directive shall, by written notice to the Owner Trustee.declare the unpaid principal amount of all Notes with accrued interest thereon to be immediately due and payable, upon which declaration such principal amount and such accrued interest shall immediately become due and payable without further act or notice of any kind.For all purposes of, this Indenture, in the absence of actual knowledge, neither the Owner Trustee nor the Indenture Trustee shall be deemed to have knowledge of an Indenture Event of Default or Event of Default except that the Indenture Trustee shall be deemed to have knowledge of the failure of the Lessee to pay any installment of Basic Rent within 10 Business Days after the same shall become due.For purposes of this Section 7.1, neither the Owner Trustee nor the Indenture Trustee shall be deemed to have actual knowledge of any Indenture Event of Default, Event of Default, Deemed Loss Event or Event of Loss unless it shall have received notice thereof pursuant to Section 11.6 or such Indenture Event of fault or Event of Default shall actually be known by an officer in the corporate trust department of Owner Trustee or by an officer in the corporate trust department of the Intlenture Trustee.as the.se may be.SEcTID Y, 7.2.Duties in Respect of iiIatters Specifted in Directice.
,, Subject to the terms of Sections 6.2, 6.3, 6.4, 6.8, 6.11, 7.1 and 7.3, upon receipt of a Directive.
the Indenture Trustee shall take such of the following actions as may be specified in such Directive: (i)give such notice or direction or exercise such right, remedy or power permitted hereunder or permitted with respect to the Facility Lease or in respect of any part or all of the Lease Indenture Estate as shall be specified in such Directive; and (ii)take such action to preserve or protect the Lease Indenture Estate as shall be specified in such Directive, it being agreed that without such a Directive, the Indenture Trustee shall not waive, consent to or approve any such matter as satisfactory to it.SEcnoN 7.3.Indemnification.
The Indenture Trustee shall not be required to take or refrain from taking any action under Section 7.1 or 7.2 or Article VI which shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability unless the Indenture Trustee shall have been indemnified by the Holders of the Notes against liability, cost or expense (including counsel fees)which may be incurred in connection therewith, or unless, in the reasonable judgment of the Indenture Trustee, the indemnities of the Lessee shall be adequate for such purpose;provided, however, that if the Holder of such Notes is the Collateral Trust.Trustee, the unsecured written undertaking of the Collateral Trust Trustee, in i'ts individual capacity, shall be sufficient indemnity for purposes of this Section.The Indenture Trustee shall not be required to take any action under Section 7.1 or 7.2 or Article VI nor shall any other provision of this Indenture be deemed to impose a duty on e Indenture Trustee to take any action, if the Indenture Trustee shall reasonably determine.
or shall have been advised by counsel, that such action is likely to result in personal liability or is contrary to the terms hereof or of the Facility Lease or is otherwise contrary to law.SF(clos 7A.Limitations on Duties;Discharge of Certain Liens Resulting froui Claims Aga Indenture Trustee.The Indenture Trustee shall have no duty or obligation to take or refrain from taking any action under.or in connection with.this Indenture or the Facility Lease, except as expressly provided by the terms of this Indenture.
The Indenture Trustee nevertheless agrees that it will, in its individual capacity and at its own cost and expense, promptly take such action as may be necessary duly to discharge all Liens on any part of the Lease Indenture Estate which result from acts by or claims against it arising out of events or conditions not related to its rights in the Lease Indenture Estate or the administration of the Lease Indenture Estate or the transactions contemplated hereby.SEn'to>7.5.Restrictions on Dealing u:ith Lease Indenture Estate.Except as provided in the Transaction Documents, the Owner Trustee shall not use, operate.store, lease, control, manage, sell, dispose of or otherwise deal with any part of the Lease Indenture Estate.Secnow 7.6.Filing of Financing Statements and Continuation Statements.
/Pursuant to Section 10(b)(2)of the Participation Agreement, the Lessee has covenanted to maintain the priority of the lien of this Indenture on the Lease Indenture Estate.The Indenture Trustee shall, at the request and expense of the Lessee as provided in the Participation Agreement, execute and deliver to the.Lessee and the Lessee will file, if not already filed, such financing statements or other documents and such continuation statements or other documents with respect to financing statements or other documents previously filed relating to the lien created under this Indenture in the Lease Indenture Estate as may be necessary to protect, perfect and preserve the li created under this Indenture.
At any time anti from time to time.upon the request of the Lessee or Indenture Trustee, at the expense of the Lessee as provided in the Participation A<reement (and up receipt of the form of docuinent so to be executed), the Owner Trustee shall promptly and duly execute and deliver any and all such further instruments and documents as the Lessee or the Indenture Trustee may request in order for the Indenture Trustee to obtain the full benefits of the security interest, assignment and mortgage created hereby and of the rights and powers herein granted.Upon the reasonable instructions (which instructions shall be accompanied by the form of document to be filed)at any time and from time to time of the Lessee or the Indenture Trustee, the Owner Trustee shall execute and file any financing statement (and any continuation statement with respect to any such financing statement), any certificate of title or any other document.in each case relating to the security interest, assignment and mortgage created by this Indenture.
as may be specified in such instructions.
In addition, the Indenture Trustee and the Owner Trustee will execute such.continuation stat'ements with respect to financing statements and other documents relating to the lien created under this Indenture in the Lease Indenture Estate as may be reasonably specified from time to time in written instructions of any Holder of a Note (which instructions may, by their terms, be operative only at a future date and which shall be accompanied by the form of such continuation statement or other document so to be filed).
ARTICLE VIII CoioERwic:
THE OwNER TRUsTEE AYD THE IYDEYTURE TRUSTEE SE<'V(oi 8.1.Acceptance of Trusts;Standard of Care.The Indenture Trustee accepts the trusts hereby created and applicable to it and agrees to peri'orm the same but only upon the terms of this Indenture and the Participation Agreenient and agrees to receive and disburse all moneys constituting part of the Lease Indenture Estate in accordance with the provisions hereof, but no implied duties or obligations s)iall be read into this Indenture or the Participation Agreement against the Indenture Trustee.The Indenture Trustee shall enter into and perform its obligations under the Participation Agreement, and, at the request of the Owner Trustee, any other agreement relating to any transfer of the Undivided Interest or the Real Property Interest or the assignment of rights under the Assignment and Assumption or, at the request of the Owner Trustee, the purchase by any Person of Notes or Additional iVotes issued hereunder, all as contemplated hereby.The Indenture Trustee shall not be liable under any circumstances, except for its own willful misconduct or gross negligence.
If any Indenture Event of Default shall have occurred and be continuing, the Indenture Trustee shall exercise such of the rights and remedies vested in it by this Indenture, subject to the provisions hereof, and shall use the same degree of care in their exercise as a prudent man would exercise or use in the circumstances in the conduct of his own aKairs, but if in the opinion of the Indenture Trustee such action may tend to involve expense or liability, it shall not be obligated to take such action unless it is furnished with indemnity satisfactory to it.SECnON 8.2.No Duties of i>faintenance, Etc.Except pursuant to Section 7.2 and except as provided in, and without limiting the generality of, Sections 7.1 and 7.4, the Indenture Trustee shall have no duty (i)to see to any recording or filing of any Transaction Document, or to see to the maintenance of an>such recording or filing.or (ii)to see the payment or discharge of any tax.assessment or other governmental char e or any lien or umbrance of any kind owing with respect to.or assessed or levied against.;uiy part of the Lease denture Estate (except such as are required to be paid or discharged by it pursuant to this Inde>>ture or any of the other Transaction Documents) or to make or file any reports or returns related thereto.SEcTioN 8.3.Representations and iVarranties of Indenture Trustee and tlie Ou:ner Trustee.NEITHER THE OWNER TRUSTEE NOR THE INDENTURE TRUSTEE MAKES ANY REPRE-SENTATION OR WARRANTY AS TO THE VALUE, CONDITION, MERCHANTABILITY OR FIT-.NESS FOR USE OF UNIT 2, THE UNDIVIDED INTEREST OR AiVY PART OF THE LEASE liVDENTURE ESTATE OB AS TO ITS INTEREST THEREIN, OR AiVY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO UNIT 2, THE UiVDIVIDED INTEREST OR AiVY PART OF THE LEASE INDENTURE ESTATE WHATSOEVER.
The Owner Trustee and the Indenture Trustee each represents and warrants, in its individual capacity, as to itself that this Indenture has been executed and delivered.
by one or more of its ofBcers who are duly authoriz'ed to'execute and deliver this Indenture on'its behalf.SECTION 8.4.iUonetgs Held in Trust;Non-Segregation of iilonegs.All moneys and securities deposited with and held by the Indenture Trustee under this Indenture for the purpose of paying, or securing the payment of, the princ'ipal of or premium or interest on the iVotes shall be held in trust.Except as provided in Sections 2.3(c), 8.8 and 11.1, moneys received by the Indenture Trustee under this Indenture need not be segregated in any manner except to the extent required by law, and may be deposited under such general conditions as may be prescribed by law: prouided, Iioueoer, that any payments received or applied hereunder by the Indenture Trustee shall be accounted for by the Indenture Trustee so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.Except-as otherwise expressly provided herein.the Indenture Trustee shall not be liable for any interest on any money held pursuant to this Indenture.
23 Sccrtoi 8.5.Reliance ori LVritings, Use of Agents, Etc The Indenture Trustee shall incur no liability to anyone in acting upon any signature, instrumen notice, resolution.
request.consent, telegram, order.certificate, report, opinion, bond or ot document or paper believed by it to be genuine and believed by it to be signed by the proper part>parties.In the case of the Lessee, the Indenture Trustee may accept a copy of a resolution of the Boarc of Directors or any duly constituted and authorized committee of the Board of Directors of the Lessee.certified by the Secretary or an Assistant Secretary of the Lessee as duly adopted and in full force<<nd effect, as conclusive evidence that such resolution has been duly adopted by such Board or Committee and that the same is in full force and effect.As to the aggregate unpaid principal amount of the Notes Outstanding as of any date, the Owner Trustee may for'all purposes hereof rely on a certificate signed by any Authorized Officer of the Indenture Trustee.As to any fact or matter the manner of ascertainment of which is not specifically described herein, the Indenture'Trustee may for all purposes hereof rely on a'certificate, signed by the Chairman of the Board, the President, any Vice President and the Treasurer or the Secretary, or any Assistant Treasurer or Assistant Secretary of the Lessee.or a Holder of a Note or any Responsible Oifice of the Owner Trustee, as the case may be, as to such fact or matter, and such certificate shall constitute full protection to the Indenture Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.The Indenture Trustee shall furnish to the Owner Trustee upon request such information,and copies of such documents as the Indenture Trustee may have and as are necessary for the Owner Trustee to perform its duties under Article III.In the administration of the trusts hereunder,'the Indenture Trustee may execute any of the trusts or powers'hereof and perform its powers and duties.here'under directly or through agents or attorneys selected by it in good faith and with reasonable care, and, with respect to matters relating to the Notes, the Lease Indenture Estate and its rights and duties under this Indenture and the other" Transaction Documents, may, at the expense of the Lessee, or, if the Lessee shall have failed to pay or provide for the payment thereof, at the expense of the Lease Indenture Estate.consult with counsel, accountants and other skilled persons to be selected and employed by it in good faith and with reasonable care, and the Indenture Trustee shall not be liable for anything done.suffered or omitted'ood faith by it'in accordance with the advice or opinion of any such counsel.accountants or ot skilled persons so selected.Unless otherwise specified herein or in any other Transaction Docuniei any opinion of counsel referred to in this Indenture or in such other Transaction Document may be relied on by the Indenture Trustee to the extent it is rendered by an attorney or firm of attorneys satisfactory to the Indenture Trustee (which may be counsel.to the Owner Participant.
the Oivner Trustee, the Lessee or any party to any Transaction Document).-
San'tow 8.6.Indenture Trustee to Act Solely as Trustee The Inde'>ture Trustee acts hereunder solely'as trustee as herein provided and not in any individual capacity, except as otherwise expressly provided herein;and except as provided in Sections 9(a)and 9(b)of the Participation Agreement or Section 7..4 or 8.1, all Persons having any claim'against the Indenture Trustee a'rising from'matters relating to the Notes by reason of the transactio'ns contemplated hereby shall;subject to th'e lien and priorities'f payment.as)ierein provided and to Sections 3.6 and 5.7, look only to the Lease Indenture Estate for payment or satisfaction'thereof.
Srn'tow 8.7.Liinitation on Rights Against Registered Holders, the Ou;ner Trustee or Lease'Indenture Estate.provided in ompensation for its services hereunder The Indenture Trustee shall be entitled to be paid or reimbursed for Trustee's Expenses as provided herein and in the other Transaction Documents.
Nonetheless, the Indenture Trustee agrees-that it shall have no right against the Holders'of the Notes, the Owner Trustee (except to the extent included in Transaction Expenses-payable by the Owner Participant) or, except as Article V and Section 6.4 or this Article VIII, the Lease Indenture Estate for any fee as.c SEn'ioN 8.8.Investment of Certain Payments Held by the Indenture Trustee Any amounts held by the Indenture Trustee hereunder other than pursuant to Section 2.3(c)or 11.1 shall be invested by the Indenture Trustee from time to time as directed in writing by'the Owner ustee or by the Owner Participant as agent of the Owner Trustee and at the expense and risk of the vner Participant in (i)obligations of, or guaranteed as to interest and principal by.the United States Government maturing not more than 90 days after such investment, (ii)open market commercial paper of anv corporation incorporated under the laws of the United States of America or any State thereof rated"prime-1" or its equivalent by Moody's Investors Service, Inc.or"A-1" or its equivalent by Standard R Poor's Corporation or (iii)certificates of deposit maturing within 90 days after such investment issued by commercial banks organized under the laws of the United States of America or of any political subdivision thereof having a combined capital and surplus in excess of$500.000.000:
provided, hou:erer, that the aggregate amount at any one time so invested (a)in open market commercial paper of any corporation shall not exceed$2,000,000 and (b)in certificates of deposit issued by any one bank shall not exceed$10,000,000.
Any income or gain realized as a result of any such investment shall be applied to make up any losses resulting from any such investment to the extent such losses shall not have been paid by the Owner Trustee or the Owner Participant pursuant to this Section 8.8.Any further income or gain so realized shall be promptly distributed (in no event later than the next Business Day)to the Owner Trustee or the Owner Participant, except after the occurrence and during the continuance of an Indenture Event of Default.The Indenture Trustee shall have no liability for any loss resulting from any investment made in accordance with this Section.Any such investment may be sold (without regard to maturity date)by the Indenture Trustee whenever necessary to make any distribution required by Article V.SECTION 8.9.No Responsibility for Recitals, etc.The Indenture Trustee makes no representation or warranty as to the correctness of any statement, recital or representation ma(le by any Person other than the Indenture Trustee in this Indenture.
any other Transaction Document or the iVotes.g g SE(wl(iN 8.10.Indenture Trustee ilay Engage in Certain Transactioris.
The Indenture Trustee may engage in or be interested in any fiinancial or other transaction witli the Lessee, the Owner Participant, the Owner Trustee and any other party to a Transaction Document.provided that if the Indenture Trustee determines that any such relation is in conflict with its duties under this Indenture, it shall eliminate the conflict or resign as Indenture Trustee.SEc710N 8.11.Construction of Arnbig<<ous Provisions.
The Indenture Trustee, subject to Section 8.1, may construe any ambiguous or inconsistent provisions of this Indenture, and any such construction by the Indenture Trustee shall be binding upon the iVoteholders.
In construing any such provision, the Indenture Trustee will be entitled to rely upon opinions of counsel and will not be responsible for any loss or damage resulting from reliance in good faith thereori, except for its own gross negligence or willful misconduct.
ARTICLE IX Suc(:Esson TIIvvrEEs SEerION 9.1.Resignation and Removal of"In'denture Trustee;Appointuient of Successor.(a)The Indenture Trustee may resign at any time without cause by giving at least 30 days'rior written notice to the Owner Participant, the Owner Trustee, the Lessee and to each Holder of a iVote, such resignation to be effective upon the acceptance of such trusteeship by a successor.
In addition, the Indenture Trustee may be removed without cause by a Directive delivered to the Owner Participant.
the Owner Trustee, the Lessee and the Indenture Trustee, and the Indenture Trustee shall promptly give notice thereof in writing to each Holder of a Note.In the case of the resignation or removal of the Indenture Trustee, a successor trustee may be appointed by such a Directive.
If a successor trustee shall not have been appointed within 30 days after such notice of resignation or removal.the Indenture Trustee, the Owner Trustee or any Holder of a Note may apply to any cou competent jurisdiction to appoint a successor to act until such time, if any, as a successor shall l been appointed as above provided.The successor so appointed by such court shall immediately ai without further act be superseded by any successor appointed as above provided within one year from the date of the appointment by such court.(b)Any successor trustee, however appointed, shall execute and deliver to its predecessor and to the Owner Trustee an instrument accepting such appointment, and thereupon such successor, without further act, shall become vested with all the estates, properties, rights.powers and duties of its predecessor hereunder in the trusts under this Indenture applicable to it with like effect as if originally named the Indenture Trustee;but, nevertheless, upon the written request of such successor trustee or receipt of a Directive, its predecessor shall execute and deliver an instrument transferring to such successor trustee, upon the trusts herein expressly applicable to it, all the estates, properties, rights and powers of such predecessor under this Indenture, and such predecessor shall duly assign.transfer.deliver and pay over to such successor trustee all moneys or other property then held by such predecessor under this Indenture.(c)Any successor trustee, however appointed, shall be a bank or trust company organized under the laws of the United States or any jurisdiction thereof having a combined capital and surplus of at least$100,000,000, if there be such an institution willing, able and legally qualifie to perform the duties of the Indenture Trustee hereunder upon reasonable or customary terms.(d)Any corporation into which the Indenture Trustee may be merged or converted or with which it m'ay be consolidated, or any corporation resulting from any merger, conversion or consolida-tion to which the Indenture Trustee shall be a party, or any corporation to which substantially all the corporate trust business of the Indenture Trustee may be transferred.
shall, subject to the terms of paragraph (c)of this Section 9.1.be the Indenture Trustee under this Indenture without i'urtlier ARTICLE X SUPPLE%I ENTs hND ANIENDxIENTs To THIs INDENTURE hND OTIIER DorU~IENTS SEAT!ON 10.1.Supplenientsi Amendments and Dlodifieations to This Indenture without Consent of Holders of Notes.The Indenture Trustee may, with the written consent of the Owner Trustee.from time to time and at any time execute a supplement to this Indenture without the consent of the Holders of Notes Outstanding in order to (i)cure any defect, omission or ambiguity in this Indenture or for any other purpose if such action does not adversely affect the interests of such Holders, (ii)grant or confer upon the Indenture Trustee for the beneflt of such Holders any additional rights, remedies, powers, authority or security which may be lawfully granted or conferred and which are not contrary to or inconsistent with this Indenture, (iii)add to the covenants or agreements to be observed by the Owner Trustee and which are not contrary to this Indenture or surrender any right or power of the Owner Trustee, (iv)confirm or amplify, as further assurance, any pledge, under, and the subjection to any lien or pledge created or to be created by, this Indenture, of the properties covered hereby, or subject to the lien or pledge of this Indenture additional revenues, properties or other collateral, including pursuant to an Undivided Interest Inde'nture Supplement, (v)qualify this Indenture under the provisions of the Trust Indenture Act, (vi)evidence the appointment of any successor Indenture Trustee pursuant to the terms hereof, (vii)evidence the assumption and release effected by the Assumption Agreement, or (viii)execute supplemental indentures to evidence the issuance of and to provide the terms of, Additional Notes'to be issued hereunder in accordance with the terms hereof.
SEGTloi 10.2.Suppleuients and Amendments to this Indenture and tlie Facility Lease 1Vith Consent of Holders ojiVotes.Except as provided in Section 10.1, at any time and from time to time, (i)upon receipt of a ective.the Indenture Trustee shall execute a supplement to this Indenture for the purpose of ding provisions to, or changing or eliminating provisions of.this Indenture.
but only as specified in such Directive.
and (ii)upon receipt of a written instruction fron>the Lessee and the Owner Trustee.the Indenture Trustee shall consent to any amendment of or supplen>ent to the Facility Lease or execute and deliver such written waiver or modification of the terms of the Facility Lease to which the Owner Trustee may agree;provided, hou;ever, that, without the consent of the Holders of all the Notes then Outstanding no such supplement or amendment to this Indenture or the Facility Lease.or waiver or modification of the terms of either thereof, shall (x)modify any of the provisions of this Section or of Section 7.1 or 7.2 or Section 4 of the Facility Lease or of the definition of Directive contained in Appendix A hereto or the definition of Indenture Event of Default herein, reduce the amount of the Basic Rent, Casualty Value, Termination Value or any payment under or pursuant to Section 16 of the Facility Lease as set forth in the Facility Lease below such amount as is required to pay the full principal of, and premium, if any, and interest on, the Notes when due, or extend the time of payment thereof, (y)except as permitted by clause (x)above, modify, amend or supplement the Facility Lease or consent to the termination or any assignment thereof, in any case reducing the Lessee's obligations in respect of the payment of the33asic Rent, Casualty Value, Termination Value or any payment under or pursuant to Section 16 of the Facility Lease below the amount referred to in clause (x)above, or (z)deprive the Holder of any Note of the lien of this Indenture on the Lease Indenture Estate (except as contemplated by Section 3.9(b))or materially adversely affect the rights and remedies for the benefit of such Holder provided in Article VI;and, provided fiirther, that, without the consent of the Holders of all the Notes then Outstanding and affected thereby, no such supplement or amendment to this Indenture or the Facility Lease, or waiver or modification of the terms of either thereof, shall reduce the amount or extend the time of payment of any amount payable under any Note.reduce or modify the provisions For the computation of the rate of interest owing or payable thereon.adversely r or modify the provisions of Article V with respect to the order of priorities in which distributions reunder with respect to the Notes shall be made, or reduce,)nodify or an<end any inde)nnities i>>, vor of the Holders of the Notes.Anything to the contrary contained herein notwithstanding, without the necessity of the consent of the Holders of Notes or the Indenture Trustee.(a)any indemnities in favor of the Owner Trustee or the Owner Participant may be modified, amended or clnnged and (b)the Owner Trustee may enter into any agreement with respect to the Lease Indenture Estate which by its terms does not become effective prior to the satisfaction and discharge of this Indenture, but any agreement entered into by the Owner Trustee.pursuant to this clause (b)shall not materially adversely affect the Indenture Trustee or the Holder of any Note.Notwithstanding the foregoing, the Indenture Trustee shall, upon receipt of a written instruction from the Lessee and the Owner Trustee, consent to an amendment of any definitions contained in or appended to this Indenture which are being changed pursuant to the amendments r'eferred to in Section 10(b)(3)(xiii)of the Participation Agreement.
The Owner Trustee shall deliver to the Indenture Trustee a copy of each amendment to the Facility Lease whether or not the Indenture Trustee is required to consent or otherwise act with respect thereto.SEn'tow 10.3.Certain Limitations on Supplements and Amendments.
If in the opinion of the Owner Trustee or the Indenture Trustee, each'of which shall be entitled to rely on counsel for purposes of this Section 10.3, any document required to be executed by either of them pursuant to the terms of Section 10.1 or 10.2 does not comply with the provisions of this Indenture or adversely affects any right, immunity or-indemnity in favor of, or increases any duty of, the ()wner Trustee or the Indenture Trustee under this Indenture, the Facility Lease or the Participation Agreement, the Owner Trustee or the Indenture Trustee, as the case may be, may in its discretion decline to execute such document.
SECriox 10.4.Directive iVeed iVot Specific Particular Forin of Supplement or Auiendiuent It shall not be necessary for any Directive furnished pursuant to Section 10.2 to specify the particular form of the proposed documents to be executed pursuant to such Section.but it shall sufficient if such request shall indicate the substance thereof.SE(zioi 10.5.Trustee to'Furnisfi Copies of Suppleuient or Amendment Promptly after the execution by the Owner Trustee or the Indenture Trustee of iuiy docunient entered into pursuant to Section 10.2, the Indenture Trustee shall mail, by first-class mail, postage prepaid.a conformed copy thereof to each Holder of an Outstanding Note at the address of such Person set forth in the register kept pursuant to Section 4.1 but the failure of the Indenture Trustee to mail such conformed copies shall not impair or afFect the validity of such document.ARTICLE XI MISCELLAi JEOUS SECnox 11.1.hlonegs for Payments in Respect of iVotes to*be Held in Trust.In case the Holder of any Note shall fail to present the same for payment on any date on which the principal thereof or interest thereon becomes payable, the Indenture Trustee niay set aside in trust the moneys then due thereon uninvested and shall pay such moneys to the Holder of such Note or such Person upon due presentation or surrender thereof in accordance with the provisions of this Indenture, subject always, however, to the provisions of Sections 3.8 and I I'.2.SECT(Oui 11.2.Disposition of hlonegs Held for Payments of iVotes Any moneys set aside under Section 11.1 and not paid to Holders of iVotes as provitled in Section 11.1 shall be held by the Indenture Trustee in trust until the latest of (i)the date three years after th'ate of such setting aside.(ii)the date all other Holders of the Notes sliall have received full paynu of all principal of and interest and other siims payable to them oii such iVotes or the Intlenture Trust shall hold (and shall have notified such Persons that it holds)in trust for th;it purpose;in anio<<nt suscient to make full payment thereof when due and (iii)the date the Owner Trustee shall have fully performed and observed all its covenants and obligations contained in this Indenture with respect to the iVotes;and thereafter shall be paid to the Owner Trustee by the Indenture Trustee on demand: and thereupon the Indenture Trustee shall be released from all further liability with respect to such moneys;and thereafter the Holders of the Notes in respect of which such moneys were so paid to the Owner Trustee shall have no rights in respect thereof except.to obtain payment of such moneys from the Owner Trustee.Upon the setting aside of such moneys, interest shall cease to accrue on the iVotes.'SECnox 11.3.Transfers Not to Acct Indentuie or Trusts.iVo Holder of a Note shall have legal title to any part of the Lease Indenture'Esta't'e..No transfer, by operation of law or otherwise, of any Note or other right, title and interest of any Holder of a Note'n and to the Lease Indenture Estate or hereunder shall operate to terminate this Indenture or the'rusts hereunder with respect to such Note or entitle any successor or transferee of such'Holder to an accounting or to the transfer to it of legal title to any part of the Lease Indenture Estate.SEn lory 11.4.Binding Egect of Sale of Lease Indenture Estate.Any sale or other conveyance of the Lease Indenture Estate or any part thereof by the Indenture Trustee made pursuant to the terms of this Indenture or the Facility Lease shall bind the Holders of the Notes and shall be.effective to transfer or convey all rights, title and interest of the Indenture Trustee.the Owner Trustee and such Holders in'and to the same.No purchaser'or other grantee shall be required to inquire as to the authorization.
necessity, expediency or regularity of such sale or 28 conveyance or as to the application of any sale or other proceeds with respect thereto by the Indenture Trustee.g SE<wioi 11.5.Limitation as to Enforcement of Rights, Remedies and Claims.Nothing in this Indenture, whether express or iinplied, shall be construed to give to any Person.other than the Owner Trustee, the Owner Participant, the Lessee (to the extent the Lessee's consent or other action by the Lessee is expressly provided for), the Indenture Trustee and the Holders of the iVotes.any legal or equitable right, remedy or claim under or in respect of this Indenture or any Note.San'los, 11.6.Notices.Unless otherwise expressly specified or permitted by the terms hereof.all communications and notices given hereunder to the Lessee, the Owner Trustee, the Owner Participant or the Indenture Trustee shall be given in the manner provided in Section 18 of the Participation Agreement.
iVotices by the Indenture Trustee to any Holder of a Note shall be in writing and shall be given in person or by means of telex, telecopy or other wire transmission (with request for assurance of receipt in a manner typical with respect to communications of that type), or mailed by registered or certified mail, addressed to such Holder at the address set forth in the register kept pursuant to Section 4.L Whenever any notice in writing is required to be given by the Indenture Trustee to any Holder of a iVote such notice shall be effective (x)if sent by telex, telecopy or other wire transmission, on the date of transmission thereof, or (y)if sent by mail, three Business Days after being mailed.SccYiow 11.7.Separability of Provisions.
In case any one or more of the provisions of this Indenture or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof and any other application thereof shall not in any way be affected or impaired.Si;<v<<>x 11.8.Benefit of Parties, Successors and Assigns.All representations, warranties.
covenants and iigrcements contained herein shall be binding upon, and inure to the benefit of, the Owner Trustee, the Indenture Trustee and their respective successors and assigns and each Holder of a Note, all as herein provided.Any request, notice, direction, consent, waiver or other instrument or action by any Holder of a Note shall bind the successors and assigns of such Holder and any Holder of a Note issued in transfer or exchange of such iVote.SEcl'loY 11.9.S<<roi<:al of Representations and<Varranties.
All representations and warranties made with respect to the Notes shall survive the execution and delivery of this Indenture and the issue, sale and delivery oF any Notes and shall continue in effect so long as any Note issued, hereunder is Outstanding.and unpaid.San'loY, 11.10.Banl'ruptcy of the Owner Trustee.If (a)the Owner Trustee becomes a debtor subject to the reorganization provisions of the Bankruptcy Code, or any successor provision, (b)pursuant to such reorganization provisions the Owner Trustee is required, by reason of the Owner Trustee being held to have recourse liability directly or indirectly to the Holder of any Note or the Indenture Trustee, to make payment on account of any amount payable as principal or interest on such iVote and (c)such Holder or the, Indenture Trustee actually receives any Excess Amoiint (as hereinafter defined)which reflects any payment by the Owner Trustee on account of clause (b)of this Section, then such Holder or'the Indenture Trustee.as the case may be, shall promptly refund to the Owner Trustee such Excess Amount.For purposes of this Section,"Excess Amount" means the amount by which such payment exceeds the amount which would have been received on or prior to the date of such payment by such Holder or the Indenture Trustee if the Owner Trustee had not become subject to the recourse liability referred to in clause (b)of this Section.SECTION 11.11.Banl;ruptcy of the Owner Participant.
The Indenture Trustee and the Holders of the Notes shall be bound by the provisions of Section 19(f)of the Participation Agreement.
SECTION 11.12.Counterpart Execution.
This Indenture and any amendment or supplement to this Indenture may be executed in any number of counterparts and by the difFerent parties hereto and thereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.
SECTION 11.13.Dating of Indenture.
Although this Indenture is dated for convenience and for the purpose of reference as of the date mentioned, the actual date or dates of execution by the Owner Trustee and the Indenture Trustee are as jndicated by their respective acknowledgments hereto annexed.30 0 4 IN WITNESS WHEREOF, the Owner, Trustee'nd the Indenture Trustee have each caused this Indenture to be duly executed by their respective ofilcers thereunto duly authorized, all as of the date first set forth above.THE FIRsT NATIQNAL BANK oF BosToN, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement dated as of Decem-ber 1, 1986, with Chrysler Financial Corporation By: Assi nt ice P FIRST CITY NATIONAL BANK OF HOU By: satan ice Presid
 
ST.a'E or NEw YoRK Co>:NTv or NEw YORK Ss.: g On the/bQ day of December.1986.before me personally came~IARTIN P.HENRY.to me known.who.being by me duly sworn, did acknowledge.
depose and say that he resides at Boston.~iassachusetts:
that he is Assistant Vice President of THE FIRsT NwTIoNwL BwNK or BosvoN, a national banl'ing association.
described in and which executed the foregoing instrument:
and that he signed his name thereto on behalf of said association by authority of the Board of Directors of said association.(NOThRIAL SEhL J Term Expires: Notary Public DAVID A.SPIVAK Notary Public, State of New York No.31-4693468 QuaMed tn New York County coaualssloa Expire lhseh w, 1wr g
 
STaE OF Vev YORK CouNTY QF NET YoRK~~~On the 46day of December.1986.before me personally came JOHN CHASE III.to me known.who.being by me duly sworn.did acknowledge, depose and say that he resides at Houston, Texas: that he is Assistant~'ice President of FIRST CITY.4hTIONAL BANK OF Hot'sTON, a national banking association.
<described in and which executed the foregoin'g instrument:
and that he signed his name thereto on behalf of said association by authority of the Board of Directors oF said association.
[NOThRIhL SEAL]Term Expires: Notary Public D@~A.SplVAK HotarY Public, State of New York 0 n EXHIBIT A-1 FOR!I OF IiVITIAL SERIES NOTE (DUE JULY 2, 1992)THIS NOTE HAS iVOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AiVD MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IV VIOLATION OF SUCH ACT Nonrecourse Promissory Note, Initial Series (DUE July 2, 1992)Issue Date: December 18, 1986 THE FIRsT NATIoNAL BANK oF BosTQN, not in its individual capacity, but solely as Owner Trustee (the Owner Trustee)under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial corporation (the ocuner Participnnt), hereby promises to pay to EI.PAso FUNDING coRPQRATIoiv, or registered assigns, the principal sum of eight million fifty-nine thousand dollars ($8,059,000) on July 2, 1992 together with interest (computed on the basis of a 360-day year of twelve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Initial Series Note until due and payable, in arrears, at the rate of 8.10%per annum.Payments of principal installments of this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Payment Dates" specified in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 and July 2, commencing July 2, 1987, until the principal amount of this Initial Series Note shall have been paid in full.Capitalized terms used in this Initial Series Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as hereinafter defined).Interest on any overdue principal and premium, if any, and (to the extent permitted by applicable w)any overdue interest shall be paid.on demand, from the due date thereof at the rate of interest annum (computed on the basis of a 360-day year of twelve 30-day months)equal to 1%above the crest rate stated above for this Initial Series iVote for the period during which any such principal, premium or interest shall be overdue.In the event any date on which a payment is due under this Initial Series Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and e6'ect as if made on the date on which such payment was due.All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture) between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sufBcient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; proutded;hotoecer, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture, then'll payments to be made under this Initial Series Note shall be made from payments made by the Lessee under this Initial Series Note in accordance with the Assumption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that in such event it will look solely to the Lessee for such payment.Principal.
premium.if any.and interest shall be payable, in the manner provided in the Indents~on presentment of this Initial Series Note at the Indenture Trustee's Office.or as otherwise providec~the Indenture.
In the nmnner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations have been duly made.This Initial Series Note is one of the Initial Series Notes referred to in the Indenture.
The Indenture permits the issuance of additional series of Notes, as provided in Section 3.5 oF the Indenture, and the several series may be for varying aggregate principal amounts and may have diH'erent maturity dates, interest rates, redemption provisions and other terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes issued and outstanding from time to time under the Indenture.
Reference is hereby made to the Indenture for a statement of the rights oF the Holders of, and the nature and extent of the security for, this Initial Series iVote and of the rights of.and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust created by the Indenture.
to all of ivhich terms and conditions the Holder hereof agrees by its acceptance of this Initial Series Note.This Initial Series Note is subject to purchase by the Owner Trustee as provided in Section 6.S(of the Indenture.
This Initial Series Note is not subject to prepayment in whole or in part.In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the principal of this Initial Series Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the elfect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufficient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms of'he Indenture.
There shall be maintained at the Indenture Trustee's Office a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer.of this Initial Series Note is registrable, as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium.if any, and interest on this Initial Series Note and for all other purposes whatsoever, whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture Trustee shall be aH'ected by notice to the contrary.A-1-2 This Initial Series iVote shall be governed by, and construed in accordance with.the laws of the State of i4ew York.Ix EVivyt:ss KVHEIIEoF, the Owner Trustee has caused this Initial Series iNote to be duly executed w of the date hereof.THF.FinsT NATIQYAL BAYk oF Bosroynot in its individual capacity.but solely as Ouner Trustee under a Trust Agreement dated as of December 1, 1986, with Chrysler Financial Corporation By.Assistant Vice President A-1-3 ASSIGYiIENT Date: December 1S.1'or value received, EL Paso FUxutx(.ConvonwYto>
hereby sells, assigns and transfers to Ftnsv Cled NATI(~h.((.
Baxv nr'o(~smx as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August 1, 1986.as amended and supplen(ented, among Et.P~so F(:io(x(: Conv(n(;n(()x, El Paso Electric Company and said Collateral Trust Trustee, without recourse.the Initial Series iNote to which this Assignment is annexed and all rights thereunder.
EL PASO FUYDIY(.COnPOnAT(AY, By: Vice President Payment Date (monthldaylyear) 7/2/1987 1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/g/1991 7/2/1991 1/2/1992 7/2/1992 SCHEDULE 1 TO THE INITIAL SERIES NOtE (DVE Jt:LV 2.1992)SCHEDl:LE OF PRI.'iCIPAL AiIOBTIZATIO.'i Principal Amount Payable 00.0000000" 670000.00 697000.00 725000.00 754000.00 785000.00 817000.00 850000.00 884000.00 920000.00 957000.00 3 8,059.000 Principal Amount Paid A-1-5
)Qy~',
EXHIBIT A-2 FORM OF INITIAL SERIES NOTE (DUE JULY 2, 1997)THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SEcUMPIEs AGT oF 1933 AND MAY NoT BE TRANsFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTE, INITIAL SERIES (DUE JULY 2, 1997)Issue date: December 18, 1986 THE FIRST NATIONAL BANK OF BosTON, not in its individual capacity, but solely as Owner Trustee (the Ou:ner Tnsstee)under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial corporation, (the ou:ner Participant), hereby promises to pay to EI.PAso FUNDING coRPQRATIoN, or registered assigns, the principal sum of twelve million two hundred ninety-Bve thousand dollars ($12,295,000) on July 2, 1997 together with interest (computed on the basis of a 360-day year of twelve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time to time from'he date of this Initial Series Note until due and payable, in arrears, at the rate of 9.20%per annum.Payments of principal installments of this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Payment Dates" speci6ed in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 and July 2 commencing July 2, 1987 until the principal amount of this Initial Series Note shall have been paid in full.Capitalized terms used in this Initial Series Note which are not otherwise de6ned herein shall have the meanings ascribed thereto in the Indenture (as hereinafter deBned).Interest on any overdue principal and premium, if any, and (to the extent permitted by applicable
)any overdue interest shall be paid, on demand, from the due date thereof at the rate of interest r annum (computed on the basis of a 360-day year of twelve 30-day months)equal to 1%above the interest rate stated above for this Initial Series Note for the period during which any such principal, premium or interest shall be over'due.In the event any date on which a payment is due under this Initial Series Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and efFect as if made on the date on which such payment was due.All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shaH have sufficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder';
provided, hou,ecer, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to See-n 3.9(b)of the Indenture, then all payments to be made under this Initial Series Note shall be made only from payments made by'he Lessee under this Initial Series Note in accordance with the Assumption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Not agrees that in such event it will look solely to the Lessee for such payment.Principal, premium, if any, and interest shall be payable, in the manner provitled in the Indenture, on presentment of this Initial Series Note at the Indenture Trustee's OfRce, or as otherwise provided in the Indenture.
In the manner and to the extent provided in the Indenture, Schedule I hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this'Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations)iave been duly made.This Initial Series Note is one of the Initial Series Notes referred to in the Indenture.
The Indenture permits the issuance of additional series of Notes, as provided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal'amounts and may have different maturity dates, interest rates, redemption provisions and other terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes issued and outstanding from tinie to time under the Indenture.
Reference is hereby made to the Indenture for a statement of the rights of the Holders of.and the nature and extent of the security for, this Initial Series Note and of the rights of.and the nature and extent of the security for.the Holders of the other Notes and of certain rights o the Oivner Trustee, as favell as for a statement of the terms anti conditions of'!ie trust create<1 by Indenture.
to all of which terms and conditions the Holder hereof agrees by its acceptance of t Initial Series Note.This Initial Series Note is subject to purchase by the Owner Trustee as provided in Section 6.S(b)of the Indenture.
This Initial Series Note may be prepaid in whole or in part at any time on,and after January 2, 1992 by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as'provided in the Indenture and at the following prepayment prices (expressed as a percentage of'he unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment:
Twcl vc XI<<a lh Period Bcg>nning Prepay@>en'aisuary 4, Price.1992....,..1993 102:63%101.31 and thereafter at the principal amount thereof, together itvith interest accrued to the prepayment date.This Initial Series Note is not otherwise subject to prepayment in whole or in part.It In case an Inde'nture Event.of Default shall occur aInd be continuing, the unpaid balance of the principal of this Initial Series Note and any other Notes, together with all-accrued by unpaid interest thereon.may.subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture.
be declared or may become due and payable in the manner and with th effect providedIin the Indenture.
A:i
)$1 C.e'4 The lien upon the Lease Indent'ure Estate is subject to being legally discharged prior to the" maturity of tl>is Initial Series Note upon the deposit with, the Indenturel Trustee of cash or certain securities sufBcient to pay this Initial Series iVote when due'r an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series, Note and the Indenturq, in each case in cordance with the terms of the Indenture..
There shall be maintained at the Indenture Trustee's OfBce a register for the purpose of registering transfers and exchanges of Votes in the n>armer provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture.
upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed'y or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series iVote, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest o'n this Initial Series Note and for all other purposes whatsoever.
whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.This Initial Series Note shall be governed by, and construed in accordance with, the laws of the State of New'ork.Ix XVtvxcss XVHFnvov, the Owner Trustee has caused this Initial'Series Note to be duly executed'-as of the date hereof.THE Ftnsr NwJtoY<t.
Bw~vv 0F Bos'row, not in its individual capacity, but solely as Ou:ner Trustee under: a-Trus't Agreement, dated as of Decem-ber 1, 198G, with Chrysler Financial Corporation By: Assistant Vice President A-2-3 ASSIGNMENT Date: December 18, 1 For value received, EI.PAso FUNDING CQRPQRATIoN hereby sells, assigns and transfers to F CIA NATIoNAL BANK oF HoUsTQN as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August 1, 1986, as amended and supplemented.
among EI.PASO FUNDINc CORPoRATIoN, El Paso Electric Company and said Collateral Trust Trustee, without recourse, the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PASO FUNDINC CORPORATION By: Vice President Payment Date (month/davl ear)7/2/1987 1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 1/2/1993 7/2/1993 1/2/1994 7/2/1994 1/2/1995 7/2/1995 I/2/1996 7/2/1996 1/2/1997 7/2/1997 SCHEDULE 1 TO THE INITIAL SERIES NOTE (DUE JULY 2, 1997)SCHEDULE OF PRINCIPAL A~IORTIZATION Principal hmount Payable$0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000.996000.00 1042000.00 1090000.00 1140000.00 1192000.00 1247000.00 1304000.00 1364000.00 1427000.00 1493000 00$12,295.000 Principal Amount Paid A-2-5
~'
EXHIBIT A-3 FORM OF INITIAL SERIES NOTE (DUE JANUARY 2, 2011)THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND iiIAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IiN VIOLATION OF SUCH ACT NQNREcoURsE PRQSIIssoRY NoTE, INITIAL SERIEs (DUE JANUARY 2>2011)Issue date: December 18, 1986 THE FIRsT NATIQNAL BANK QF BosToN, not in its individual capacity, but solely as Owner Trustee (the Oconer Trustee)under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial Corporation (the Oioner Pnrtieipnnt), hereby promises to pay to EI.PAso FUNDINc CoRFoRATIoN, or registered assigns, the principal sum of Fifty-six million forty-six thousand dollars (856,046,000) o'n January 2, 2011, together with interest (computed on the basis of a 360-'day year of twelve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Initial Series Note until due and payable, in arrears, at the rate of 10.375%per annum.Payments of principal installments of this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Payment Dates" specified in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 and July 2, commencing July 2, 1987, until the principal amount of this Initial Series Note shall have been paid in full.Capitalized terms used in this Initial Series Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as hereinafter de6ned).Interest on any overdue principal and premium, if any, and (to the extent permitted by applicable
)any overdue interest shall be paid, on demand, from the clue date thereof at the rate of interest er annum (computed on the basis of a 360-day year of twelve 30-day months)equal to 1%above the interest rate stated above for this Initial Series Note for the period during which any such principal, premium or interest shall be overdue.In the event any date on which a payment is due under this Initial Series Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and efFect as if made on the date on which such payment was due.All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, hfortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Trgstee), shall be made only from the Lease Indenture Estate and-the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to, the extent that the Indenture Trustee shall have suolcient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, hou:euer, that in the event the Lessee shall assume all the obligations of the Owner Trustee.hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture.
then all payments to be made under this Initial Series Note shall be made only from payments made by the Lessee under this Initial Series iVote in accordance with th Assumption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series N agrees that in such event it will look solely to the Lessee for such payment.Principal.
premium.if any, and interest shall be payable, in the manner provided in the Indenture.
on presentnient of this Initial Series Vote at the Indenture Trustee's'OfHce.
or as otherwise provided in the Indenture.
In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d),of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series iVote agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations have been duly made.This Initial Series iVote is one of the Initial Series Notes referred to in the Indenture.
The Indenture permits the issuance of additional series of Notes, as provided in Section 3.0 of the Indenture, and the several series may be'or varying agg'regate p'rincipal amounts and may have different maturity dates, interest rates, redemption provisions and other terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes issued and outstanding from time to time under the Indenture.
Reference is hereby made to the Indenture for a statement of the rights of the Holders of, and the nature and extent of the security for, this Initial Series Note and of the rights of, and the nature and extent of the security for, the Holders of the other iVotes and of certain rights of the Owner Trustee.as well as for a stateinetit of the terms and cottditions of the trust created by t Ittde>>tttre.
to all of which terms and conditions the Holder hereof agrees by its accepta>>ce of t Initial Series iVote.This Initial Series Note is subject to purchase by the Owner Trustee as provided in Section 6.8(b)'f the Indenture and to mandatory prepayment in full as provided in Section 5.2 of the Indenture, such prepayment being without premium but including accrued interest to the date of prepayment, In addition, this Initial Series Note may be prepaid in whole or in part at any time on and after January 2, 1992 by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment:
Twelve Xfontb Period Beginning January'~, 1992"..1993..1994..1995..1996..1997..1998..1999..Prepayment Price 107.78%10.26 106.74 106.23 105.71 105.19 104.67 104.15 Twelve itonth Period Beginning January K 2000.....2001.....2002.2003.....2004.....2005.....2006.....Prepayment Price 103.63%103.11 102.59 102.08 10L06 101.04 100.52 and thereafter at the principal amount thereof, together with interest accrued to the prepayment date.This Initial Series iVote'is not otherwise subject to prepayment in whole or in part.In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of th princioal of this Initial Series iVo'te'and any other iVotes, together with all accrued but unpaid inter A-3-2 thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or'eferred to in the Indenture, be declared or may become due and payable in the manner and with the g ffect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufBcient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture.
in each case in accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's OSce a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner'Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Initial Series Note and for all other purposes whatsoever, whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.This Initial Series Note shall be governed by, and construed in accordance with, the laws of the State of New York.Ir'tvxass Witenroe, the Owner Trustee has caused this Initial Series Note to be duly executed as of the date hereof.T~tv, Fins'.iTlONAL BAXk Ol BOSTON., not in its individual capacity.but solely as Oilier Twister under a Trust Agreement.
dated as of Decein-ber I, 198G.with Chrysler Financial Corporation By: Assistant Vice President ASSIGN~IENT Date: December IS, I For value received.El.PAso FI:>DIx(;ConPovATlox hereby sells, assigns and transfers to F CITy NAa'I()xAL BAil'l'ol.'sToN as Collateral Trust Trustee pursuant to the Collateral Trus Indenture dated as of August I, 1986, as alnended and supplemented, among EL PAso FI:FDIC(: Coin'<iIIA'I'II)i.
El Paso Electric Company and said Collateral Trust Trustee.without recourse.the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PAso FUYDIY(.CQIIPQIIATIQY By: Vice President A-3-4 Payment Date (month/day/year) 7/2/1987 1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 1/2/1993 7/2/1993 1/2/1994 7/2/1994 1/2/1995 7/2/1995 1/2/1996 7/2/1996 1/2/1997 7/2/1997 1/2/1998 7/2/1998 1/2/1999 7/2/1999 1/2/2000 7/2/2000 1/2/2001 7/2/2001 1/2/2002 7/2/2002 1/2/2003 7/2/2003 1/2/2004 7/2/2004 1/2/2005 7/2/2005 1/2/2006 7/2/2006 1/2/2007 7/2/2007 1/2/2008 7/2/2008 1/2/2009 7/2/2009 1/2/2010 7/2/2010 1/2/2011 SCHEDULE 1 TO THE INITIAL SERIES NOTE (DVE JANUARY Q 2011)SgHEDVLE OF PRINCIPAL ABIORTIZATION Princi pal Amount Pavable g 0.0000MO 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 1561000.00 1642000.00 1383000.00 1128000.00 1300000.00 1204000.00 1390000.00 1287000.00 1486000..00 1376000.00 1588000.00 1470000.00 1698000.00 1572000.00 1815000.00
,1996000.00 2801000.00
'2946000.00 3099000.00 3260000.00 3429000.00 3607000.00 3794000.00 3991000.00 4198000.00 1025000.00 0.0000000$56.046.000, Principal dmounl Paid A-3-5 I!~
EXHIBIT B ASSUxlPTIOYi ACBEExlEYT
: The Holders (as defined below)from time to time of the iVotes (as defined below)of The First iVational Bank of Boston, not in its individual capacity, but solely as owner trustee under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial Corporation (in such capacity, the"Issuer")under the Trust Indenture.
Mortgage, Security Agreement and Assignment of Rents (the-Indenture-)
dated as of December 1, 1986 between the Issuer and First City National Bank of Houston.as trustee (the"Trustee").The undersigned, EL PAso ELEGTBlc CoxlpANY, a Texas corporation (the"Obligor").for the purpose of satisfying in part its obligation to make certain payments under that certain Facility Lease dated as of December 1, 1986 between the Issuer and the Obligor (the"Facility Lease").does hereby covenant and agree with the Holders (as defined in the Indenture) from time to time of the iVotes (as defined in the Indenture) as follows: Szcviov 1.The Obligor does hereby agree to, and does hereby, assume unconditionally the payment of the principal of the Notes and of the interest and premium, if any, thereon.at the rates provided in the Notes, when and as the same shall become due and payable, whether at maturity or upon mandatory prepayment or upon declaration or otherwise, according to the terms of the Notes and of the Inde'nture.
SEGT[oN 2.The assumption herein contained shall be binding upon the Obligor, its successors and assigns, and shall remain in full force and effect irrespective of the power or authority of the Issuer to issue the Notes or to execute, acknowledge and deliver the Indenture or the validity of the Notes, or the Indenture, or of any defense whatsoever that the Issuer may or might have to the payment of the Notes (principal, interest or premium), or to the performance or observance of any of the provisions r conditions of the Indenture or any Note, or of the existence or continuance of the Issuer as a legal ity: nor shall said assumption be affected by the merger, consolidation.
or other dissolution of the ier or the sale or other transfer of the property of the Issuer as an entirety, or substantially so.to any other person;nor shall the assumption be discharged or impaired by any act, failure or omission whatsoever on the part of any Holder of any Notes or the Trustee, including, amoiig other such acts.failures and omissions, the following: (a)any failure to present any Note for payment or to demand payment thereof, or to give to the Obligor notice of dishonor and non-payment of any Note when and as the same may become due and payable, or notice of any failure on the part of the Issuer to do any act or thing or to perform or keep any covenant or agreement by it to be done.kept or performed under the terms of the iVotes or the Indenture;(b)any extension of the obligation of any Note, either indefinitely or for any p'eriod of time, or any other modification in the obligations under any Note or the Indenture or of the Issuer thereon or in connection therewith;(c)any act or failure to act with regard to any iVote or the Indenture or anything which might vary the risk of the Obligor;and (d)any action taken under the Indenture and the Notes in the exercise of any right or power thereby conferred or any failure or omission on the part of the Trustee or the Holder of any Note to enforce any right or security given under the Indenture or any Note, or any waiver of, any right or any failure or omission on the part of the Trustee or any Holder of any Note to enforce any right.of any Holder'of any Note against the Issuer;provitled, always, that the specific enumeration of the above mentioned acts, failures, waivers or ssions shall not be deemed to exclude any other acts,, failures, waivers or omissions though not ifically mentioned herein, it being the purpose and intent of this Assumption Agreement that the igation of the Obli":" shall be absolute and unconditional to the extent herein specified and sh;ill B-1 not be discharged, impaired or varied except by the payment of the principal of and interest on any Note and any premium thereon in case of prepayment, and then only to the extent of such payments.San'inc 3.(a)Subject to the requirements of Sections 10(b)(3)(iii) and 10(b)(3)(iv) of t Participation Agreement and to the provisions of paragraph (b)of this Section, nothing containec this Assumption Agreement shall prevent any consolidation or merger of the Obligor with or into ai other corporation or corporations (whether or not afBliated with the Obligor), or successive consolidations or mergers in which the Obligor or its successor or successors shall be a party or parties.or shall prevent any sale, conveyance or lease of all or substantially all the property of the Obligor.to any other corporation authorized to acquire and operate the same;prooided, hou:erer, and the Obligor hereby covenants and agrees, that upon any such consolidation, merger, sale, conveyance or lease.all obligations of the Obligor under this Assumption Agreement on or in respect of any iVote, and the due and punctual performance and observance of all of the covenants and conditions of this Assumption Agreement to be performed by the Obligor, shall be expressly and duly assumed, by an agreement reasonably satisfactory in form and substance to the Trustee, executed and delivered by the corporation (if other than the Obligor)formed by such consolidation, or into which the Obligor shall have been merged, or by the corporation which shall have acquired such property.(b)The Trustee, subject to applicable provisions of the Indenture, may rely upon an opinion of counsel to the Obligor as conclusive evidence that any such merger, consolidation, sale or conveyance complies with the provisions of this Section.Secnoiv 4.The Obligor does hereby consent to all of the terms and conditions of each series of Notes and of the Indenture, and hereby waives any and all rights of notice of any fact or facts or circumstance or circumstances whatsoever and consents to any extension or extensions of time of any payment or payments, or of any other act or thing which any Holder or Holders of any Note or the Issuer may agree to consent to, either expressly, by acquiescence or otherwise, and hereby agrees not to claim or enforce any rights of subrogation or any other right or privilege which might otherwise arise on account of any payment made by it or act or thing done by it on account of or in accordanc with its assumption herein contained, unless and until all of the Notes have been fully paid;discharged.
Scrviox 5.The assumption herein expressed may be transferred or assigned at any time or from time to time and shall be considered to be transferred and assigned upon the transfer of any Note.whether with or without the consent of or notice to the Obligor or the Issuer.The Obligor hereby agrees to execute and deliver such instruments and to do such acts and things requested by the Trustee as shall be reasonably necessary to carry out and eIFectuate the purposes and intents of this Assumption Agreement.
This Assumption Agreement may not be amended or modified in any respect without the prior written consent (evidenced as provided in the Indenture) of the Holders of not less than a majority in principal amount of the Notes Outstanding (as defined in the Indenture);
provided, however, that without the written consent of the Holders of all of the Notes Outstanding, no such amendment or modification shall be efFective which will change any of the provisions of Sections 1, 2, 4 or 5 of this Assumption Agreement.
The Obligor agrees to Ble with the Indenture Trustee a duplicate original of each such consent.Secnow 6.Capitalized terms used herein, but which are not deBned herein, shall have the meanings set forth in Appendix A to the Indenture.
EL PASO ELECTRIC COxlPAaVY ATTEST: By: Title: B-2 EXHIBIT C U iDIVIDED I%a'TEIIEsT SLJPPLESIE!iTAL I<DE'.<TI:IIE Sl;PPLESIE.'iTAL I<DE!<TI:IIE No.dated as of , to the TIIEST I.iDI'.KTI:IIE, ivfoIITcAcE, SEGUIIITY AGIIEESIE.v'T A ID Asslc.ISIENT QF RENTs (hereinafter.
together with supplements theretothe Indenture) dated as of December 1, 1986, between THE FHIST NATIONAL BALI'F BosTni (FNB).not in its individual capacity.but solely as trustee (the Oli:ner Triste<~)under a Trust Agreement.
dated as of December 1, 1986, between FiVB, whose address is 100 Federal Street.Boston.!vfassachusetts 02110, and Chrysler Financial Corporation, and FIIIST CITY NATloxAL BALI'F HoL'sTox, a national banking association (the Indenture Trustee), whose address is First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002.WITNESSETH:
WHEnEAs, in accordance with Section 9(j)of the Facility Lease, the Owner Trustee is obligated.
in certain cases, to cause the Undivided Interest and the Real Property Interest to be, subjected to the lien of the Indenture; and WHEIIEAS, in order to further secure the obligations referred to in the Indenture, the Owner Trustee desires to grant to the Indenture Trustee the security interest and realty mortgage herein provided and the parties hereto desire that the Indenture be regarded (i)to the extent that the Undivided Interest constitutes personal property, as a"security agreement" and as a"financing statement" under the Uniform Commercial Code and (ii)to the extent that the Undivided Interest and the Real Property Interest constitute fixtures or real property, as a realty mortgage;NOw, THEREFOIIE, in consideration of the premises and of other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTIolv 1.1.The Indenture.
This Supplemental Indenture shall be construed as supplemental to amendatory of the Indenture and sliall form a part thereof.an<I the In<leiiture is hereby corporated by reference herein and is hereby ratified, approved and confirme<l.
SEcTroi 1.2.Definitions.
Capitalized terms used herein, but which are not otherwise defined'herein.shall have the meanings set forth in Appendix A to the Indenture.
SEcTIoli 1.3.Recording Inforinntion.
The Indenture was recorded on December, 1986, in Maricopa County, Arizona[describe j[specify other recorded documents)
[specify other places of recordation)
.SEcTIoii 1.4.Governing Laui.This Supplemental Indenture and the Indenture shall, for all purposes, be construed in accordance with and governed by the laws of the State of lVew York except to the extent that the laws of the State of Arizona shall be mandatorily applicable thereto.SECTION 1.5.Seciiritg Interest and Realty ilfortgage.
As further security for the due and punctual payment of the principal of and premium, if any, and interest-on the Notes according to their respective terms and e6'ect and the performance and observanc'e by the Owner Trustee of all the covenants and agreements made by it or on its behalf in the Notes, the Participation Agreement and the Indenture, the Owner Trustee does, by its execution and delivery hereof, hereby grant a security interest in, bargain, convey, warrant, assign, transfer, mortgage, pledge and set over unto the Indenture Trustee, and to its successors and assigns in trust, the following (which shall be a part of the Lease Indenture Estate for all purposes of the Indenture and the other Transaction Documents):
(1)the Undivided Interest and the Real Property Interest, including, without limitation, the Owner Trustee's interest in all Capital Improvements (including any which constitute fixtures under Applicable Law)now existing or which hereafter may become part of the Undivided Interest C-1 (2)all right, title and interest of the Owner Trustee in.to and under (a)the Bill of Sale.(b)the ANPP Participation Agreement and (c)[the Deed and the Assignment of Beneficial Interest[[the ground lease described in Section 10(b)(3)(xiv)of the Participation Agreement[.including, without limitation, all amounts of Rent, insurance proceeds and condemnation.
requisition an~'ther awards and payments of any kind for or with respect to any part of the Lease Indent Estate as contemplated in such documents; (3)all other property of every kind and description, real, personal and mixed.and interests therein now held or hereafter acquired by the Owner Trustee pursuant to any term of any Transaction Document, whether or not subjected to the lien of the Indenture by an indenture supplemental hereto;and (4)all proceeds of the foregoing; but excluding, hou ever, from the Lease Indenture Estate any and all Excepted Payments: and subject, Iiou:ever, to (i)the terms and provisions of the Indenture and (ii)the rights of the Lessee under the Facility Lease.To HwvE AND To Hot.D all the aforesaid properties, rights and interests unto the Indenture Trustee, its successors and assigns, forever, but in trust, nevertheless, for the use and purposes and with the power and authority and subject to the terms and conditions mentioned and set forth in the Indenture.
UPQN CQNDITIQN that, unless and until an Indenture Event of Default shall have occurred and be continuing, the Owner Trustee shall be permitted, to the exclusion of the Indenture Trustee, to possess and use the Lease Indenture Estate and exercise all rights with respect thereto and, without limitation of the foregoing, the Owner Trustee may exercise all of its rights under the documents specified in clause (2)above to the same extent as if its right, title and interest therein had not been assigned to the Indenture Trustee to the extent set forth above, except that the Indenture Trustee shall receive all payments of Assigned Payments and all moneys and securities required to be held by or deposited with the Indenture Trustee hereunder.
The Owner Trustee hereby warrants and represents that it has not assigned or pledged any of'ight, title or interest in and to the Lease Indenture Estate to anyone other than the Indenture Trustee.SEcrioN 1.6.Real Estnte Remcdics.In addition to the remedies specified in the Indenture (including but without limitation Section 6A thereof)or otherwise available pursuant to Applicable Law, to the extent that any portion of the Lease Indenture Estate constitutes fixtures or real property, the Indenture and this Supplemental Indenture shall be, and shall be deemed to be, a realty mortgage and assignment of rents with respect to all items of real p'roperty and fixtures and the Indenture Trustee shall have, to the extent not inconsistent with the Indenture, all the rights, remedies and benefits of a mortgagee of real property under Applicable Law (including, but without limitation, rights'and remedies pursuant to Arizona Revised Statutes Section 33-702.B, or any comparable successor provision) and the Owner Trustee shall be and be deemed to be a mortgagor with respect to such fixtures and real property.SEenoN 1.7.Certain Releases.In case a release from the security and other interests created by Section 1.5 hereof by the Indenture Trustee of a portion of the Undivided Interest shall be necessary in order to enable the Owner Trustee or the Lessee to perform its covenants and agreements set forth in the Transaction Documents or in the ANPP Participation Agreement or the Owner Trustee or the Lessee to carry out any action required by Section 8 of the Facility Lease, the Indenture Trustee shall execute and deliver to, or as directed by, the Owner Trustee or the Lessee an appropriate instrument or instruments provided to the Indenture Trustee by the Owner Trustee or the Lessee (in due form for filing or recording), so releasing a portion of the Undivided Interest, prou'iced, hocceuer, that the Indenture Trustee shall have first received an Officer's Certificate, executed by the Lessee, accompa-nied by an opinion of counsel.each of which shall be to the effect that all necessary-actions have been C-2 e or are being taken simultaneously with such release in connection with the proposed action to comply with the terms of the Indenture and Section 8 of the Facility Lease.SEn'toi 1.8.Severance.
The parties hereto understand and agree that Unit 2 and the Common cilities (including the Undivided Interest), each Capital Improvement and each part thereof is or all be severed, and shall be and remain severed, from the real estate constituting the PVNGS Site and even if physically attached thereto, shall retain the character of personal property, shall be treated as personal property with respect to the rights of all persons whomsoever, shall not be or become fixtures or othenvise part of the real estate constituting the PVNGS Site, and, by virtue of its nature as personal property, shall not be affected in any way by any instrument dealing with the real estate constituting the PVNGS Site.SEcTloN 1.9.Appointment of Co-Tnistees or Separate Triistees.(a)At any time or times, when necessary or prudent or for the purpose of meeting the legal requirements of any jurisdiction in which any part of the Lease Indenture Estate may, at any time, be located, the Indenture Trustee, except as set forth in subsection (b)(6)of this Section 1.9.may, and upon receipt of a Directive shall, appoint one or more Persons to act as co-trustee of all or any such part of the Lease Indenture Estate or to act as separate trustee of any property constituting part thereof, in either case with such powers as may be provided in the instrument of appointment.
and to vest in such Person or Persons any property, title, right or power deemed necessary or desirable, subject to the remaining provisions of this Section 1.9.Except as set forth in subsection (b)(6)of this Section 1.9 the Owner Trustee shall join in any such appointment upon the request of the Indenture Trustee, but such joining will not be necessary for the effectiveness of such appointment.(b)Every separate trustee or co-trustee shall be appointed subject to the following terms: (1)The rights, powers, duties and obligations conferred or iniposed upon any such separate trustee or co-trustee shall not be greater than those conferred or imposed upon the Indenture~~~Trustee, and such rights and powers shall be exercisable only jointly with the Indenture Trustee.except to the extent that.under any laiv of any jurisdiction in which any particular act or acts are to be performed.
the Indenture Trustee sliall be i>>conipetent or uiiqualified to perforni suc)i act or acts, in which event, except as set forth in subsection (b)(6)of t)iis Section 1.9.such ri hts and powers shall be exercised by such separate trustee or co-trustee subject to the provisions of subsection (b)(4)of this Section 1.9.(2)The Indenture Trustee may at any time, by an instrument in writing executed by it, accept the resignation of, and may (and upon the receipt of a Directive, shall)remove any separate trustee or co-trustee appointed under this Section 1.9.(3)No trustee under the Indenture and this Supplemental Indenture shall be liable by reason of any act or omission of any other trustee or co-trustee under this Indenture.
--(4)Except as set forth in subsection (b)(6)of this Section 1.9, no power given to such separate trustee or co-trustee shall be separately exercised hereunder by such separate trustee or co-trustee except with the consent in writing of the Indenture Trustee.(5)The Indenture Trustee shall maintain custody of all money and securities.
(6)Notwithstanding anything contained to the contrary in this Section 1.9, to the extent the laws of any jurisdiction preclude the Indenture Trustee from taking any action hereunder either alone, jointly or through a separate trustee under the direction and control of the Indenture Trustee, the Owner Trustee, at the instruction of the Indenture Trustee, shall appoint a separate trustee for such jurisdiction, which separate trustee shall have full power'and authority to take all action hereunder as to matters relating to such jurisdictio'n without the consent of the Indenture Trustee, but subject to the same limitations in any exercise of his power and authority as those'to which the Indenture Trustee is subject.C-3 (c)Upon the acceptance in writing of such appointment by any such separate trustee or co-trustee, it shall be vested with the estates or property to which its appointment relates as specifIed in the instrument of appointment, subject to all the terms of the Indenture and this Supplemental Indenture.
(<l)Any separate trustee or co-trustee may, at any time.constitute the Indenture Trustee.agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of the Indenture and this Supplemental Indenture on its behalf and in its nanIe.If a separate trustee or co-trustee shall die, become incapable of acting, resign or be renIoved.all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.SEn'IoN 1.10.Separability of Prouisions.
In case any one or more of the provisions of this Supplemental Indenture or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof and the Indenture and any other application hereof and thereof shall not in any way be aH'ected or impaired.SEGTIoN 1.11.Counterpart Execution.
This Supplemental Indenture may be executed in any number of counterparts and by the diff'erent parties hereto and thereto on separate counterparts.
each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNEss WHEIIEoF, the Owner Trustee and the Indenture Trustee have each caused this Indenture to be duly executed by their respective olBcers thereunto duly authorized, all as of the date first set forth above.THE FIIIsT NATIQNAL BAivK oF BosToN, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement dated as of December 1, 1986, with Chrysler FiImncial Corporation 0 By Title: FIIIST CITY NATIONAL BANK OF HOVSTON By THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SEGURITIEs AcT oF 1933 AND MAY NQT BE TRANsFERRED.
SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT Nonrecourse Promissory Note, Initial Series (DUE July 2, 1992)Issue Date: December 18, 1986 THE FIRsT NATloNAL BANK QF BosToN, not in its individual capa'city, but solely as Owner Trustee (the Owner Trustee)under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial corporation (the opener Participant}, hereby promises to pay to Er.Phso FUNDING coRPoRATloN, or registered assigns, the principal sum of eight million Bfty-nine thousand ollars ($8,059,000) on july 2, 1992 together with interest (computed on the basis of a 3604ay year ve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time time from the date of this Initial Series Note until due and payable, in arrears, at the rate of 8.1 o per annum.Payments of principal installments of this Initial Series Note shall be made i" rincipal Amount Payable" and on the"Payment Dates" speci8ed in Schedule 1'hereto.Paymen accrued interest on this Initial Series Note shall be made on each January 2 and July 2, co encing July 2, 1987, until'the principal amount of this Initial Series Note shall have been paid in Capitalized terms used in this Initial Series Note whi e not otherwise deBned herein shall have the meanings ascribed tliereto in the Indenture as hereinafter deGned).Interest on any overdue principal and premium, if an, and (to the extent permitted by applicable law)any overdue interest shall be paid, on demg&l, From the due date thereof at the rate of interest per annum (computed on the basis of a 360-day~f twelve 30-day months)equal to 1%above the terest rate stated above for this Initial Series Note for the period during which any such principal, emium or interest shall be overdue.In the event any date on which a payme is due under this Initial Series Note is not a Business Day, then payment thereof may be m on the next succeeding Business Day with the same force and eEect as if made on the date on whi ch payment was due.All payments of principal, emium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust ture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as t any time amended or supplemented in accordance with the provisions thereof (the Indenture) between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Tutee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation'for the payment thereof except to the extent that the Indenture Trustee shall have sudlcient income or, proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered.under the Indenture or any other Transac'tion Document or for any liability thereunder, provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture, then all payments to be made under this Initial Series Note shall be made only from'payments made by the Lessee under this Initial Series Note in accordance with the hssumption hgreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that in such event it will look solely to the Lessee for such payment.Principal.
premium.if any.and interest shall be payable.in the manner provided in the Ind ire.on presentrrient of this Initial Series Note at the Indenture Trustee's OfRce.or as otherwise pr in the Indenture.
I>>the nianner and to the extent provided in the Indenture.
Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990.in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof.by its acceptance of this Initial Series Note.agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations have been duly made.This Initial Series Note is one of the Initial Series Notes ref o in the Indenture.
The Indenture permits the issuance of additional series of Notes, as p'd in Section 3.5 of the Indenture, and the several series may be for varying aggregat principal amounts and may have different maturity dates.interest rates, redemption provisions t r terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pled o the Indenture Trustee to the extent provided in the Indenture as security for the payme of'the principal of and premium.if any.and interest on this Initial Series Note and all other Not and outstanding from time to time under the Indenture.
Reference is hereby made to the re for a statement of the rights of the Holders of, and the nature and extent of the security for, th Initial Series Note and of the rights of.pnd the nature and extent of the security for, the H rs of the other Notes and of certain rights of the Owner Trustee.as well as for a statement of the tehi7s and conditions of the trust created by the Indenture.
to all of which terms and conditio e Holder hereof agrees by its acceptance of this Initial Series Note.This Initial Series Note is subject to p hase by the Owner Trustee as provided in Section)of the Indenture.
This Initial Series Note subject to prepayment in whole or in part.In case an Indenture Event of Default s all occur and be continuing, the unpaid balance of the principal of this Initial Series Note ny other Notes.together with all accrued but unpaid interest thereon, may, subject to certain righ the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be eclare or may become due and payable in the manner and with the effect provided in the Indentu The lien upon the Lease In nture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufficient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms'f the Indenture.
There shall be maintained at the Indenture Trustee's OfRce a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture.
upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Pri'or to due presentment for registration of transfer of this Initial Series Note.the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium.if any.and interest on this Initial Series Note and for all other purposes whatsoever.
whether or not this Initial Series Note be overdue.and neither the Owner Trustee nor the Indenture t Trustee shall be affected by notice to the contrary.
This Initial Series liote shall be governed by, and construed in accordance with.the laivs of the State of New York.lb IVITNI is WHEIIEOF.the Owner Trustee has caused this Initial Series Note to be duly esecuted as of the date hereof.THE FIIIST NhTIOXAL BALI'F'on<>x.not in its individu;>I capacity.but solely as Ou'ner Tnistec under a Trust Agreement dated as of December 1.1986, with Chrysler Financial Corporation By: Assistant Vice Pres This Note is one of the seri of Notes referred to therein and in', the within-mentioned Ind ture.FIRST CITY NATIONAL BANK OF HOUSTON as Indenture Trustee, BY: Authorized Officer Pavment Date (month/da/year)7/2/1987 1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 SCHEDl:LE 1 TO THE L~m.~L SERiu NOTE (Dt:E Jt:LV 2.1992)SCHEDt.'LE OF PRt'ICIP tL AitOATIZATto'N Principal Amount Paiable$0.0000000 67OOOO.OO 697000.00 725000.00 754000.00 785000.00 817000.00 ssoooo.oo ss4ooo.oo 920000.00 957OOO 0 8.05 Principal dmoum Paid 0
ASSIGNMENT Date: Decen<ber IS.1986 For value received.Et.Pcs<)Ft:iota<;ConPnniYtow hereby sells.assigns and transfers to F<nsv~~C<vy N~v<<iii<.Biiv OP Hnt'svnx as Collateral Trust Trustee pursuant to the Collateral Trust In<lenture dated as of August 1.19SG.as amended and supplen<ented.
an)ong EL Pci<>F<.'x<><x<.
C<uu'<in,n><ii, El Paso Electric Company and said Collateral Trust Trustee.without recourse.the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL Phso FUYDI.'<<'onPonATl<li By: President (f'I I Oi THIs NoTE HAS NQT BEEN REGISTERED UNDER THE SEcl:RITIES AcT oF 1933 AND MAY NQT BE TRANsFERRED.
SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NoNREcoURsE PRoMIssoRY NoTE, INITIAL SERIES (DUE JULY 2, 1997)Issue date: December 18, 1986 THE FIRST NATIQNAL BANK QF BosToN, not in its individual capacity, but solely as Owner Trustee (the Ou;ner Trustee)under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial corporation, (the ou:ner Participant), hereby promises to pay to EL P FUNDING coRPQRATIQN, or registered assigns, the principal sum of twelve million two hundr ty-five thousand dollars ($12.295,000) on July 2.1997 together with interest (computed on the b of a 360-day year of twelve 30-day months)'n the aggregate amount of such principal sum maining unpaid from time to time from the date of this Initial Series Note until due and payabl'ars, at the rate of 9.20%per annum.Payments of principal installments of this Initial Series No shall be made in the"Principal Amount Payable" and on the"Payment Dates" specified i hedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each J and July 2 commencing July 2, 1987 until the principal amount of this Initial Series Note sh been paid in full.Capitalized terms used in this Initial Series No~which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (hereinafter defined).Interest on any overdue principal and prem m.any, and (to the extent permitted by applicable
~~~law)any overdue interest shall be paid, on dern rom the due date thereof at the rate of interest er annum (computed on the basis of a 360-day>>ear of twelve 30-day months)equal to 1%above the terest rate stated above for this Initial'te for the period during which any such principal.
premium or interest shall be overdue.In the event any date on which yment is due under this Initial Series Note is not a Business Day, then payment thereof may be m on the next succeeding Business Day with the same force and efFect as if made on the date on which ch payment was due.All payments of principal, ium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust I enture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment'thereof except to the extent that the Indenture Trustee shall have sufBcie'nt income or proceeds from the Lease Indenture Esfate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor,,except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable.to the Holder hereof for any amounts payable under this Initial Series Note or for any'erformance to,be rendered under the Indenture or any.other Transaction Document or for any liability thereunder; procided, hou:ever, that in the event the Lessee shall assume all the obligations of the Owner'Trustee hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture, then all payments to be'made under this Initial Series Note shall be made r, only from payments made by the Lessee under this Initial Series Note in accordance with the AsstinIption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that in such"event it will look solely to the Lessee for such payment.Principal.
premium.if any.and interest shall be payable.in the manner provided in the Ind on presentment of th'is Initial Series Note at the Indenture Trustee's OfIIce.or as otherwise prov n th<<l>>deiI ture.In the manner and to the extent provided in the Indenture.
Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30.1990.in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees.by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in a event transfer or otherwise dispose of this Initial Series Note unless and until all such notations een duly made.This,Initial Series Note is one of the Initial Series Notes referre to in the Indenture.
The Indenture pernlits the issuance of additional series of Notes.provided in Section 3.6 of the Indenture.
and.the-several series may be for varying aggrega cipal amounts and may have difFerent maturity dates, interest rates, redemption provisions and o er terms.The properties of the Owner Trustee included in'the Lease Indenture Estate are dged to the Indenture Trustee to the extent provided in the Indenture as security for the pay e principal of and premium.if any." and interest on this Initial Series Note and all other Notes ed and outstanding from time to time under the Indenture.
Reference is hereby made to tile Indenture for a statement of the rights of the Holders of.and the nature and extent of the security~his Initial Series Note and of the rights of.and the nature and extent of the security for.the olders of the other Notes and of certain rights of'he Owner Trustee.as well as for a statement o he rms and conditions of the trust created bv he Indenture.
to all of which terms and conditions older hereof agrees by its acceptance Initial Series Note.This Initial Series.v'ote is subject to pu by the Owner Trustee as provided in Section G.S(b)of the Indenture.
This Initial Series No may e prepaid in whole or in part at any time on and after January 2, 1992 by the Owner Trust follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the wing prepayment prices (expressed as a percentage of the unpaid principal amount hereo together with interest accrued to the date fixed for prepayment:
Twelve XInnth Perind Beginninr.
Prepuv menI Junuun n Price 1992 1993 102.63%101.31 and thereafter at the principal amount thereof.together with interest accrued to the prepayment date This Initial Series Note is not otherwise subject to prepayment in whole or in part.In case an Indenture Event of Default shall occur and be continuing.
the unpaid balance of the principal of this Initial Series Note and any other Notes.together with all accrued by unpaid interest thereon.may.subject to certain rights of the Owner Trustee or the Owner Participant contained or ref'erred to in the Indenture.
be declared or may become due and payable in the manner and with the effect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities suScient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture.
in each case irl~~~~~accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's Once a register for the purpose of registe'ring transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable.
as provided in the Indenture.
upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed.
together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Initial Series Note and for all other purposes whatsoever.
whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.This Initial Series Note shall be governed by, and construed in ac ance with.the laws of the State of New York.ly WniEss KVHEnEOF.the Owner Trustee has caused this I as of the date hereof.ries Note to be duly executed THE ATlOYAL BAYK OF BO'i7oi.not in its.indivi capacity, but solely as Ou:nrr Triistee~~~der a Trust Agreement.
dated as of Decem-19S6.with Chrysler Financial Corporation Bi Assistant Vice Presi
~~This Note is one of the ser i of Notes referred to therein the within-mentioned Ind ture.0 and in FIRST CITY NATIONAL BANK OF HOUSTON as Indent e Trustee, BY: Authorized Officer Payment Date (month/dav/
ear)7/2/1987 I/2/1988 7/2/1988 I/2/1989 7/2/1989 I/2/1990 7/2/1990 I/2/1991 7/2/1991 I/2/1992 7/2/1992 I/2/1993 7/2/1993 I/2/1994 7/2/1994 I/2/1995 7/2/1995 I/2/1996 7/2/1996 I/2/1997 7/2/1997 TO THE INiTlhL$EAlES NOTE (DUE JW.T 2, 1997)SCHEDt:LE OF PAJNCJPhL hhfOATlZhTlON Principal hmount Pa>ahle$0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0,0000000 0.0000000 0.0000000 0.0000000 0.0000000 O.N00000.99600 00 1042 109000 0 11&0000.00 119~0.00 47000.00 3 4000.00 64000.00 1427000.00 1493000 00 P19.293.000 Principal dmouai Paid gL 0 ASSIGNMENT Date: December 18, 1986~~For value received, EI.PAso FUNDING CoRPoRATIoN hereby sells.assigns and transfers to FIRsT CIA NATIoNAI.BANK QF HQUsToN as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August 1.1986, as amended and supplemented.
among EI.PAso FUNDING CoRpoRATIoN, El Paso Electric Company and said Collateral Trust Trustee, without recourse, the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PASO FUNDING CORPORATION resident
~h'1 0 I THIs NoTE Hhs NoT BEEN REctsTERED UNDER THE SEcQRITIEs Acr oF 1933 AND MAY NoT BE TRANSFERRED.
SQLD QR OFFERED FQR SALE IN VIOLATION oF SUcH AcT NoNREcoURsE PRQMIssoRY NoTE.INITIAL SEMEs (DIJE JANUARY R, 201 1)Issue date: December 18.1986 THE FIRST NATIONAL BANK OF BosTOIu, not in itS individual capacity, but solely as Owner Trustee (the Ou:ner Trustee)under a Trust Agreement dated as of December 1, 1986 with Chrysler Financial corporation (the chaner Participant), hereby promises to pay to EI.P o FUNDINc coRpoR~TIoN, or registered assigns, the principal sum of Fifty-six million forty-six t dollars ($56,046,000) on January 2, 2011, together with interest (computed on the basis of a day year of twelve 30-day months)on the aggregate amount of such principal sum remaini unpai from time to time from the date of this Initial Series Note until due and payable, in arre e rate of 10.37o%per annum.Payments of principal installments of this Initial Series Note shal made in the"Principal Amount Payable" and on the"Payment Dates" specified in Schedul hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 a, commencing july 2, 1987, until the.principal amount of this Initial Series Note shall have be'd in full.Capitalized terms used in this Initial Series No which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture ereinafter defined).Interest on any overdue principal and prem, if any, and (to the extent permitted by applicable
~~~~~~law)any overdue interest shall be paid, on dern om the due date thereof at the rate of interest er annum (computed on the basis of a 360-day year of twelve 30-day months)equal to 19o above the nterest rate stated above for this Initial s ote for the period during which any such principal.
'premium or-interest shall be overdue.In the event any date on which yment is due under this Initial Series Note is not a Business Day, then payment thereof may be on the next succeeding Business Day with the same force and efFect as if made on the date on which ch payment was due.All payments of principal.
ium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust I nture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sufBcient income or proceeds from the Lease Indenture Estate to make such payments in accordance
'with the terms of Article V of the Indenture.
The Holder hereof;by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided.and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any per'formance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; prooided, hou:ever, that'in the event the Lessee shall assume all the obligations of the Owner Trustee" hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture.
then all payments to be made under this Initial Series Note shall be made only from payments made bv the Lessee under this Initial Series Note in accordance with the Assumption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that in such event it will look solely to the Lessee for such payment.Prittcip;tl.
premiunt.if any.and interest shall be payable.in the manner provided in the In re.on prese>>tmc ttt of tltis Initial Series Note at tlte Indenture Trustee's OFicc.or as otltrrvvise proi ided itl the Indenture.
In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990.in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof.by its acceptance of this Initial Series Note, agrees that each payment receivedby it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof.that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in event transfer or otherwise dispose of this Initial Series Note unless and until all such notation.een duly made.This Initial Series Note is one of the Initial Series Notes referr d to in the Indenture.
The Indenture permits the issuance of additional series of Not.provided in Section 3.5 of the Indenture, and the several series may.be for varying aggreg'ncipal amounts and may have different maturity dates.interest rates, redemption provisi ns and ther terms.The properties of the Owner Trustee included in the Lease Indenture Estate a edged to the Indenture Trustee to the extent provided in the Indenture as security for the pa the principal of and premium.if anv:.~and interest on this Initial Series Note and all other Note'ued and outstanding from time to time under the Indenture.
Reference is hereby made to~Indenture for a statement of the rights of the Holders of.and the nature and extent of the security~.
this Initial Series Note and of the rights of.and the nature and extent of the security for.t Holders of the other Notes a'nd of certain rights of the Owner Trustee.as well as for a statement th terms and conditiotts of the trust created by the Indetttttre.
to all of which terms and condition e Holder hereof agrees by its acceptance iis Initial Series Note.Tltis Initial Series Vote is subject to se by the Owner Trustee as provided in Section g.(b)of the Indenture and to ntandatory prepaym t in full as provided in Section 5.of the Indenture.
such prepayment being without premiu ut including accrued interest to the date of prepayment.
In addition.this Initial Series Note may repaid in whole or in part at any time on and after January.2.
1992 by the Owner Trustee as f llows: pon the giving of not less than 30 days'otice as provided in the Indenture and at the fol prepayment prices (expressed as a percentage of the unpaid principal amount hereof).toget with interest accrued to the date Bxed for prepayment:
Twelve lfonth Period Beginning Janoan 5 1992.....'........
1993.........:...
1994.............
1995.............
1996.............
1997.............
1998.............
1999.............
Prepayment Price 107.787o 10(.26 106.74 106.23 105.71 105.19 104.67 104.15 Tu'elve llonth Period Beginning 2000.....2001.;...2002......2003.....2004.....2005.....2006.....PrepayInent Price.103.63%103.11 102.59 102.08 101.56 101.04 100.52 and thereafter at the principal amount thereof.together with interest accrued to the prepayment date.This Initial Series Note is not otherwise subject to prepayment in whole or in part.In case an Indenture Event of Default shall occur and be continuing.
the unpaid balance of the principal of this Initial Series Note and any other Notes.together with all accrued but unpaid i t thereon.mav.subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture.
be declared or mav become due and payable in the manner and with the efFect provided in the Indenture.
~~~~The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufRcient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Oivner Trustee under this Initial Series Note and the Indenture.
in each case in accordance with the terms of the Indenture.
There shall be mainlined at the Indenture Trustee's OFice a register for the purpose of registering transfers and exchanges of Notes-in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable.
as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner Trustee and the Indenture Trustee may treat t erson in whose name this Initial Series Note is registered as the owner hereof for the purpose o ng payments of principal of and premium.if any.and interest on this Initial Series Note and for a ther purposes whatsoever.
whether or not this Initial Series Note be overdue, and neither t Oivner Trustee nor the Indenture Trustee shall be afFected by notice to the contrary.This Initial Series Note shall be governed by, and cons ed in accordance with.the laws of the State of New York.lx Wrriass%'oencov, the O~ner Trustee has caused t nitial Series Note to be duly executed as of the date hereof.g THE Ftasv N.a'toi.~t.
B~iv, or Bosvni.not in its ndividual capacity.but solely as O~cncr Trustee under a Trust Agreement.
dated as of Deceni-ber 1.19S6.with Chrysler Financial Corporation By: Assistant Vice re n This Note is one of the seri of Notes referred to therein and in the within-mentioned Ind ture.FIRST CITY NATIONAL BANK OF HOUSTON as Indentu e Trustee, BY: Authorized Officer Pavment Date imonth/dav/i ear)7/2/1987 I/2/1988 7/2/1988 I/2/1989 7/2/1989 I/2/1990 7/2/1990 I/2/1991 7/2/1991 I/2/1992 7/2/1992 I/2/1993 7/2/1993 I/2/1994 7/2/1994 I/2/1995 7/2/1995 I/2/1996 7/2/1996 I/2/1997 7/2/1997 I/2/1998 7/2/1998 I/2/1999 7/2/1999 I/2/2000 7/2/2000 I/2/2001 7/2/2001 I/2/2002 7/2/2002 I/2/2003 7/2/2003 I/2/2004 7/2/2004 I/2/2005 7/2/2005 I/O/2006 7/2/2006 I/2/2007 7/2/2007 I/2/2008 7/2/2008 I/2/2009 7/2/2009 I/2/2010 7/2/2010 I/2/2011 SCHEDULE I'ro THE INrTlAL SERFS NOTE (DUE JANUARY 2v 2011)SCHEDULE OF PRlNiClPAL hMORTIZATlON Principal Amount Pavable$0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0.0.0.0.0, 1561000.00 1 42000.00 383000.00 1128000.00 1300000.00 1204000.00 1390000.00 1287000.00 1486000.00 1376000.00 1588000.00
'1470000.00 1698000.00 1572000.00'815000.00 1996000.00 2801000.00 2946000.00 3099000.00 3260000.00 3429000.00 3607000.00 3794000.00 3991000.00 4198000.00 1025000.00 0.0000000$56.046.000 Princi pa)dmounl Paid
~'l, ASSIGNS f EVI'ate: December IS.19S6 For value received.Et.P.xsn Fz'iotas.Conpon.into~
hereby sells.assigns and transfers to Fmsv~~~Clv>N.a'naia>.
B~iv.OF Ho<s7ox as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August 1.1966.as amended and supplen>ented.
among EL Pc~()FL'yDli~: C<un'iu:i'i'n>i.
El Paso Electric Con>pany a>>d said Collateral Trust Trustee.ivithout recourse.the Initial Series iNote to which this Assignment is annexed and all rights thereunder.
Et.P~so Ft:iotir: ConponATIAi I/~~/(J'y Vice President r
~1 COLLATERAL TRUST INDENTURE dated as of August 1, 1986 Among EL PASO FUND I NG CORPORAT I ON g EL PASO ELECTRIC COMPANY and F IRST CITY NAT IONAL BANK OF HOUSTON~as Trustee Providing for the Issuance from Time to Time of Securities To,Be Issued in One-.or More, Series I PALO'ERDE;NUCLEAR GENERATING STATION d, 1,
 
EL PASO FUNDING CORPORATION EL PASO ELECTRIC COMPANY Reconciliation and tie between Indenture dated as of August 1, 1986 and Trust Indenture Act of 1939 Section of Act 310 (a)=(l)(2)(3)(4)(b),.'c)311(a)(b)(c.)312 (a)(b)(c)313 (a)'313 (b)(1)(2)(c)(d)314 (a)(b)(c)(1)(2)'(3)(d)(1)(2)(3)(e)3'15(a)(1)
(2)Section of Indenture 9.09 9.09 Znapplicable Inapplicable 9~08 g 9~10 (a')g 9.10 (d), 9.10 (e), 9.11 Inapplicable 9~13 Inapplicable 10.01 10.02(a)10.02 (b)10.02 (c)10.03 (a)10.03(b)(1) 10.03 (b)10.03(a)&(b)10.,03(c)10.04 5.06 1.02 1'2 Inapplicable Inapplicable Inapplicable Inapplicable 1.02 9.01(a)(1) 9.01(a)(2) 02 1.CHRYSLER.1106.53: 1 Section of Act Section of Indenture 315(a)(last clause)(b)(c)(d)(1)(2)(3)(e)316 (a)(1)(A)(~)(2)(a)(last sentence)(b)317 (a)(1)(2)(b)318 (a)9.01(a)(2)9'2 9.01(b)9.01(c)(1)9.01(c)(2)9.01(c)(3)8.10 8~07 8.08 Inapplicable 1.01 (" Outstanding")8.11 8.05(a)8.05 (d)5.03 9.14 (c)(2)1.07 NOTE: This reconciliation and tie shall not, for any pur>>be deemed to constitute a part of the Indenture.
1021.CHRYSLER.1106.53: 1 e
?r TABLE OF CONTENTS~~ECITALS~~~~~~Pacae~~~~~~1 GRANTING CLAUSES~~~~~~2 Section Sect:ion Section Section Section 1.01.1.02.1.03.1.04.1.05.Section-Section Section Section Section Section Section-Section 1.06.1.07.1.08.1.09''0.1.11.1'2.1.13.ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
r Definitions.
Compliance Certificates*
and Opinions.Form of Documents Delivered to Trustee.Acts.of Holders.Notices, etc., to Trustee, El Paso and Company..Notices to Holders;Waiver.Conflict with Trust Indenture Act:.Effect of Heading and Table of Content's.
Successors and Assigns.Separability Clause.Benefits of Indenture:.
Governing Law.Legal Holidays.~~3~~3.10.11.12.13.13.14.14.14..1'4.14.15.15 ARTICLE THO THE SECURITIES
.15 Section 2.01.Section 2.02.Section 2.03.Section 2.04.Section Section Section Section Section 2~05~2.06.2.07.2.08.-'2~09..Section 2.10.Section 2.11.Section 2.12.Section 2.13.r Forms Generally.
Form of Trustee's Authentication.
Amount Unlimited; Issuable in Series;Limitations on Issuance.Authent:ication and Delivery of'ecurities.
Form and Denominations.
Execution of Securities.-.
Temporary Securities....
Registration, Transfer.and.Exchange.
Mutilated, Destroyed, Lost and Stolen Securities.
Payment of Interest;Interest Rights Preserved.-
Persons Deemed Owners.Cancellation.
Dating of Securities;, Authentication.
.15.15.16.18.19.20.20.'.21.22.23.24.25.25 21.CHRYSLER.1106.53: 1 TABLE OF CONTENTS, Continued Section 2.14.Section 2.15.Source of Payments: Rights and Liabilities of Lessors and Equity Investors.
~~~~~~~~~~~~~Sale of Securities; and Application of Proceeds from the Sale of Securities.
Pacae.25.26 ARTICLE THIGH PROVISIONS AS TO PLEDGED PROPERTY.26 Section 3.01.Section 3.02.Section 3.03.Section 3.04.Section 3.05.Holding of Pledged Securities.
Disposition of Payments on Pledged Property.Exercise of Rights and Powers Under Pledged Lessor Notes and Lease Indentures.
Certain Actions in Case of Judicial Proceedings.
Cash Held by Trustee Treated as a Deposit.~~~~~~~~~~~~~.26~27.27.28.28 ARTICLE FOUR WITHDRAWAL OF COLLATERAL.
~~~~~~~Section 4.01.Section 4.02.Withdrawal of Collateral.
Reassignment of Pledged Lessor upon Payment.~~~~~~Notes~~~~~~28 ARTICLE FIVE Section 5.01.Section Section Section Section Section Section Section 5.04.5.05.5.06.5.07.5.08.5.09.5.10.Section 5.02.Section 5.03.COVENANTS~~~~~~~~~~~~~~Payment of Principal, Premium (i f any)and Interest.Maintenance of Office or Agency.Money for Security Payments to be Held in Trust.Maintenance of Corporate Existence.
Protection of Pledged Property.Opinions as to Pledged Property.Performance of Obligations Negative Covenants Administration of Principal Instruments Annual Statement as to Compliance.
~'~~.29.29~29.30.30.31.32.32~33.35 1021.CHRYSLER.1106.53: 1-li-0 h TABLE OF CONTENTS,.Continued ARTICLE SIX REDEMPTION OF SECURITIES pacae.36 Section 6.01.Section 6.02.Section 6.03.Section 6.04.Section 6.05.Section 6.06.Notice to Trustee of Redemption.
Selection by Trustee of Securities to Redeemed.Notice of Redemption.
Deposit of Redemption Price.Securities Payable on Redemption Date Securities Redeemed in Part.be.36.36.37~38~~38.39 ARTICLE SEVEN SINKING FUNDS..;;.......,....39 Section 7.01.Section 7.02.Sink'ing Funds for Securities.
.......39 Selection by Trustee of Securities to be Redeemed Through Operation of Sinking F unde~~~~~~~~~~~~~~~~~~~40 ARTICLE EIGHT EVENTS OF DEFAULT;REMEDIES........4 1 Section 8.01.ection 8.02.Section 8.03.Section 8.06.Section 8.07.Section 8.08.Section-8;09.Section 8.10.Section 8.11.Section 8.12.Section 8.13.Section 8.04.Section 8.05., Events of Default.Acceleration of Maturity;Rescission and Annulment.
Trustee's Power of Sale of Pledged Property;Notice Required;Power to Bring Suit.Incidents of Sale of Pledged Property.Judicial Proceedings Instituted by Trustee Securityholders May Demand Enforcement of Rights by Trustee.Control by Securityholders.
Waiver=of Past Defaults...Securityholder May Not Bring Suit Exc'ept-under Certa'in Conditions.
Undertaking To Pay Court Costs.Right of Securityholders To Receive Payment Not To Be Impaired.Application of Moneys Collected by Trustee.~~~~~~~~~~~~~~~'Securities Held by Certain Persons Not To Share in Distribution.
.41.43 ,44.45.46.49.49.,50.50'-'51.52.52.53" 02 1.CHRYSLER.1'106.53 1*-iii-TABLE OF CONTENTS, Continued Section 8.14.Section 8.15.Waiver of Appraisement, Valuation, Stay, Right to Marshalling.
Remedies Cumulative; Delay or Omission Not a Waiver.0.54~~54 ARTICLE NINE Section 9.01.Section 9.02.Section 9.03.Section 9.04.Section 9.05.Section 9.06.Section 9.07.Section 9.08.Section 9.09.Section 9.10.Section 9.11.Section 9.12.Section 9.13.Section 9.14.THE TRUSTEE Certain Duties and Responsibilities.
Notice of Defaults.Certain Rights of Trustee.Not Responsible for Recitals or Issuance of Securztz.es.
May Hold Securities.
Funds May Be Held by Trustee or Paying Agent;Investments.
Compensation and Reimbursement Disqualification; Conflicting Interests.
Corporate Trustee Required;Eligibility.
Resignation and Removal;Appointment of Successor.
~~~~~~~~~~~~~~Acceptance of Appointment by Successor.
Merger, Conversion, Consolidation or Succession to Business.Preferential Collection of Claims against any Obligor.Maintenance of Agencies..55.55.56.56.57.58.58.59.59.65.66.67.68.72 ARTICLE TEN SECURITYHOLDERS
'ISTS AND REPORTS BY TRUSTEE AND EL PASO.74 Section 10.01.Section 10.02.Section 10.03.Section 10.04.El Paso to Furnish Trustee Names and Addresses of Securityholders.
Preservation of Information; Communications to Securityholders.
Reports by Trustee.Reports by El Paso..74.74.76.78 1021.CHRYSLER.1106.53: 1-iv TABLE OF CONTENTS, Continued Pacae TICLE ELEVEN SUPPLEMENTAL INDENTURES
..........
7 9 , Section 11.01.Section 11.02.Section 11.03.Section 11.04.Section 11.05.Section 11.06.Section 11.07.Supplemental Indentures Without Consent of Securityholders.
Supplemental Indenture With Consent of Securityholders.
Documents Affecting Immunity or'ndemnity.
~~~~~~~~~~~~~~Execution of Supplemental Indentures..
Effect of Supplemental Indentures.
Conformity with Trust Indenture Act.Reference in Securities to Supplemental Indentures.
.79.80.81.81.82.82.82 ARTICLE TWELVE Sect:ion 12.01.Sect'.ion.
12.02.DEFEASANCE
.................82 Payment of Indebtedness; Satisfaction and Discharge of this Indenture.
.....82 Application of Deposited Money.....,..84 TICLE THIRTEEN RELEASE OF FUNDS BY THE TRUSTEE FOR PAYMENT OF THE PLEDGED LESSOR NOTES AND RELEASE AND SUBSTITUTION OF PLEDGED PROP,ERTY..................
84 Section 13.01.Conditions Precedent to Release of Funds by the Trustee for Payment of-the Pledged Lessor Notes............84 ARTICLE FOURTEEN SUNDRY PROVISIONS.
Section 14-..01.Execution in Counterparts.
PARTIES~~~~~~~~~~~~~~~~~~~~~EXHIBIT A Requirements for Pledged Lessor Notes, Indentures, Leases and Participation Agreements
~~Lease.85.85.'85.90'21, CHRYSLER.1106..53: '1,~~
1 0, l p COLLATERAL TRUST INDENTURE, dated as of August 1, 1986, among EL PASO FUNDING CORPORATION, a Delaware corporation (hereinafter called the Company), having its principal office and mailing address at Corporation Trust Center, 1209 Orange Street, lilmington, Delaware 19801, EL PASO ELECTRIC COMPANY, a Texas corporation, having its principal office and mailing address at 303 North Oregon Street, El Paso, Texas 79901 (hereinafter called El Paso), and FIRST CITY NATIONAL BANK OF HOUSTON, a national banking association, as Trustee (hereinafter called the Trustee), having its corporate trust office at First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002.RECITALS WHEREAS, the Company has duly authorized the creation of an issue of its debentures, notes or other evidences of indebtedness to be issued in one or more serie's (the Securities) up to such principal amount or amounts as may from time to.time be authorized in accor-dance with the terms of this Indenture arid ta'ecure the Securities and to provide for the authentication and de'givery.
thereof by the Trustee, the Company has duly authorized the'execution and delivery of this Indenture; and WHEREAS, all acts necessary to make this Indenture a valid instrument for the security of the, Securities, in accordance with its and their terms, have been done;NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, to secure~~he payment of the principal of, premium (if any)and interest on all he Securities authenticated and delivered hereunder and issued by the Company and outstanding, and the per'formance of the covenants therein and herein contained, and in co'nsideration of the premises and of the covenants herein contained and of the purchase of the Securities by the holders thereof, and of the sum of one dollar ($1.=00)paid to the Company by the Trustee at or before the'delivery hereof, the receipt whereof-is.hereby acknowledged, the Company by'these presents does grant, bargain., sell, release, convey, assign, pledge, transfer,.mortgage, hypothecate, and confirm unto the Trustee all and=singular the.f ol lowing (which collectively are hereinafter called the Pledged Property), excluding, in any event, any.moneys which are specifically stated herein not to constitute.
part of the Pledged Property, to wit: 'CLAUSE FIRST All Pledged Lessor Notes (as hereinafter defined)as shall be actually pledged.and,:assigned by the Company to the Trustee, together with the interest.of, the Company (if any}in the Lease Indentures (as hereinafter defined)securing said Lessor Notes, pursuant to the Series'Supplemental Indentures or other supplemental 021.CHRYSLER.1106.53: 1~~~
indentures to be executed and delivered as provided in this Indenture.
CLAUSE SECONDAll right, title and interest of the Company in, to and under any agreements with respect to commitment fees or other amounts payable by El Paso entered into between El Paso and the Company in connection with the issuance and sale of any series of Securities, if actually assigned by the Company to the Trustee pursuant to a Series Supplemental Indenture or other supplemental indentures to be exe-cuted and delivered as provided in this Indenture.
CLAUSE THIRD All the proceeds received by the Company from the sale of the Securities, all the tolls, rents, issues, profits, products, rev-enues and other income of the property subjected or required to be subjected to the lien of this Indenture, and all the estate, right, title and interest of every nature whatsoever of the Company in and,,', to the same and every part thereof.CLAUSE FOUREH Any property, including cash, that may, from time to'herea f ter be sub j ected to the lien and/or pledge hereof b Company or which pursuant to any provision of this Indenture o y Series Supplemental Indenture or other supplemental indentures to be executed and delivered as provided in this Indenture may become sub-jected to the lien and/or pledge hereof;and the Trustee is hereby authorized to receive the same at any time as additional security hereunder.
Such subjection to the lien hereof of any such property as additional security may be made subject to any reservations-, limita-tions or conditions which shall be set forth in a written instrument executed by the Company and/or by the Trustee respecting the scope or priority of such lien and/or pledge or the use and disposition of such property or the proceeds thereof.TO HAVE AND TO HOLD the Pledged Property unto the Trustee and its successors and assigns forever subject to the terms of this.Indenture, including, without limitation, Section 12.01.I'enefit and security of the holders from time to time of all the Securities authenticated and delivered hereunder and issued by the Company and outstanding, without any priority of any one Security over any other.1021.CHRYSLER.1106.,53: 1.
AND UPON THE TRUSTS and subject to the covenants and condi-tion's hereinafter set forth.0 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
SECTION 1.01.Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1)the terms defined in this Article have the mean-, ings assigned to them in this Article, and include the-, plural as well as the singular;(2)all other terms used herein which are defined in the Trust Indenture Act (as hereinafter defined),, either directly or by reference therein, have the meanings assigned to them therein;(3)all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (4)all reference in this Indenture to designated"Articles","Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Indenture; and (5)the words"herein","hereof" and"hereunder" and other words of similar import refer-to this Indenture as a whole and not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Nine, are defined in that Article."Act".when used with respect to any Holder has the, meaning specified in Section 1.04=.'Af f iliate" of any specified Person means any other Person directly or indirectly controlling or contxolled by or under direct or indirect common control with such specified Person.For the pur-poses of this definition,"control," when used.with respect to any specified Person;.means the power to direct the management and-policies of such Person, directly.or-indirectly, whether through the ownership of voting securities, by contract or oth'erwise; and the I 021.CHRYSLER.1106.53: 1 terms"controlling" and"controlled" have meanings correlative to the foregoing."Authorized Agent" means any Paying Agent or Sec Registrar."Authorized Officer" shall mean any officer of the Trustee or any other individual who shall be duly authorized by appropriate corporate action on the part of the Trustee to authenticate Securities."Board of Directors" means the board of directors of the Company, when used with respect to the Company, and either the board o f directors, or any committee of that board duly authorized to act for it hereunder, when used with respect to El Paso."Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or El Paso, as the case may be, to have been duly adopted by the Board of Directors of such entity and to be in full force and effect on the date of such certification, and delivered to the Trustee."Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York, New York, the City of Boston, Massachusetts, the City of El Paso, Texas or the City of Houston, Texas are autho-rized by law to remain closed."Change" with respect to any instrument means any co amendment, waiver, approval, notice or direction or the execu grant or giving of any thereof."Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body per-forming such duties on such date."Company" means the Person named as the"Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this indenture, and thereafter"Company" shall mean such successor corporation."Company Request" and"Company Order" mean, respectively, a written request or order signed in the name of the Company by its President or one of its Vice Presidents, and by its Treasurer, Secretary, or one of its Assistant Treasurers or Assistant Secretaries, and'delivered to the Trustee.-1021.CHRYSLER.1106.53: 1-4 "Corporate Trust Office" means the principal office of the Trustee at which at any particular time corporate trust business of the Trustee shall be administered, which at the date of this Indenture is First City Financial Center, 1301 Fannin Street, 21st loor, Houston, Texas 77002: Attention of Corporate Trust Department."El Paso" means El Paso Electric Company, a Texas corpora-tion,.and, subject to the provisions hereof, its successors and assigns."Equity Investor" means any Equity Investor identified in a Schedule to a Series Supplemental Zndenture, until a successor or assignees thereof shall have become such pursuant to the applicable provisions of the Participation Agreement to which such Equity Investoris a party, and thereafter"Equity Investor" means such suc-cessor or assignees;"Equity Investors" means each and every Equity Investor.F 01'Event of Default" has the meaning specified in Section"Extension Letter" means the Extension Letter, to be dated the date of issue of a Pledged Lessor Note and addressed to the=Trustee by the parties to the Participation Agreement, extending to the Trustee the representations, warranties and covenants of such parties set forth in the Participation Agreement."Holder" or"Securityholder" means a Person in whose name a ecurity is registered in the Security Register."Indenture" means this instrument as originally executed and as it may from time to time, be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof.'Initial-Interest Date" with respect to any series of-Securities means the date of the Stated Maturity for the initial installment of interest on Securities of such series."Lease Indenture".
means-any Lease Indenture and any Lease Indenture.
Supplement identified in a S'chedule to-a Series.Supplemental Indenture,=
as such Lease Indenture and Lease Indenture-Supplement may be amended or supplemented from time to time pursuant to the applicable.
provisions thereof and of this Indenture;."Lease Indentures" means each and every Lease Indenture.-"Leases"'means any'Lease and any: Lease Su'pplement identified in.a Schedule to a Series Supplemental Indenture, as such-Lease and Lease Supplement may be amended from time'to',time pursuant 021.CHRYSLER.1106.53: 1 to the applicable provisions thereof and of this Indenture;"Leases" means each and every Lease."Lease Indenture Trustee" means the Lease Indenture Tr'identified in a Schedule to a Series Supplemental Indenture, un successor Lease Indenture Trustee shall have become such pursuan co the applicable provisions of the Lease Indenture to which such Lease Indenture Trustee is a party, and thereafter"Lease Indenture Trustee" means the successor Lease Indenture Trustee;"Lease Indenture Trustees" means each and every Lease Indenture Trustee."Lease Payments" with respect to any Lease shall mean amounts payable by El Paso under such lease in respect of (i)interim rent (if any), (ii)basic rent, (iii)casualty value, (iv)special casualty value, (v)termination value or (vi)any other amounts pay-able in connection with termination of the Lease, in each case as more fully described in and assigned pursuant to the related Lease Indenture;"Lease Payments" with respect to all Leases means the aggregate of Lease Payments under any and all Leases."Lessee Request" and"Lessee Order" mean, respectively, a written request and a written order signed in the name of El Paso by its President or one of its Vice Presidents or Assistant Vice Presidents and by its Treasurer or Secretary or one of its Assistant Treasurers or Assistant Secretaries, or by any authorized agent of El Paso, and delivered to the Trustee."Lessor" or"Owner Trustee" means any Lessor or 0~er Trustee identified in a Schedule to a Series Supplemental Inde until a successor shall have become such pursuant to the appli e provisions of the related Trust Agreement identified in said Schedule, and thereafter"Lessor" or"Owner Trustee" means such suc-cessor;"Lessors" or"Owner Trustees" means each and every Lessor or Owner Trustee."Lien of this Indenture" or"lien hereof" means the lien and security interest created by these presents, or created by any concurrent or subsequent conveyance to the Trustee (whether made by the Company or any other Person and whether pursuant to a Series Supplemental Indenture or otherwise), or otherwise created, consti-.tuting any property a part of the Pledged Property held by the,'rustee for the benefit of the Securities Outstanding hereunder."Obligor", when used with reference to the Securities or this Indenture, means El Paso and any successor to the obligations of El Paso under a Lease, and does not include the Trustee, the Lease Indenture Trustee, an Owner Trustee or an Equity Investor so long as.they have not assumed such obligations; provided, however, that no reference to El Paso as an Obligor herein shall be construed as implying any guaranty by El Paso of the Securities.
1021.CHRYSLER.1106.53: 1 "Officers'ertificate" means a certificate signed by the President or a Vice President, and by the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant Secretaries, of El Paso, any Lessor or the Company, as the case may be, and delivered to the Trustee."Opinion of Counsel" means a written opinion of counsel for any Person either expressly referred to herein or otherwise satisfac-tory to the Trustee which may include, without limitation, counsel to the Company, any Lessor, the Lease Indenture Trustee, any Equity Investor or El Paso, whether or not such counsel is an employee of any of them."Outstanding" when used with respect to Securities means, as of the date of determination, all Securities theretofore authenti-cated and delivered under this Indenture, except: (i)Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;(ii)Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee in trust for the Holders of such Securities as provided in Section 12.01, provided that, if such Securities, are to be redeemed (otherwise than through the operation of the Sinking Fund), notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;and (iii)Securities paid in full or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture unless held by a Holder in whose hands such Securities constitute valid obligations of the Company;provided, however,'that in determining whether the Holders of the requisite principal amount of Securities Outstanding have given any request, demand;authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or owned by El Paso, any.Lessor or any Equity Investor, or any Affiliate of El Paso, of'ny Lessor or of any Equity, Investor", shall be disregarded'nd deemed not.to-be Outstanding,"unless such Persons own 100%of the Securities owned by all Persons,'except that, in'determining whether the Trustee shall be protected in relying upon any such request, demand, authori-zation, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged.in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so.to act with'espect to such Securities
-.and that the pledgee is not, the Company or El'aso, any Lessor or any 21.CHRYSLER.1106.53: 1~~~~~
Equity Investor or any Affiliate of the Company, of El Paso, of any Lessor or of any Equity Investor.<<Participation Agreement" means any Participation Agr.t or other similar Lessor Note purchase document to which the C y is a party identified in a Schedule to a Series Suppleme al Indenture, as such Participation Agreement or other purchase document may be amended from time to time pursuant to the applicable provi-sions thereof and of this Indenture;"Participation Agreements" means each and every Participation Agreement."Paying Agent" means any Person acting as Paying Agent hereunder pursuant to Section 9.14."Paying Agent'Of f ice<<means the principal of fice of the Paying Agent at which at any particular time corporate trust business of the Paying Agent shall be administered, which at the date of this Indenture is 120 Broadway, New York, New York."Permitted Investment" means (i)direct obligations of the United States of America, or (ii)obligations fully guaranteed by the United States of America, or (iii)certificates of deposit issued by, or bankers'cceptances of, or time deposits with, any bank, trust,'ompany or national banking association incorporated or doing busi-,'ess under the laws of the United States of America or one of the''tates thereof (but not exceeding$15,000,000 in principal amount of all certificates of deposit and time deposits at any given time for any one bank, trust company or national banking association) hav'combined capital and surplus of at least$300,000,000 (includi e Trustee, any Lease Indenture Trustee, any Lessor and any Paying at if such conditions are met), or (iv)commercial paper of companies incorporated or doing business under the laws of the United States of America or one of the States thereof (but not exceeding$15,000,000 in principal amount at any given time for any one company)and in each case having a rating assigned to such commercial paper by Standard&Poor's Corporation or Moody's Investors Service, Inc.(or, if neither such organization shall rate such commercial paper at any time, by any nationally recognized rating organization in the United", States of America)equal to the highest rating assigned by such orga-nization, or (v)repurchase agreements fully collateralized by an obligation of-the, type described in clause (i)or (iv)above, pursu-ant to which a bank, trust company or national banking association='eferred to in clause (iii)above or another financial institution
'aving a net worth of at least$200,000,000 is obligated to repur-chase any such obligation not later., than 90 days after the purchase of any such obligation."Person" means any individual, corporation, partnership, j oint venture, association,-joint-stock company, trust, 1021.CHRYSLER.1106.53: 1 unincorporated organization or government or any agency or political subdivision thereof."Place of Payment", when used with respect to the Securities of any series, means the office or agency maintained pur-suant to Section 5.02 hereof and such other place or places, if any, where the principal of (and premium, if any)and interest on the Securities of that series are payable as specified in the Series Supplemental Indenture setting forth the terms of the Securities of such series."Pledged Lessor Note" means any Lessor Note identified in a Schedule to a Series Supplemental Indenture, as such Lessor Note may be amended or supplemented from time to time pursuant to the appli-cable provisions thereof, of the related Lease Indenture and of this Indenture;"Pledged Lessor Notes" means each and every Pledged Lessor Note."Pledged Property" has the meaning set forth in the Granting Clauses."Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security;and, for the purposes of this definition, any Security authenticated and delivered under Section 2.09 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security."Principal Instruments" means the Pledged Lessor Notes, the Lease Indentures, the Participation Agreements and the Leases."Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption by or pursuant to this Indenture."Redemption Price" when used with respect to any Security to be redeemed means the price (inclusive of accrued interest)at, which i: t is to be redeemed pursuant to this Indenture and the terms of, such Security."Regular Record Date".for the Stated Maturity of any installment of interest means the 15th day (whether or'not a Business Day)next preceding such Stated Maturity.r"Responsible Officer" when used with respect to the Trustee means any officer of the Trustee customarily performing corporate trust functions.
'21.CHRYSLER.1106.53: 1 2.08."Security Register" has the meaning specified in Section"Security Registrar" means any Person acting as Secu Registrar hereunder pursuant to Section 9.14."Series Supplemental Indenture" means an indenture supple-mental to this Indenture, for the purpose of specifying, in accor-dance with Article Two hereof, the form of the Securities of any series, and/or for the purpose of subjecting to the Lien of this Indenture the Pledged Lessor Notes related to such'series;
>>Series Supplemental Indentures>>
means each and every Series Supplemental-Indenture.
>>Sinking Fund>>has the meaning specified in Section 7.01."Special Record Date" for the payment of any defaulted interest means a date fixed by the Trustee pursuant to Section 2.10."Stated Maturity" when used with respect to any Security or any installment of interest thereon means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable."Trust Indenture Act>>or>>TIA>>means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 11.06."Trustee" means the Person named as the"Trustee" i first paragraph of this instrument until a successor Trustee.have become such pursuant to the applicable provisions of t is Indenture, and thereafter"Trustee" shall mean such successor Trustee.SECTION 1.02.Compliance Certificates and Opinions.Upon any application or request by the Company, any Lessor or El Paso to the Trustee to take any action under any provision of this Indenture, the Company, such Lessor or El Paso, as the case may be, shall furnish to the Trustee an Officers'ertificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provi-sion of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished; provided that any action which may be taken under any provision of this Indenture by a Lessor may be taken by El Paso on behalf of such 1021.CHRYSLER.1106.53: 1-10-0 Lessor pursuant to the agency granted to El Paso pursuant to the Participation Agreement unless and until the Trustee has been noti-fied of the revocation of such agency.Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include (1)a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;(2)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;(3)a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opin-ion as.to whether or not such covenant or condition has been complied with;and r (4)a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.SECTION 1.03.Form of Documents Delivered to Trustee.In any case where several matters are required to be certi-fied by, or covered by an opinion of, any specified Person,.it is not necessary that all such matters be certified by, or covered by the'pinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, of any Lessor or of El Paso may be based, in so far as it relates to.=legal matters, upon a certi'ficate or opinion of, or representations by, counsel, unless such officer knows that the certificate or opin-ion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.
Any such certificate or Opinion of Counsel may be based, in so far as it relates to fac-tual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company,.of any Lessor or of El Paso, as the case may be, stating that the information with respect to such factual matters is in the possession of.-the Company,-such Lessor or El Paso, respectively, unless such counsel knows that the 021.CHRYSLER.1106.53:1
~~~
certificate or opinion or representations with respect to such matters are erroneous.
Any Opinion of Counsel stated to be based on the opini f other counsel shall be accompanied by a copy of such other opi Vihere any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 1.04.Acts of Holders.'a)Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing;and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company and to El Paso.Such instrument or instruments (and the action embodied therein and evidenced thereby)are herein sometimes referred to as the"Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writ-ing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 9.01)conclusive in favor of the Trustee, the Company and El Paso, if made in the manner prov'ed in this Section.(b)The fact and date of the execution by any Person of any such instrument or writing may be.proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deed's or administer oaths that the Person execut-ing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn to before any such notary or other such officer and where such execution is by an offi-cer o f a corporation or association or a member of a partnership, on, behal f of such corporation, association or partnership, such certifi-cate or affidavit shall also constitute sufficient proof of his l authority'.
The fact and date of the execution.
of any such instrument or writing, or th'e authority of the Person executing the same, may-'lso be proved in any other manner which the Trustee deems sufficient.(c)The ownership of Securities shall be proved by the Security Register.(d)Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall 1021.CHRYSLER.1106.53: 1 bind the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, whether or not notation of~~~such action is made upon such Security.SECTION 1.05.Notices, etc., to Trustee, El Paso and Company.Any request, demand, authorization, direction, notice, con-sent, waiver or Act of Holders or other document provided or permit-ted by this Indenture to be made upon, given or furnished to, or filed with, (1)the Trustee by any Holder, by the Company, by El Paso or by an Authorized Agent shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2)the Company by the Trustee, by any Holder, by El Paso or by an Authorized Agent shall be sufficient for ever'y purpose hereunder if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any, other address previously furnished in writing to the Trustee and El Paso by the Company for such purpose, or (3)El Paso by the Trustee, by any Holder, by the Company or by an Authorized Agent shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to El Paso addressed to it at the address of its principal office specified in the first~paragraph of this instrument or at any other address previ-ously furnished in writing to,the Trustee and the Company by'El Paso for such'purpose.SECTION 1.06.Notices to Holders;Waiver.Where this Indenture provides for notice to Holders of any event, such notice'hall be sufficiently given (unless otherwise herein expressly provided)if=in-writing-and mailed,'first-class
'posta'ge prepaid, to each Holder,.at his address as it appears in the Security'egister, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.Where this Indenture provides for notice in any manner, such notice'ay be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall.be the equivalent of.such notice.Waivers of-notice by Holders shall be filed with the Trustee;but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such C 2 1.CHRYS LER.1'106.53:.1~~-13-a waiver.In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders, and any notice whi mailed in the manner herein provided shall be conclusively pre to have been duly given.SECTION 1.07.Conflict with Trust Indenture Act.If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the TIA, such required provi-sion shall control.Notwithstanding the foregoing, the provisions of the TIA contained in Sections 9.08, 9.13 and 10.03 shall not become operative under this Indenture until this Indenture shall have been qualified under the TIA.SECTION 1.08.Effect of Heading and Table of Contents.The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construc-tion hereof.SECTION 1.09.Successors and Assigns.All covenants, agreements, representations and warranties in this Indenture by the Trustee, El Paso and the Company shall bind and, to the extent permitted hereby, shall inure to the benefi of and be enforceable by their respective successors and ass whether so expressed or not.SECTION 1.10.Separability Clause.In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.SECTION 1.11.Benefits of Indenture.
=Nothing in this'Indenture.or in the Securities, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Holders of Securities, and the Lessors and the Equity Investors as expressly provided herein, any benefit or any legal or equitable right, remedy or claim under this Indenture.
1021.CHRYSLER.1106.53: 1 SECTION 1.12.Governing Law.This Indenture and each Security are being executed and delivered in the State of New York, shall be deemed to be contracts ade in such State and for all purposes shall be construed in accor-dance with and governed by the laws of the State of New York.SECTION 1.13.Legal Holidays.In any case where the Redemption Date or the Stated Maturity of any Security or of any installment of interest, or any date on which any defaulted interest is proposed to be paid, shall not be a Business Day, then (notwithstanding any other provision of this Indenture) payment of interest and/or principal (and premium, if any)need not be made on such date, but may be made on the next suc-ceeding Business Day with the same force and effect as if made on the Redemption Date or at the Stated Maturity, or on the date on which the defaulted interest is proposed to be paid, and no interest shall accrue for the period from and after such Redemption Date or Stated Maturity,.or date for the payment of defaulted interest, as the case may be.ARTICLE TWO THE SECURITIES SECTION 2.Ol.Forms Generally.
The Securities of each series shall be in the form (not inconsistent with this Indenture) as shall be established in one or.more Series Supplemental Indentures, in each case with such appropri-ate insertions, omissions, substitutions andother variations in and" to such-form as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or leg-ends, not inconsistent with the provisions.
of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities, as evidenced by their execution thereof.-SECTION 2.02.Form of., Trustee's Authentication.
The Trustee's certificate of authentication on all Securities shall'be in substantially the following form: 21.CHRYSLER..
1106.53: 1 This is one of the Securities of the series des-ignated therein referred to in the within-mentioned Indenture.
FIRST CITY NATIONAL BANK OF HOU as Trustee By Authorized Officer SECTION 2.03.Amount Unlimited; Issuable in Series;Limitations on Issuance.The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
Securities may be issued hereunder up to the aggregate principal amount which may be authorized from time to time by the Board of Directors of the Company.The terms of any series of Securities relative to payment of principal thereof, and premium (if any)and interest thereon, need not correspond exactly to the schedule for such payments under the related Pledged Lessor Notes.The Securities may be issued in one or more series.There shall be established in one or more Series Supplemental Indentures, prior to the issuance of Securities of any series, (1)the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities) and the form or forms of Securities of such series;(2)any limit upon the aggregate principal amount of the Securities of such series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 2.07, 2.08, 2.09, 6.06 or 11.07);,.(3)the date or dates on which the principal of the Securities of such series is payable;(4)the rate or rates at which the Securities of such series shall bear interest, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates 1021.CHRYSLER.1l06.53: 1 for the determination of Holders to whom interest is payable;(5)the place or places where the principal and interest on Securities of such series shall be payable (if other than as provided in Section 5.02);(6)the price or prices at which, the period or per-iods within which and the terms and conditions upon which Securities of such series may be redeemed, in whole or in part, at, the option of the Company, pursuant to any sinking fund or otherwise; (7)the.obligation, if any, of the Company to redeem, purchase or repay Securities of such series pursu-ant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditi'ons upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursu-ant to such obligation; (8)if other than denominations of$1,000 and any multiple thereof, the denominations in which Securities of such series shall be issuable;(9)any other terms of such series (which terms shall not be inconsistent with the provisions of this Indenture);
and (10)any trustees, authenticating or paying agents, warrant agents, transfer agents or registrars with respect to the Securities of such series;provided, however, that, after giving effect to the issuance of a new.series of the.-Securi;t'ies and the subj'ection to the Lien of this Indenture of the related Pledged Lessor Notes, the=average of the daily balance of Excess Funds for each fiscal year of the Company=shall not exceed 10: of the average of the aggregate principal amount, of Securities Outstanding on each day in.such fiscal year..For pur-poses of the".foregoing proviso,,"Excess-Funds" shall mean, for any day, amounts'ctually'aid to the Trustee-under the Pl'edged-Lessor Notes in excess of amounts-then due and payable in respect of Securities.
021.CHRYSLER.1106..53: 1 SECTION 2.04.Authentication and Delivery of Securities.
At any time and from time to time after the execution nd delivery of this Indenture, the Company may deliver Securities o series executed by the Company to the Trustee for authentica together with a Company Order for the authentication and delivery of such Securities, and the Trustee shall thereupon authenticate and deliver such Securities in accordance with such Company Order, with-out any further action by the Company.In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be enti-tled to receive, and (subject to Section 9.01)shall be fully pro-tected in relying upon: (1)an executed Series Supplemental Indenture; (2)an Officers'ertificate of'the Company (a)certifying as to resolutions of the Board of Directors of the Company by or pursuant to which the terms of the Securities of such series were established, (b)certifying that all conditions precedent under this Indenture to the Trustee's authentication and delivery of such Securities have been complied with and (c)certifying that (x)the terms of the documents re f erred to in clauses (3)and (4)below are not inconsistent with the terms of this Indenture as then and theretofore supplemented and (y)such documents comply with Exhibit A hereto (if applicable);
(3)fully executed counterparts (but not the origi-nal thereof)of (a)the Lease Indentures under which were issued the Pledged Lessor Notes relating to such series of Securities and (b)the Leases relating to such Pledged Lessor Notes;(4)the original of the Pledged Lessor Notes relat-ing to such series of Securities; d and n the (5)signed copies, either addressed to the Trustee or accompanied by statements that the Trustee may rely on such documents, of all certificates and opinions of counsel.delivered to the Company in connection with its purchase pursuant to the applicable Participation Agreements of the Pledged Lessor Notes relating to such series of Securities and, to the extent not covered by such opinions, Opinions of Counsel (x)to the effect that: (a)the form or forms and the terms of such Securities have been established by a Series Supplemental Indenture as permitted by Sections 2.01 and.2.03 in conformity with the provisions of this Indenture;(b)such Securities, when authenticate delivered by the Trustee and issued by the Company i 1021~CHRYSLER.1106.53: 1 manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obli-gations of the Company;and (c)all laws and requirements in respect of the execution and delivery by the Company of the Securities have been complied with;and (y)covering such other matters as the Trustee may reasonably request;and (6)duly executed Extension Letters relating to the Pledged Lessor Notes;provided, however, that if a series of Securities is to be authenti-cated by the Trustee in advance of the actual delivery to the Trustee of the Pledged Lessor Notes relating thereto, (X)the documents described in the foregoing clauses (2)(c), (3), (4), (5)(other than the opinion described in subclauses (x)and (y))and (6)need not be delivered in connection with such authentication, but shall be=deliv-ered in connection with the release of the proceeds of the'sale of such series of Securities in accordance with Sections 2.15 and 13.01 hereof and (Y)the form of the Series Supplemental Indenture shall be appropriately modified to reflect the later delivery and pledge of the related Pledged Lessor Notes.Receipt by the Trustee of the Officer's Certificate referred to in clause (2)above shall be conclusively presumed for all purposes of this Indenture to establish that the Lease Indentures, the Leases and the Pledged Lessor Notes referred to in e such certification comply with the requirements of Exhibit A hereto.The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Company.or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust com-mittee of directors or trustees and/or responsible officers shall determine that such action would expose the Trustee to personal liability.
SECTION 2.05.Form and Denominations.
The Securities
=of, each series shall be in-registered form and may have such letters, numbers or other marks of identification and such legends or endorsements printed, lithographed or engraved thereon, as may be required to comply with the rules of any securi-<ies exchange or to conform to any usage.in respect thereof, or as may, consistently herewith, be prescribed'y the Board of Directors of, the Company or by the officers executing such Securities, such determination by said officers to be evi'denced by their signing the Securities.
021.CHRYSLER.1106.53: 1' The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitt y the rules of any securities exchange, all as determined by the cers executing such Securities, as evidenced by their executi f such Securities.
All Securities of any one series shall be substantially identical except as to denomination and Stated Maturity and except as may otherwise be provided herein or in the Series Supplemental Indenture setting forth the terms of the Securities of such series.SECTION 2.06.Execution of Securities.
The Securities shall be executed on behalf of the Company ,'y its President or one of its Vice Presidents under its corporate seal reproduced thereon and attested by its Secretary or one of its Assistant Secretaries.
The signature of any such officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at the time such signatures were affixed the'roper officers of the Company shall bind the Company, notwithstand-ing that such individuals or any of them have ceased to hold such'ffices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
SECTION 2.07.Temporary Securities.
\Pending the preparation of definitive Securities a~ny" series, the Company may execute, and upon Company Order the Trustee'hall authenticate and deliver, temporary Securities of such series which are printed, lithographed, typewritten, photocopied or other-wise produced, in any denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their, execution of such Securities.
lf temporary Securities of any series are issued, the Company.will cause definitive Securities of'such series to be pre-pared without unreasonable delay.After the preparation of defini-, tive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series'pon surrender of the temporary Securities of such series at the office or agency of the Company, for such purpose, in the Place of'Payment>without charge to the Holder.Upon surrender for cancella-~tion of any one or more temporary Securities of any series the," Company shall execute and the Trustee shall authenticate and deliver'n exchange therefor a like aggregate principal amount of definitive 1021.CHRYSLER.1106.53:1 Securities of such series of authorized denominations.
Until so exchanged such temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as efinitive Securities of such series.SECTION 2.08.Registration, Transfer and Exchange.The Trustee shall cause to be kept at the Corporate Trust Office a register in which, subject to such reasonable regulations as the Company may prescribe, the Company shall provide for the regis-tration of Securities and of registration of transfers and exchanges of Securities.
This register and, if there shall be more than one Security Registrar, the combined registers maintained by all such Security Registrars, are herein sometimes referred to as the"Security Register".
Upon surrender for registration of transfer of any Security of any series at the Corporate Trust Office, or at any office or agency maintained for such purpose pursuant to Section 9.14(a), the Company shall execute, and the Trustee shall authenticate and deliv-er, in the name of the designated transferee or transferees, one or more new Securities of the same series and of the same Stated Maturity for principal and interest and of a like aggregate principal amount.At the option of the Holders, Securities of'any series may be exchanged for an equal aggregate principal amount of Securities of the same series and of the same Stated Maturity for principal and nterest and of any authorized denominations, upon surrender of the Securities to be exchanged at the Corporate Trust Office, or at any'ffice or agency maintained for such purpose pursuant to Section.9.14(a).Whenever any Securities are so surrendered for exchange,.." the Company shall execute, and the Trustee or any other-'uthenticating Agent shall authenticate and deliver, the Securities which the Securityholder making the exchange is entitled to receive.All Securities issued upon any transfer or exchange of Securities shall be the valid obligations of the Company, evidencing
-the same debt, and entitled to the same security and benefits under this Indenture, as the Securities surrendered upon such transfer or.exchange.
E Every Security presented or surrendered for registration of trans f er or exchange shall be duly endoised, or be accompanied by a ,written instrument of transfer in form satisfactory to the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.';-~No,service charge.shall be'requir'ed-'f any Securityholders
'articipating in any transfer or exchange of Securities in respect of~~021.CHRYSLER.1106.53: 1 such transfer or exchange, but the Security Registrar payment of a sum sufficient to cover any tax or other charge that may be imposed in connection with any exchange of Securities, other than exchanges pursuant 2.07, 6.06 or 11.07 not involving any transfer.may require governmental transfer or to Sec The Security Registrar shall not be required (i)to issue, transfer or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series selected for redemption under Section 6.02 or 7.02 and ending at the close of business on the day of such mailing, or (ii)to transfer or exchange any Security so selected for redemption in whole or in part except the unredeemed portion of any Security selected for redemption in part.SECTION 2.09.Mutilated, Destroyed, Lost: and Stolen Securities.
If (i)any mutilated Security is surrendered to the Trustee, or the Company, the Security.Registrar and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii)there is delivered to the Company, to the Security Registrar and to the Trustee evidence to their satisfac-tion of the ownership and.authenticity thereof, and such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company, to the Security Registrar or to the Trustee that such Security has been acquired a bona fide purchaser, the Company shall execute and upon its re the Trustee shall authenticate and deliver, in exchange for lieu of any such mutilated, destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company may, upon satisfaction of the conditions set forth in clauses (i)and (ii)of the preceding paragraph, instead of issuing a new Security, pay such Security.Upon the issuance of any new Security under this Section, the Security Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an origi-nal additional'ontractual obligation of the Company, whether or not the destroyed, lost or''stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the security and 1021.CHRYSLER.1106.o3: 1 benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall pre-lude (to the extent lawful)all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10.Payment of Interest;Interest Rights Preserved.
Interest on any Security which is payable, and is punctu-ally paid or duly provided for, at any Stated Maturity of an install-ment of interest shall be paid to the Person in whose name that Security (or one or, more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.At the option of the Company, payment: of interest on any Security may be made by check mailed to the address of the Person entitled thereto as such address shall,,appear in the Security Register.Any interest on any Security of any series which is pay-able, but is not punctually paid or duly provided for, at any Stated Maturity of an installment of interest shall forthwith cease to be-payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder;and such defaulted interest may be paid by the Company, at its election in each case, as provided in paragraph (1)or paragraph (2)below: e (1)The Company may elect, which election shall be at the direction of any Lessor whose Pledged Lessor Note is in default in respect of the payment of interest and who is proposing to make payment of all or part of such defaulted interest, to make payment of any defaulted interest to the Persons in whose names the Securities of such series in respect of which interest is in default (or their respec-tive Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such defaulted interest, which shall be fixed in the following manner.Such Lessor shall notify the Trustee and the Paying Agent in'riting of the amount of defaulted interest proposed to b'e paid on each such'ecurity and the date of the proposed payment, and at the same time there shall be~deposited with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or there shall be made arrangements sat-isfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as in this paragraph provided.Thereupon the Trustee shall fix a Special Record Date for 21.CFfRYSLER.
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the payment of such defaulted interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.The Trustee shall promptly notify the Company and the Security Registrar of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such defaulted interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each holder of a Security of such series at his address as it appears in the Security Register, not, less than 10 days prior to such Special Record Date.Notice of the proposed payment of such defaulted interest and the Special Record Date therefor having been mailed as aforesaid, such defaulted interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following paragraph (2).(2)The Company may make, or cause to be made, pay-ment of any defaulted interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities in respect of which inter-est is in default may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such payment shall be deemed practicable by the Trustee.Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security, and each such Security shall bear interest from.whatever date shall be necessary so that neither gain nor loss in interest shall result from such transfer, exchange or replacement.
SECTION 2.11.Persons Deemed Owners.Prior to'ue presentment for registration of transfer, the Person in whose name any Security is registered shall be deemed to be'he owner of such Security for the purpose of receiving payment of principal of (and premium, if any), and (subject to Section 2.10)interest on, such Security and for all other purposes whatsoever, whether or not such Security be overdue, regardless of any notice to anyone to the contrary.1021.CHRYSLER.1106.53: 1-24-0 SECTION 2.12.Cancellation.
All Securities surrendered for payment, redemption, credit against any Sinking Fund payment or redemption payment, transfer or xchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for cancellation.
The Company may at any time deliver to the Trustee for cancellation any Securities previ-ously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so deliv-ered shall be promptly cancelled by the Trustee.No Securities shall be authenticated in lieu of or in exchange for any Securities can-celled as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Securities held by the Trustee shall be destroyed and certification of their destruction delivered to the Company unless, by Company Request, the Company otherwise directs.SECTION 2.13.Dating of Securities; Authentication.
Each Security.of any series shall be dated the date of the original issuance of the Securities of such series by the Company, which date shall be specified by the Company in the Company Order delivered to the Trustee pursuant to Section 2.04 in connection with the original authentication and delivery of the Securities of such series.No Security shall be secured by or entitled to any benefit under this Indenture or=be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication, in the form provided for herein, executed by the Trustee by the manual signature of one of its Responsible Officers or any Authorized fficer, and such certificate
'upon any Security shall be conclusive vidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.
SECTION 2.14.Source of Payments: Rights and Liabilities of Lessors and Equity Investors.
All payments of principal and premium (if any)and interest to be made under the Securities and this Indenture (other than pay-ments made in connection with an optional redemption by a Lessor)shall be made only from assets subject to the lien of this Indenture or the income and proceeds received by the Trustee therefrom.
Each.Holder, by its acceptance of a, Security, agrees that (x)it will look solely'to the assets subject to the lien of this Indenture or the income and proceeds received by the Trustee therefrom to the extent available for distribution to such Holder as herein provided and (y)none of any Equity Investor, any Lessor, any Lease Indenture Trustee or the Trustee is liable to any Holder or, in the case of any Equity Investor, Lessor and Lease Indenture Trustee, to the Trustee for any amounts"payable under any Security or, except as provided herein with respect to the Trustee, for any liability under this Indenture.
An Equity Investor, Lessor or Lease Indenture Trustee shall not have any 021.CHRYSLER.1108.53:1 L
duty or responsibility under this Indenture or the Securities to any Holder or to the Trustee.SECTION 2.15.Sale of Securities; and Applicatio Proceeds from the Sale of Securities.(a)Promptly upon receipt by the Company of the proceeds from any sale of a series of the Securities, the Company shall deposit such proceeds with the Trustee.The funds so deposited shall be held by the Trustee in a separate account as part of the Pledged Property and shall be invested, applied and distributed by the Trustee as provided herein.(b)Subject to the provisions of Section 13.01, upon the issuance of the Fledged Lessor Notes related to any series of Securities and the delivery thereof to the Trustee to be subjected to the Lien of this Indenture pursuant to a Series Supplemental Indenture, the Trustee shall pay to the Lessor obligated in respect of any such Pledged Lessor Note, out of funds held by the Trustee in such separate account as Pledged Property, an amount equal to the principal amount of such Pledged Lessor Note in respect of which such Lessor is obligated.
All payments to be made by the Trustee to any Lessor shall be made in immediately available funds at the respective offices designated by such Lessor.ARTICLE THREE PROVIS IONS AS TO FLEDGED PROPERTY SECTION 3.01.Holding of Pledged Securities.
0 The Trustee is authorized in its discretion to cause to be registered in its name, as Trustee, or in the name of its nominee, any and all coupon bonds which it may receive as part of the Pledged Property, or it may cause the same to be exchanged for registered bonds without coupons of any denomination.
The Trustee may cause to be transferred into its name, as Trustee, or into the name of its nominee, any and all registered bonds which it may receive as part of the Pledged Property, or may cause such registered bonds to be exchanged for coupon bonds.All Pledged Lessor Notes assigned to and pledged with the Trustee pursuant to any provision of this Indenture or any Series Supplemental Indenture shall be endorsed in blank for transfer or be accompanied by proper instruments of assignment satis-factory to the Trustee, duly executed by the Company.The Company will deliver promptly to the Trustee such documents, certificates and opinions as the Trustee may reasonably request in connection with subjection of any securities to'the Lien of this Indenture to the extent contemplated hereby.1021.CHRYSLER.1106.53:1 SECTION 3.02.Disposition of Payments on Pledged Property.Unless and until all Outstanding Securities have been paid in full or provision for the payment of such Securities has been made in accordance with this Indenture, the Trustee shall be entitled to receive all principal, premium (if any)and interest paid in respect of any Pledged Lessor Notes and interest paid on bonds or other obli-gations or indebtedness which may be subject to the lien of this Indenture and shall apply the same to the payment of the principal of, and premium (if any)and interest on, the Securities when and as they become due and payable pursuant to, and in accordance with, this Indenture.
The Trustee shall duly note on the Schedules attached to the Pledged Lessor Notes or by'ther appropriate means all payments of principal, premium, if any, and interest made on the Pledged Lessor Notes.SECTION 3.03.Exercise of Rights and Powers Under Pledged Lessor Notes and Lease Indentures.
The Trustee shall not take any, action as the holder of the Pledged Lessor Notes to direct'any'Lease Indenture Trustee in any respect or to vote any Pledged Lessor Note or any portion thereof except as specified in this Section.The Trustee shall give notice to the Securityholders of the occurrence of any'Indenture Event of Default or Indenture Default under any Lease Indenture (as defined therein), and of every Event of Loss, Deemed Loss Event, or Special Loss Event occurring under a Lease, but only to the extent the same shall actually be known by an officer in the corporate trust depart-ent of the Trustee.The Trustee may, at any time, and shall, upon he request of any Lease Indenture Trustee made to the Trustee to give any direction or to vote its interest in the Pledged Lessor Notes, request from Securityholders directions as to (i)whether or not to direct such Lease Indenture Trustee,to take or refrain from-taking any action which holders of a Pledged Lessor Note have the option to direct and (ii)how to vote any Pledged Lessor'Note if a vote has been called for with respect thereto.In addition, any Securityholder may at any time request the Trustee to direct, or to participate in the direction of, any action under any Lease Indenture to'the extent that the Trustee may do so under such Lease Indenture.
In'irecting any action or casting'ny vote as the holder of a Pledged L'essor Note, the.Trustee, shall-,specify to.the Lease Indenture Trustee the principal amount-of the Pledged Lessor Note, which is in favor of the action or vote, the principal amount of the Pledged-Lessor Note which is opposed to the action or vote, and the principal amount of the Pledged Lessor.Note which is not taking any position for the action or vote.'uch principal amounts shall be determined by allocating the total principal amount of the Fledged Lessor Note with respect to which'irection'as requested, in accordance with the---.,principal='amount, of Securities taking.corresponding positions or not taxing any position.In'ddition; the Trustee shall"certify to the.021.CHRYSLER.1'106.53: 1.
Lease Indenture Trustee that the principal amounts of Securities taking such corresponding positions or not taking any position was determined in accordance with the provisions of this Indent SECTION 3.04.Certain Actions in Case of Judi Proceedings.
ln case all or any part of the property of any Lessor or any other Person which may be deemed an obligor in respect of the Pledged Lessor Notes shall be sold at any judicial or other involun-tary sale, the Trustee shall receive any portion of the proceeds of such sale accruing on the Pledged Property held hereunder, and such proceeds shall be held as provided in Section 3.05.SECTION 3.05.Cash Held by Trustee Treated as a Deposit.Any and all cash held by the Trustee under any provision of this Indenture may be treated by the Trustee, until required to be paid out hereunder, as a deposit, in trust, without any liability for interest.ART I CLE FOUR WITHDRAWAL OF COLLATERAL.
SECTION 4.01.Withdrawal of Collateral.
Except as provided in Section 4.02 and Article Thir none of the Pledged Property shall be subject to withdrawal un ss and until all Outstanding Securities have been paid in full or provi-sion for such payment has been made in accordance with the terms of this Indenture and the Trustee shall have received the documents and opinions required by Article Twelve.SECTION 4.02.Reassignment of Pledged Lessor Notes upon Payment.Upon receipt of payment-in full of the principal of, and',," premium (if any)and interest on, any Pledged Lessor Note held by the~Trustee;the Trustee shall deliver'to the Company sai:d Pledged Lessor.Note and any instrument of'ransfer or assignment necessary to reas-sign to the Company said Pledged Lessor Note and the interest of the Company (if any)in the Lease Indenture relating thereto;provided that nothing herein contained shall prevent the Trustee from present-.ing any Pledged Lessor Note to a Lease Indenture Trustee for final,', payment in accordance with the applicable provisions of the related Lease Indenture.
1021.CHRYSLER.1106.53:1 0 ARTICLE FIVE COVENANTS SECTION 5.01.Payment of Principal, Premium (if any)and The Company will duly and punctually pay, or cause to be paid, the principal of, and premium, if any, and interest on, the Securities in accordance with the terms of the Securities and this Indenture.
SECTION 5.02.Maintenance of Office or Agency.The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surren-, dered for transfer or exchange and where notices and demands to or.upon the Company in respect of Securities and this Indenture may be, served.The Paying Agent's Office is hereby designated as such'ffice or agency.El Paso will give prompt written notice to the Trustee of the location, and of any change in the location, of each such office or agency.If at any time the Company shall fail to maintain any such office or agency or the Company or,El Paso shall fail to furnish the Trustee with the address thereof, such presenta-tions, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby ppoints the Trustee its agent to receive all such presentations, urrenders, notices and demands..Trust.SECTION 5.03.Money for Security Payments to be Held in All moneys deposited with the Trustee or with any Paying Agent for the purpose of paying the principal of or premium, if any, or interest on Securities shall be deposited and held in trust for the benefit of the Holders of the Securities entitled to such princi-pal, premium, if any, or interest, subject to the provisions of this Section.Moneys so deposited and held in trust shall not be a part of the Pledged Property-but shall constitute a separate trust fund-for the benefit of the-Holders of the.relevant-Securities.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any Paying Agent to pay,,to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Paying Agent;and, upon-such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.21.CHRYSLER.1106.53:1 Any money deposited with the Trustee or any Paying Agent in trust for the payment of the principal of or premium, if any, or interest on any Security and remaining unclaimed for three years (or such lesser period as may be required by law to give effect to~~provision) after such principal, premium or interest has become and payable shall be paid to the Company on Company Request (to extent such monies shall have been deposited by the Company)or to any other Person on its request (to the extent such monies shall have been deposited by such other Person);and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company or such other Person, to the extent such monies shall have been paid to the Company or such other Person, as the case may be, for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease;provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company or, to the extent such monies are to be paid to another Person, such other Person cause to be mailed to each such Holder notice that such money remains unclaimed and that, after a date spec-ified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be repaid to the Company or such other Person.SECTION 5.04.Maintenance of Corporate Existence.
The Company, at its own cost and expense, will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights and franchises, except as otherwise specif ically permitted in this Indenture; provi however, that the Company shall not be required to preserve any or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not dis-advantageous in any material respect to the Securityholders.
SECTION 5.05.Protection of Pledged Property.The Company and El Paso will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance, and other instruments necessary to (i)grant more effectively all or any portion of the Pledged Property, (ii)maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof, 1021.CHRYSLER.1106.53:1 (iii)perfect, publish notice of, or protect the validity of, any grant made or to be made by this Indenture, (iv)enforce any of the Securities, or (v)preserve and defend title to any Securities or other instrument, included in the Pledged Property and the rights.of the Trustee, and of the Securityholders, in such Securities or other instrument against the claims of all persons and parties.The Company hereby designates the Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required pursuant to this Section.SECTION 5.06.Opinions as to Pledged Property.Promptly after the execution and delivery of this Indenture and of each Series Supplemental Indenture or other supplemental indenture or other instrument of further assurance, the Company shall furnish to the Trustee an Opinion of Counsel stating that, in the opinion of such Counsel, this Indenture and all such Series Supplemental Indentures, other supplemental indentures and other instruments of further assurance have been properly recorded, regis-tered and filed to the extent necessary to make effective the lien intended to be created by this Indenture, and reciting the details of uch action or referring to prior Opinions of Counsel in which such etails are given, and stating that all financing statements and con-inuation statements have been executed and filed that are necessary fully to preserve and protect the rights of the Securityholders and the Trustee, or stating that, in the opinion of such Counsel, no such action is necessary to make such lien effective.
On or be f ore May 1, in each calendar year, beginning with the first calendar year commencing more than three months after the date of authentication and delivery of any Securities, the Company shall furnish to the Trustee an Opinion of'ounsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and re-filing of this Indenture, any Series Supplemental Indenture and any, other requisite documents and with.respect to the execution and filing of any financ-ing statements and continuation statements as is necessary to main-tain the lien and security interest created by this Indenture with respect to the Pledged.Property and reciting the details'f such-action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.Such Opinion of Counsel shall also describe the recording, filing,.re-recording and re-filing of this Indenture, any Series Supplemental Indenture and any other requisite documents and the execution and 21.CHRYSLER.1106.53: 1~~
filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture with respect t e Pledged Property until May 1 in the following calendar year.SECTION 5.07.Performance of Obligations (a)Neither the Company nor El Paso will take any action or permit any action to be taken by others which would release any Person from any of such Person'covenants or obligations under any instrument included in the Pledged Property, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument, except as expressly provided in this Indenture.(b)El Paso will fully perform all of its obligations under the Leases.SECTION 5.08.Negative Covenants During such time as any Security issued hereunder is Outstanding, the Company will not: (i)sell, transfer, exchange or otherwise dispose of any portion of the Pledged Property except as expressly permitted by this Indenture;(ii)engage in any business or activity other than in connection with, or relating to, the issuance of Securitie pursuant to this Indenture or amend Article Third, Fourth or Sixth of its Certificate of Incorporation as in effect on the date of execution and delivery of this Indenture, without, in each case, the consent of the Holders of not less than 66 2/3'.of the aggregate principal amount of the Securities then Outstanding; notwithstanding the foregoing, however, the Company may, with respect to one or more series o f Securities (or one or more Stated Maturities within any series), enter into credit or liquidity support facilities (including, but without limitation, bank letters of credit, bank.lines of credit and bonds of insurance) and'ay engage.in interest rate swaps;, (iii)issue bonds, notes or other evidences of indebt-edness other than (i)Securities issued hereunder or (ii)bonds, notes or other evidences of indebtedness secured by a pledge of Securities issued hereunder or evi-dencing indebtedness permitted by clause (ii)above;(iv)incur, assume or guaranty any indebtedness of any Person-;1021.CHRYSLER.1106.53: 1 e (v)dissolve or liquidate in whole or in part;(vi)take any action which would (1)permit the validity or effectiveness of this Indenture or any grant of any of the Pledged Property to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subor-dinated, terminated or discharged, or permit any Person to be released from any covenant or obligation under this Indenture, (2)permit any Lien, charge, security, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Pledged Property or any part thereof or any interest therein or the proceeds thereof, or (3)permit the Lien of this Indenture not to constitute a valid first priority security interest in the Pledged Property;or (vii)institute any proceedings to be adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other appli-cable federal or state law or law of the District of Colu'mbia, or consent to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official)of the Company or any substantial part of its property, or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or take any corporate action in furtherance of the foregoing.
SECTION 5.09.Administration of Principal Instruments.(a)Without the consent of the Holders of a majority in principal amount of Outstanding Securities (or, in the case of Changes to a Support Facility, the series (or the Stated Maturity Dates within a series)of outstanding Securities benefiting from such Support Facility), the Trustee shall not consent to any Change in any Principal Instrument; provided, however, that the Trustee may consent to any Change in any Principal Instrument if such Change is permitted by subsection (b)of this Section 5.09, (b)Subject to the provisions of subsection (c)of this Section 5.09, the Trustee may consent to any Change in any Principal Instrument if such Change is: e (1)to cure any ambiguity, to correct or supplement any provision in such Principal Instrument which may be defecti've or inconsistent with any other provision in such Principal Instrument or any related Principal Instrument,-
or to make any other provisions with respect to matters arising under any such Principal Instrument, provided, in each instance, that such action shall not materially adversely affect the interests of Holders of Securities; or (2)to add to the covenants and agreements of the parties to such Principal Instrument other covenants and agreements thereafter to be observed by any such party, or to surrender any right or power therein reserved to or con-ferred upon the Company;or (3)to amend or supplement such Principal Instrument, or to give any consent or grant any waiver thereunder, so long as thereafter such Principal Instrument will comply with the requirements (if any)of Exhibit A hereto;provided that such action does not materially adversely affect the interests of Holders of Securities; or (4)in any other manner not inconsistent with Exhibit A hereto;provided that such action does not mate-rially adversely affect the interests of Holders of Securities; or (5)a Change in the Lease permitted by applicable provisions of the related Lease Indenture; or (6)to describe more fully and to amplify or correct the description of any property or rights assigned or pledged by such Principal Instrument or intended so to be, or to assign, pledge, mortgage or grant a security interest in any additional property, rights and interests, subject to such liens, restrictions or other encumbrances, if any, as shall be therein specifically described; or (7)in the case of a Lease Indenture, to enable the Lease Indenture Trustee thereunder to confer upon holders of Pledged Lessor Notes any additional rights, remedies, powers or authorities that may lawfully be granted or con-ferred upon such holders;or (8)-to evidence the appointment-of a separate or co-Lease Indenture Trustee or the succession of a new Lease Indenture Trustee;or (9)to evidence the succession of or assumption by a successor or assignee Lessee under the Leases and the Participation Agreements or to evidence the succession of a new Lessor or Owner Trustee under any Principal Document to which it is a party;or 1021.CHRYSLER.1106.53: 1 (10)permitted by the terms of such Principal Instrument to be made without the consent of or notice to the holders of the related Pledged Lessor Notes;or (11)to provide for the issuance of Lessor Notes in addition to the Pledged Lessor Notes relating to such Principal Instruments in accordance with the applicable provisions of the related Principal Instruments.(c)No Change with respect to a Principal Instrument, whether effected pursuant to subsection (a)or pursuant to subsection (b)of this Section 5.09, and anything in such subsections or else-where in this Indenture to the contrary notwithstanding, shall, with-out the consent of the Holder of each Outstanding Security affected thereby: (1)except as provided in any Lease, change such Lease in such a way as to change the timing or reduce the amount o f any Lease Payment, or otherwise to release, except as provided in such Lease, El Paso from its obliga-tion under such Lease in respect of payment of Lease Payments;or (2)modify, amend or supplement the Participation Agreements in such a way as to, or give any consent, waiver, authorization or approval which would, release any Equity Investor from its payment obligations contained in e said Participation Agreements.(d)Except during the continuance of an Event of Default hereunder, upon request of the Company or El Paso, the Trustee shall consent to any Change described in this Section 5.09, and shall exe-cute any instrument requested by the Company or El Paso, as the case may be, for the purpose of confirming such consent, but only upon receipt by the Trustee of an Officers'ertificate and an Opinion of Counsel of the Company or El Paso, as the case may be, each stating that such Change is authorized by this Indenture and that execution of such instrument is appropriate to confirm such consent, unless such Change adversely affects the Trustee's rights, duties or immuni-ties under this Indenture or otherwise, in which case the Trustee may, in its discretion, but shall'ot be obligated t'.o, give such con-sent and the Trustee shall be fully protected in relying on such Officers'ertificate and Opinion of Counsel.SECTION 5.10.Annual Statement as to Compliance.(a)El Paso and the Company each will deliver to the Trustee, on or before 120 days after the end of each of its fiscal years, a written statement (which need not comply with Section 1.02)signed by its President or one of its Vice Presidents and by its Treasurer or one of its Assistance Treasurers or its Comptroller or one of its Assistant Comptrollers, stating, as to each signer there-of, that (1)a review of the activities of El Paso or the Company, as the case may be, required during such year of El Paso or the Company, as the case may be, under this Indenture has been made under his supervision; and (2)to the best of his knowledge, based on such review, El Paso or the Company, as the case may be, has fulfilled all its obligations under this Indenture through-out such year, or, if there has been a default in the ful-fillment of any such obligation, specifying each such default known to such officer and the nature and status thereof.(b)El Paso and the Company each will deliver to the Trustee, promptly after having obtained knowledge thereof, but in no event later than five days thereafter, written notice of any event which with the giving of notice or lapse of time, or both, would become an Event of Default under Section 8.01.ARTICLE SIX REDEMPTION OF SECURITIES The provisions of this Article Six shall be applicab the Securities of any series which are redeemable before their S Maturity of principal except as otherwise provided in such Securities or the Series Supplemental Indenture with respect thereto as contem-plated by Section 2.03.SECTION 6.01.Notice to Trustee of Redemption.
In case of any redemption of any Securities of any series otherwise than through the operation of an applicable Sinking Fund, the Company shall, at least 45 days prior to the scheduled Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of the principal amount of Securities of such-series to be redeemed.SECTION 6.02.Selection by Trustee of Securities to be Redeemed.If fewer than all the Securities of any series are to be redeemed, other than through the operation of an applicable Sinking Fund, the particular Securities of such series to be redeemed shall be selected following receipt by the Trustee of the notice required 1021.CHRYSLER.1106.53: 1 b y Section 6.01, but not more than 60 days prior to the Redemption Date, by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee ha 1 l deem f a ir and appropriate and which may provide f or the selec-ion for redemption of portions of the principal of Securities of any denomination larger than$1,000;provided, however, that for purposes of selecting Securities of an/series for redemption pursuant to this Section, Securities of such series shall be redeemed from each Stated Maturity of principal of Securities of such series as nearly as prac-ticable in the proportion that the aggregate principal amount of Securities of such series of such Stated Maturity of principal Outstanding immediately prior to the Redemption Date shall bear to the aggregate principal amount of Securities of such series of all Stated Maturities of principal then Outstanding, in each case taking into account in the determination of Securities Outstanding the Securities of such series subject to such redemption; provided fur-ther, however, that when Securities are being redeemed pursuant to any applicable optional (rather than mandatory) redemption provi-sions, the Securities to be redeemed shall be selected solely from the Securities of the series and of the Stated Maturity of principal in respect of which a Company Order has been received.If Securities are to be selected for any redemption pursuant to this Section, the Trustee may make such adjustments as it shall deem necessary so that the principal amount of Securities redeemed shall be$1,000 or an integral multiple thereof, such adjustments to be made by the Trustee in such manner as the Trustee in its sole discretion deems appropriate.
The Trustee shall promptly notify the Company, El Paso, the Security Registrar and the Paying Agent in writing of the Securities
~elected for redemption and, in the case of any Security selected, for partial redemption, the principal amount thereof to be redeemed.For all purposes of this Indenture, unless the context oth-erwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in'part, to the portion of the principal of such Security which has been or is to be redeemed.SECTION 6.03.Notice of Redemption.
Notice o f redemption (including redemption through the operation of any applicable Sinking Fund)shall-be given by first-class mail, postage prepaid, mailed not less than 20 nor more than 60 days prior to t he Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.All notices of redemption shall state: 021.CHRYSLER.1106.53: 1 (1)the Redemption Date, (2)the Redemption Price, (3)if fever than all Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts)of the particular Securities, including the series and the Stated Maturity of principal of such Securities, to be redeemed, (4)that on the Redemption Date the Redemption Price will become due and payable upon each such Security, and that interest thereon shall cease to accrue from and after said date, (5)the place vhere such Securities are to be sur-rendered for payment of the Redemption Price, and (6)that the redemption is through the operation of a Sinking Fund, if such is the case.Notice of redemption of Securities to be redeemed shall be given by the Trustee in.the name of the Company.SECTION 6.04.Deposit of Redemption Price.Prior to any Redemption Date, the Company shall deposit or cause to be deposited, with the Trustee or the Paying Agent an-t of money sufficient to pay the Redemption Price of all the Secu s which are to be redeemed on that date.SECTION 6.05.Securities Payable on Redemption Date.Notice of redemption having been given as.aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Paying Agent's Office (or, if such office is not in, the, Borough of Manhattan,'.
the City of New York, at either such office or an office to be maintained in such Borough)at the Redemption Price therein specified and from and after such.date'-,, (unless'here shall be.-.-a default i'n the payment of the Redemption, Prie'e)such Securities shal'l cease to bear interest.Upon surrender of such Securities for redemption in accordance with said notice, such Securities shall be.paid at the Redemption Price, exclusive, however, of installments of interest maturing on or pri'or to the Redemption Date, payment of which shall have been.made or duly pro-.vided for.to the Holders'f such Securities registered as such on the,'elevant-Record Dates,'r otherwise,'ccording to,their terms and the=provisions of Section 2.10.4 It 102 1, CHRYSLER-.1106.53 1'-38-4 4.4'4 4 4 4 4 If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any)shall, until paid, continue to bear interest from the Redemption Date at the rate borne by the Security in respect of overdue payments.SECTION 6.06.Securities Redeemed in Part.Any Secur'ity which is to be redeemed only in part shall be surrendered at the Paying Agent's Office (or, if such office is not in the Borough of Manhattan, the City of New York, at either such office or an office to be maintained in such Borough)(with due endorsement by, or a written instrument of transfer in form satisfac-tory to the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing)and the Company shall execute and the Trustee shall authenticate and deliver to the Paying Agent for delivery to the Holder of such Security a new Security or Securities of, the same series and the same Stated Maturity of princi-pal, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unre-deemed portion of the principal of the Security so surrendered.
ARTICLE SEVEN SINKING FUNDS Sinking Funds for Securities.
The amount of any sinking fund payment provided for by the terms of Securities of any series (and any Stated Maturity of princi-pal within a series)is herein referred to as a"Sinking Fund", and the date on which a Sinking Fund payment is to be made is herein referred to as a"Sinking Fund Date." Each such Sinking Fund payment shall be applied to the redemption of Securities of the appropriate series and the appropriate Stated Maturity of principal on the appro-priate Sinking Fund Date.In the event that there shall" have been any partial redemp-".tion of a series':of
'Securities (other.than pursuant.to an applic'able Sinking Fund),'he amount,,of each applicable S'inking Fund payment of.a'articular Stat'ed Maturity, of principal within such series subse-quent to such.redemption'hall be reduced by an amount equal to the amount obtained by (i)multiplying the amount of such Sinking'Fund payment with respect to such Stated Maturity of principal as, in effect prior to such redemption by a fraction of which the, numerator shall be the aggregate principal amount of Securities of such Stated Maturity of such series redeemed;pursuant to=such partial redemption, and the denominator shall be the-aggregate principal amount of Securities of such Stated Ma'turi.'ty of such series Outstanding
~021.CHRYSLER.1106.53:1 1
immediately prior to such redemption, and (ii)rounding the amount indicated in (i)to the nearest$1,000, subject to necessary adjust-ment so that the total amount of such reduction is equal to the l principal amount.of Securities redeemed pursuant to such pa redemption, such adjustment to be made by the Trustee in such ma, er as the Trustee in its sole discretion deems appropriate.
SECTION 7.02.Selection by Trustee of Securities to be Redeemed Through Operation of Sinking Fund.ln the case of Securities to be redeemed through operation of the Sinking Fund, the particular Securities to be redeemed shall be selected no more than 60 days nor less than 30 days prior to the Redemption Date by the Trustee from the outstanding Securities of the same series and of the same Stated Maturity of principal not previ-ously called for redemption by prorating, as nearly as may be, the principal amount of Securities to be redeemed among the Holders of Securities of the same series and of the same Stated Maturity of principal registered in their respective names.Zn any proration pursuant to this Section, the Trustee'shall make such adjustments, reallocations and eliminations as it shall deem proper so that the principal amount of Securities so prorated shall be$1,000 or an integral multiple thereof, by increasing or decreasing or eliminating the amount which would be allocable to any Holder on the basis of exact proportion by an amount not exceeding$1,000.The Trustee in its discretion may determine the particular Securities of a Stated Maturity of principal registered in the name of any Holder which re to be redeemed, in whole or in part.Notwithstanding the provisions of the preceding paragraph, if, at the time of any such selection, there shall be any Holders of less than$1,000,000 aggregate principal amount of Outstanding Securities of the series and of the Stated Maturity of principal to be so redeemed, the selection of the particular Securities to be so redeemed shall be made in the following manner: (a)the Trustee shall first prorate.the principal amount of Securities of such series and of such Stated Maturity to be so redeemed between (i)Holders of Securities in aggregate principal, amounts of,.$1,000,000 or more and"(.ii)'., Hol'ders" of'Securities
'in aggiegate.'priricipal" amounts of less than"$1,000,'000; such proration to be effected in accordance with the respective aggregate prin-cipal amounts of such Securities held by the, Holders referred to in the foregoing items (i)and (ii), respec-tively;(b)the Trustee-shall then'select for redemption in the'.manner hereinabove'in th'e first paragraph of this Section 7.'02 provided,"from the Securities.of such series, 1021..CHRYS'LER.1106.53:1 0
and Stated Maturity held by the Holders referred to in item (i)of clause (a)above, particular Securities (or portions thereof)in the principal amount prorated to such Holders pursuant to said clause (a);and (c)the Trustee shall then select for redemption in the manner provided in Section 6.02 hereof, from the Securities of such series and Stated Maturity held by the Holders referred to in item (ii)of said clause (a), par-ticular Securities (or portions thereof)in the principal amount prorated to such Holders pursuant to said clause (a);provided, however, in any such prorating pursuant to this paragraph the Trustee may, according to such method as it shall deem proper in its discretion, make such adjustments by increasing or decreasing by not more than$1,000 the amount which would be allocable on the basis of an exact proportion, as may be necessary to the end that the prin-cipal amount so prorated shall be in each instance an integral multi-ple of$1,000.ARTICLE EIGHT EVENTS OF DEFAULT;REMEDIES SECTION 8.01.Events of Default."Events of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to a judgment, decree or order of any.court or any order, rule or regulation of any administrative or gov-ernmental body): (1)default.in the payment of any interest upon any Security when it becomes due and payable, and continuance of such default for a period of ten (10)days;or II (2)default'n the payment, of:.the principal of'or premium,-if any;-'on)any Security at its Stated Maturity,, or upon call for redemption or'therwi'se, and continuance of such default: for a period of ten'(10)days;or (3)default in the making of any Sinking Fund pay-ment, and continuance of such default for a period of ten (-10)days;or (4.)default in the performance, or breach, of any covenant-of El Paso or the Company contained herein and 1 02:1, CHRYSLER.1106.53: 1;-'41-'
continuance of such default or breach for a period of 30 days a f ter there has been given, by registered or certif ied mail, to El Paso and the Company by the Trustee, or to El Paso, the Company and the Trustee by the Holders of at least 25~in principal amount of Outstanding Securities, a written notice specifying such failure and requiring it to be remedied and stating that such notice is a"Notice of Default" hereunder; or (5)the occurrence of an"Indenture Event of Default" under any Lease Indenture and the declaration as a result thereof that any Pledged Lessor Note is due and pay-able;or (6)the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company a bank-rupt or insolvent, or approving as properly filed a peti-tion seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under the Federal Bankruptcy Act or any other applicable federal or state law or law of the District.of Columbia, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official)of the Company or of any substan-tial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;or (7)the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceed-ings against it, or the f iling by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other applicable federal or state law or law of the District of Columbia, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official)of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by=-it in writing of its inability to pay its debts generally as they become due, or the taking of corpo-rate action by the Company in furtherance of any such action.1021.CHRYSLER.1106.53: 1 SECTION 8.02.Acceleration of Maturity;Rescission and Annulment.
Upon the occurrence of an Event of Default, (i)if such ent of Default is one referred to in clause (1), (2), (3), (4), (6)or (7)of Section 8.01, the Trustee may, and upon the direction of the Holders of not less than 25%in principal amount of the Securities Outstanding shall, and (ii)if such Event of Default is the one referred to in clause (5)of Section 8.01 (including without limitation an event of default under any Lease which has resulted in an Event of Default referred to in clause (1), (2), or (3)of Section 8.01), the Trustee shall, declare the principal of all the Securities to be due and payable immediately, by a notice in writing to El Paso and the Company, and upon any such declaration such principal shall become immediately due and payable;provided that no such declaration shall be made (a'nd no action under Section 8.03 or 8.05 shall be taken)in cases,'in which the Event of Default is one referred to in clause (1), (2);or (3)of Section 8.01 which resulted directly from a failure of'El'aso to make any payment of rent under any Lease until such time~as the Lessor under such Lease has been given the opportunity to exercise its rights, if any, under provisions of the related Lease Indenture analogous to Section 6.8 of the Lease Indentures dated as of August 1, 1986.At any time after such a declaration of acceleration has been made and before any sale of the Pledged Property, or any part thereof, shall have been made pursuant to any power of sale as here-'nafter in this Article provided, the Holders of a majority in prin-ipal amount of the Securities Outstanding, by written notice to the ompany and the Trustee, may rescind and annul such declaration and its consequences if (1)there shall have been paid to or deposited with the Trustee a sum sufficient to pay (A)all overdue installments of interest on all Securities, (B)the principal of (and premium, if any, on)any Securities which have become due otherwise than by such-declaration of acceleration and interest thereon at the respective rates provided in the Securities-for late payments of principal or premium, (C)to the extent that payment of such interest is lawful, interest upon overdue installments of interest at the respective rates provided in the Securities for late payments of interest, and 21.CHRYSLER.1106.53: 1 (D)all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;and (2)all Events of Default, other than the non-payment of the principal of Securities which have become due solely by such acceleration, have been cured or waived as provided in Section 8.08.No such rescission shall affect any subsequent default or impair any right consequent thereon.SECTION 8.03.Trustee's Power of Sale of Pledged Property;Notice Required;Power to Bring Suit.If an Event of Default shall have occurred and be continu-ing, subject to the provisions of Sections 8.06 and 8.07 and the pro-viso to the first paragraph of Section 8.02, the Trustee, by such officer or agent as it may appoint, may: (1)sell, to the extent permitted by law, without recourse, for cash, or credit or for other property, for immediate or future delivery,, and for such price or prices and on such terms as the Trustee in its discretion may determine, the Pledged Property as an entirety, or in any such portions as the Holders of a majority in aggregate principal amount of the Securities then Outstanding shall request by an Act of Securityholders, or, in the absence of such request, as the Trustee in its discretion shall deem expedient in the interest of the Securityholders, at public or private sale;and/or (2)proceed.by one or more suits, actions or pro-ceedings at law or in equity or otherwise or by any other appropriate remedy, to enforce payment of the Securities or Pledged Lessor Notes, or to foreclose this Indenture or to sell the Pledged Property under a judgment or decree of=a court'r courts of competent jurisdiction, or by the'nforcement of any such.other appropriate legal or'quita-ble"remed'y',"'as".the-Trustee, being:advised" by counsel, shall deem most ef fectual to p'ro'tect, and enforce any of its rights or powers or any of the rights or powers of the Securityholders.
" In the event that.the Trustee shall deem it advisable to sell any.of or all the Pledged Property in accordance.with the, provi-sions.of-this Section,-El Paso and the Company"agree that if..registration of any such'Pledged Property shall, be required, in the opinion of counsel for the-Trustee, under the Securities Act of 1933 1021.CHRYSLER.1106.53: 1-44-e or other applicable law, and regulations promulgated thereunder, and if El Paso shall not effect, or cause to be effected, such registra-tion promptly, the Trustee may sell any such Pledged Property at a rivate sale, and no Person shall attempt to maintain that the prices t which such Pledged Property is sold are inadequate by reason of the failure to sell at public sale, or hold the Trustee liable therefor.SECTION 8.04.Incidents of Sale of Pledged Property.Upon any sale of all or any part of the Pledged Property made either under the power of sale given under this Indenture or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Indenture, the following shall be applicable:
(1)Securities Due and Payable.The principal of, and premium, if any, and accrued interest on, the Securities, if not previously due, shall immediately become and be due and payable.(2)Trustee Appointed Attorney of Company to Make Conveyances.
The Trustee is hereby irrevocably appointed the true and lawful attorney of the Company, in its name and stead, to make all necessary deeds, bills of sale and instruments of as'signment, transfer or conveyance of the property thus sold;and for that purpose the Trustee may execute all such documents and instruments and may substi-tute one or more persons with like power;and the Company hereby ratifies and confirms all that its said attorneys, or such substitute or substitutes, shall lawfully do by virtue hereof.(3)Company to Confirm Sales and Conveyances.
If so requested by the Trustee or by any purchaser, the Company shall ratify and confirm any such sale or transfer by executing and delivering to the Trustee or to such pur-chaser or purchasers all proper deeds, bills of sale, instruments of assignment, conveyance or transfer and releases as may be designated in any such request.(4)Securityholders and Trustee May Purchase Pledged Property.Any Securityholder:or the Trustee may bid for and purchase any of the Pledged Property, and upon compli-ance with the terms of sale, may hold, retain, possess and dispose of such Pledged Property-in his or its own absolute right without further accountability.
(5)Purchaser at Sale May Apply Securities to Purchase Price.Any purchaser at.any such sale, may, in 21, CHRYSLER~1106-.53: 1~~~
paying the purchase price, deliver any of the Securities then Outstanding in lieu of cash and apply to the purchase price the amount which shall, upon distribution of the net proceeds of such sale, after application to the costs of the action and any other sums which the Trustee is autho-rized to deduct under this Indenture, be payable on.such Securities so delivered in respect of principal, premium, if any, and interest.In case the amount so payable on such Securities shall be less than the amount due thereon, duly executed and authenticated Securities shall be deliv-ered in exchange therefor to the Holder thereof for the balance of the amount due on such Securities so delivered by such Holder.(6)Receipt of Trustee Shall Discharge Purchaser.
The receipt of the Trustee or of the officer making such sale under judicial proceedings shall be a sufficient dis-charge to any purchaser for his purchase money, and, after paying such purchase money and receiving such receipt, such purchaser or his personal representative or assigns shall not be obliged to see to the application of such purchase money, or be in any way answerable for any loss, misappli-cation or non-application thereof.(7)Sale To Divest Rights of Company in Property Sold.Any such sale shall operate to divest the Company of all right, title, interest, claim and demand whatsoever', either at law or in equity or otherwise, in and to, the Pledged Property so sold, and shall be a perpetual bar both at law and in equity or otherwise against the Company, and its successors and assigns, and any and all persons claim-'ng or who may claim the Pledged Property sold or any part thereof from, through or under the Company, or its succes-sors and assigns.(8)Application of Moneys Received upon Sale.Any moneys collected by the Trustee upon any sale made either under, the power of sale given by this Indenture or under judgment or decree in any judicial proceedings for foreclo-sure.or otherwise'for the enforcement of this Indenture; shall be.applied as provided, in Section 8.12.'ECTION 8.05.Judicial Proceedings Instituted by Trustee (a)Trustee May Bring Suit.*I f there shall be a failure to make payment of the principal of any, Security at, its Stated"Maturity or upon declaration of acceleration, call for redemption or,..otherwise, or of any Sinking Fund payment when due and payable-by the terms hereof or of such-Security, or if there.shall-be a failure to pay the premium, if any', or interest on any Security when the same 1021.CHRYSLER'.1106.53:1 0
4'I.becomes due and payable, then the Trustee, if any such failure shall continue for 15 days,'in its own name, and as trustee of an express trust, shall be entitled, and empowered subject to the proviso to the irst paragraph of Section 8.02 to institute any suits, actions or roceedings at law, in equity or otherwise, for the collection of the sums so due and unpaid on the Securities, and may prosecute any such claim or proceeding to judgment or final decree, and may enforce any such judgment or final decree and collect the moneys adjudged or decreed to be payable in any manner provided by law, whether before or after or during the-pendency of any proceedings for the enforce-ment of the Lien of this Indenture, or of any of the Trustee's rights or the rights of the Securityholders under this Indenture, and such power of the Trustee shall not be affected by any sale hereunder or by the exercise of.any other right, power or remedy for the enforce-ment of the provisions of this Indenture or for the foreclosure of the lien hereof.(b)Trustee May Recover Unpaid Indebtedness after Sale of Pledged Property.In=the case of a sale of the Pledged Property and of the application of the proceeds of such sale to the payment of the indebtedness secured by this Indenture, the Trustee in its own name, and as trustee of an express trust, shall be entitled and empowered, by any appropriate means, legal, equitable or otherwise, to enforce payment of, and to receive all amounts then remaining due and unpaid upon, all or any of the Securities, for the benefit of the Holders thereof, and upon any other portion of the indebtedness remaining unpaid, with interest at the rates specified in the respective ecurities on the overdue principal of and premium, if any, and (to he extent that payment of such interest is legally enforceable) on he overdue installments of interest.(c)Recovery of Judgment Does Not Affect Lien of this Indenture or Other Rights.No recovery of any such judgment or final decree by the Trustee and no levy of any execution under any such judgment upon any of the Pledged Property, or upon any other property, shall in any manner or to any extent affect the Lien of this Indenture upon any of the Pledged Property, or any rights, powers or remedies of the Trustee, or any liens, rights, powers or remedies of the Securityholders, but all sue/liens, rights, powers and remedies shall continue unimpaired as before.(d)Trustee May File Proofs of Claim;Appointment of Trustee: as Attorney-in-Fact in Judicial Proceedings.
The Trustee in its own name, or as trustee of an express trust, or as attorney-in-fact for the Securityholders, or in any one or more of such capacities (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand for the payment of overdue principal, premium (if any)or interest), shall be entitled and empowered to 21.CHRYSLER.1106.53: 1-47 file such proofs of'claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Securityholders (whether such claims be based upon the provi-sions of the Securities or of this Indenture) allowed in any e receivership, insolvency, bankruptcy, liquidation, readjust reorganization or any other judicial proceedings relative to ne Company or any obligor on the Securities (within the meaning of the TIA), the creditors of the Company or any such obligor, the Pledged Property or any other property of the Company or any such obligor and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official)in any such judicial proceeding is hereby autho-rized by each Securityholder to make such payments to the Trustee and in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disburse-~ments and advances of the Trustee, its agents and counsel.The Trustee is hereby irrevocably appointed (and the successive respec-tive Holders of the Securities, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee)the true and lawful attorney-in-fact of the respective Securityholders, with authority to (i)make and file in the respective names of the Securityholders (subject to deduction from any such claims of the amounts of any claims filed by any of the Securityholders themselves), any claim, proof of claim or amendment thereof, debt, proof of debt or amendment thereof, petition or other document in any such proceedings and to receive payment of any amounts distributable on account thereof, (ii)execute any such other papers and documents and to do and perform any and all such acts and things for an on behalf of such Securityholders, as may be necessary or advisa n order to have the respective claims of the Trustee and o e Securityholders against the Company or any such obligor, the Pledged Property or any other property of the Company or any such obligor allowed in any such proceeding and (iii)receive payment of or on account of such claims and debt;provided, however, that nothing con-tained, in this Indenture shall be deemed,to give to the Trustee any right to accept or consent to any plan of reorganization or otherwise by action of any character in any such proceeding to waive or change in any way any right of any Securityholder.
Any moneys collected by the Trustee under this Section shall be applied as provided in Section 8.12..t (e)Trustee Need Not Have'ossession
'of Secur'ities; All rights of action and of asserting claims under this Indenture or under any.of the Securities enforceable by the Trustee may be enforced by the Trustee without possession of any of such Securities or the production thereof at the trial or other proceedings
'relative thereto.('f)'Suit To Be Bro'ught for Ratable Benefit of'ecurityholders.
Any suit, action or other proceeding at law, in 1021'.'CHRYSLER.
1106.53: 1.-4 8-'V I'C s.~'s Qy r equity or otherwise which shall be instituted by the Trustee under any of the provisions of this Indenture shall be for the equal, rat-able and common benefit of all the Securityholders, subject to the rovisions of this Indenture.(g)Trustee May Be Restored to Former Position and Rights in Certain Circumstances.
In case the Trustee shall have proceeded to enforce any right under this Indenture by suit, foreclosure or otherwise and such proceedings shall have been discontinued or aban-doned for any reason, or shall have been determined adversely to the Trustee, then in every such case, El Paso, the Company and the Trustee shall be restored without further act to their respective former positions and rights hereunder, and all rights, remedies and powers of the Trustee shall continue as though no such proceedings had been taken.SECTION 8.06.Rights by Trustee.Securityholders May Demand Enforcement of If an Event of Default shall have occurred and shall be continuing, the Trustee shall, upon the written request of the Holders of a majority in aggregate principal amount of the Securities then Outstanding and upon the offering of indemnity as provided in Section 9.03 (e), but subject in all cases to the provisions of Section 3.03 and the proviso-to the first paragraph of Section 8.02, proceed to institute one or more suits, actions or proceedings at law, in equity or otherwise, or take any other appropriate remedy, to enforce payment of the principal of, or premium, if any, or interest n, the Securities or Pledged Lessor Notes or to foreclose this Indenture or to sell the Pledged Property under a judgment or decree of a court or courts of competent jurisdiction or under the power of sale herein granted, or take such other appropriate legal, equitable or other remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights or powers of the Trustee or the Securityholders, or, in case such Securityholders shall have requested a specific method of enforcement permitted here-under, in the manner re'quested, provided that such action shall not be otherwise than in accordance with law and the provisions of this Indenture, and the Trustee, subject to such indemnity provisions, shall have the right to decline to follow any such request if the Trustee in good faith shall determine that the suit, proceeding or exercise of the remedy so requested would involve the Trustee in per-sonal liability or expense.SECTION 8.07.Control by Securityholders.
The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy 021.CHRYS-LER.
1106.53: 1~~~
available to the Trustee or exercising any trust or power conferred on the Trustee, provided that (1)such direction shall not be in conflict with any rule of law or with this Indenture, and (2)the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
SECTION 8.08.Waiver of Past Defaults.The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders'of all the Securities waive any past default hereunder and its consequences, except that only the Holders of all Securities affected thereby may~waive a default (1)in the payment of the principal of (or premium, if any)or interest on such Securities, or (2)in respect of a covenant or provision hereof which under Article Eleven cannot be modified or amended without the consent.of the Holder of each Outstanding Security affected.Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to ave been cured, for every purpose of this Indenture; but no such r shall extend to any subsequent or other default or impair any t consequent thereon.SECTION 8.09.Securityholder May Not Bring Suit Except under Certain Conditions.
A Securityholder shall not have the right to institute any, suit, action or proceeding at law or in equity or otherwise for the foreclosure of this Indenture, for the appointment of a receiver or for the enforcement of any other remedy under or upon this Indenture, unless:.(-1)'uch Securityholder previously shall have given.written notice to the Trustee of'-a continuing Event of.Default;(2)the Holders of at least 25: in aggregate princi-pal amount.of the Securities then Outstanding shall have requested the Trustee-in'riting to institute'uch action,.suit or proceeding and,.shal'l have-offered to the Trustee indemnity as.provided in-Section 9.03(e);1021.CHRYSLER.1106.53 1'50-(3)the institute any after receipt ty;and Trustee shall have refused or neglected to such action, suit or proceeding for',60 days of such notice, request and offer of indemni-(4)no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of outstanding Securities.
It is understood and intended that no one.or more of the Securityholders shall have any right, in any manner whatever hereunder or under the Securities to (i)surrender, impair, waive, affect, dis-turb or prejudice the Lien of this Indenture on any property subject thereto or the rights of the Holders of any other'Securities, (ii)obtain or seek to obtain priority or preference over any other such Holder or (iii)enforce any right under this Indenture, except in the manner herein provided and for the equal, rytable and common benefit of,all the Securityholders'ubject to the provisions of this Indenture.
SECTION 8.10.Undertaking To Pay Court Costs.All parties to this'ndenture,, and each-Securityholder by his acceptance of a Security, shall be deemed to have agreed that any court may in its discretion require, in any suit, action or proceed-ing for the enforcement of any right or remedy under this Indenture, or in any suit, action or proceeding against the Trustee for any ction taken or omitted by it as Trustee hereunder, the filing by any arty litigant in such suit, action or proceeding of an undertaking to pay the costs of such suit, action or proceeding, and that'.such court may, in its discretion, assess reasonable costs, including rea-sonable attorneys'ees, against any party litigant in such suit, action or'proceeding, having due regard to the merits and good faith of the claims or defenses made by such party litigant;provided, however, that the provisions of this Section shall not apply to (a)any suit, action or proceeding instituted by the Trustee, (b)any suit, action or proceeding instituted by any Securityholder or group.of Securityholders holding in the,.aggregate more than 10: in aggre-gate principal amount of the Securities then Outstanding or (c)any suit, action or proceeding instituted by any Securityholder for the enforcement of the payment of the principal of, or, premium, if a'y,'r interest on, any of the Securities, on or after the respective due dates expressed therein..
SECTION.8.11.Right of Securityholders To Receive Payment Not To Be Impaired.Anything in this Indenture to the contrary notwithsta the right of any Holder of any Security to receive payment o.e principal.
of, and premium, if any, and interest on, such Security, on or after the respective due dates expressed in such Security (or, in case of redemption, on the Redemption Date fixed for such Security), or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected with-out the consent of such Holder.SECTION 8.12.Application of Moneys Collected by Trustee.Any moneys collected or to be applied by the Trustee pursu-ant to this Article, together with any other moneys which may then be held by the Trustee under any of the provisions of this Indenture as security for the Securities (other than moneys at.the time required to be held for the payment of specific Securities at their Stated Maturities or at a time fixed for the redemption thereof)shall be applied in the following order from time to time, on the date or dates fixed by the Trustee and, in the case of a distribution of such moneys on account of principal, premium, if any, or interest, upon presentation of the several Outstanding Securities, and stamping thereon of payment, if only partially paid, and upon surrender there-of, if fully paid: FIRST: to the payment of all taxes, assessments or liens prior to the Lien of this Indenture, except those subject to which any sale shall have been made, all reason-able costs and expenses of collection, including the rea-sonable costs and expenses of handling the Pledged Property and of any sale thereof pursuant to the provisions of this Article and of the enforcement of any remedies hereunder or under-any Lease.Indenture, and to the payment of all amounts due the Trustee or any predecessor Trustee under Section 9.07, or thxough the Trustee by any Securityholder or Securityholders;
-'.SECOND:
i.n case,'the principal of.the Securities or any,,-of.them.'hall.
not have, become.due, to,the payment of any interest in default, in.the order-of the maturity of the installments of such interest, with interest at the rates specified in the respective Securities in respect of overdue payments (to the extent that payment of such inter-est shal l be legally en f orceable)'n the overdue install-,ments'hereof;
'HIRD: in,cas'e the principal of any'"of;but not,all the Securities'=shall h'ave.becom'e due at their-Stated 1021.CHRYSLER.1106.53: 1-52-"
Maturities, upon redemption or otherwise,.
first to the payment of accrued interest in the order of the maturity of the installments thereof with interest at the respective rates specified in the Securities in respect of payments on overdue principal, premium, if any, and (to the extent that payment of such interest shall be legally enforceable) on overdue installments of interest, and next to the payment of the principal of all Securities then due;FOURTH: in case the principal of all the Securities shall have become due at their Stated Maturities, by decla-ration, upon redemption or otherwise, to the payment of the whole amount then due and unpaid upon the Securities then Outstanding for principal, premium, if any, and interest, together with interest at the respective rates specified in the Securities in respect of overdue payments on principal, premium, if any, and (to the extent that payment of such interest shall be legally enforceable) on overdue install-ments of interes't, and, in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid, then to the payment of such principal, premium, if any, and interest ratably, without discrimination or pref-erence;and'FIFTH: in ca'se the.principal of all the Securities shall have become due at their Stated Maturities, by decla-ration, upon redemption or otherwise, and all of such Securities shall have been fully paid, together with all interest (including any interest on overdue payments)and premium, if any, thereon, any surplus then remaining shall*be paid to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct;provided,*however, that all payments to be made pursuant to this Section shall be made ratably to the persons entitled thereto, with-out discrimination or preference.
SECTION 8.13.Securities Held by Certain Persons Not To Share in Distribution.
Any Securities known to-the Trustee to be'wned or held by, or for the account or benefit of, El Paso, the Company or any Affiliate-of any thereof shall not be entitled to share in any pay-ment or distribution provided for in this Article until all Securities held by other Persons have been paid in full.
SECTION 8.14.Waiver of Appraisement, Valuation, Stay, Right to Marshalling.
To the extent it may lawfully do so, each of El Pas the.Company, for itself and for any Person who may claim throu under it, hereby: (1)agrees that neither it nor any such Person will set up, plead, claim or in any manner whatsoever take advantage of, any appraisement, valuation, stay, extension or redemption laws, now or hereafter in force in any juris-diction, which may delay, prevent or otherwise hinder (i)the performance or enforcement or foreclosure of this Indenture, (ii)the sale of any of the Pledged'roperty, or (iii)the putting of the purchaser or purchasers thereof into possession of such property immediately after the sale thereof;(2)waives all benefit or advantage of any such laws;(3)waives and releases all rights to have the Pledged Property marshalled upon any foreclosure, sale or other enforcement of this Indenture; and (4)consents and agrees'hat all the Pledged Property may at any such sale be sold by the Trustee as an entirety.Waiver.SECTION 8.15.Remedies Cumulative; Delay or Omission Every remedy given hereunder to the Trustee or to any of the Securityholders shall not be exclusive of any other remedy or remedies, and every such remedy shall be cumulate;ve and in addition to every other remedy given hereunder or now or hereafter given by statute, law, equity or otherwise.
The Trustee may exercise all or any of the powers, rights or remedies given to it hereunder or which-may now, or hereafter be given by statute, law or equity or otherwise, in its absolute discretion.
No course of dealing between El Paso or'='"'the Company and'he Trustee or the'Securityholders or any'elay or-omission of the Trustee-or of any Securityholder to exer'cise'any'ight, remedy or power accruing upon any Eve'nt of Default shall impair any such right,, remedy or power or shall be construed to be a waiver of any such Event of Default or of any right of the Trustee or of the S'ecurityholders or acquiescence.-therein, and, subject to theprovisions of Section 8;07, ev'eryright, remedy and power.given by'this Article,to the Trustee or to the Securityholders may be exercised from'time.
to.t:ime and-as often as may"be deemed expedient by, the Trustee"or'by the Securityholders.''
10,21, CHRYS'LER.;1106.
53: 1 ARTICLE NINE THE TRUSTEE SECTION 9.01.Certain Duties and Responsibilities.(a)Except during the continuance of an Event of Default, (1)the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee;and (2)in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this-Indenture; but in the case of any such certificates or opinions which by any provisions hereof are specifically
.required to be furnished to the Trustee, the Trustee shall'e under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.;(b)In case an Event of Default,has occurred and is con-tinuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and kill in their exercise, as a prudent man would exercise or use under he circumstances in the conduct of his own affairs.(c)No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or.its own willful misconduct, except that (1)this Subsection shall not be construed to limit the effect of Subsection (a)of this Section;(2)the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless it shall be proved that-the Trustee was negligent in ascertaining the pertinent facts;(3)the Trustee shall not be liable with respect.to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a major-ity in principal amount of the Outstanding Securities relating to the time, method and place of conducting any proceeding f or*any remedy available to the Trustee, or 21.CHRYSLER.1106.53: 1~~~~~
exercising any trust or power conferred upon the Trustee, under this Indenture; and (4)no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believ-ing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.(d)Nhether or not herein expressly so provided, every pro-vision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.SECTION 9.02.Notice of Defaults.In addition to its obligation to give notice to Securityholders as provided in Section 3.03, as promptly as practica-ble after, and in any event within 90 days after, the occurrence of any default hereunder, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear in the Security Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived;provided, however, that, except in the case of a default in the payment of the principal o f (or premium, i f any)or interest on any Security o"'the payment of any Sinking Fund installment, the Trustee sha protected in withholding such notice if and so long as the boa f directors, the executive committee or a trust committee of directors and/or Responsible Of f icers of the Trustee in good f aith determine that the withholding of such notice is in the interests of the Securityholders; and provided, further, that, in the case of any default of the character specified in Section 8.01(4)no such notice to Securityholders shall be given until-at least 30 days.after the occurrence thereof.For the purpose of this Section, the term"default" means any event which is, or after notice or lapse of time'.or both would become, an Event of Default..SECTION 9.03;Certain Rights,,-of Trustee.Except as otherwise provided in Section 9.01: (a)the Trustee may rely and shall be protected in acting ,or refraining from acting in reliance-upon any resolution, certifi-cate, statement, instrument, opinion, report, notice, request,--direc-tion, consent, order, bond, debenture or other paper or document: believed-by it to be.genuine.and to have.be'en signed.or presented'by the proper party'or part'ies;1021.CHRYSLER.1106;53
.1 2-56-0 (b)any request or direction of El Paso or the'ompany men-tioned herein shall be sufficiently evidenced by a El Paso or Company'equest or Order, in the case of a request or direction of El Paso, he Company, as the case may be and any resolution of the Board of Directors of El Paso or the Company may be sufficiently evidenced by a Board Resolution of El Paso or the Company, as the case may be;(c)whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or estab-lished prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence o f bad faith on its part, rely upori an Of f icers'ertificate of El Paso or.-the Company;(d)the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full*and complete authorization and protection,'in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance"thereon;((e)the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Securityholders pursuant to this Indenture, unless such.Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs,'expenses and liabilities which might be-incurred by it in compliance with=such request or direction;(f)the Trustee shall not be bound to make any investiga-ion into the facts or matters stated in any resolution, certificate, statement; instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investi-gation into such facts or matters as it may see'it, and, if the Trustee-shall',determine to make such further inquiry or investiga-tion, i;t shall be entitled to examine the books, re(cords and premises of El Paso or the Company, personally or, by agent or attorney;and'(k (g)the Trustee may execute any of the trusts or powers.hereunder or perform any duties hereunder either directly or by or ,through agents or attorneys and.the Trustee shall"not be responsible for'ny.'misconduct, or-negligence
'on".'the part of-any agent, or,'.attorneyI('ppointed-with due care by it.he'reunder.
SECTION-9.04.Not Responsible'for Recitals or Issuance of Securities.
The recitals contained herei.'n and in=the Securities'except
''the certi'fic'ates of authentication, shall not be taken as the'tateme'nts.of-the Trustee, and::,,the Trustee assumes no'esponsibility for their, correctness.
The'Trustee makes no.'representations,.
as to 0'21.CHRYSLER..1106.
53:.1-57--
the validity or sufficiency of this Indenture, the Pledged Property or the Securities, except that the Trustee hereby represents and war-rants that this Indenture has been executed and delivered by one of its officers r>ho is duly authorized to execute and deliver such ment on its behalf.The Trustee shall not be accountable for th or application by the Company of Securities or the proceeds.there f.SECTION 9.05.May.Hold Securities.
The Trustee, any Paying Agent, Security Registrar or any other agent of El Paso or the"Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 9.08 and 9.13, may otherwise deal with El Paso and the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent.SECTION 9.'06.Funds May Be Held by Trustee or Payi;ng Agent;Investments.(a)Subject to subsection (b)of this Section 9.06, any monies held by the Trustee or the Paying Agent hereunder as part of the Pledged Property may, until paid out by the Trustee or the Paying Agent as herein provided, be carried by the Trustee or the Paying Agent on deposit with itself, and neither the Trustee nor the Paying Agent shall have any liability for interest upon any such monies.(b)At any time and from time to time prior to payment in full of any amounts to be paid by the Trustee pursuant to Sec'2.15(b)in respect of any series of Securities, if at the ti Event of Default has occurred and is continuing, the Trustee si.on Company Request, invest and reinvest in Permitted Investments as specified in such Company Request any monies, from the sale of the Securities of such series at the time on deposit with the Trustee as part of the Pledged Property, together with any income and gains from.the investment'nd reinvestment thereof, and sell any Permitted Investments, in either case, at.such prices, including accrued inter-'st, as are set forth in such Company Request, and such Permitted Investments shall-be held by the Trustee until so sold in trust as part of the Pledged Property.The Trustee shall, on Company Request, se11 such Permitted Investments as may be speci;f ied therein, and the Trustee sha.ll,,wi."thout Company..R'equest, in.the event monies, a'e'.''required.for payment of any amounts.to be paid by, the Trustee-pursu-ant to-Section 2.15(b)in respect of any series of Securities and for any payment of principal, premium, if any, or interest on any series of Securities sell such Permitted Investments as are required to restore to cash as part of the Pledged Property such amounts as are needed for any: such payment..The'Trustee shall not be responsible-for any losses on'ny investments or sales of Permitted Investments
'ade pursuant to'the procedure specified:
in this subsecti'on
-(b)..F 1021.CHRYSLER.1106.53: 1 SECTION 9.07.Compensation and Reimbursement The Company agrees (1)to pay, or cause to be paid, to each of the Trustee and any Authorized Agent from time to time reason-able compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);(2)to reimburse, or cause to be reimbursed, each of the Trustee and any Authorized Agent-upon its request for all expenses, disbursements and advances incurred or made by it in accordance with any provision of this Indenture (including the compensation and the expenses and disburse-ments of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its own negligence, willful misconduct or bad faith;and (3)to indemnify, or cause to be indemnif ied, each of the Trustee, any predecessor Trustee and any Authorized Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or.liability in connection with the exercise or per-formance of any of it's powers or duties hereunder.
As security for the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such,, except funds held in trust for the payment of prin-cipal of (and premium, if any)or interest on particular Securities.
SECTION 9.08.Disqualification; Conflicting Interests.(a)If the Trustee has or shall acquire any conflicting interest, as-defined in this Section, it shall, within 90 days after-ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect hereinafter specified in this Article.(b)In the event that the Trustee shall fail to comply with the provisions of Subsection (a)of this Section the Trustee shall, within 10 days after the expiration of such 90-.day'period, transmit by mail to all Securityholders,'as their.names and addresses, appear in the Security Register, notice of such failure.
(c)For the purposes of this Section, the Trustee shall be deemed to have a conflicting interest if (1)the Trustee is trustee under another Indenture under which any other securities, or certificates of inter-est or participation in any other securities, of any obli-gor on the Securities are outstanding, unless (A)the Securities are collateral trust bonds under which the only collateral consists of securities issued under such other indenture, or (B)such other indenture is a collateral trust indenture under which the only collateral consists of Securities issued under this Indenture, provided that there shall be excluded from the operation of this paragraph any indenture or indentures under which other securities, or certificates of interest or participation in other securi-ties, of such obligor are outstanding, if such obligor shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing there-on, that trusteeship under this Indenture and such other indenture or indentures is not so likely to involve a mate-rial conflict of interest as to make it necessary in the public interest or for the protection of investors to dis-qualify the Trustee from acting as such under one of such indentures; (2)the Trustee or any of its directors or executive offic'ers is an obligor upon the Securities or an under-writer for such obligor;(3)the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with any obligor on the Securities or an underwriter for such obligor;(4)the Trustee or any of its directors or executive officers is a director,.officer, partner, employee, appoin-tee or representative of any obligor on the Securities, or of an underwriter (other than the Trustee itself)for such obligor who is currently engaged in the business of under-writing, except-that (i)one indiyidu'al may.be a director....'."or an.executive officer, or*both-,-,of the=Trustee and.a-director'or-an executive officer-,,or-both,.of.an'bligor.
on the Securities bu't may not be at the same time an executive officer of both the Trustee.and such obligor;(ii)if and so=long as the number of directors of the Trustee in office is more than nine, one additional individual may be direc-tor or an executive officer, or=both, of-the Trustee and a director of an-obligor on.the Securities; and (iii)the Trustee may be designated by an obligor on.the Securities or by'ny'underwriter for such.oblig'or to=act in the f-1021;CHRYSLER.1106.53:1,-60-,, 1 P capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity, or, subject to the provisions of paragraph (1)of this Subsection, to act as trustee, whether under an indenture or otherwise; (5)10: or more of the voting securities of the Trustee is beneficially owned either by any director, part-ner, or executive officer thereof, or 20%or more of such voting securities is benef icially owned, collectively, by any two or more of such persons;or 10: or more of the voting securities of the Trustee is beneficially owned either by an underwriter for any obligor on the Securities or by any director, partner or executive officer thereof, or is beneficially owned collectively by any two or more such persons;(6)the Trustee is the beneficial owner of,.or holds as collateral security for an obligation which is.in default (as hereinafter in this Subsection defined), (i)5%or more of the voting securities, or 104 or more of any other class of security, of any obligor on the Securities not including the Securities issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (ii)10: or more of any class of security of an underwriter for any obligor on the Securities; (7)the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this Subsection defined), 5%oi more of the voting securities of any person who, to the knowledge of the Trustee, owns 104 or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with,'ny obligor on the Securities; (8)the Trustee is the beneficial owner of, or holds collateral security for an obligation which is in default (as hereinafter in this Subsection defined), 10%or more of any class of security of any person who, to the knowledge of the Trustee, owns 50;or more of the voting securities of any obligor on the Securities; or-(9)the Trustee owns, on May 15 in any calendar year, in the capacity of executor, administrator, testamen-tary or inter vivos trustee, guardian, committee or conser-vator, or in any other similar capacity, an aggregate of 254 or more'of the voting securities, or of any class of security., of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraphs (6), (7)or (8)of this Subsection.
As to any such securities of which the Trustee acquired ownership through becoming executor, administrator, or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition to the extent that such securities included in such estate do not exceed 25: of such voting securities or 25'.of any such class of security.Promptly a f ter May 15 in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the above mentioned capacities as of such May 15.If any obli-gor upon the Securities fails to make payment in full of the principal of, or the premium, if any, or interest on, any of the Securities when and as the same becomes due and payable, and such failure continues for 30 days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above mentioned capacities as of the date of the expiration of such 30 day period, and after such date,-notwithstanding the foregoing provisions of this paragraph, all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes.of paragraphs (6), (7)and (8)of this Subsection.
The specification of percentages in paragraphs (5)t inclusive, of this Subsection, shall not be construed as indic that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of paragraph (3)or (7)of this Subsection.,For, the purposes, of paragraphs (6), (7), (8)and (9)of this Subsection only,.(i)the terms"security" and"securities" shall'nclude only such securities as are generally known as corporate securities, but shall.not include.any note or other evidence of indebtedness,-issued to evidence an obligation to repay moneys loaned to a-person by.one or-more banks,',trust companies or banking firms, or any certificate'f interest.or participation in'ny such'-note, or.,-'" evi'dence or.,indebtedness;,.-'(ii) an obligation shall be'deemed to be.'in default" when a default in payment of principal shall have con-tinued for 30 days or more and shall not have been cured;and (iii)the Trustee shall.not be deemed to be the owner or holder of (A)any security which it holds as collateral security, as trustee or other-wise, for an obligation, which is.not.in default as defined in clause (i i)above, or (B)any-security which it holds-as.collateral security-.under'this Indenture, irrespective o', any default hereunder,or (C)--any s'ecurity which it holds as agent'or collection, or as custodian,'021.CHRYSLER.1106.,53.:
1-62-0:
escrow agent, or depositary, or in any similar representative capacity.t Except as provided in the next preceding paragraph, the word"security" or"securities" as used in this Indenture shall mean any note, stock, treasury stock, bond, debenture, evidence of indebt-edness, certificate of interest or participation in any profit shar-ing agreement, collateral trust certificate, preorganization certifi-cate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in gen-eral, any interest or instrument commonly known as a"security", or any certificate of interest or participation in, temporary or interim certif icate for, receipt for, guarantee of, or warrant or right to subscribe to purchase, any of the foregoing.(d),For the purposes of this Section: P (1)The term"underwriter" when used with reference to any obligor on the Securities means every person who, within three years prior to the time as of which the deter-mination is made, has purchased from such obligor with a view to, or has offered or sold for such obligor in connec-tion with, the distribution of any security of such obligor outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person irhose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors
'r sellers'ommission.
(2)The term"director" means any director of a cor-poration, or any individual performing similar functions with respect to any organization whether incorporated or unincorporated.
(3)The term"person" means an individual, a corpo-ration, a partnership, an association, a joint-stock com-pany,, a trust, an.unincorporated organization, or a govern-ment or political subdivision thereof.As used in this paragraph, the term"trust" shall include only a trust where the interest or interests of the beneficiary or bene-ficiaries are evidenced by a security.(4)-The term"voting security" means any security presently entitling the owner or holder thereof to vote in the direction'or management of the affairs of a person, or any security issued under or pursuant to any trust, 021.CHRYSLER.1106.53:1 agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or manage-ment of the affairs of a person.(5)The term"obligor" means any obligor upon the Securities within the meaning of TXA.(6)The term"executive officer" means the presi-dent, every vice president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors.(e)The percentages of the voting securities and other securities specified in this Section shall be calculated in accor-dance with the following provisions:
(1)A specified percentage of the voting securities of the Trustee, any obligor-or any other person'eferred to in this Section (each of whom is referred to as a"person" in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person.(2)A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding.
(3)The term"amount", when used in'regard to secu-rities, means the principal amount if relating to evidences , of indebtedness,.
the number'f shares if'relating to capi-tal shares and the number of units i;f relating to.any other kind of security.(4,).The-teim.*"outstanding"" means,.issued.
and not held'y.or fo'r the.account of:the;-issuer;The followirig, securi-'ties shall not b'e deemed-outstanding within the meaning of this definition: (i)securities of an issuer held in a sinking fund, relating.to securities of.the issuer of the same class';1021;CHRYSLER.1106.53:1.
,.-.64-,'
e'(ii)securities of an=issuer held in'sinking fund relating to another class of securities of~the issuer, if the obligation evidenced by such other class of securities is not'n default as to principal or interest or otherwise;(iii)securities pledged by the issuer thereof as security for an obligation of the issuer.not in default as to principal or interest or otherwise; and (iv)securities held in escrow if placed.in escrow by the issuer thereof;I provided,'however, that any voting securities of an issuer shall.be deemed outstanding if any person other than the issuer, is entitled to exercise the voting rights thereof.\''(.5)A security shall be deemed to'be of the same class's another security if.both securities confer upon the holder or holders substantially.
the same rights and privileges; provided, however, that in the case of secured evidences of indebtedness, all of which are issued: under a single indenture; differences in'he interest rates or maturity dates o f various series thereof shal'l not:be deemed sufficient to.constitute such series different clas-ses;and,provided, further, that, in the.'case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed suffi-cient to constitute them securities of different classes, whether or not they are issued under a single indenture.
SECTION 9.09.Corporate Trustee Required;Eligibility.
There shall at all times be a Trustee hereunder which shall be a-corporation organized and doing business under the laws of the United States of America'r of any State, authorized under such laws to exercise corporate trust powers, having'a combined capital and surplus of at least$50,000,000, and subject to supervision.
or exami-nation by.Federal or State authority.
If, such corporation publishes"repoits of condition, at least annually, pursuant to law or to,the requirements.of the'f'oresaid supervising<
or examining authority,~'.then'or-the'urpo'ses*
of this Section;the.'combined capital and sur--plus of such corporation-shall be deemed to be its combined capital and surplus-as.set forth in its most recent report of condition so pub'lished.
If at any time the Trustee shall cease to be eligible in accordanCe with the provisions of this Section, it shall resign imme--diately in=the manner and w'ith the effect hereinafter specified in.this Article.,'l~~321.CHRYSI.ER.
1106.53: 1 65 1 SFCTION 9.10.Resignation and Removal;Appointment of Successor.(a)No resignation or removal of the Trustee a appointment of a successor Trustee pursuant to this Article become effective until the acceptance of appointment by the successor Trustee under Section 9.11.(b)The Trustee may resign at any time by giving written notice thereof to El Paso and the Company.If an instrument of acceptance by a successor Trustee shall not have beeri delivered to El Paso, the Company and the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.(c)The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee, El Paso and to the Company.(d)If at any time: (i)the Trustee shall fail to comply with Section 9.08(a)after written request therefor by any Lessor or by any Securityholder who has been a bona fide Holder of a Security for at least 6 months, or (ii)the Trustee shall cease to be eligible under Section 9.09 and shall fail to resign after written request therefor by any Lessor or by any such Securityholder, or (iii)the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any publ'ic officer shall take charge or control of the Trustee or-of its-property or affairs for the purpose of rehabili-tation, conservation or liquidation, then, in any such case, (i)El'Paso-,'cting after consultation with the Company, may.remove.the." Trustee by.Board.Resolution or, (ii)subject: to,Section-8.10;-
any.'Securityholder=
who has been a bona fide='Ho'lder, of'.a Security for at.least'6 months may', on behalf of himself-'nd all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.(e)If.the Trust'ee shall resign, be removed or become.i:ncapable of acting, or if a vacancy shall occur in, the offi.ce of.Trustee, for any-cause, El Paso., acting after consultation with the.Company, shall promptly appoint by Board Resolution a successor-
.-1021.CHRYSLER.1106.53: 1!-66-y 4 4 Trustee.If, within 1 year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to El Paso, the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by El Paso.If no successor Trustee shall have been so appointed by El Paso, acting after consultation with the Company, or by the Securityholders, and accepted appointment in the manner hereinafter provided, any Securityholder who has been a bona fide Holder of a Security for at least 6 months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdic-tion for the appointment of a successor Trustee.(f)The Company shall give notice of each resignation and each removal of, the Trustee and each appointment of a successor Trustee'by mailing written notice of such event by first-class mail, postage prepaid;-to the Holders of Securities as their names and addresses appear in the Security Register.Each notice shall include the name of th'e successor Trustee and the address of its Corporate Trust Office.SECTION 9.11.Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to El Paso, the Company and to the retiring rustee an instrument accepting such appointment, and thereupon the esignation or removal of the retiring Trustee shall become effective and'such successor Trustee, without any further act, deed or convey-ance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee;but, on request of any Lessor, the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transfer-ring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such'successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 9.07.Upon request of any such successor Trustee, El Paso and='he.Company shall execute'ny and all instruments for more fully and.certainly vesting i'n and conf irming to such successor Trustee all such rights, powers and trusts.No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
SECTION 9;12.Merger, Conversion, Consolidation or Succession to Business.Any corporation into which the Trustee may be merg r converted or with which it may be consolidated, or any corpo resulting from any merger, conversion or consolidation to which e Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corpo-ration shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
SECTION 9.13.Preferential Collection of Claims against any Obligor.'(a)Subject to Subsection (b)of thi;s Section, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of any obligor on the Securities (as defined in Subsection (c)of this Section)within 4 months prior to a default, as defined in Subsection (c)of this Section, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the ben it of the Trustee individually, the Holders of the Securities a e holders of other indenture securities (as defined in Subsectio)of this Section): (i)an amount equal to any and all reductions in the amount due.and owing upon any claim as suc'h creditor in resp'ect of principal or-interest, effected after the begin-ning of-such 4 month period and val'id as against any obli-gor on the Securities and its other creditors, except any such reduction resulting from the receipt or disposition of any property described'n-paragr'aph (ii)of this Subsection,:or from the exercise of any ri;ght of.set-o'ff
;.which" the Trustee.could*have"exercised"-'if-.:a petition in bankiuptcy had-been filed.by-or against'any such obligor upon the.date of such default;and (ii)all property received by the.Trustee in respect of any claim as such creditor, either as security therefor;or in.sat'isfaction or composition thereof, or otherwise, after the-beginning of such 4 month period, or a'n amount ,.equal.to,,the proceeds of.any such=-property,,if disposed.of, subject,'owever,:
to the rights,'f any, of.any obligor on-'102 1;.CHRYSLER.'106.
53: 1 4 the Securities and its other creditors in such property or such proceeds.Nothing herein contained, however, shall affect the right of the rustee (A)to retain for its own account (i)payments made on account of any such claim by any Person (other than an obligor on the Securities) who is liable thereon, and (ii)the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii)distributions made in cash, securities or other property in respect of claims filed against such obligor in bankruptcy or receivership or in proceed-ings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law;(B)to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such 4 month period;(C)to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any.property held by it as security for any such claim, if such claim was created after the beginning of such 4 month period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe.that a default as defined in Subsection (c)of this Section would occur within 4 months;or (D)to receive payment on any claim referred to in paragraph (B)or (C), against the release of any property held as security for such claim as provided in paragraph (B)or (C), as the case may be, to the extent of the fair value of such property..For the purposes of paragraphs.(B), (C)and (D), property substituted after the beginning of such 4 month period for property held as secu-rity at the time of such substitution shall, to the extent of the fair value'of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of.such paragraphs is created in renewal of or in substitution for or for the purpose of repaying*or refunding any pre-existing claim of the Trustee as such creditor,-
such claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds-and property held in such special account and the proceeds thereof shall be apportioned between the Trustee>the Securityholders and the hold-ers of other indenture securities in such manner that the Trv the Securityholders and the holders of other indenture secur s realize, as a result of payments from such special account and pay-ments of dividends on claims filed against the obligor on the Securities in bankruptcy or receivership or in proceedings for reor-ganization pursuant to the Federal Bankruptcy Act or applicable State law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from such obligor of the funds and property in such special account and before crediting to the respective claims of the Trustee and the Securityholders and the holders of other indenture securities dividends on claims filed against such obligor in bank-ruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such div-idends and from the funds and property so held in such special account.As used in this paragraph, with respect to any claim, the term"dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or proceedings for reorganiza-tion pursuant to the Federal Bankruptcy Act or applicable State.law, whether such distribution is made in cash, securities, or other prop-erty, but shall not include any such distribution with respect to the.secured portion, if any, of such claim.The court in which such bankruptcy, receivership or proceedings for reorganization is pe'shall have jurisdiction (i)to apportion between the Trustee a e Securityholders and the holders of other indenture securitie n accordance with the provisions of this paragraph, the funds and prop-erty held in such special account and proceeds thereof, or (ii)in lieu of such apportionment, in whole or in part, to give to the pro-visions of this paragraph due consideration in determining the fair--ness of the distributions to be made to the Trustee and the Securityholders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as, security for any such claim, or to make a specific allocation of such distributions as'bet;ween the secured and unsecured portions of such-claims or',other-, vlise.to,apply
-'the provisions of-:this paragraph:
as a mathematical' formula.Any Trustee which has resigned or been removed after the beginning of such 4 month period shall be subject to the provisions
'f this.Subsection as though such res'ignation or, removal-had not occurred.If any.Trustee has.resigned or been-removed prior to the'eginning.of-such,4 month.-period, it shall be subject to.the 1021..CHRYSLER.1106.53:1 provisions of this Subsection if and only if the following conditions exist: (i)the receipt of property or reduction of claim, which would have given rise to the obligation to account if such Trustee had continued as Trustee, occurred after the beginning of such 4 month period;and (ii)such receipt of property or reduction of claim occurred within 4 months after such resignation or removal.(b)There shall be excluded from the operation of Subsection (a)of this Section a creditor relationship arising from (1)the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acqui-sition by the Trustee;(2)advances authorized by a receivership or bank-ruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encum-brances thereon, if notice of such advances and of the cir-cumstances surrounding the making thereof is given to the Securityholders at the time and in the manner provided in this Indenture; (3)disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity;(4)an indebtedness created as a result of services rendered or premises rented;or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in Subsection (c)of this Section;(5)the-ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a)of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of El Paso;or (6)the acquisition, ownership, acceptance or nego-.tiation of any drafts, bills of exchange, acceptances or obligations which.fall within the classification of self-liquidating paper as defined in Subsection (c)of this Section.02 1.CHRYS i ER;1106.53: 1 (c)For.the purposes of this Section only: (1)The term"default" means any failure to make payment in full of the principal of or interest on any of the Securities or upon the other indenture securities when and as such principal or interest becomes due and payable.(2)The term"other indenture securities" means securities upon which the Person obligated thereunder is an obligor (as defined in the Trust Indenture Act)outstanding under any other indenture (i)under which the Trustee is also trustee, (ii)which contains provisions substantially similar to the provisions of this Section, and (iii)under which a default exists at the time of the apportionment of the funds and property held in a special account as pro-vided in Subsection (a)of this Section.(3)The term"cash transaction" means any transac-tion in which full payment for goods or securities sold is made within 7 days after delivery of the goods or securi-ties in currency or in checks or other orders drawn upon banks or bankers and payable upon demand.(4)The term"self-liquidating paper" means any draft, bil'l of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by any obligor on the Securities for the purpose of financing the purchase, pro-cessing, manufacturing, shipment, storage or sale of goods, wares-or merchandise and which is secured by documents evi dencing title to, possession of or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising f rom the sale o f the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with such obligor-arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.
(5)The term"obligor" means any ob'ligor upon the-.Securities
=within-the meaning of the TIA.SECTION'9.14.'Maintenance, of Agencies.(a), There shall at all times be maintained in the Borough of Manhattan, the City of New York, an office or agency where, Securities may be presented or surrendered for transfer or exchange or for the.registration thereof, and for payment of principal, pre-.-mium (if any)and interest.and where notices and demands to or upon.the Trustee in'respect, of the Securities or of'this Indenture may be,, s'e'rved'.=-
Such, of fice or.,agency shall be initi.'ally at the Paying 102 1.CHR'l S LER..1 106.5 3: 1'72-Agent's Office.Written notice of the location of each of such other office or agency and of any change of location thereof shall be given to the Company and to the Trustee.In the event that no such office or agency shall be maintained or no such notice of location or f change of location shall be given, presentations and demands may be made and notices may be served at-the Corporate Trust Office.(b)There shall at all times be a Security Registrar and a Paying Agent hereunder.
Each such Authorized Agent shall be a bank or trust company, shall be a corporation organized and doing business under the laws of the United States or any State thereof, with a com-bined capital and surplus of at least$50,000,000, and shall be authorized under such laws to exercise corporate trust powers, subject to supervision by Federal or State authorities.
Mellon Trust Company is hereby appointed as Paying Agent hereunder.
The Trustee shall be the Security Registrar hereunder.(c)Any Paying Agent (other than the Trustee)from time to time appointed hereunder shall execute and deliver to the Trustee an instrument in which said Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1)hold all sums held by it for the payment of principal of, and premium (if any)and interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;e (2)give the Trustee within five days thereafter notice of any default by any obligor upon the Securities in the making of any such payment of principal, premium (if any)or interest;and (3)at any time during the continuance of any such default, upon the written request, of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.Notwithstanding any other provision of this Indenture, any payment required to be made,to or received or held by the Trustee may, to the extent authorized by written instructions of the Trustee, be made to or received or held by a Paying Agent in the Borough of Manhattan, the City of New York, for the account of the Trustee.(d)Any corporation-into which any Authorized Agent may be merged or converted or with which it may be consolidated, or any cor-poration resulting from any merger, consolidation or conversion to which any Authorized Agent shall'e a party, or any corporation succeeding to the corporate trust business of any Authorized Agent, 21.CHRYSLER.-1106.
53: 1~~~=
h shall be the successor of such Authorized Age'nt hereunder, if such successor corporation is otherwise eligible under this Section, with-out the execution or filing of any paper or any further act on the part of the parties hereto or such Authorized Agent or such succ corporation.(e)Any Authorized Agent may at any time resign by giving written notice of resignation to the Trustee, El Paso and the Company.The Company may, and at the request of the Trustee or any Lessor shall, at any time, terminate the agency of any Authorized Agent by giving written notice of termination to such Authorized Agent and to the Trustee.Upon the resignation or termination of an Authorized Agent or in case at any time any such Authorized Agent shall cease to be eligible under this Section (when, in either case, no other Authorized Agent performing the functions of such Authorized Agent shall have been appointed), the Company shall promptly appoint one or more qualified successor Authorized Agents approved by the Trustee and each Lessor to perform*the functions-of the Authorized Agent which has resigned or whose'gency has been terminated or who shall have ceased to be eligible under this Section.The Company shall give written notice of.any such appointment to all Holders as their names and addresses appear on the Security Register.h ARTICLE TEN SECURITYHOLDERS'ISTS AND REPORTS BY TRUSTEE AND EL PASO SECTION 10.01.El,Paso to Furnish Trustee Name Addresses of Securityholders.
El Paso will, furnish or cause to be furnished to the Trustee semiannually, between January.15 and January 30, inclusive, and between July 15 and July 30, inclusive, in each year, and at such other times as the Trustee may request in writing,=within 30 days after receipt by El Paso of any such request, a list, in such form as the Trustee may reasonably require, of the names and addresses-of the'Holders of-Securities, in each case as of a date not more than 15.days prior:to the'ime such.list is, furnished; provided', however,'-that:so'long as-the-Trustee.'is'he insole SecurityRegistrar, no such-list need be furnished for s'o.long as-a copy of the Security'=Register-'s being furnished to the-Trustee pursuant to Section 9.14 (b).SECTION.'0.
02.Preservation of Information; Communications
'o Securityholders.(a)The Trustee shall preserve, in as current, a form as is.'eason'ably;practi.cab'le, the names and'ddresses of'ol'ders of'ecuri.ties contained.in'he most recent list furnished to the, Trustee h', 1021.CHRYSLER.11'06.'53:
'1 h t h A 4 h I h-'--74-.~
as provided in Section 9.14(b)or Section 10.01, as the case may be, and the names and addresses of Holders of Securities received by the Trustee in its capacity as Security Registrar, if so acting.The~~~~rustee may destroy any list furnished to it as provided in ection 9.14(b)or Section 10.01, as the case may be, upon receipt of a new list so furnished.(b)If three or more Holders of Securities (hereinafter referred to as"applicants")apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the appli-cants desire to communicate with other Holders of Securities with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communica-tion which such applicants propose to transmit, then the Trustee shall, within 5 Business Days after the receipt of such application, at its election, either: (i)afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 10.02(a), or (ii)inform such applicants as to the approximate number of Holders of Securities whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 10.02(a), and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application.
\~'4 If the Trustee shall elect to afford such applicants access'to such information, the Trustee shall, upon the written request of such applicants, mail to each Securityholder whose name and address appear, in the information preserved at the time by the Trustee in accordance with Section 10.02(a)', a copy of the form of proxy or other communication which is specified in such request, with reason-.able.promptness a f ter a tender to the Trustee of the material to be mailed and of payment, or provision-for the payment, of the.reason-.able expense's of mailing, unless.within five days.after, such tender,'the'rustee shall m'ail'o.;such.applicants..an'd
*'file.with the'.Commiss'ion, together with, a copy.of-the'material to.',be mail'ed;, a written statement to the effect that, in the opinion of the Trustee, such mailing=-would,.be'contrary to~the best interests of the Holders of Securities or would be in violation of applicable law..Such writ-'ten.st'atement, shall specify the basis of such opinions.If the ,Commission, after opportunity=
for a hearing upon, the4objections spec-.', ified in'the written sta'tement.so,.filed, shall enter an order refusing to sustain.any.'..of such objections or if, after the entry of.-,an order=sustaining one.or'more of-such objecti:ons', the Commission 4 4 Y-75-021'.CHRYSLER.1106;53: 1.4 4 f~4 4 4~'4 t'4, shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall'mail copies of such material to all such Securityholders with reasonable promptness after the entry of order and the renewal of such tender;otherwise the Trustee sha relieved of any obligation or duty to such applicants respect ng their application.(c)Every Holder of Securities, by receiving and holding the same, agrees with El Paso and the Trustee that neither El paso nor the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Securities in accordance with Section 10.02(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pur-suant to a request made under Section 10.02(b).SECTION 10.03.Reports by Trustee.(a)Within 60 days after May 15 in each year, commencing
" with 1987, the Trustee shall transmit by mail t'o'll Securityholders,, as their names and addresses appear in the Security Register, a brief report dated as of such May 15 with respect to: (1)it eligibility under Section 9.09 and its quali-fications under Section 9.08, or in lieu thereof, if to the best of its knowledge it has continued.
to be eligible and qualified under said Sections, a written statement to such effect;(2)the character and amount of any advances (and'if the Trustee elects so to state, the circumstances surround-ing the making thereof)made by the Trustee (as such)=which remain unpaid on the date of such report, and for the reim-bursement of which it claims or may claim a lien or charge, prior to that of the Securities, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect)to report-such advances if such advances so remaining unpaid aggregate'ot more than I/2.of 1: of the principal amount of'the.Securities Out'standing.
on the,'ate of suchreport;,.-*(3)the amount, interest rate and maturit'y date of all other indebtedness owing by.an obligor, on the Securities within the meaning of the.TIA to the Trustee in its individual capacity, on the date of such report, with a brief description of any property-held's collateral secu-rity therefor, except an indebtedness based upon a creditor relationship, arising in any manner'described in Section 9.13'(b)(2), (3);(4)or (6);,1021.CHRYSLER..1106,.
53: I, (4)the property and funds, if any, physically in the possession of the Trustee as such on the date of such report;(5)any release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any)which the Trustee has not previously reported;(6)any additional issue of Securities which the Trustee has not previously reported;and (7)any action taken by the Trustee in the per-formance of its duties hereunder which it has not previ-ously reported and which in its opinion materially affects the Securities, except action in respect of a default, notice of which has been or is to be withheld by the Trustee in accordance with Section 9.02.(b)The Trustee shall transmit by mail to all Securityholders, as their names and addresses appear in the Security Register, a brief report with respect to: (1)the release, or release and substitution, of property subject to the Lien of this Indenture (and the consideration therefor, if any), such report to be trans-mitted within 90 days of such time;and (2)the character and amount of any advances (and if the Trustee elects so to state, the circumstances surround-ing the making thereof)made by the Trustee (as such)since the date of the last report transmitted pursuant to Subsection (a)of this Section (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this Subsection, except that the Trustee shall not be required (but may elect)to report such advances if such advances.remaining unpaid at any time aggregate 10: or less of the princip'al.
amount-of the Securities Outstanding at such time, such report to be transmitted within 90 days after such time.(c)A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with each stock exchange upon which the Securities are listed,,and also with the Commission.
El Paso will notify the Trustee when the Securities'.
are listed on any stock exchange.021.CHRYSLER.1106.53: 1~~~-77'-
SECTION 10.04.Reports by El Paso.El Paso will (1)file with the Trustee, within 15 days after El Paso is required to file the same with the Commission, copies of the annual reports and of the information, docu-ments and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which El Paso may be required to file with the Commission pursuant to Section 13 or Section 15(d)of the Securities Exchange Act of 1934: or, if El Paso is not required to file information, docu-ments or reports pursuant to either of said Sections, then it will file with the Trustee and the Commission, in accor-dance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (2)f i le with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by El Paso with the conditions and covenants of this Indenture as may be required from time to time by such rules and regula-tions;and (3)transmit by mail to all Securityholders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries, of any information, documents and reports requiied to be filed by El Paso pursuant to paragraphs (1)and (2)of this Section as may be.required by rules and regulations prescribed from'time to time by the Commission.
1021.CHRYSLER.1106.53: 1-'-78-0 ARTICLE ELEVEN'UPPLEMENTAL INDEKHJRES SECTION 11.01.Supplemental Indentures Without Consent of Securityholders.
Without the consent of the Holders of any Securities, El Paso, when authorized by a Board Resolution, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto (a"Series Supplemental Indenture" in the case of item 1 below), in form satisfactory to the Trustee, for any of the following purposes: (1)to establish the form and terms of Securities of any series of Securities permitted by Sections 2.01 and 2.03;or (2)to evidence the succession of another corpora-tion to El Paso, and the assumption by any such successor of the covenants of El Paso herein contained, or to evi-dence the succession of another corporation to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities contained; or (3)to add to the covenants of=El Paso or the Company, for the benefit of the Holders of the Securities, or to surrender any right or power herein conferred upon El Paso or the Company;or (4)to convey, transfer and assign to the Trustee, and'o subject to the Lien of this Indenture, with the same force and effect as though included in the Granting Clauses hereof, additional, Pledged Lessor Notes or additional prop-erties or assets, and to correct or amplify the description of any property at any-time subject to the Lien of this Indenture or to assure, convey and confirm unto the Trustee.any property subject or required to be-subject to the Lien of this-Indenture; or-(5')=to.modify,.el>iminate or.-add'to the provisions'of:
'his Indenture'o such extent as.shall be'necessary to con-tinue the qualification of this Indenture (including any supplemental indenture) under the TIA, or under any similar federal statute hereafter enacted, and to add, to this Indenture such other provisi'ons as may be expressly permit-.ted-by.the TIA, excluding, however, the provisions referred, to in;Section 316(a)(2)of the TIA as in effect at, the date,.as of-=;wh.ich,'his instrument was=executed or.-any~~(021.CHRYSLER1106.
53: 1*I*F-'79-'1 C E corresponding provision in any similar federal statute hereafter enacted;or (6)to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other pro-visions with respect to matters or questions arising under this Indenture, provided such action shall not adversely affect the interest of the Holders of the Securities.
SECTION 11.02.Securityholders.
Supplemental Indenture With Consent of With the consent of (i)the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, and (ii)El Paso, when authorized by a Board Resolution, and the Company may and the Trustee, subject to Section 11.03 shall, enter into an indenture or indentures supplemental hereto for the purpose of adding any pro-visions to or changing in any manner the rights and obligations of the Holders of the Securities and of El Paso and the Company under this Indenture; provided, however, that, no such supplemental inden-ture.shall, without the consent of the Holder of each Outstanding Security affected thereby, (1)change the Stated Maturity of the principal of, or any installment of interest on, or the dates or circum-stances of payment of premium (if any)on, any Security, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Security or the premium (if any)or the interest thereon is payable, or impair the right to insti-tute suit for the enforcement of any such payment of prin-cipal or interest on or after the Stated Maturity-thereof (or, in the case of redemption, on or after the Redemption Date)or such payment of premium (i f any)on or after the date such premium becomes due and payable or change the dates or the amounts of payments to be made through the.operation.of the Sinking Fund--in respect=of such ,Securities,.
or.-.(2)=except With resp'ect to additional series-of Securities issued in.accordance with the terms of this Indenture, permit the creation of any lien prior to or pari passu with the Lien of this Indenture with respect to-any of the Pledged Property, or terminate the Lien of this Indenture on any Pledged Property (except in each case as permitted by,,and.pursuant.to,, Article Four)or deprive any I I 102 1, CHRYSLER'.
1106.'3-: 1-80-0 Securityholder of the security afforded by the Lien of this Indenture, or (3)reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is r'equired for any such supplemental indenture, or the con-sent of whose Holders is required for any waiver (of com-pliance with certain provisions of this Indenture or cer-tain defaults hereunder and their consequences) provided for in this Indenture, or (4)modify any of the provisions of this Section or Section 8.08, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby.Upon receipt by the Trustee of Board Resolutions of El Paso and the Company and such other documentation as the Trustee may rea-sonably require and upon the filing with the Trustee of evidence of the Act of said Holders, the Trustee shall join in the execution of such supplemental indenture or other instrument, as the case may be, subject to the provisions of Sections 11.03 and 11.04.It shall not be necessary for any Act of Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall, be sufficient if such Act shall approve the substance thereof.SECTION 11.03.Documents Affectin Immunit or Indemnit.g If in the opinion of the Company or the Trustee any docu-ment required to be executed by it pursuant to the terms of Section.11.02 affects any interest, right, duty, immunity or indemnity in favor of'he Company or the Trustee under this Indenture or any of the Participation Agreements, the.Company or the Trustee, as the case may be, may in its discretion decline to execute such document.~SECTION ll'..04.Execution of Supplemental,Indentures.
:.*,;'..In;executing;
'or-accept'ing the additional.trusts cr'eated by,;any supplemental indenture.
permitted by*,this, Article"or the modi-'.fications thereby'f the trusts created by this Indenture, the Trustee shill-be entitled to receive, and (subject to Section 9.01)-shall be fully protected in relying upon, an Opinion of Counsel stat-,ing that the execution of such supplemental indenture is authorized or permitt'ed by, this=Indenture.
J 21..CHRYSLER;1106.
53." 1-.8'1-SECTION 11.05.Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under s Article, this Indenture shall be modified in accordance ther and such supplemental indenture shall form a part of this Inde e for all purposes;and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.SECTION 11.06.Conformity with Trust Indenture Act.Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in ef feet.SECTION 11.07.Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by any Lessor or the Company, bear a notation in form-approved by such Lessor, the Company and the Trustee as to any matter provided for in such supplemental indenture; and, in such case, suit-able notation may be made upon Outstanding Securities after proper presentation and demand.If any Lessor or the Company shall so determine, new Securities so modified as to conform, in the opinion of such Lessor, the Company and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and auth cated and delivered by the Trustee in exchange for Outsta Securities.
ARTICLE TWELVE DEFEASANCE SECTION 12.01.Payment of Indebtedness; Satisfaction and Discharge of this Indenture, This Indenture shall.cease to be of further effect.(except-=as.to,any r.ights of r.egis-tration.
of.--tr'ansfer.'.
or, exchange of.-.'.S'ecurities.
herein, expressly'rovided for and-the rights of the Trustee, any predecessor Trust'ee and any Authorized*
Agent under Section 9.07), and the Trustee, on demand and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1)either 1'02 1.CHRYSLER.1 106.53 1-82-'<<'
(A)all Securities theretofore authenticated and delivered (other than (i)Securities which have been destroyed, lost or stolen and which have been replaced or redeemed as, provided in Section 2.09 and (ii)Securities for the payment of which money held in trust hereunder has been paid to the Company and dis-charged f rom such trust, as provided in Section 5.03)have been delivered to the Trustee for cancellation; or (B)all such Securities not theretofore deliv-ered to the Trustee for cancellation (i)have become due and payable, or (ii)will become due and payable at their Stated Maturity of principal within one year, or (iii)are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name and at the expense of the Company, and the Company, in the case of (i), (ii)or (iii)above, has deposited or caused to be deposited with the Trustee in trust (subject to Section 9.06 hereof)for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore can-celled by the Trustee or delivered to the Trustee for cancellation, an amount sufficient to discharge such indebtedness, including principal, premium (if any)and interest to the date of such deposit (in the case of Securities which have become due and payable), or to the Stated Maturity of principal or Redemption Date, as the case may be;(2)All other sums then due and payable hereunder have been paid;and (3)El Paso or.the Company has delivered to the Trustee an'fficers'ertificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
.~.ee SECTION 12.02.Application of Deposited Money.All money deposited with the Trustee pursuant to Se'on 12.01 shall be held in trust and applied by it, in accordanc h the provisions of the Securities and this Indenture, to the pa to the Persons entitled thereto of the principal, premium (if any), and interest for the payment of which such money has been deposited with the Trustee.ART I CLE THIRTEEN RELEASE OF FUNDS BY THE TRUSTEE FOR PAYMENT OF THE PLEDGED LESSOR NOTES AND RELEASE AND SUBSTITUTION OF PLEDGED PROPERTY SECTION 13.01.Conditions Precedent to Release of Funds by the Trustee for Payment of the Pledged Lessor Notes.The obligation o f the Trustee to make payments to the Lessors pursuant to Section 2.15(b)hereof is subject to the receipt by the Trustee of the following: (a)an executed counterpart of a supplemental indenture appropriate.to subject to the Lien of this Indenture the related Pledged Lessor Notes;(b)the documents, opinions and certificates specif'.n the proviso to Section 2.04;(c)a written notice of the Company, dated as of the clos-, ing date under the applicable Participation Agreements (the Closing Date), of the Closing Date;(d)a certificate of each Lessor dated as of the Closing'ate under the related Participation Agreement (i)specifying the principal amount of the Pledged Lessor Note to be issued thereby and.(ii)stating that (A)such Lessor has received the amount of-the'quity Investor's investment pursuant to applicable provisions of such Parti'cipation Agreement.and;that such amount is available.for use,by-sich Lessor pursuant-to applicable provisions.
of such.'articipation Agreement upon-receipt of the amount to be paid by the Trustee with respect to such Pledged Lessor Note pursuant to Section 2.15 (b)hereof;(B)to the best knowledge of such Lessor no event has occurred and is continuing which constitutes an Indenture'vent, of Default, or would constitute an Indenture Event of Default after notice or lapse of, time or both under-the related Lease'Indenture and (C)the Pledged Lessor Note of such Lessor has been'duly authorized, executed and delivered by'uch Les'sor.,and, is, a'valid and binding obl'igation of'such Lessor;and e 1021.CHRYSLER.1106.53: 1 e e (e)such other doc..ments and evidence with respect to the Lessors and the Company as the Trustee may reasonably request.ARTICLE FOUR'TEEN SUNDRY PROVISIONS SECTION 14.01.Execution in Counterparts.
This instrument may be executed in any number of counter-parts, each of which when so executed shall be deemed to be an origi-nal, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed, and their respective corporate seals to be here-unto affixed and attested, all as of the day and year first above written.I'L PASO FUNDING CORPORATION Attest: c.)l.'l(.-u<~ssistant Secretary By V,CJ>EL PASO ELECTRIC COMPANY Attest:.By Executive Vice President Assistant ecretary 1.rCHR'YS:LER.
1106'..53:
1'8 5'-..r FIRST CIT NATI AL K OF HOUSTON tt t: By ssistant Uice r sident sist Cashier 1021.CHRYSLER.1106.53: 1 STATE OF NEW YORK o ss~o On this 18th day of August, 1986, before me personally came K.E.Ko jalowicz, to me known, who, being by me duly sworn, did depose and say that she resides at New York, New York;that she is the Vice President of EL PASO FUNDING CORPORATION, one of the corpo-'ations described in and which executed the foregoing instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal;that it was so affixed by authority of the Board of Directors of said corporation, and that she signed her name thereto by like authorit[NOTARIAL SEAL]
STATE OP NEW YORK)~SS~: COUNTY OF NEW YORK)On this 18th day of August, 1986, before me personally came Billye E.Bostic, to me known, who, being by me duly sworn, did depose and say that he resides at Houston, Texas;that he is the Executive, Vice President of EL PASO EZZCTRIC COMPANY, one of the cor-porations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal;that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
[NOTARIAL SEAL]P"'.'A T.CAN",/,CQ 0 cterg Pi.ol" S'.o o iXcw York-88-'4 e 1021.CHRYSLER.1106.53: 1 STATE OF NEW YORK)Ssoo COUNTY OF NEW YORK)Qn the 18th day of August, 1986, before me personally came John'hase llI, to me known who, being by me duly sworn, did depose and say that he resides at Houston, Texas;that he is an Assistant Vice-President of FIRST CITY NATIONAL BANK OF HOUSTON, a national banking association and one of the associations described in and which executed the foregoing instrument; that he knows the seal of said associations; that.the seal affixed to said instrument is such corporate seal;that it was so affixed by order of the Board of Directors of said associations, and that he signed his name thereto on behalf of said associations by like order.[NOTARIAL SEAL]Qp tA T.Ql'~!A";C'0 Notary puht.'c, S'.or.~o.'ow York bio, 41"'~t t 0 gvn!'!<<d tn 6";".i: CcintV Comm!co!un Ex.!rcs!..'orcu
.3, 19'~4 1 J J~~~02,1.;CHRYSLER.1106.-5-.,89-3:1-h k A EXHIBIT A TO COLLATERAL TRUST INDENTURE REQUIREMENTS FOR PLEDGED LESSOR NOTES AND LEASE INDENTURES The Pledged Lessor Notes and the Lease Indentures relating to any series of Securities shall contain the provisions summarized below or other provisions substantially as protective or more protec-tive of the interests of Holders of Outstanding Securities.
Notwithstanding the foregoing, (i)the Principal Instruments in con-nection with the initial series of Securit'ies issued under this Indenture shall be deemed to satisfy all criteria set forth in this Exhibit A and (ii)the Principal Instruments in connection with any subsequent series of Securities, if substantially similar.in form and substance to the Principal Instruments in connection with such ini-tial series of Securities, shall also be deemed to satisfy all cri-teria set forth in this Exhibit A.I.'ach Pledged Lessor Note will: (i)be duly issued pursuant to, and be secured by, the related Lease Indenture;(ii)provide for the payment to the registered holder thereof, not later than when due, of amounts at least equal to that portion of all principal of and premium, if any, and interest on the series of Securities issued in connec-tion with and relating to the pledge thereof under the Indenture, such p'ayment: to be without defenses or set-offs and otherwise unconditional;
(,iii)(A)if such Pledged Lessor Note is the ini;tial.series issued under the related Lease-Indenture, the prin-cipal amount'thereof=shall'not.'exceed-an'amount,.equal.
to 80'.'of the sum'of the'aggregate'purchase'rice of the prop-'rty being purchased with the proceeds of the issuance and-sale of such Lessor Note;and (B)if such Pledged Lessor Note is of an addi.tional series issued under the related L'ease Indenture; the sum of the principal amount.thereof and the principal amount of Pledged Lessor Notes thereto-.fore issued under such.Lease indenture shall: not exceed an amount equal-" t o 80%of.the sum of (1)the aggregate purchase price.of property being purchased with the 1 1021.CHRYSLER~1106.53: 1,-90-0,*l F proceeds of the issuance and sale of such Lessor Note and (2)the aggregate purchase price of the property purchased with the proceeds of the issuance and sale of each Pledged Lessor Note theretofore issued;and (iv)provide that no Change to the Pledged Lessor Note may be made without the consent of the holder thereof.II.Each Lease Indenture will: (i)assign to the Lease Indenture Trustee obliga-tions under the related Lease to which the Owner Trustee then or thereafter is entitled at least sufficient to pay the principal of, premium, if any, and interest on the related Pledged Lessor Note;and (ii)contain provisions no less protective of the interests of Holders of Securities than the following pro-visions of the Lease Indentures in connection with the ini-tial series of Securities:
Article II, Sections 3.4, 3.5, 3.6, 3.8-, 3.11, Article V, Article VI and Article VII.
I EL PASO FUNDINC CORPORATION, EL PASO ELECTRIC COMPANY FIRST CITY NATIONAL BANK OF HOUSTON, as Trustee Series 19865.6onh Suyplrmental 3<nhenturj, Dated as of December 1, 1986 to (6ollafj,nL C>rust 3<nhenture dated as of August 1, 1986-Providing for the Issuance of$146,305,000 Aggregate Principal Amount of Lease Obligation Bonds, Series 1986A with the Interest Rates and Stated WIaturities Set Forth Herein PALO VERDE NUGLEAR GENERATING STATION
'I ,~I t E I'0 t~.V~P p I' SERIEs 1986k.BoYD SUPPLE~IENTAL INDENTI.'RE, dated as of Decem-ber 1, 1986 among EI PAso Ft;NDING CoRPoRATIGN, a Delaware corpora-tion (the C'n~npany), EL PAso ELEcTRlc CobIPANY, a Tezas corporation (El Paso).and FIRsT CITY iXATIoNAL BANE ol: HoUsTGN, a na'tlonal bankIng association, as trustee (the Tncstee}.WHEREAsy the Company and El Paso have heretofore ezecuted and delivered to the Trustee an indenture dated as of August 1, 1986 (the Original Indenture) to provide for the issue from time to time of the Company's debentures, notes or other evidences of indebtedness to be issued in one or more series (the 8ecccrities);
WHEREAS, Section 2.03 of the Original Indenture provides.among other things, that El Paso, the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of Securities of any series as permitted by Section 2.03 of the Original Indenture; WHEREAs, Securities in the aggregate principal amount of$396,328,000 are currently issued and outstanding under the Original Indenture; WHEREAs, El Paso and the Company (i)desire by the issuance by the Company of a new series of Securities as hereinafter designated to provide funds to be loaned by the Company to purchasers of portions of El Paso's undivided interest in Unit 2 of the Palo Verde nuclear Oenerating StatioII, and (ii)have requested the Trustee to enter into this Series 1986K Bond Supplemental Indenture for the purpose of establishing the form and terms of the Securities of such series;WHEREAs,, all action on the part of the Company necessary to authorize the issuance of$146,305,000 principal amount.of its Lease Obligation.
Bonds, Series 1986K (the Bonds)under the Original Indenture and this Series 1986k.Bond Supplemental Indenture (said Original Indenture, as lieretofore supplemented and amended=and as supplemented by this Series=1986K Bond Supplemental:In'denture, being, hereinafter'alled tl>e Indeti--.tiire)has'.been duly taken AVHEREAS, the Bonds to be issued hereunder are to be substantially in" the form annezed as Schedule 1 hereto;and.WHEREAS, all.',acts and things necessary to make'the B'onds, when ezecuted by, the Company and authenticated and.delivered by the-Trustee I T 4 1
~e as provided in the Original Indenture.
the valid, binding and legal obliga-tions of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms.have been dotie aiid pertormed, attd the ezecutiori of this Series 1986A Bond Supple-mental Indenture and the creation and issuance under the Indenture of 8146,305,000 aggregate principal amount of the Bonds have in all respects been duly authorized, and the Company, in the ezercise of legal right and power in it vested, executes this Series 1986A Bond Supplemental Inden-ture and proposes to create, execute, issue and deliver the Bonds: Now, THEREFoRE, THIs SERIEs 1986A BovD SUPPLEMENTAL Ii4DEN-TURE AVITilESSETH'.
1 That in order to establish the form and terms of and to authorize the authentication and delivery of the Bonds, and in consideration of the acceptance of the Bonds by the holders thereof and of the sum of one dollar duly paid to the Company by the Trustee at the ezecution of these presents, the receipt whereof is hereby acknowledged, the Company and El Paso each covenant and agree with the Trustee, for the equal and proportionate benefit of the respective holders from time to time of the Bonds, as follows: ARTICLE ONE THE BONDS SECTION 1.01.Ter>tts of the Bonds.There is hereby created a series of Securities designated"Lease Obligation Bonds, Series 1986A." Bonds in the aggregate principal amount of 8146,305,000 may forthwith be ezecuted by the Company and delivered to the Trustee for authentication and delivery by the Trusteeain accordance with the provisions of Section 2.04 of the Original Indenture in the following principal-amounts for the Stated i~I'aturities of principal and at the interest rates indicated:
~(Stated IIaturity.;of.Principal.
'e*'i'uly'2 1992''uly 2, 1997 January 2;2011 Interest.'.Rale"'8.100%%uo 9.200'%%uo 10.375%%uo Principal'-Amount," S 14,506;000 24,129,000
=107,670,000 la e te a e a The Bonds shall be payable, bear interest and have and be subject to such other terms as provided in the form of Bond attached as Schedule 1 ltereto.SEcTioi 1.02.3Iandatory Redemption of tlie Bonds.(a)Terntination of Lease.In the'event that there shall occur under Section 14 of any Lease identified in Schedule 2 hereto a termination of such Lease, Bonds with a Stated Maturity of principal of January 2, 2011 shall be redeemed, in part, in an aggregate principal amount equal to the principal amount of the Pledged Lessor Notes related to such Lease (the Prepaid Lessor iVotes), prepaid in accordance with their terms and Section 5.2 of the Lease Indenture under which such Pledged Lessor Notes are issued.Any such redemption shall be on the same date on which, and shall be made to the eztent that, the Prepaid Lessor i4otes are so prepaid.(b)Selection.
Any Bonds redeemed pursuant to Section 1.02(a)of this Series 1986A Bond Supplemental Indenture shall be selected in accordance with Section 6.02 of the Indenture, but without giving effect to the tirst proviso contained in such Section.'c}Redemption Price.The Redemption Price for any Bond to be redeemed pursuant to this Section 1.02 shall be 100'7o of tlte principal amount thereof, together with accrued interest to the Redemption Date.SEcTIo'i 1.03.Optional Redemption of Bonds.(a)Bonds tcith a Stated iVaturity of Principal of July 2, 1997.The Bonds with a Stated Maturity.of principal of July 2, 1997 shall be redeemable prior, to maturity at the option of the Company at the following times and redemption prices (ezpressed as a percentage of principal amounts);together.with.interest accrued to the redemption date: Twelve Month Perio<UBeginning
'-Joniiiry S-1992.;.....~......1993 Redemption.
Price 102.63fo 101.31 and thereafter at the principal amount thereof, together with, interest accrued to.,the redemption date.
(b)Bonds t<<itlt a 8tated 3laturity of Principal of January'~, 001i.The Bonds with a Stated Alaturity of principal of January 2, 2011 shall be.redeemable prior to maturity at the option of the Company at the following'times arid redemption prices (ezpressed as a percentage of principal amounts), together with interest accrued to the redemption date: Twelve Twelve llonth ironth Period Period Beginning Redemption Beginning Redemption January 2 Price January 2 Price 1992.......1993.......1994.......1995.......1996.......1997~......1998..~....1999.......107.787o 107.26 106.74 106.23 105.71 105.19 104.67 104.15 2000.......2001.......2002.......2003.......2004..~....2005.......2006.......103.63~io 103.11 102.59 102.08 101.56 101.04 100.52 and thereafter at the principal amount thereof, together with interest accrued to the redemption date.SECvlDY 1.04.8inlring Fti,ttd (a)Amounts and Dates.The Bonds shall be redeemed'through opera-tion of a sinking fund.The amount of each Sinking Fund payntent (subject to adjustment as provided in paragraphs (c)and (d)below)and each Sinking Fund Date applicable to a Stated ittIaturity of principal of the Bonds are as set forth below: Sinking Fund Date January 2,;1988 July 2,.1988;..;.-...-......'::
January,'>, 1989....".:...".....
*'July'2, 1989 January 2, 1990.July 2, 1990-................
January'~, 1991-July'2, 1991 July" l992 670,000 704;000 1',423;000 1,480,000 1,540,000 , 1,603,000 1,668,000 1;735,000-Stated!traturity July'997 January 2, 20ll
~Sinking Fund Date january'.199'~Julv 2, 1992 January 2, 1993 July 2, 1993 January 2, 1994.July 2, 1994 January 2, 1995.July 2, 1995 January 2, 1996.July 2, 1996 January 2, 1997.July 2, 1997 January 2, 1998.July 2, 1998 January 2, 1999...July 2, 1999 January 2, 2000.July 2, 2000 January 2, 2001.Julv 2, 2001..January 2, 2002 July 2, 2002....January 2, 2003 July 2, 2003.January 2, 2004 July 2, 2004....January 2, 2005 July 2, 2005 January 2, 2006 July 2, 2006 January 2, 2007 J'uly 2, 2007.January 2, 2008 July 2, 2008.January 2, 2009 July 2;2009.July'992 81,805.000 1,878,000~Stated llaturitv July a l997 8 1,955,000 2,045,000 2,139,000 2,237,000 2,339,000 2,447,000 2,559,000 2,677,000 2,801,000 2,930,000 January', 20ll 8 2,525,000 2,730,000 2,391,000 2,291,000 2,377,000 2.447,000 2,541,000 2,616,000 2,717,000 2,797,000 2,904,000 2,989,000 3,104,000 8,196,000 3,318,000 3,732,000 4,408,000 4,802,000 4 938,000 6,116,000 6,433,000 6,767,000$,118,000 7,487,000
~'Sinking-Fund Date January'i."010 July'i, 2010.January 2, 2011 Julv'992 Stated llaiurity July'997 January'~COll 8 7.876.000 4,893,000 2,158,000 (b)8election of Bonds.The provisions of Section 7.02 of the Original Indenture to the contrary notwithstanding, the Trustee shall first select for redemption on any Sinking Fund Date on which Bonds with a Stated~laturity of principal of January 2, 2011 are to be redeemed in accordance with the Sinking F'und relating thereto, such Bonds, if any, of such Stated illaturity of principal of January 2, 2011 as the Company shall specify (by Bond number)are held by El Paso or an Affiliate of El Paso in a Company Request deliv'ered to the Trustee at least 40 (but not more than 90)days prior,to such Sinking Fulled Date and upon which the Trustee may rely.El Paso agrees'h'at (i)neither it nor any of its Affiliates shall purchase any Bond more than 180 days in advance of the date of the mandatory sinking fund redemptio'n.applicable thereto, (ii)the aggregate principal amount of.Bonds purchased by El Paso or any Affiliate shall not ezceed the amount of the next succeeding sinking fund payment applicable thereto and (iii)any Bonds so purchased shall be the subject of a Company Request delivered in accordance with the preceding sentence.(c)Adjustments to 8inking Funds in Respect of Reoptimization Pursu-a>>t to 8ection 2(e)of a Participation Agreement.
The principal amount of Bonds of a particular Stated i>laturity of principal-to be re'deemed througli operation of the Sinking Fund for the Bonds of such Stated illaturity of principal may be adjusted (upward or downward)at the discretion of the Company at one time (contemporaneously with similar adjustments foi all Stated i>laturities of principal) prior to June 30, 1990;provided;however, that no such adjustment shall be made by the Company which will increase..=or reduce tile average life of.the Bonds of such Stated iAIaturity of principal-(calculated, in accordance, with generally accepted fiinancial-practice from." the date o'f initial issuance).
by'more'.than.6 m'onths;provided-ficither, however, such adjustment may only be made in connection with an adjust-ment to basic rent pursuant to Section 3(d)of one or more of the Leases identified in Schedule 2 hereto.If the Company shall elect to make the foregoing adjustment, the Company shall deliver to the Triistee and El Paso at least 60 days prior,to the first Sinking Fund Date proposed to be alVccrcd bi sucli iidjilstnieiit, a Cotnl)any Reqilest (w)sriiiiiig rliiir t)ie Company has elected to make such adjustment in conriection with a(jjust-ments to basic rent under one or more of such Leases, (x)setting forth a revised schedule of principal amounts of tire Sinking Fund applicable to Bonds of the affected Stated Maturity of principal, (y)attaching a copy ot the revised schedules of principal amortization for the related Pledged Lessor Notes (as hereinafter defined)and (z)attaching calculations showing that (i)the average life of the Bonds of the affected Stated Maturity of principal will not be reduced or increased except as permitted by this paragraph (c), (ii)the aggregate principal amount of the Pledged Lessor Notes identified on Schedule 2 hereto equals the aggregate principal amount of the Bonds and (iii)the aggregate amortization of the principal amount of such Pledged Lessor Notes is sufficient to repay in full, as and when due, the principal amount of the Bonds as and when due,.wliether upon redemption through operation of the applicable Sinking F'untls.'or at maturity.The Trustee may rely on such Company Request and slrall'have no duty with respect to the calculations, referred to in the'foregoing clause (z), other than to make them available for inspection by any Holder of Bonds at the Corporate Trust Office upon reasonable notice.Tire Trustee shall.at the expense of El Paso, send to each Holder of Bo>>ds ot the atVected State(l Maturity of principal at least 20 days before the first Sinking Fund Date to be affected thereby, bv first class mail, a copy of such revised schedule of principal amounts of Sinking Fund payments applicable to such Bonds.(d)Adjustments to Sinking Frind iu Respect of'Partial Redeniption.
Notwithstanding the-second paragraph of'Section 7.01 of the 0'riginal Indenture, in the event that there shall have been any partial redemption of Bonds of a particular Stated ibIaturity of principal (other than pursuant to , the Sinking Fund),.Sinking Fund payments thereafter to be made with respect to,-'such Bo'nds shall be adjusted as follows.The Trustee shall'first,-
....ideiitify-all'.r clat'ed,Pledged,:Lessor.
iVotes-identified in'chedule 2'.hereto, having the.-same'matur'ity as'=the Bonds of'such particular'Stated Maturity of principal redeemed, if any, which are outstanding following such redemp-tion and, having so identified all such Pledged Lessor Notes, shall'deter-mine the dates on which the principal of such Pledged Lessor Notes is to be airrortiied (the Scheduled Amortizatioir.Dates).'The amount of the Sinking'I Fund payment scheduled to be made on each Sinking Fund Date subse-querrr to the date of such redemption in respect of Bonds having the same>rrrred~l<<turity of prirrcipal as the Bonds redeerrred sh<<ll tlren be<<rljusrerl to equal the aggregate principal amount of all related Pledged Lessor Notes identified in Schedule 2 hereto having the same maturity as the Stated AIaturity of principal of the Bonds redeemed which is scheduled to be amortized on the Scheduled Amortization Date corresponding to such Sinking Fund Date, after taking into account any prepaynrent of Pledged Lessor Notes.All such adjustments in respect of a Sinking Fund Date shall be rounded to the nearest 81,000, and slrall be subject to necessary hrrther adjustment so that the total amount of such reduction is equal to the total principal amount of Bonds redeemed pursuant to such partial redemption.
-In connection with the adjustme'nts
>required by the preceding two sentences, the Company..shall deliver to the Trustee a Company Request not later than 30 days following any partial redemption of Bonds (other than pursuant to the Sinking.Fund), setting.forth (x)the schedules of principal amortization of all related PledgedEiessor Notes-identified on Schedule 2 hereto having the same maturity as the Stated Maturity of principal of the Bonds redeemed and (y)a revised schedule of Sinking Furrd payments applicable to.Bonds having the same Stated illaturity of principal as tire.Bonds redeemed.The Testee may rely orr such Cornparry Request a>>d slrall have no duty ivith respect to the adjustmerits set forth therein other th<<rr ro make them available for inspection by a Holder of Bonds at tire Corporate Trust Office upon reasonable no'tice.(e)Redemption Price.The Redemption Price for any Bond to be redeemed pursuant to paragraph (a)of this Section 1.04 shall be 3.00'7o ot.the principal amount thereof;togetlier with accrued interest to the Redemp-tion Date.Sr;(a'lr>x 1.05'.Place of Pay>nenes for Bonds..The.Bonds'shall also'be p'ayable,'at the option of, any Holder,'t; the,'o'rporate Trust 0'ffice.-'
A,RTICLE TAVO Pl.l;"I)III:
i)I'ES~(>II N(rl'I:i To secure tlie payment of the principal of and premium (if any)and interest on all the Securities from time to time Outstanding under the Indenture, and the performance of the covenants therein and herein contained, the Company by these presents does grant.bargain.sell.release, convey, assign, transfer, mortgage, hypothecate, pledge, confirm and create a security interest in, unto the Trustee, the Lessor Notes identified on Schedule 2 hereto (herein referred to as the Pledged Lessor.Votes).To H;xvI,",siD To H(>I.I)the aforesaid Pledged Lessor Notes unto the Trustee and its successors and assigns forever, in trust and for the uses and purposes and subject to the covenants and conditions set forth in the Indenture.
0 ARTICLE THREE illIH('I;I.I.Az I,"(>I's Sl'.("I'I(>z 3.01.EzecI(tion as 8I(pplen(ental Indentnt e: Definitions.
This Series 1986A Bond Supplemental Indenture is ezecuted and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Series 1986A Bond S((pplenlen-tal Indenture forms a part thereof.,Ezcept as herein ezpressly othenvise defined, the use of the terms lierein is in, accordance ivith the definitions contained in the Original'Indenture.,\SI'.('vI(>z 3.02 Responsibility for Recitals, Etc.,-4*Tlie.recitals contained, herein'and'in tile Bonds, ezcept the Trustee's'.
certifica'te of authentication, shall be taken as the statements of the Company and El Paso, and the Trustee assumes no responsibility for the correctness of the same.The Trustee makes no representation as to the validity or sufficiency of this S'eries 1986A.Bond Supplemental Indenture or the'Bonds.I l h/,4 P P h 10 SE(''r(i>i:3.03.
Provisions Binding on successors.
All the covenants.
stipulations.
promises and a reements in this Series 1986K Bond Supplemental Indenture contained by or on behalf.of the Company shall bind its successors and assigns, whether so ezpressed or not.St:.("r(()x 3.04.Xe((~York Contract.This Series 1986K Bond Supplemental Indenture and each Bond shall be deemed to be a contract under the laws of the State of'Mew York, and for all purposes shall be governed by and construed in accordance witli the laws of said state.~~0~SE(s'I()Y, 3.05.Co((nterparts.
~~This Series 1986K Bond Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original;but such counterparts shall together constitute but one 4nd.the same instrument.
I~
Ii~V(Tia~i AVItt:.ttvt>v, the Company, El Paso and the Trustee have eauseel ti>is Series 19S6A Bond Supplemental Indettture to be duly exe-cuted l)y their re)peetive otficers tllerelul't<)
dtll~atlthorize<l.
as<it the<late and year first above written.El.PAs<<Ft'Yule<:
C<<nr<<n.vrl<>x lC<n;I<ln.vrt:.SRAI.]Attest: ,C Vice President Secreta ry E[.Pas<<EI.i:<"rai<
C<<)u.i):v[t<>nl<<n vrit<bl'<I By V'ce Presi<lr<<l Attest:.4s ista it creta g Fllis'I'ITY.iA'I'I>>%hi.
BARIC>>I: FI<>I'i"I'>>Y..<<8 Tl1lst>>0[C>>i;i~>>(;.ski:.8y..ii.J ('istant 1 ice-Pi~sicl
'it Att~<t: Assistant Cashier 13'8TAI'I: ot:.<Ew YoRK (<<I'~"i'y<<I'Ety Y<)RK ss.: On this~"4day of December, 1986, before rne personally canle g, p.~rr/dp, to me known, who, being by me duly sworn, did depose and say that he resides at AVilmington, Delaware;that he is the Vice President of Et.PA>>()Ft;Nuts(;CoRP()ltATt(IN, one of the corporations described in and which ezecuted the foregoing instrument; that he knows the seal of said corporation; that the seal affized to said instrument is such corporate seal;that it was so affized by authority of the Board of Directors of said corporation, and that he signed his name thereto bv like authority.
[i<<OTARIAI<
SEAI<]STATI'.ol" NEw YoltK Co(NTv (>I"'AEw Y()ttt<Ss.: DEUA SANTIAGO Notary Public.S:ate of Nevr York No.41-3451160 Qualified In Queens County n"7 Commission Expires March 30.19~On this/@today of December, 1986, before me personally canre 5~<to rile kllowll.wllo<bt lng'by me duly>>worrl, (lrd depose and>>ay that he reside>>at, El Paso, Tezas;that he is the Vice President of Et, PA>>o Et.t:(a'trl(CoxtvANv, orle nf the corporations de-scribed in and whicker ezecuted the foregoing instrument; that he knows the seal of said corporation; that the seal affized to.said instrument is such corporate seal;that it was so affized by authority of the Board of Directors of said corporation, and that he signed his.name thereto by like a thority.'I (.'4(ITAtrtAI.
SEAt.]a DELIA T.SANTIAGO Notary Publtc, St te of New York No.41='451160,'ualified in'ueens County~~'ommission Expires March 30, t~.*
STATE<<Y XFw Y<>RK Gn'zTY<<I: XEw Y<>l<li 0>>this/9%ay of December, 1986, before rne personally carne QZ;/pe (g jt5~)-to me known, who, being by me duly sworn, did depose and say that he resides at Houston, Tezas: that he is an Assistant Vice President of FtnsT CfTY YaTfoz;xf.
BazK ov Hut'iT<<z, one of the corporations described in and which ezecuted the foregoing instrument; that he knows the seal of said corporation; that the seal affized to said instrument is such corporate seal;that it was so aNzed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
[N(vv.xftuf, SE.xf,]~<, Iq~r;,'r~-<";8,-.e,':p'...<f."lew Yerk'f'e.'n"..'.'f<eo C<<elified In Cceen~(',~~8*
SCHEDULE 1 to SERIES 1986A BOND SUPPLEIIENTAL INDENTURE[FORM OF FACE OF BOND]No.R-EL PASO FUNDING CORPORATION LEASE OBLIGATION BOND, SERIES 1986A INTEREST RATE STATED illATURITY REGISTERED HOLDER: ISSUE DATE: DECEMBER, 1986 PRINCIPAL AiXIOUNT: DOLLARS Er.P.i~<>Fr'xr)rirr Cr)rrr>r>ru'r'rr>i, a Delaware corporatiorr (lrereirrafter called the"Cowparryr," which term includes any successor corporatiorr under the Irrdenture referred to on the reverse lrereof), for value received, hereby promises to pay to the Registered Holder (named above)hereof, or registered assigns, the Principal Amount (stated above)on the Stated hlaturity (stated above)and to pay interest tlrereon from the Issue Date hereof (stated above), or from the most recent interest payment-date to which interest has been paid or duly provided for, semiarrnually on Janu-ary 2 and July 2 in each year, commencing July 2, 1987, at the Interest Rate'(stated above)pe'r annum, until the principal hereof'is'paid'in full or made , available for payment.The iriterest.so'payabl'e,'and punctually paid, or duly.provr'ded
'.for,':;on, any inte'rest payment date'will;.as provided in.such:.Indenture, be paid to the'erson in'whose name this Bond (or one or more.Predecessor Securities, as defined in s'uch Indenture) is registered at the close of business on the Regular Record Date for such interest, whi'ch shall be'the June 17 or December 18, as the case may be (whether.or not a Business Day, as defiiied in such Indenture), nezt preceding such interest*, pavine'nt',date,:
Any su'ch interest not so punctually'paid or duly,.provided'for ,C<<
Eg shall forthwith cease to be payable to the Registered Holder on such Regular Record Date, and may be paid to the person in whose nanie this Bonil (or o>>e or niore Pretlecessor Securities) is re ist<<red<<t the close of busiiiess on a Special Record Date for the payment of such defaulted interest to be fized by the Trustee, notice of which shall be given to the Bondholders not less than 10 days prior to such Special Record Date.or mav be paid at any time in any other lawful manner not inconsistent with the requirements of any securities ezchange on which the Bonds may be.listed, and upon such notice as may be required bv such ezchange, all as more fully provided in such Indenture.
Payment of the principal of (and premium, if any)and, interest on this Bond will be made at the corporate trust office of the Paying Agent (or if such office is not in the Borough of i~Ianhattan, The City of New York, at either such office or an office to be maintained in such Borough), or, at the option of the Registered Holder, at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public or private debts.Payment of interest may, however, be made at the option of the Company by check mailed to the address of the Holder entitled thereto as such address shall appear oii the Security Register.Interest oii any overtllle principal and preinium.if any,<<nd (to tile eztent permitted by applicable law)any overdue interest shall be paid.on deniand, from the due date thereof at the rate of interest per annum (computed on the basis of a 360-day year of twelve'30-day moiiths)equal to I'jo=above the Interest Rate (stated above)on this Bond for the periotl during which any such principal, premium or interest shall be overdue.-Reference is hereby made to the further, provisions of this Bond set forth on the reverse hereof which further provisions shall for all purposes have the same effect as if set forth at this, place.1 ,Unless.the certificate of authentication hereon has been executed by",the Trustee by: manual'signature,.tthis.Sond'shall,'not'e.entitl'e*d;.to aiiy.benefit'under such-'Indentu're,"or'be valid or obligator'y for a'y-purpose.
1 Ix AvlTillsi IvtlEltElil:, the Company has caused this instrument to be tluly executed under its corporate seal.El.PAs()Ft'xl)lou C()lllnlllATlllh By President Attest: Secreta'FORilI OF CERTIFICATE OF AUTHEiVTICATIOiV j This is one of the Securities of the series desi<gnated therein referred to in the within-mentioned Indenture.
FlRsT CITY VATnlYAl.BAYlx l>v Hl)l~CI)i ah Trustee By 2>ithorized Officer e 4 I~1 C h IC P
[FOR.'il OF REVERSE OF BOYD)EL PASO FUNDING CORPORATION LEASE OBLIGATION BOND, SERIES 1986A This Bond is one of an authorized issue of Securities of the Company known as its"Lease Obligation Bonds, 8eries 1986A" (the"Bonds")issued under, and all equally and ratably secured by, a Collateral Trust Indenture dated as of August 1, 1986 among the Company, El Paso Electric Company, a Tezas corporation (herein called"El Paso"), and First City National Bank of Houston, as Trustee (herein called the"Trmstee," which term includes any successor Trustee under the Indenture), as heretofore supple-mented and amended and as further supplemented by the Series 1986k.Bond Supplemental Indenture dated as of December 1, 1986 among such parties (collectively, the"Indenture")to which Indenture reference is hereby made for a description of the nature and'extent of the securities and other property assigned, pledged and transferred thereunder, the respec-tive rights of the holders of the Bonds and of the Trustee and the Company in respect'of such security, and the terms upon which the Bonds are and are to be authenticated and delivered.
The principal of, and premium, if any, and interest on, this Bond are payable from, and secured by, the assets subject to tlie lien of the Indenture or the income and proceeds received by the Trustee tlierefrorn.
and all payments of principal, premium (if any)and interest shall be made in accordance with the terms of the Indenture.
The Indenture and each of the Participation Agreements among an Equity Investor (as hereinafter defined), a-Lessor (as hereinafter defined), ,'.the.Company, a Lease Indenture Trustee (as hereinafter=defined) and El Paso (each a"Participation Agreement")provide that, as and when issued, certain Nonrecourse Promissory Nbtes (the"Pledged'essor~.iVotes"), in aggregate principal amount of 8146,305,000, to be issued by The.First,.Natio'nal..Bank,'of Boston, as'owner t'rustee under separate Trust I-Agreements ivith the respective institutio'nal investors'n'ained in such: Trfu*st*Agreemen'ts (The First National Bank of B'oston in each of such capacities as owner trustee being herein called a"Lessor" and each such institutional investor being herein called an"Eqicity Investor"), will be included within the assets subject to the lien of the Indenture pursuant to indenture supplements, Such Pledged hessor Notes-are,to be issued, under.separate--
.=T I R Tr I I'I]R O~R*I-,,-
documents entitled Trust Indenture, Alortgage.
Security Agreement and Assignment of Rents.each between a I essor and First City National Bank of Houston.as trustee (-L~u~e Indenluiv Tru~te<<")(each ot'uch Trust Indentures, as it was ezecuted and delivered and as amended in accortlance with its terms, being herein called a"Lease Inclenture").
Reference is made to each Lease Indenture for a description of the nature and eztent of property to be assigned.pledged, transferred and mortgaged thereunder and the rights of the holders of notes issued thereunder, including the Pledged Lessor Notes.Ezcept as ezpressly provided in a Lease Indenture, all payments of principal, premium, if any, and interest to be made on a Pledged Lessor Note and under such Lease Indenture will be made only from the assets subject to the lien of such Lease Indenture or the income and proceeds received by the Lease Indenture Trustee therefrom, includ-ing, in the case of each Lease Indenture, the rights of the Lessor which is a party thereto to receive basic rentals and certain other payments under a Lease with El Paso relating to an undivided interest in certain assets-constituting part of the Palo Verde Nuclear Generating Station (also known as the Arizona Nuclear Power Project)(each.of such I eases, as it was ezecuted and delivered and as amended in accordance with its terms.being herein called a"Lease"), which basic rentals and other payments will be at least sufficient to provide for the payment of the principal of a>>d premium, if any, and interest when due on each Pledged Lessor Note issued under such Lease Indenture.
Each Holder hereof." by its acceptance of tltis Bond, agrees (z)that ezcept, as ezpressly provided above.it will look solely to the assets subject to the lien of the Indenture or the income and proceeds received by the Trustee therefrom, to the eztent available for distribution to the Holder hereof as provided in the Indenture and (y)that rione of an.Equity Investor, a Lessor;a Lease Indenture'Trustee or the Trustee is'iable to the Holder hereof or, in the'c'ase of an Equity Investor, a Lessor-and'a=Lease Indenture Trustee, to the Trustee for any amounts payable'nder this Bond'or','ezcept as'provided in.the Indenture with respect t'o the Trustee,.for any'.liability under the"Indentuie.
An,Equity Imesto'r shall:not," , have any.duty or;responsibility.u'nder tlie"Indenture or'he'Bonds to any'Holder or to the Trustee..The Indenture permits, with certain exceptions as therein provided, the amendmerit thereof and the modification of.the rights and.obligations of El Paso and the Company and the rights of the Holders of the Securities
'nder the Indenture at any time by El Paso and the Company with the conserrt nf the Holders of not less than a majority in aggregate principal aruount of the Securities at the time Outstanding, as deiined in the Indenture.
The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by El Paso and the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Bond shall be conclusive and binding upon such Holder and upon all future Holders of.this Bond and of any Securit'y issued upon the transfer hereof or, in ezchange herefor or in lieu hereof whether or not notation of such consent.or waiver is made upon this Bond;As provided in the Indenture, the aggregate principal amount of.Securities which may be issued thereunder is unlimited.
The Bonds ar'limited in aggregate principal amount to$146,305,000, consisting of: Stated Maturity Interest Principal of Principal Rate Amount,.July 2, 1992 8.100'14 606 000.July Q.1997 9.20(Pc"4,129,000.January'~.2011 10.376~c 107.670.000 8146.:305,000 In the event that one or more Leases are terminated under Section 14'hereof, the Bonds with a Stated irlaturity of principal of January 2;2011 are subject to mandatory redemption.
in whole or in part from time to time on not less than 20 nor more than'60 days'-prior notice given as provided in the Indenture at a redemption price equal to the principal amount of the Bonds to be redeemed plus accrued interest to the date.fized for redemp-tion, on the same'date on which, and to the, sameeztent that, the Pledged.Lessor.iNotes'relating to the Bonds are-prepaid as.provided.in Sect'ion 5;2"..of-the''Lease
..Indenture under which they-w'ere issue'd;.The Bonds of each Stated,liIaturity of principal are also subject'o mandatory redemption pursuant to sinking fund installinents, as more fully provided in the I'ndenture, at the principal amount thereof, together with P: P*If*'1 interest accrued to the date fized for redemption, on the dates and in the respective principal amounts set forth in the Indenture.
The sinking fund installments for the Bonds of a particular Stated illaturity of principal set forth in the Indenture may be adjusted once at the discretion of the Company prior to June 30, 1990, in connection with certain adjustments in basic rent pursuant to oneor more of the Leases: provided, hourever, that no such sinking fund adjustments shall be made by the Company which will increase or reduce the average life of such Bonds (calculated in accordance with generally accepted financial practice from the date of initial issuance thereof)by more than 6 months.As provided in the Indenture, in connection with any mandatory sinking fund redemption of Bonds with a Stated illaturity of principal of January 2, 2011, the Company, may cause the Trustee first to select for such redemption Bonds of such Stated Maturity of principal held by El Paso or an affiliate of El Paso.In the event of any partial redemption of Bonds of a particular, Stated ilIaturity of principal (other than pursuant to the aforementioned sinking fund), the principal amount of Bonds of such Stated llaturity of principal to be redeemed.thereafter pursuant to the sinking fund schedule indicated in the Indenture shall be adjusted in accordance with the Indenture.
In addition, the Bonds (other than Bonds with a Stated Ilaturity of principal of July 2, 1992)are subject to redemption, in whole or in part, at the option of the Company, with monies deposited with the Trustee, on not less than 20 nor more than 60 days'otice given as provided in the Indenture, at the following redemption prices (ezpressed as a percentage of principal ainount)-, together with interest accrued to'the date fized for redemption as follows: Bonds with a Stated iAIaturity of principal of July 2, 1991 may be redeemed at any time on'and after January 2;-1992 at a price of..',.102.63%of.the'-principal'amount thereof, such prie to decline'to
'':;101.3lfo=of-such principal"amount on Ja'nuary 2,"1993 and.to'00/o: of such principal'amou'nt on January 2, 1994, as set forth.in the Indenture, together with accrued interest;and Bonds with a Stated Alaturity of principal of January 2, 2011 ,may be'redeemed at any time on and after January 2, 1992 at a'.-C I 4 I NT END G PAGE CONDITIONS ARE O.K 4 1'HE NEXT PAGE: 027;00;00.00.;
.~I, I ,~r''C price of 107."r&~o of the principal amount thereof, such price to , decline on.January 2, 1993 and each anniversary thereof, as set'orth in the Indenture.
until such date as such price shall be the principal amount of.such Bonds, together with accrued interest;In the case of any redemption of Bonds, unpaid interest installments who'se Stated~laturity, as defined in the Indenture, is on or prior to the date fized for redemption will be payable to the Holders of such Bonds or one or more Predecessor Securities of record at the close of business on the relevant Regular or Special Record Date referred to on the face hereof.The Indenture provides that Bonds of a denomination larger than 81,000 may be redeemed in part (81,000 or an integral multiple thereof)and that upon any partial redemption of any such Bond the same may be surrendered at the corporate trust office of the Paying Agent in ezchange for one or more new Bonds for the unredeemed portion thereof.Bonds (or portions thereof as aforesaid) for whose redemption and payment provision is made in accordance with the Indenture shall there-upon cease to be entitled to the lien of the Indenture and shall cease to bear interest from and after the date fized for redemption.
If an Event of Default, as defined in the Indenture, shall occur, the principal of this Bond may become or be declared due and payable, in the manner and with the effect providetl in the Indenture.
This Bond is transferable by the registered owner hereof in person or by attorney authorized in writing, at the corporate trust office of the Bond Registrar, First City National Bank of Houstbn (or if such office is not in the Borough of iAIanhattan, The City of New York, at either such office or an'ffice to be maintained in such Borough), upon surrender of this Bond, and upon any such transfer a new Bond of the same Stated llaturity of principal, for the.-same aggregate principal amount, will be issued to the transferee in ezchange herefor.~The.-Borid's are issuable'only.'as'.regist'ered Bonds without coupons.in, denoniinations of 81,000 or'any integral multiple thereof-.As provided in;-and subject to the provisions of, the Indenture, Bonds of a particular Stated ilIaturity of principal are e'zchangeable for other Bonds of such Stated~laturitybut of a different authorized denomination or denomina-tions, as requested by the Holder surrendering th'e same.,--'l-".URRENT'ENDING P'AGE CONDITIONS ARE I r'*INCONSISTENT WITH, THE: NEXT PAGE-.'.I.r'28.00.00.00 C'C 4 X'o service'charge will be made to any Holder of Bonds for any such transfer or exchange, but the Bond Registrar may require payment of a sum suNcient to cover any tax or other governmental charge payable in connec-tion therewith.
Prior to d'ue presentment for registration of transfer, the person in whose name this Bond is registered shaB be deemed to be the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Bond be overdue, regardless of any notice to anyone to the contrary.As provided in the Indenture, the Indenture and the Bonds shall be construed in accordance, with and governed by the laws of the State of Yew York.
$P P 5:.C I h~'f k*C'I I I.0 4 C E f SCHEDULE 2 to SERIES 1986A BOND SUPPLE.tIE iTAL INDE iTURE A.As used in this Series 1986A Bond Supplemental Indenture, the following terms have the following meanings: (1)Lease Indenture means each of: (i)the Trust Indenture, Xiiortgage, Security Agree-ment and Assignment of Rents, dated as of December 1, 1986, between the Indenture Trustee and the Owner Trustee, as owner trustee for Chrysler Financial Corpo-ration;and (ii)the Trust Indenture, iAIortgage, Security Agree-ment and Assignment of Rents, dated as of December 1, 1986, between the Indenture Trustee and the Owner Trustee, as owner trustee for Commercial Federal In-vestment Corporation.
(2)Lessor Pote means each of: (i)the:Non-Recourse Promissory Note, Initial Se-ries (Due July 2, 1992)in the amount of 88,059,000 dated December 18, 1986, payable by the Owner Trustee, as owner trustee for Chrysler Financial Corporation, to the Company;(ii)the Non-Recourse Promissory Note,.Initial Se,-ries (Due July 2, 1997)in tive amount of'812,295,000 dated December 18, 1986, payable by the Owner Trustee as owner trustee-for Cl>rysler Financial Corporation, t'o'-, th'e Company';, p (iii)-'the Non-Recourse Promissory Note, Initial Se-ries (Due January 2, 2011)in the amount of 856,046;000 dated December 18, 1986, payable by the Owner Trustee, as owner trustee for Chrysler Financial, Corporation, to the Company;4 I (iv)the Non-Recourse Promissory Note, Initial Se-ries (Due July 2, 1992)in the amount of 86,447,000 dated December 18, 1986, payable by the Owner Trustee, as owner trustee for Commercial Federal Investment Corporation, to the Company;(v)the Non-Recourse Promissory Note, Initial Se-ries (Due July 2, 1997)in the amount of 811,834,000 dated December 18, 1986, payable by the Owner Trustee, as owner trustee for Commercial Federal Investment Corporation, to the Company;and (vi)the Non-Recourse Promissory Note, Initial Se-ries (Due January 2, 2011)in the amount of 851,624,000 dated December 18, 1986, payable by the Owner Trustee, as owner trustee for Commercial Federal Investment:
Corporation, to the Company.(3)Lessor or Occner TrMstee means The First NationaL Bank of Boston, a national banking association (FNB), in its capacity as owner trustee under two separate Trust Agreements, each dated as of Decem-ber 1, 1986,.with the Equity Investor named therein.(4)Iadenttcre Trccstee means First City National Bank of Houston, a national banking association, as Trustee.(5)Lease means each of: (i)the Facility Lease, dated as of December 1, 1986, between'El Paso, as lessee, and the Owner Trustee, as owner trustee for'Chrysler Financial Corporation, as lessor;and (ii)the Facility Lease, dated as of December 1,, 1986, between El Paso, as lessee, and the Owner Trustee,''as'owner=
t'rustee for Commercial-Federal/Investment
'~*';=-".-;-,-'Corpo'ration, as lessor..''';'."-: "'.;.':."*'6)Partccipatiocc Agreement means each of: (i)the Participation Agreement, dated as of Decem-ber 1,.1986, among the Owner Participant designated therein, the Company, FNB, in its individual capacity and as Owner Trustee for Chrysler Financial Cotpora-tion, First City National Bank of Houston, in its intlivid-ual capacity and as Indenture Trustee, a>>d El Paso: a>>tl (ii)the Participation Agreement, dated as of De-cember 1, 1986, among the Owner Participant designated therein, the Company, FNB, in its individual capacity and as Owner Trustee for Commercial Federal Invest-ment Corporation, First City Rational Bank of Houston, in its individual capacity and as Indenture Trustee, and El Paso.
e Letter of Credit and Securit A reement LETTER OF CREDIT AND SECURITY AGREEMENT, dated as of December 1, 1986, among (i)EL PASO ELECTRIC COMPANY (the"Company"), (ii)THE BANK OF NEW YORK (the"Bank")and (iii)for the purposes of Sections 10(h)and 10(i)only, CHRYSLER FINANCIAL CORPORATION.
WHEREAS, the Company has entered into a Participa-tion Agreement, dated as of December 1, 1986 (the"Partici-pation Agreement"), among Chrysler Financial Corporation, as Owner Participant (the"Equity Participant"), El Paso Funding Corporation, as Loan Participant, The First National Bank of Boston, in its individual capacity and=as Owner Trustee (the."Owner Trustee"), First City National Bank of Houston, in its individual capacity and as Indenture Trus-tee, and the Company, providi'ng for the acquisition o'f an undivided interest in Unit 2 of the Palo Verde Nuclear Generating Station ("PVNGS")and a real property interest related thereto (collectively, the"Equitv Interest")through a trust for the benefit of the Equity Participant; and WHEREAS, the Company has entered into a Facility Lease, dated as of December 1, 1986 (the"Facilitv Lease"), between the Owner Trustee, as Lessor, and the Company, as Lessee, providing for the leasing of the Equity Interest to the.Company;and WHEREAS, it is a condition.
precedent to the Owner'rustee'-st causing the Equitv Interest'o be purchased through''rust for the bene it of the Equity Participant that the Bank issue to the Equity Participant an irrevocable
'letter of credit in the form of Annex A hereto (the"Letter of-Credit");, and: I FF I'HEREAS,'-,the-Bank'=is'willing"'to issue-the.Letter=of-Credit on.the-terms and'conditions set forth herein;NOW,=THEREFORE, in consideration of the premises-and in order'to induce the-Bank,to issue the Letter of.Credit, the'parties, here'to'hereby agree as follows:,'SECTION 1'.('a)','efinitions..
In addition't'o'he terms defined='-in.
the reci'tais,, the following terms,=as used herein;h'ave, th'e.fol'lowing respective meanings:,*,"Af~'iliate".
shall mean anv Peison directlv or.indirectlv controlling or controlled by th'e Company.F~F RR , I I R F F "Borrowed Money" means any obligation to repav money, any indebtedness evidenced by notes, bonds, deben tures or similar obligations, any obligation under a con-ditional sale or other title retention agreement, and the net aggregate rentals under any lease which under generally accepted accounting principles would be capitalized on the books of the Company or which is the substantial equivalent of the financing of the property so leased."Business Day" means any day that is not a Saturday, Sunday or legal holiday in the State of New York or Texas or a day on which banking institutions chartered by the State of New York or Texas or the United States are legally authorized to close."CD" shall have the meaning ascribed to such term in Section 9 hereof."Code" means the United States Internal Revenue Code of,1986, as amended."Collateral" shall have the meaning ascribed to such term in Section 10 hereof."Date of Issuance" means the date on which the Letter of Credit is issued upon request of the Company pursuant to Section 2(a)hereof, which date shall in no event be later than December 22, 1986."Default" means any event or condition which with the giv'ing of notice or the lapse of time or both would, unless cured or waived, become.an Event of Default."ERISA" means'he Employee Retirement Income Security, Act of 1974, as amended."Event of Default" means any of the events speci-fied'n'Section,.9.
hereof..'"Expiration Date'" means January 3;1992, unless the Bank'hall have agreed to extend the Letter of Credit" in.accordance with the terms thereof, in which event such term shall mean January 3, in the year in which the Letter of Credit., as so extended,.
exp'ires.'.Financing Documents,".shall have the meaning,*-ascribed', to such,'term i;n--the:F'acili'ty Lease..h"Junior Obligations"-
shall.have-the meaning, ascribed'o such-'term
=in Section 10'ereof."~I~"'1 V t" "Letter of Credit Amount" shall have the meaning ascribed to such term in the Letter of Credit."Maintenance Level" shall have the meaning ascribed to such.term in Section 10(b)hereof."Maximum Drawing Amount" shall have the meaning ascribed to such term in the Letter of Credit."PBGC" means the Pension Benefit Guaranty Cor-poration and any entity succeeding to any or all of its functions under ERISA."Permitted Investments" shall have the meaning ascribed to such term in Section 10 hereof."Person" means and includes an individual, a corporation (including a business trust), a partnership, an unincorporated association, a joint stock company, a trust, a joint venture or any other entity or organization, includ-ing a qovernment or political subdivision or an agency or instrumentality thereof."Plan" means at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum fundinq standards under Section 412 of the Code and is maintained by the Company for employees of the Company."Proceeds" shall have the meaning ascribed to such term in Section 10 hereof."Reports" means-the Company's Annual Report on Form 10-K for the year'ended December 31, 1985, as amended by Amendment No.1 on Form 8 dated April 2, 1986;,and the'ompany's Quarterly Reports on Form 10-''or the quarters'nded March 31,',1986,'-
June,'30,-1986 and, September 30, 1986,*,-" iespec'ti'vel'y;;and the::Company'.s Current Reports on Form*".8;.K:''
dated June 16,.1986, July-22,,'1986, Augus't:29; 1986, ,',-*September 11, 1986 and October 1, 1986, which have hereto-fore been delivered to the, Bank."Senior,.Obl.iqation'-'hall have the.meaning ascribed-to such term:in-Section 10.hereof.."Significant"-Subsidiary".
of any company means a Subsidi.ary'"includi'ng.
its'.Subsidiaries, which meets any of-'he following co'nditions:..(i)-such companv's'=-i'nvestments in,and advances to''the'.Subsid'iary exceed 3.0 percent of the" total-assets.of s'uch-company
".and.'its Subsidiaries consoli-..--
dated as.of theend'ofthe most recently.-comppleted.fiscal
-'---3-e*N ,~'
year;or (ii)such company's and its other Subsidiarie's'roportionate share of the total assets (after intercomp eliminations) of the Subsidiary exceeds 10 percent of the total assets of such company and its Subsidiaries consoli-dated as of the end of the most recently completed fiscal year;or (iii)such company's and its other Subsidiaries'quity in the income from continuing operations before'ncome taxes, extraordinary items and cumulative effect of a change in accounting principle of the Subsidiary exceeds 10 percent of such income of.such company and its Subsidi-aries consolidated for the most recently completed fiscal year."Subsidiary", where used with respect to any company, means any corporation the majority of the voting shares of which at the time are owned: directly or indirectly by such company and/or by one or more subsidiaries of such company."Transaction Documents" shall have the meaning ascribed to such term in the Facility Lease.(b)Accountin'erms'and Determinations.
Unless otherwise specified herein, all accounting terms used herein i shall be interpreted, all accounting determinations here--under shall be made, and all financial statements requir to be delivered hereunder shall.be prepared, in=accordan with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by-the Company's independent public accountants) with the most recent audited consolidated financial statements of the Company delivered to the Bank.~(c)Incor orated Terms.Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the Facility Lease.h J.:SECTION,.
2..'lssuance of, the-.Letter.of;Crredit;
=, Conditi'ons
'Precerdent to.Issuance..(a')-On,.or.before December'22, 1986-,: subject'to satisfaction of the conditions
=precedent set forth in subsections (b), (c), (d), (e)and (f)of this.Secti'on 2, the Bank shall issue the Letter of Credit'.,(b)As a condition precedent to the issuance of..the Letter.of Credit, the'-Bank shall''have rece'ived on or-before''the D'ate'of.Issu'ance the.following-,.
each dated such"date, in'form and subs'tance r'easonably satisfactory t'o the='Bank:, ,C 1 (i)opinions of Kemp, Smith, Duncan&Hammond, Snell 6 Nilmer and Mudge Rose Guthrie Alexander&Ferdon, counsel to the Company, as to the matters set forth in Section 6 (b), (c), (d), (e), (f), (g)and (i)hereof and as to such other matters, including without limitation matters relating to the other Transaction Documents and Financing Documents, as the Bank may reasonablv request;(ii)an opinion of Sullivan 6 Cromwell, counsel for.the Bank, as to the form of docu-ments delivered to the Bank pursuant to this Section 2 and as to such other matters as the Bank may reasonably require;(iii)copies of the resolutions of the Board of Directors of the Company with respect to this Agreement, the other Transac-tion Documents, the Financing Documents and.the transactions contemplated hereby and thereby, certified by the Secretary or an Assistant Secretary of the Company (which certificate shall state that such resolutions are in full'force and effect on the Date of Issuance jnd are the only resolutions of the Company's Board of Directors or any committee thereof with respect to this Agreement, the other Transaction Documents, the Financing Documents or the transactions
'contemplated hereby and thereby);(iv)certified copies of (x)all appro-vals, authorizations or consents of, or'notices to or registrations with, any gov-, ernmental body-.,or agency required'for the Company='.to.'enter, int'o.this Agreement,-
the'ther-.Tran'sac@ion Documents and.the Fina'ncing
', Documents and to grant the pledge provided for in Section 10 hereof and (y)all such approvals,.
authorizations, notices or regis-trations required to'e obtained or made by.the Company'rior to the Date of Issuance.in,.connection with the transactions contemplated bv.,this,.A'greement, the-other,-Transaction
.'., Documents and the-Financing Documents;'-(v).a"certificate-of.the.,Secretary or ,.an*Assistant Secretary..of:the Company.certi-fving-.the, names and.true..signatures of the officers of the Company authorized to sign this Agreement and the other documents to be delivered by the Company hereunder;(vi)executed copies (or duplicates thereof)of the other Transaction Documents and the Financing Documents, each of which shall be in form and substance reasonably satis f actory to the Bank;and-~(vii)such other documents, instruments, approvals (and, if requested by the Bank, certified duplicates of executed copies thereof)or opinions as the Bank may reason-ably request.'I (c)The following statements shall be true and correct on the Date of Issuance and the Bank shall have received a certificate signed by a duly authorized officer of the Company, dated the Date of Xssuance, stating that: (i)the representations and warranties of the Company contained in Section 6 hereof are correct on and as of the Date of Issuance as though made on and as of such date;(ii)no Default or Event of Default shall have occurred and be continuing or would result from the issuance of the Letter of Credit or'he consummation of the trans-actions contemplated by this Agreement, the other Transaction Documents and Financing Documents; and (iii).no event of default, event of loss or deemed l'oss event, e'ach as defined in the ,Facility, Lease, shall have occurred or be: '-.continuing.,-*,,-4 (d)On'or before the Date*of issuance: (i)each of the Transaction Documents and Financing Documents shall have been duly authorized.
and executed.by the respective parties thereto and-shall'be in full force and;effect;(ii)..'all conditions.pr'ecedent to the,'losing,set,forth
=in,Sec'tion 11.of, the,.P*articipat'ion.Agreement shall have been.=.fulfilled; and (iii)the Purchase Documents shall have been delivered to the Owner Trustee.(e)The Bank shall have received at least two days prior to the Date of Issuance a written notice of the proposed Date of Issuance signed by the Company and the Equity Participant.
(f)On or before the Date of Issuance, the Company shall have pledged and delivered to the Bank Collat-eral with a value equal to or greater than the greatest Maximum Drawing Amount in effect during the period from the Date of Issuance until the date 35 days thereafter.
SECTION 3.Reimbursement and Other Pa ents.(a)The Company agrees to pay to the Bank (i)immediately, after any amount is paid pursuant to a drawing under.the Letter of Credit a sum equal to the amount so drawn;(ii)all reasonable, charges and expenses incurred by the Bank relative to the Letter of Credit;(iii).interest on anv amounts paid pursuant to a drawing under the Letter of Credit from the date of such drawing until payment in full and interest on any and all other amounts unpaid by the Company when due hereunder from the date such amounts become~~~~~~due until payment in full, in each case payable on demand, at a fluctuating interest rate per annum (computed on the basis of a year of 360 days for the actual number of days elapsed)equal to 1%per annum above the Bank's prime com-mercial loan rate as announced to be in effect from time to time, which rate shall change as and when said prime commercial loan rate shall change, but such fluctuating interest rate shall in n'o event be" higher (with respect to each amount due and payable.hereunder) than the maximum rate permitted by applicable law;and (iv)any and all reasonable expenses incurred by the Bank in enforcing any rights under this-Agieement.
'...*'V ,(b).The'Company.ag'rees'hat'.it.wil'1...pay'-'to the.,"'";-Bank a commission-with zespect.to'-the-Lett'er of C'redi.t (.i)':".'t'the rate.of 1/4 of 1.0%per annum of the Maximum Drawing-Amount (computed on the basis of a year of 360 days for the actual number af days elapsed)and (ii)at the rate of 1/10.of 1.0%-per annum of-the excess', if any, of the Letter of Credit'Amount.over'he'Maximum Drawing'.Amount,, in each'ase.payable.-qu'arterly in airear's, commencing-'March 3'1;," 198'7;'until the e'arliest'.'of, the Exp'iration'at'e or the date,.on~.-*'hich'.the-Lette'i'of Credit.-has been surrendered to, the'Bank (calculated.on.'each'day on which such'-fee,-is'..payable based'po'n.
the: Maximum Drawing,-Amount and.the=Letter-of',.Credit Amount.=.then in effect,,without reduction or, adjustment-for.any-subsequent termination.--of the Lettez of'Credit or h'I'~,, i-r II*4~-I' reduction of the Maximum Drawing Amount and the Letter Credit Amount).(c)If, after the date hereof, any change in any applicable law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with'the administration thereof or the enactment of any applicable law or regulation shall (i)impose upon, modify, require, make or deem applicable to the Bank or any of its Affiliates any reserve requirement based upon the issuance of the Letter of Credit, special deposit requirement, insurance assessment or similar costs or requirement against or affecting the Letter of Credit or (ii)subject.the Bank or any of its Affiliates to any tax, charge, fee, deduction, withholding or similar costs of any kind whatsoever or (iii)impose any condition upon or cause in any manner the addition of any supplement to or increase of any kind in the Bank's or an Affiliate's capital or cost base for issuing letters of credit which results in an increase in the capital requirement supporting such letters of credit, (iv)impose upon, modify, require, make or deem applicable to the Bank.or any of its Affiliates any capital requirement, increased capital requirement or similar requirement such as by the deeming of such letters of credit to be assets held by the Bank or any of its Affiliates f capital calculation or other purposes or (v)impose on t Bank any other.condition regarding this Agreement or the Letter of Credit, and the result of any events referred to in (i), (ii), (iii), (iv)or (v)above shall be to increase the costs or decrease the benefit in any way to the Bank or any Affiliate of issuing, maintaining or participating in the Letter of Credit, then and in, such event the Company shall immediately after the-.mailing o'f a written statement (which shall describe the nature of the change giving rise to the increased costs or decreased benefits and a summary of the Bank's calculations of the amounts.due to the Bank-'in connection therewith) to the Company,'which shall be conclusive'absentmanifest*-error, pay,-.",to the'Bank all suchadditional'amounts=which in,the;*Bank's sole good: faith calculation as allocated ta the Letter of Credit, shall be.sufficient
=to compensate't for all such incre'ased costs and/or decreased benefits, all as stated by the Bank in said written-notice to the Company.Such amount shall bear'nterest thereon-from the fifth Business Day,after the~.effective receipt.o'f the aforementione'd'.notice.
unti.l payment, in, full'thereof at'he;rate.-provided'"in.,clause'-'("iii*)
of sub-".section (a)o'f this Section: (d),-A11 paymerits by.the Company to.the Bank hereunder shall, be made in-lawful, currency of'the United'tates and in immed'iately available, fund's t'o The Bank of J P 1 York, International Division, Letter of Credit Department, 110 Washington Street, New York, New York 10006, Attention:
Elizabeth Mallon.whenever any payment hereunder shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day, and any interest payable thereon shall be payable for such extended time at the specified rate.SECTION 4.Ad ustment of Maximum Drawin Amount.The Maximum Drawing Amounts shall be modified from time to time as follows: (a)Upon payment by the Bank of each drawing under the Letter of Credit, the Maximum Drawing Amounts applicable to the period of and each period subsequent to such payment shall be automatically reduced by an amount equal to the amount of the drawing so paid and shall not be reinstated except in accordance with clause (b)below.(b)After any payment by the Bank of a drawing under the Letter of Credit, then upon the Bank's receipt of a certificate in the form of Exhibit 1 to the Letter of Credit purportedly signed by authorized officers of the Company and the Equity Participant,-
the Maximum Drawing Amounts applicable to the period of and each period subsequent to such payment shall be reinstated to the Maximum Drawing Amounts which would have been in effect-immediately after such payment had no reduction in the.Maximum Drawing Amounts been effected pur'suant to clause (a)above.The Company agrees that (i)it shall reimburse'he, Bank f'r the amount of any''payment, by"the Bank qf a drawing under=th'e Letter'of Credit ,prior-'to-,any-'such"re'instatement of such',",,'amount;, arid (,i'i)i'.,it,'.shall.-'e,'"i'n"comp3.'iance".,''with'all of its-covenants
'and agreements in=this Agreement,, including Section'10 hereof,.upon.and after giving effect to such reinstatement.
.(c)-If adjustments are'ade to Casualty" Values, un'der"the Faci1ity Lease, then-upon--'the=.'Bank's receipt of a,c'ertificate in the form.,of.Exhibit 1-to the'etter'-'.of Credit'.='puiportedlv,signed;by.
autho'rized
'officeis=.,of
, the Company and'th'e Equity Participant,;
co'rresponding ad'justments shall be, made to*~4" h a W 1-'
the Maximum Drawing Amounts shown in Schedule I (as then in effect),~rovided that if any such adjustment would cause the Maximum Drawing Amount for any period to exceed the Letter of Credit Amount, the Letter of Credit Amount shall apply for such period.The Company agrees that (i)it shall be in compliance with all of its covenants and agreements in this Agreement, including Section 10 hereof, upon and after giving effect to such adjustment, and (ii)it shall have delivered Collateral to the Bank, if required, so that the market value of the Collateral at the date of such-adjustment in Maximum Drawing Amounts is equal to the greatest Maximum Drawing Amount in effect during the period from the date of such adjustment to the 35th day thereafter.
SECTION 5.Obli ations Absolute.The obligations of the Company under this Agreement shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, irrespective of any of the following circumstances: (i)any lack of validity or enforce-ability of the Letter of Credit, this Agree-ment or any other Transaction Document or Financing Document or any transaction relat-ing hereto or thereto;e (ii)any amendment or waiver of, or consent'o d'epaiture from, any other Trans-a'ction Document or Financing Document;(iii)the existence of any claim, set-off., defense, or other.rights which, the'" Company.may-have, at, any time against.,any'-beneficiarey'-,or.
any'tiansferee,-.of.
the'.Letter.
of Credit (or any"persons or entities for whom anv such benefi'ciary or any such trans-feree'ay be acting), the Bank or any other.Person.or entity,,whether in connection with.this Agreement, anv other Transaction Docu-'ent or, Financing,:,Document.
or"an'y.unreelated
.,*" tr'ansactions; I',-.-('iv).."-any'statement or any other document"piesented
'under the'-Letter; of'Credit.(includ-',.ing.Exhibits-1,.
2,-3, 4;5 or 6;thereof),',pioving,teo be.fo'rged; fraudulent,.invalid or'4 insufficient in any respect or any statement therein being untrue or inaccurate in any respect-whatsoever;(v)'ayment by the Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit,.provided such payment shall not have constituted gross negligence or willful misconduct of the Bank;or (v'i)'ny other circumstance or happening whatsoever,.whether or not similar to any of the..foregoing, provided that the same shall not have constituted negligence or willful misconduct of the Bank.SECTION 6.Re resentations and Warranties.
The Company represents and warrants to the Bank as of'the date hereof and.'a't the Date of Issuance as follows: (a)Subsidiaries.
The Company'has no Significant Subsidiaries.
(b)Good Standin and Power.Each of the Company and Franklin Land&Resources, Inc.is a corporation, duly organized and existing and in good standing under the laws of the'jurisdiction of its incorporation, and has the corporate power to own its property and to carry on its business as now being conducted and is duly qualified to do business and is in'-good standing in'ach jurisd'iction in which the character of the properties owned or leased bv it therein or in which the transaction of its business makes such qualification necessary.:
'I (c), Cor orate Authorit..7he Company has.-full'power and".authority; to,enter-int'o and,'perform
.'this*'Agreement'',
,-.and each,.other..Transaction-'Document,an'd'Fi.'nancing Document.'to-which't is a party and the-transactions relating hereto and thereto, all of which have been, or on or, before the Date of'ssuance, will have been, duly.authorized by all proper and necessary corporate action.No consent or approval', of'harehold'ers'f the Company or, any'Subsidiary of~:-.'.the.,Company., or any-trustee'.or
'holder.of,"any i:ndebtedness" of'.'the Company or any Subsided.ary.-is*=required as a condition=to''the.validity'f this'greement or'anyother Transaction
'---Document or Financing Document to which.it-..is.'a party other ,than,!such consents.and
'approvals.
as-have',been,, or on;or before the Date of Issuance.will'have.been, duly obtained., 1 , l1 P*,
(d)Consents.All authorizations, consents, approvals, registrations, exemptions and licenses with o from governmental authorities which are necessary for the execution and delivery by the Company of this Agreement and each other Transaction Document and Financing Document to which it is a party and the performance by the Company of its obligations hereunder and thereunder have been effected or obtained and are in full force and effect except for such authorizations, consents, approvals, registrations, exemptions, and licenses (i)as have been, or on or before the Date of Issuance will have been, duly obtained, given or accomplished, with true copies thereof delivered to the Bank, (ii)as may be required under existing Federal, Texas, New Mexico, Arizona or New York law to be obtained, given or accomplished from time to time after the Date of Issuance in connection with the maintenance, use, possession or opera-tion of Unit 2 or otherwise with respect to Unit 2 and the Company's or the Operating Agent's involvement therewith and which are, for PVNGS, routine in nature and which the Com-pany has no reason to believe will not be timely obtained and (iii)as may be required under applicable law not now in effect.No authorizations, consents, approvals, registra-tions, exemptions, or licenses with or from any governmental authority relating to the Securities Act, the Securities Exchange Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act, the Nuclear Waste Act, the P lic Utility Holding Company Act, the Texas Public Utility Regulatory Act, the New Mexico Public Utility Act, the Arizona Public Utility Act, energy or nuclear matters, public utilities, the environment, health and safety or Unit 2 is or will be required (a)in connection with the participation by-the Bank in the.consummation of the trans-actions contemplated by thi;s Agreement, or in connect'ion with the participation by any party thereto in the con-summation of the transactions contemplated by-the other Transaction Documents or-Financing Documents or (b)to be obtained in-connection'ith.Unit 2 by any of such'Persons.'-dur'ing
-.the Lease, Term,'.,except such authorizations.
consents, approvals; registrations,.
exemptions.
and licenses'(i)as have been, or.on=-or before the Date of Issuance, will have been, duly obtained, given or accomplished;(ii)as may be required by applicable law not now in effect, (iii)as may be required in consequence'f any transfer of ownership of,.any Note or Bond by%he holder thereof or of the beneficial
'n6erestv in the Trust, by the Equity, Partic'ipant, (iv)as.may be,'required in consequence.of the issuance.,'sale or exchange and delivery of=or.any obligations issued.un'der'nd pursuant to the=Collateral-Trust Indenture.(other than th'e Initial Series.Bonds';(v)as'."would be required'by applicable.law'xisting on the, Lease'Termination"Date"in.
connection-with taking possession.of an-in'terest inUnit 2, (vi)as may required by existing applicable,law if, after the Lease Termination Date, the Lessee should provide transmission services for the Owner Trustee or cease to be agent for the'wner Trustee as provided under the Assignment and Assump-tion, or (vii)as may be required in consequence of any exercise of remedies or other rights by any such Person in connection with taking possession of an interest in Unit 2.No authorizations, consents, approvals, registrations, exemptions or licenses with or from any governmental authority which are required after the date hereof but which have not yet been obtained (except as may be required under applicable law which is not now in effect, promulgated or proposed)shall in any way.affect the Company's obligations hereunder.(e).Bindin Effect.This Agreement constitutes, and each other Transaction Document and Financing Document to which it is a party when'executed and delivered will con-C stitute, the'alid and legally binding obligations of th ompany enforceable in accordance with their respective e terms subject, as to enforcement, to bankruptcy, insolvency, reorganization and'ther laws of general applicability relating to or affecting creditors'ights and to general equity principles.
P~1 I I h I A I P P I'(f)No Conflicts.
There is no statute, regula-tion, rule, order or judgment, no charter or by-law or preference stock provision of the Company, or any Affiliate of the Company Pand no provision of any mortgage, indenture, contract or agreement binding on the Company.or affecting its properties, whi;ch would prohibit, conflict with or in any way prevent the execution, delivery or performance by the-Company of the terms of this Agreement, or: any other Transaction.
Document or Financing Document to which it is a party or the transactions contemplated hereby or thereby.(other than the Mortgage Releases which shall be obtained on or befoie'he Date-of Issuance).
*P*I:: IP Reports;:,=
there, are--no proceedings"ox'-'investigations pending.='r, so far as the.ohfficers of the Company know, threatened against.the Company'or any Subsidiary
'thereof before any court or.arbi'trator or before or by any governmental autho;rity.wh'ich, in any one case.or in, the aggregate,.
i;f,deter-m'ined'dversely-'to-the.'interests
='of the Company.or, such a ubsi;diary; w'oui'd, have'material, adverse effect" on the bush'iness" ,properties; condition.(financial or otherw'se)
'or--operations, present:.'or'.
piohspective-, of'theh Company.and its.'.-.consolidated Subsid'iaries t'aken as''hole or on the opera-,.., tion nf:Unit-2 of PVNGS..---.
(h)Financial Condition.
The consolidated balance sheet of the Company and Subsidiary as of Decem-ber 31, 1985, together with consolidated statements of income, retained earnings and sources of Funds invested in utility plant and other plant, for the fiscal year then ended, together.with the notes accompanying such financial statements, all'certified by Peat, Marwick, Mitchell&Co., and the consolidated balance sheet of the Company and Sub-sidiary as of September 30, 1986, together with consolidated statements of income, retained earnings and sources of funds invested in utility plant and other plant for the nine months then ended, together with the notes accompanying such financial statements, all certified by the chief financial officer of the.Company,, heretofore delivered to the Bank, fairly present the financial condition of the Company and Subsidiary and the'results of their operations as of the dates and for the periods referred to and have been prepared in accordance with generally accepted accounting principles consistently maintained by the Company and its Subsidiaries throughout the periods involved subject in the case of the consolidated balance sheets and the related consolidated statements at or for a nine-month period ending on Septem-ber 30, 1986, to the condensation of certain financial information and the omission of certain footnote disclosures as permitted by the rules and regulations of the Securit'nd Exchange Commission and to normal year-end audit adj ments.The Company knows of no such adjustments which would, if made on the date hereof, be material.There are no liabilities, direct or indirect, fixed or contingent, of the Company as'f the dates of such balance sheets which are not reflected therein or in the notes thereto-;Except as disclosed in the Reports, at the date hereof there has been no material adverse-change in the business, properties, condition (financial or other)or operations, present or prospective, of the Company since December 31, 1985..', ('i)..Com liance with-ERZSA., The,,Companv has, ,'-..~*...fulfilled;:its'-,obligations
'under='.the minimum'funding,'tan--
dard's.of ERlSA,and the'Code"with
'respect to each" Plan,.is in'compliance in all materi;al respects with the presently applicable provisions of ERISA and=the Code,-and has not.incurred any liability to the PBGC under Title ZV of ERlSA.1 (j)Collateral..=Section 10.=of this Agreement creates,a=.valid grant;, assi'gnment, pledge and'ecurity interes't in favor.'of the Bank.in the=Collateral, deliver'ed, to-the Bank from time to.time.=pursuant thereto'and,-,upon
'elivery.of, such Collateral=
to the Bank, shall constitute;,-
a ful'lv,perfected first,.and.prior security, interest in and.~-lien upon all"'right;...tit3.e,and interest of the Company in'uch Collateral, superio'r in'.right to any liens, existin or future, which the Company or any third person may have against such Collateral.
or interests therein.SECTXON 7.Affirmative Covenants.
The Company covenants and agrees that, until the Exp>.ration Date, and for so long as the Letter of Credit shall remain in effect or any monetary obligations of the Company arising hereunder shall remain unpaid, the Company will: (a)Cor orate Existence.
Maintain its corporate existence in good standing, qualify and remain qualified to do business as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it therein or in which the transaction of its business makes such qualification necessary, and preserve, renew and keep in full force and effect all rights, privileges, franchises, licenses, trademarks, copyrights and patents necessary or normal in the conduct of its business, and cause each of its Significant Subsidiaries so to do except (i)for mergers and consolidations as permitted by Section 8(b)below, and (ii)that the Company may discontinue any right or franchise if its board of directors shall determine that such discon-tinuance is necessary or desirable in the conduct of its business and does not materially and adversely affect or diminish the ability for the Company to perform its obliga-tions under this Agreement or any other Transaction Document or Financing Document.(b)Financial Statements.
Furnish to the Bank (i)as soon as available but in no event more than 60 days after the end of each of'he Company's fiscal quarters, a consolidated balance sheet of the Company and its Subsidiar-
'ies as of the close.of such period and consolidated state-ments of income, r'etained earnings and sources of funds invested in utility plant and other plant from the beginning of the then current-fiscal-year and'from the beginning of such fiscal quarter to the-close of such period;.together ,.with the-notes,.accompanying.'such
--fi.nanci.al statements;--all
*'', certified-by: the:,chief financi'al..;officer=
of the'Company and'ccompanied, by.a certific'ate'of'.said'officer-stating whether any.event has occurred which constitutes Default or an'vent of Default and, if so, stating the facts with respect thereto, and providing.calculations which establish the Company's.
compliance with the requirements or restrictions imposed by',Section 10;(ii)as soon'.as.'avail'able but in no event more.than;12'0, days after'the close: of each of-the Company."s-fisc'al;years;-a copy of the=annual-audit report relating:to.
the'Company and its Subsidiaries in reasonabl'e detai.l-:=satisfactory to the, Bank and prepared.in,'ccordance.
with.genera'lly a'cce'pted account'ing,-'pr'inciples',by"Peat,.
" Ma'rwick', Mitchell, G Cp.:.,'or,'other
'ndependent public*I h IL-1 C*'r I P accountants satisfactory to the Bank, together with fi:na cial statements consisting of a consolidated balance sh of the Company and its Subsidiaries as of the end of suc fiscal year and consolidated statements of income, retained earnings, and sources of funds invested in utility plant and other plants of the Company and its Subsidiaries for such fiscal year together with the notes accompanying such financial statements;(iii)as soon as available but in no event more than 120 days after the close of each of the Company's fiscal years, a letter or opinion'of the accoun-tants who prepared the annual audit report relating to the Company and its Subsidiaries stating whether.anything in such accountants'xamination has revealed the occurrence of any event which constitutes a Default or, an Event of Default and, if so, stating the facts with respect thereto;and (iv)such additional information, reports or statements as the Bank may from time to time reasonably request.s e (c)Taxes.Pay and discharce, and cause each of its Subsidiaries to pay and discharge, all taxes, assess-ments and governmental charges upon it, its income and its properties prior to the date on which penalties are attached thereto, unless and to the extent only that (i)such taxes, assessments and governmental charges shall be contested in good faith and by appropriate proceedings by the Company or such Subsidiary, as the case may be, and (ii)the Compan such Subsidiary shall have set aside on its books adequ~reserves therefor.I (d)Insurance.
Maintain,.
and cause each of its Subsidiaries to maintain, insurance.
with responsible insur-ance companies-against such, risks, on such properties and in'-such amounts as is customarily maintained by similar busi-nesses, and file, and cause each of its Subsidiaries to file, with the Bank upon its request a detailed list of the insurance.
then in effect and stating the names of the insurance companies, the amounts and rates of;the insurance, ,the'dates.of-the=expiration thereof and the-pr'operties:,and
'i;ssks covered thereby;--(e)Maintenance of Records.-For the Company and, each of its Significant Subsidiaries (i)keep proper books of record and account in which full, true and correct entries will be made of.all dealings or transactions-of or:in relation to its business and affairs;(ii)set,up on its books'reserves,wi'th respect'to all.taxes, assessments, charges,'evies, and'claims;and-'(iii),.on a current.basis, set up on its books,, from its-earnings,.'.appropriate reserves.againstdoubtful accounts re'ceivable; advances and invest-ments and.a3.1 other prope'r.'reserve's (including,.'without
*':.limitation bv reason of enu'meration, resrerves*
for premiu ,*~*4 e~
if any, due on required prepayments and reserves for depre-ciation, obsolescence, or amortization of properties), which should be set aside from such earnings in connection with its business.All determinations pursuant to this sub-section shall be made in accordance with, or as required by, generally accepted accounting principles consistently applied in the opinion of such independent public accoun-tants as shall then be regularly engaged by the Company.(f)Subsidiaries to permit, the Bank to have one or more of its officers and employees, or any other person designated by the Bank, at the Bank's expense, visit and inspect any of the properties of the Company and to examine the minute books, books of account and other records of the Company and its Subsidiaries (other than tax returns)and make copies thereof.or extracts therefrom, and discuss its affairs, finances and accounts with its officers and, at the request of the Bank and with opportunity for officers of the Company to be present, with the Company's independent accountants, during normal business hours and at such other reasonable times and as often as the Bank may reasonably desire.(g)Maintenance of Pro ert , Etc.Maintain, keep and preserve and cause each of its Significant Subsidiaries to maintain, keep and preserve all of its properties which are used or useful in the conduct of the Company's business in good repair, working order and condition and from time to time make all.necessary and proper repairs, renewals, replacements, and improvements thereto (provided that this Section 7(g)shall not be'onstrued as a covenant of'the Company, or any Sig'nificant Subsidiary not to dispose of such properties by sale, lease, transfer, conveyance or otherwise).(h)'onduct of Business.Engage in, as'ts principa'l=-business the-providing.-of,electiic power'o wh'olesale and r'eta'il,customers.",",,-'.,'~:,-*.:.~''(i)Defaults;'romptly'otify the Bank of the occurrence of any event which constitutes a Default or an Event of Default hereunder or-an event of default.by the Company under any other.Transaction Document or Financing'ocument or any instrument.described or referred-to in'paragraph: (e)of Section.9-''e'ieof..
&1 SECTION 8..'Ne a'tive Covenants.
The'Companv-covenants=
and.,-agre'es-'.that;, until the.Expira'ti:on Date'and for'so long.as the'-Lettei,of Credit'shall.'remain'n:-effect or anv,=monetary obligations of the Company, arising hereunder-':.;shall''emain unpaid, the..Company''will:-
not, without-the prior , wr'<ten-consent of.--the B'ank.:..-'
(a)Pledges.Except for the pledge and secu interest in favor of the Bank and the Owner Participant provided for in Section 10, create, incur, assume or suf er to exist any pledge, lien or other encumbrance of any kind upon, or any security interest in, the Collateral or any part or portion thereof or any interest therein'(b)Mer ers and Sales of Assets.Merge or consolidate with or z.nto any other Person or sell, lease, transfer, convey or otherwise dispose of any asset, or permit any of its Significant Subsidiaries so to do, except, so long as no Default or Event of Default has occurred and is continuing, (i)as permitted under Section 10(b)(3)(ii) of the Participation Agreement, as amended from time to'ime, provided that in the case of any merger or consolida-tion to which the Company is a party, the corporation formed by such consolidation or into which the Company shall be merged shall assume the Company's obligations under this Agreement in a writing satisfactory in form and substance to the Bank, (ii)transactions of such nature to which the Owner Participant consents pursuant to Section 10(b)(3)(ii) of the Participation Agreement, as, amended from time to time, and which do not materially and adversely affect the Bank's rights and interests hereunder or the ability of the Company to perform its obligations hereunder, provided t in the case of any merger or consolidation'o which the Company is a party, the corporation formed by such conso dation or into which the.Company shall be merged shall assume the Company's obligations under this Agreement in a writing satisfactory in form and substance to the Bank,*(iii)any Subsidiary of the Company may merge or consolidate with or into the.Company, (iv)asset transfers between the Company and its consolidated, Subsidiaries, (v')pursuant-to the Existing Mortgages and (vi)-other sale and le'aseback transactions pertaining to assets of the Company..;=.'(c), Related, D'ocuments..-Enter into--or consent to,-'....,;any.'amendment.'r-assignment, of-any,-other,",Transaction, Docu-.-;"ment;or'Financi;ng';Docume'nt:,to., which-.'it'-is a.party',.
unless't.--
shall have given the Bank ten prior Business Days'otice thereof-(unless it is impossible for the Company to give ten-days'rior notice, in which event the Company shall give notice as soon as possible, but in,no event later than the , date such amendment.
or ass'ignment becomes effective)
-and,".if'uch'mendment.
or-assignment could''materially and adversely affect'he..Bank's-'rights and interests hereunder or.'the ability.of the Company to perform its'bl'igati.'ons hereunder, the Bank'shall.have given its-written consent to such-'".amendment=
'or ass'ignment
..0~J~l SECTXON 9.Events of Default.(A)The followi.ng events shall be Events of Default hereunder unless waived by the Bank pursuant to Section 1.1.hereof: (a)the Company shall fail to pay, and there shall otherwise fail to have been paid on behalf of the Company, when due any amount payable under Section 3(a)or 3(b)hereof on or before the third Business Day after the Bank has given notice, of such failure to the Company and the Equity Participant;(b)the Company shall fail to observe or perform any of its obligations set forth in Section 8 or 10 hereof;(c)the Company shall fail to observe or perform any other covenant, restriction or agreement.
contained in this Agreement for 30 days after the Company becomes aware of such failure;(d)any representation, warranty, certification or statement made by the Company in.this Agreement or in any certificate, financial statement or other'document delivered pursuant to this Agreement shall prove'to have been incor-rect in any material respect when made;~~~~~~~~~~~~(e)any obligation or.obligations.(other than its obligation hereunder).
of the Company or of any"Subsidiary thereof for the payment of Borrowed Money, which payment or payments, shall exceed$10,000,000 in the aggregate is not paid when.dtie oi becomes or is declared to be due and pay.-able.prior to-the express maturity thereof;~(f)the entry=bv a'court'aving jurisdiction in the premises of (A)a decree or.=-order for relief in respect of the Company in, any involuntary case or proceeding under anv applicable Federal or state bankruptcy, insolvency,'eorganizatio'n or.other similar lawor,.(B).a decree or order'adjud'ging;,:the:-Companv a".bank'rupt'or insolven't;','.or'approving
!-",'."'"as prop'erly.'-.
filed a.,peti.'tion'.,seeki.ng reorganization';-
arrangement,'djustment oi;composition of or in respect of the Company under any,'applicable Federal or state-law, or appointing a custodian, receiver, li.'quidator, assignee, trustee, sequestrator or other similar official of.,the-.C'ompany or.of..any substantial'-
part of any of its.propex;ty,'r'.ordering..the.-winding up'-or'iquidation of its affairs.,~and the-'-continuation of',any such;decree or order for"-relief, or'any.,sich other, decree,-or;.order.-unstayed and-in=effect for*a.period.of 60=;consecutive d'ays;.and..';-: (g)..'the.commencement bv.the.Company of"a.volun-tary case or proceeding under any'applicabl'e Federal or..~"='1*~'I I l\.~-
state bankruptcy, insolvency, reorganization or other si lar law or of any other case or proceeding to be adjudic a bankrupt.or insolvent, or the consent by the Company to the entry of a decree or order for relief in respect of the Company in any involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reor-ganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company, or the f iling by the Company o f a petition or answer or consent seeking reorganization or relief under any applicable Federal or state law, or the consent by the Com-pany to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company, or of any substantial part of its property, where the making by it of an assignment for the benefit of credi-tors, or the admission by the Company in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.(B)lf an Event of Default occuis and is con-tinuing hereunder, the Bank may in its sole discretion (A)notify the Equity Participant of such occurrence by delivering to the, Equity Participant a certificate in th form of Exhibit 5 to the Letter of Credit, thereby termi ating such Letter of Credit effective not earlier than th close of business on the tenth Business Day after the giving of-such certificate to the Equity Participant in the case of an Event of Default under Section 9(f)or (g)or the 30th day after'he giving of such certificate to the Equity Participant in the'case.of any other Event'of-Default here-under.and/or (B):exercise the rights granted to it in para-graph (f)of Section 10.-~, t SECTION.-10.
Collateral.
P",'...~.',,""':,'',:
.".('a),: Foi-va3,ue'received'nd,;to;,;induce.-tthe;.Bank;to.'...
-~'.'.;'.".i's sue'he" L'etter>of.Credit".for''the account o'''the.Company in accordance, with the terms of this A'greement, the'ompany hereby grants to the Bank;as security for all present and future obligations and liabilities of the Company to the Bank,.under or with respect to the Letter of.Credit and/or.this Agreement; whether for principal,-interest;,.-
fees, expenses..oi
'otherwise
.(collectively.
referied,to as, the ,"Senior Obligations"), a.security'i.nterest,:in the-':following describ'ed, property, (collectively referred'-to.as the"Collateral
'):.l..,;..(,i).Certificate-,of..Deposit.
No.'29208, dated.December 17;.-1986-,'issued=bv.Bankers,'-~~I t t*l'l h t t t t*p Trust Company in the amount of~30,000,000, with interest thereon at the rate of 6.30%per annum and maturing on, January 16, 1987 (the"CD"), and.(ii)all other indebtedness owed to the Corn/any and the certificates and instruments evidencing such indebtedness, which are.delivered to the Bank from time to time pursuant to this Section 10.together with (iii)their products, proceeds and acces-sions, including without limitation all.interest thereon and cash, instruments.
or other property received, receivable or other-wise distributed in respect of or in exchange for any or all of the property'eferred to in clauses (i)and (ii)above, or any such products, proceeds or accessions (collec-tively the"Proceeds").(b)(i)The Company shall deliver or cause to be~~~~~delivered to the Bank on or before the Date of Issuance the CD..Thereafter; on each day the Company shall maintain with the Bank Collateral.
consisting of Permitted Investments having a market.value as most recently determined by the Bank pursuant to, clause (d)below equal to or greater than the Maximum Drawing Amount in effect during the period from such day until the 35th daythereafter (the"Maintenance Level"),~rovided that.the Company shall not be obligated to deliver additional Collateral unless it has received notice pursuant to clause (b)(iii)below."P'ermitted Investments" means any investment permitted to be made under the Invest.-ment Agreement, dated as of December-1, 1986, between the Company.and the Bank..',.*~-~**=~:."(ii)..''In-.the,'vent that the-mark'et;,;value.-(as
'd'etermined
'pursuant.'to.cl'ause ('d)below)of the Collater'al exceeds'he Maintenance'evel,"the Company may from=time to~time by notice in wri;ting to the Bank request'he, release from'his Agreement of the excess amount of the Collateral
~(but not'an".amount..less than$100,000),.-and the Bank shall;provided that.there'..is not.".('and-would--not by reason'of such,'elease be).:,any Default-or-Event.of;-Default,.-release=
sich'.excess secur'ity from the.-provisions of=this:Agre'ement and.h I (((((C~('h (((v=-~~'I ((
return such excess security to the Company.The Bank wi release from this Agreement any Collateral held by it af the Letter of Credit has been surrendered or has expired and all amounts due and owing to the Bank hereunder have been paid in full.(iii)In the event that the market value (as determined pursuant to clause (d)below)of the Collateral is less than the Maintenance Level, upon the Bank's giving of notice to such effect to the Company, the Company shall deliver additional instruments comprising Permitted Invest-ments to the Bank, and such additional instruments shall immediately and without any need for any further action on the part of the Company or the Bank become subject to the security interest, lien and assignment set forth in this Section 10, and be deemed Collateral for all purposes here-under and be subject to the provisions of this Agreement.(c)The Bank is hereby authorized and directed to invest and reinvest Proceeds on the written instructions of the Company or, if the Company shall fail to give such instructions upon delivery of any such Proceeds, in the sole discretion.
of the Bank, provided that.in no event may the Company give instructions to the Bank to, or may the Bank in its discretion, invest or reinvest Collateral in other t Permitted'Investments.
In addition, the Bank shall have right't any time to exchange certificates or instrument representing or evidencing Collateral for certificates or instruments of smaller or larger-denominations.
I (d)Not later than the second day of each month (or..if such day is not a Business Day,.then on the next suc-ceeding Business Day), and on the date of any adjustment in Maximum Drawing Amounts pursuant to Section 4 hereof, and at any time the Bank otherwise determines, the Bank shall.determine the market, value of the Collateral then held by the.Bank as of the last day of'he preced'ing.month, or, the'"d'ate::..of such adjustinent or such,'other
.,time,';as..'the case'may.'j.be,,'and'shall.no'ti;fy, the..Company in writing--pr'omptly'here-after-.The determination by the Bank of the market value of the'Coll'a'terai shall be binding and conclusive on all parties.its.*(e).=,-The Bank m'ay from time'.to time-: (i)--Transfer'r register=.any-of the=..-Collateral into.the name'-of the=Bank.or nominee.--;,,''
 
(ii)Notify parties obligated on any of the Collateral to make payment to the Bank of any amounts due or to become due thereunder.(iii)Enforce collection of any of the Collateral by suit or otherwise; surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the origi-nal period)any obligation of any nature of any party with respect thereto;and exercise all other rights of the Company in any of the Collateral, except as hereinafter provided with respect to income from or interest on the Collateral and except that, prior to a Default or an Event of Default, the Company may exercise its voting and consensual rights with respect to any Collateral constituting voting securities.(iv)Take possession or control of any proceeds of the Collateral.
The Bank will promptly notify the Company of any action taken by it under clause (i)or (ii)above.Until the occurrence of a D'efault or an Event of Default, the Company shall have the right to receive all income from or interest on Collateral, and if the Bank receives any such income or interest prior to the occurrence of a Default or an Event of Default, the Bank shall pay the same to the Company, except that in the case of securities or other non-'cash"property distributed by way.of a dividend or otherwise with respect to the Collateral and subject to.Section.10.(b)(ii) above,,such securities=
oi other.property'shall, be'promptly delivered to-the Bank to be held's Col-, lateral h'ereunder.
Upon the, occurience of a,Default.
or an-,,-,Event of.Default,'the;Company'.will
-.not=;-demand.'r receive any'income-"f'rom or'.'interest:
on the.Collateral, a'nd.i::f the..Com'-pany receives any such income or i.nterest, the same shall be held-by the Company:in
.'trus't for the Bank in the same medium in which received, shall not be co-mingled with.any assets, of, the Company-and shall..be delivered to the, Bank in.the'f orm r'eceived, properly'endorsed'to permi.t collection, not,.later'han'he next-business, d'ay following the"da'y of.-its,;.-'receipt.'he;Bank-may.
ap'ply the ne't-cash re'ceived.from such: income-or.
interest to-pavme'nt if.,any..of..the
'Obligations, provided that'he.Bank--sha3.1'.account-for and'.pay'ver to the..'Company-any such i'ncome:-or interest*remaininq.
after.payment.in'full, of-the Obligations then o'utstanding..
C I C J (f)Ef an Event of Default shall have occurre (i)the Bank's rights and remedies with respect to the Collateral shall be those of a secured party under the Uniform Commercial Code as'in effect in the State of New York and under any other applicable law, as the same may from time to time be in effect, in addition to those rights granted herein in any other, agreement now or hereafter in effect, between the Company and the Bank.(ii)'Without in any way requiring notice to be, given in the following time and manner, the Company agrees that any notice by the Bank of sale, disposition or other intended a'ction hereunder in connection therewith, whether required by the Uniform Commercial Code as'in effect in the State of New York or otherwise, shall constitute reasonable notice to the Company if such notice is mailed by regular or certified mail, postage prepaid, at least three days prior to such action, to the Company's address specified in Section 12 hereof.'(iii)All dividends, payments of interest and other distributions of every character made upon or in.respect of the Collateral or any part thereof shall be deemed to be Collateral and shall be paid directly to and=-shall be=-held by the Bank as additional Collateral pledged under and subject to this Agreement.
t (g).The Company agrees to=take such actions and to execute such stock or, bond-'.poweis-.and such-other or-'.different wri'tings=-as.-the Bank may request.,(and;,irrevo'cably
" authoriz'es,-the-Bank-to execute"such wri.tin'gs,.as:.,'the-Com-'.'any's'agent'and'attorney-in-fact')
further to: perfect,'confirm and assure'the Bank's security interest in the Collateral and to assist.the Bank's realization thereon.~-'.(h)To.secure'the obligations and,Liabilities of the Company*to the-,Equity Participant under-the Facili,-ty Leas'e.in an'mount not:to exceed at any=time the~Maximum Drawing Amount in--effect'at such time'(the
".Junior Obliga-,'ions")., the-Company herebv grants the Equi:.ty-Participant a*.:, s'ecurity interest in allColl'ateral'z;om time to time.held.by the Bank pursuant..to this.Section.10...'
l...-.24-.;
(i)To induce the Bank to issue the Letter of Credit and permit the Company to grant the security interest to the Equity Participant pursuant to Section 10(h), the Equity Participant agrees that the Junior Obligations shall be subordinate and junior in right of payment, to the extent and manner provided below, to the Senior Obligations: (i)the Equity Participant will not take any actions to enforce any remedy against the Company with respect to the Collateral until a court of final jurisdic-tion shall have first determined that the Equity Participant shall have made a proper demand for payment under the Letter of Credit and the Bank'shall have wrongfully refused to honor such demand.(ii)the Bank shall be entitled to receive payment in full of all amounts due on or in respect of the Senio'r Obligations before the Equity Participant is entitled to receive any amount of Collateral or proceeds thereof on account of any of the Junior Obligations.
Xn.the event that, notwithstanding the foregoing, any dis-'ribution of or from the Collateral or the proceeds thereof by the Company or any payment by or on behalf of the Company of any kind or character of-or from the Collateral or the proceeds thereof, whether in cash, securities or other pro-perty, to which the Equity Participant would be entitled but for'he provisions.
of this Subordination Agreement, shall be received by the Equity Paiticipant before all Senior Obliga-tions are paid in full, such distribution or payment shall be held in.trust for the benefit of, and shall, immediately upon receipt'thereof, be paid-over or delivered, to the Bank for application to the payment of Senior Obligations.
The*,Equity'Participant."-;agrees.th'at the.,Bank shall not.',hold the,',;;;-...*'Collateral':.'as,,'bailee:
or.'-trustee.o'r''otherwis'e,of
'the'quity.
'..Participant.
and that the Bank shall not,owe any fiduciary or other obligation to the Equi'ty Partic'ipant wj.th respect to'the Collateral.
The Equity Participant, hereby.consents to, , and agrees that the Bank=shall have,no liability to it in connection-wi.th,.any action that the Bank-in its'sole dis-.'cretion may take with-r'espect'to the Collateral, including',without li'mitation, any: sale, transfer..or other:.:disposition
.of.any.of,.the Collateral;or"any,releas'e of the Collateral.f'rom, the, security interest created'.by-this..Section 10 in favor of the,-Bank and the Equity Particip'ant.,~,.The Equitv~~*Participant.=
agrees., that the, Bank shall not be responsible,.in' any'anner,to, the,,Equity Participant for.any representation P~-0'r', , P~/'!
or warranty made by the Company herein or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Section 10 or the security interests granted to the Bank or the Equity Participant herein.The Equity Participant exonerates and releases the Bank from any obligation or liability for any loss of, depreciation of, or failure to realize upon the Collateral; or any failure to collect or receive payment on the Senior Obligations; or any claim for any reason with respect to the inadequacv of the proceeds realized upon the.sale of any Collateral, or of the value of any Collateral substituted for existing Collateral.
The Equity Participant hereby irrevocably consents to the jurisdiction of any state or federal court in New York City: for the purpose of any, suit, action, proceeding or judgment relating to or arising out of Sections 10(h)and 10,(i)hereof.r~SECTION 11.Amendments and Waivers.No amendment or waiver of any provision of this Agreement nor consent, to=anv departure by the Company or the Bank therefrom shall in any event be effective unless the same shall be in writing and signed by the Company and the Bank.Any such waiver or, consent shall be effective only in the specific instance and for the specific purpose for which given.SECTION 12.Notices.All notices, requests an other communications to any party hereunder shall be in writing (including telexes, telecopies or similar writing and shall be given to such party, addressed to it, at its address set forth below.or such other address as such party may hereafter specify for the purpose by notice to the other parties.Each such.notice, request or communication shall be effective (i)if'iven by mail 10 days after'uch commu-ni:cation is depos'ited in the mails with first.class postage prepaid, addressed as aforesaid, (ii)if given by.telex or telecopier, when transmitted to the number set forth below or (iii)'f given by any other means, when'delivered at the...a'ddtess'.
specific'd below:;~//.~Pait::;...,".':-.:,',:,""""'': Address''.-,:-"-'.j El'aso Electric-Company.303 North Oregon Street El.Paso, Texas 79901 Attn: Corporate Secretary~'.'-,".='P;O.'-Box, 7'9960'=.El Paso, Texas 79960;--''Attn: Corporate Secretary Telex:.'Telecopier:
*.,>~//~//I//-'I ,~/'//
The Bank of New York Public Utilities Division 48 Wall Street New York, New York 10015 Attn: Guy Mule Telex: 12304 Telecopier:
(212)530-3119~(212)530-3110 Chrysler Financial Corporation c/o Chrysler Capital Corp.Greenwich Office Park I Greenwich, Connecticut 06836 Attn: Vice President, Leveraged Leasing Telex: (510)600-6491 Telecopier:
(203)629-1466 or to such other address as either party may specify in a notice to the other parties.SECTION 13.No Waiver;Remedies.No failure on the part of the Bank to exercise, and no delay in exercis-ing, any right'hereunder shall operate as-a waiver thereof nor shall any single or partial exercise of any right here-under.preclude any other, or further exercise thereof or the exercise of any other right.The remedies herein provided are cumulative and not exclusive of any remedies provided by law.SECTION 14.Indemnification.
The Company hereby indemnifies and holds harml'ess the.Bank from and against any and.all claims, damages, losses, liabilities, costs or expenses whatsoever which the Bank may incur (or which may be'.claimed', against the Bank by any person or entity whatso-ever),(i.')
by reason of.the provisions of Section 10;(ii)bv;reason of or.in connection.,with"'the.
execution and,delivery'.,:.'-
..,'..or", transfei'",of:;:.
or, payment, or-.failure.to.'pay',un'der',.the Letter',of.'Credit'.or the'.effe'cting.or.fai.-lin'g-to''effect
'any, increase or: decrease in Maximum Drawing Amounts under'ection 4 here'of or Paragraph 3 of the-Letter of Credit, except to the'extent.of (x).the Bank's-.willful misconduct or..gross negligence in determining whether documents presented, under, the'Letter-of Credit, comply with the terms-thereof-or.
.(y)the Bank,'s-wi;1lful"failure to pay'under.the Letter of Credit'after the-presentatio'n"to
'it by"-the Equity Participant of'a=draft,an'd cert'ificate..strictlv'omp'lying with the terms-'and condition of'he, Letter of Credit;(iii)*bv-reason,.o'f any'inaccuracv in, any mate'rial'respect,, or unt'rue'statement..-or alleged untr'ue.statement of, any material'"act.contained:,'or-incorporated
'by reference,,in, any offering r*~'v*4,~
document or prospectus distributed by or on behalf of th Company in connection with obtaining purchasers of the Company's undivided interest in Unit 2 of the PVNGS or in connection with the financing thereof pursuant to the Financing Documents, or in any supplement or amendment to either thereof, or the omission or alleged omission to state therein a material fact necessary to make such statements, in the light of the circumstances under which they are-or were made, not misleading; or (iv)by reason of or in connection with the execution of, delivery and performance of the Transaction Documents and Financing Documents.
Lr'r tl t SECTION 15.Continuin Obli ation.The obliga-=tions of the Companv under, this Agreement shall continue until the date upon which.(i)the Letter of Credit has been surrendered or has expired according to its.terms and (ii), all amounts due and owing to the Bank hereunder shall have been paid in full.This A'greement shall (a)be binding upon the parties hereto and their respective successors and assigns and (b)inure to the benefit of and be enforceable by the-parties hereto and their respective successors, transferees and assigns;~rovided, however, that (i)the Company may not assign all or any part.of this Agreement without the prior written consent of the Bank, (ii)the obligations of the Company pursuant to Section 14 hereof shall survive.the payment in full of amounts payable und Section 3 hereof and termination of this Agreement.
The security interest granted to the Equity Participant.pursuant to Section 10(h)may only be assigned by the Equity Participant to.a successor Owner Participant under the Trust Agreement to which the Letter df Credit has been transferred pursuant to, Paragraph, 11"of the Let'ter.of Credit, and then may only-be so assigned if such transferee
'delivers to the Bank a-duly executed'etter of accession in-form and substance satisfactory to the Bank pursuant to which such ,transferee agrees t'o be bound by.the terms of.Section 10(.i')hereof..'rr.'="':".SECTION,16.
'o'iabil'it
:of'he.'Bank.'.
The Com-.pany assumes all iisks of the acts or omissions of-the Equity Participant and any transferee of any Letter of Credit with respect.to its use of the Letters of Credit.Neither the Bank nor any of its officers or directors shall b'e liable or'esponsible for: (a)the use which may-.be, made-,of..'any Letter'f Credit or for a'y acts or, omissions'of the Equity aP1articipant;-or any other benefi'ciarv.-or transferee, in connection:-therewith (b)'<he va'lidity,~sufficiency or gen-:.uineness ofdocuments, or of"a'nv.'endorsements or signatures*
'heieorn;prevent i,f such documents';.,-.endorsements,',or',signatures', should,i.'n,.fact.,prot ye to..be in any.or all respec'ts'invali.insufficien't, fra'udulent or, forged;(c)'.-payment;by; the'L against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit;(d)acting upon any telex or telecopied notice given pursuant hereto or to the Letter of Credit;(e)any action or failure to act by the Bank to increase or.decrease Maximum Drawing Amounts pursuant to Section 4 hereof and Paragraph 3 of the Letter of Credit;or (f)any.other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except only that the Company shall have a claim against the Bank, and the Bank shall be liable to the Company to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by the Company as a direct result of (i)the Bank's willful misconduct or gross negligence in determining,whether documents presented under.the Letter of Credit comply with the terms thereof or (ii)the Bank'willful failure to pay under the Letter of Credit after the presentation to it by the Equity Participant of a draft and certificate strictly complying with the terms and condition of the Letter of Credit.In furtherance and not in limita-tion of the foregoing, the Bank may.accept documents that appear on their face to be in order, without responsibility for further investigation-.
SECTION 17.Costs Ex enses and.Taxes.The Company agrees to pay on demand all reasonable costs and expenses of the Bank in connection with the preparation, execution, delivery, filing and administration of this Agreement, the other Transaction Documents, the Financing Documents and any other documents which may be delivered in connection with or, related, to this Agreement or any of the other-Transaction Documents or the Financing Documents and realization upon, the Col'lateral, including, without limita-tion, the fees and out-of-'pocket expenses of counsel for the Bank with respect thereto:and with respect'o advising the.Bank as to its rights and responsibilities under'this Agree-'.;..'ment
'-or:-any.
waiver or'.amendment,'of,'r the enforcement of.'h'is Agreement and..-such:
other,doc'uments.'which'.may be., delivered" in'onnection with this Agreement or'any of-the other Transaction Documents or the Financing Documents.'n addition, the Company shall pay any and all stamp and othertaxes and fees pavable or determined to be payable in con-'ection.with-the execution,'..
d'eliverv,',filing and recordin'g
'f,.this Agieement,'the, other Transaction Documents; the-.,.Financing..Documents and'such other d'ocuments,a'nd agrees to'-save the Bank harm3.ess.
from and'gainst any and"all'i;abili-*
=.ties.with.resp'ect to, or-resulting from',any delay in paying': or.omissi:on.to, pay.'such--taxes and fees.')I'P V, Agreement which is prohibited, unenforceable ox not auth rized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforce-ability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.
SECTION 19.Governin Law;Submission to Juris-'iction.
This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.The Company hereby irrevocably submits to the~'on-exclusive jurisdiction of any state or Federal court in~, New York City for the purpose of anv suit, action, pro-ceeding or judgment relating to or arising out of this Agreement or the Letter of Credit.The Company hereby appoints Mudge Rose Guthrie Alexander&Ferdon, with offices on the date hereof at 180, Maiden Lane, New York, New York, as its authorized agent on.,whom process may be served in any action which may be instituted against.it by the Bank in any state or Federal court in New York City, arising out of'r relating to this Agreement or the Letter of Credit.Service of process upon such authorized agent and written notice of such service to the Company shall be deemed in every res-effective service of process upon the Company, and the C pany herebv'rrevocably consents to the jurisdiction of a such court in any such action and to the laying of venue in New York City.The Company hereby irrevocably waives'any objection to the laying of venue of'ny such suit, action or proceeding brought in the aforesaid courts and hereby irrevocably waives any, claim that any such suit, ac'tion or proceeding brought in any such court has been brought in an inconvenient forum.No'twithstanding the foregoing, nothing herein shall in any way affect the right of the Bank,to'ring any.action arising out of or relating to.this Agree-ment=or the.Le'tter-of.-Credit
=in.any competent..:,court else-.'here haVing jurisdiction, over.the Company.,or:.'its prope'rty..
.',-~*SECTION'0.
Right of.Setoff."The Bank hereby irrevocably waives its right to exercise as collateral security for the Senior Obligations any bankers lien.or right of setoff it may have, with respect to any balances,.-credi;-ts,'ac'counts, or moneys of the Company at-any time with the.Bank, when: and i: f;there;shall'e-a=drawi.'ng under the Letter'of-Credit during,-the
*pendency of any.proceeding'y, or'agai.nst.
the Company's a.debtor under, any'1'aw re'lating-to".b'ankruptcy;=--
insolvency,".or,"reor'ganization or'elease, of".:,.*-debtors:,'unles's:and until'it,.is-.determined
'by.a*c'ourt-of.;competent.
jurisdiction, that the.,failure.-,to grant"such:wai.would'ot'ead
'to-the.Bank being released, prevented,.or' restrained from or delayed in fulfilling its obligations under the Letter of Credit and unless the exercise of such-banker's lien or right of setoff would not constitute any payment (including pursuant to the Letter of Credit)to the Equity Participant in respect.of amounts payable under the Facility Lease a voidable preference payment under federal bankruptcy law then in effect.I'.~~*4'~Y a SECTXON 21.Headinces.
Section headings in t Agreement are'included herein for convenience of referen only and shall not constitute a part of this Agreement for any other purposes.IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written.EL PASO ELECTRIC COMPANY aa By Name: Title: THE BANK OF NEW YORK By Name: Title: I r'.c CHRYSLER FINANCIAL CORPORATION (but solely for purposes of Sections 10 (h)and 10 (i))Ey.Name': Title,;p>~~~y-in/-~pi.p
.>>\h a r I'I r, F-*s a I a a*a F\a~Fa>32 F ah Attachment A Irrevocable Trans ferable Letter of Credit No.14677 CHRYSLER FINANCIAL CORPORATION Gxeenwich Office Park I Greenwich, Connecticut 06836 Attn: Leasing and Investment Services-December 18, 1986
 
==Dear Sirs:==
1.We hereby establish, at the request and for the account of.E1 Paso Electric Company, a Texas corporation (the"Company"), this Irrevocable Transferable Letter of Credit, whereby we irrevocably authorize you to draw on THE BANK OF NEW YORK, New York, New York (sometimes herein referred to as the"Bank")in an amount not exceeding$45,000,000 (as such amount may be reduced from time to time by drawings hereunder or pursuant to the terms hereof, the"Letter of Credit Amount"), in connection with the leasing of an undivided interest in Unit 2 of the Palo Verde Nuclear Generating Station t'o the Company pursuant to a Facility Leasedated as of December 1, 1986 (the"Facilitv Lease"),.between the Company and The First National Bank of Boston, as.Owner Trustee under.,a Trust Agreement, dated as, of.De'cember 1,'986 with you, in accordance with the terms and.cond'.ti;ons hereinafte'r set.forth.K p"2'."..Any..drawing;under this=-Letter-.
of.'Ciedi't.shall-not exceed-the.
lesser of (a)the Letter-of'Credit'Amount and (b)the amount shown opposite the period including the date*of such-drawing (the."Date of Drawing")-in the Table of Maximum Drawing.Amounts attached.hereto as Schedule I whi,ch,.forms an integral pait, of this Letter'f.Credi't, as, such amounts-are'modified
'fiom time to ti'me in"accord'ance with:.,the=:next paragraph':
Such=amounts,,'as modified--in accordance.,with the next paragr'aph, are hereinafter-referred'.to collec-', tively as*the"Maximum Drawing Amounts" and individuallv.
as'he"!'Maximum;Drawing,,Amount"....
".~;..*'/3.'he',Mavimum, Drawing Amounts: shall be'modified.from'time-'to'.
t'ime as=follows',:" I' P'b, (a)upon payment by the Bank of each drawing under this Letter of Credit, the Maximum Drawing Amounts applicable to the period of and each period subsequent to such payment shall be automatically reduced by an amount equal to the amount of the drawing so paid and shall not be reinstated except in accordance with clause (b)below;0 (b)after any payment by the Bank of a drawing under this Letter of Credit, then upon the Bank's receipt of a certificate in the form of Exhibit 1 to'this Letter of Credit, which exhibit forms an integral part of.this Letter of Credit,~purportedly signed bv authorized officers;of-She Company and you, the Maximum Drawing Amounts applicable to the period of and each period subsequent to such payment shall be reinstated to the Maximum Drawj.ng Amounts which would have been in effect imme'diately after such payment had'o reduction.
in the Maximum Drawing Amounts been effected pursuant'o clause (a)above;'b!!(c)-if adjustments are made to Casualty Values under the Facility=Lease, then upon the Bank's receipt of'a certificate in the form of Exhibit 1 to this Letter of Credit, which exhibit.'orms an integral part-of this Letter of Credit;purportedly signed by authorized officers of the Company and you, correspond-ing.-adjustments shall be made'to=the Maximum Drawing Amounts shown in.Schedule I (as then'n effect),~tcvided that if any such adjust-ment, would cause the, Maximum Drawing Amount.for any period to, exceed th'e Letter of Credit Amount,.the'Letter of Credit Amount shall P-apply for such period.-.:-'.'-=;.
!bUp'on'su'irender"of this'etter of'redit together with such certificate, we will promptly issue an irrevocable transferable letter of credit-containi'ng a', revised Schedule I reflecting the adjustments contained in such certificate and in..~*all=other,;respects:
id'enti:ca3.
to this.Letter-of-'redi;t.,!';.=..Subject
'to'the foregoing..and the furthe'r prov'j.si'ons of.-.this Letter of Credit,-a=demand.for payment..'ay.be made'by,~clou by'resentat'ion'to,:us,at-our address,~".Wa'shifngto'n.
Streetfb New-York,'ew York:-10006 (A'ttention.
!*P~'b P P!t b~'
International Division, Letter of Credit Department, Elizabeth Mallon)or to such other address as we may specify to you in writing at least 15 days prior to the effectiveness of such change in address, of (a)your draft in the.form of Exhibit 2 hereto, which exhibit forms an integral part of this Letter of Credit, and (b)your drawing certificate in the form of Exhibit 3 hereto, which exhibit forms an integral part of this Letter of Credit, each appro-priately completed and purportedly signed by one of your authorized officers.If your draft and your drawing certificate, so completed and purportedly signed by one of your authorized officers, are presented to us at our aforesaid office at or prior to 10:00 A.M., New York time, on a business day, payment shall be made to you of the amount specified before our close of business on such business day.If this Letter of Credit and.your drawing certificate, so completed and purportedly signed by one of your authorized officers, are presented to us at our aforesaid office after 10:00 A.M., New York time, on a business day, payment shall be made to you of the amount specified before our close of business on the next succeeding business day.Payment under this Letter of Credit.to you shall be'made by wire transfer in same day funds to an account maintained by you with a commercial bank in the City of New York and specified in your drawing cer-tificate presented to us.5.As used herein"business day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or required by law to,close.6.This, Letter of Credit-shall expire at the earlier of (a)our close of business at the aforesaid address on.January 3, 1992,~rovided, however, t.hat said expiratio'n date'hall.
be extended without increase in the-Letter of, Credit Amount-then.in.effect or:,ariy other'," amendment; except';as,.described'ri''the:.following-,sentence,.'=.,I our-.one,.vear
''from.'said expira'ti;on:,.date,'or fiom.anv.future expiration'ate,.if, on or-before-the date'hi:ity-days pri.o'-to the date four years prior to such expiration date, we shall notify you by registered"mail of our election (which is'in our sole.discretion) to-renew.this Letter of.Credit'or.anv'.such, additional per'iod.and (b)th'e*.date.on which.we-pay'.a'dr'awing,under.this" Letter-of C'redit iri.the fu'll amount;.of the Maximum Drawing: Amount" then in'effect..
Zn the event..'that we'lect to-renew'his Let'ter of, Credit f'r any'additiona'l.period pursuant.to:-:clause (a)above, such renewal'ha'll become.'ffective
'onlv....if.
you andthe-Companv,.shall ,delive'r'o.
us, piiora-to.December'1.in the year.owe,so elect to renew-this L'etter"of Credi.t'for', the relevant peri.'od,''notice.in',,th'e
'form.of.:.-,Exhibit-.4-he'redo,,which:.-exhibits.forms
~s 4 v I'I 4 F*s s s f s~~i 4 an integral part of this Letter of Credit, setting fort supplemental Table of Maximum Drawing Amounts'or such period (none of which Maximum Drawing Amounts shall exceed the Letter of Credit Amount).Upon surrender of, this Letter of Credit together with said notice we will promptly issue an irrevocable transferable letter of credit containing a revised Schedule.I reflecting the terms contained in said notice and in all other respects identical ta this Letter of Credit.7.'otwithstanding any other provision of this Letter of Credit, this Letter of Credit shall expire at our close of business at our aforesaid address on the date ten business days or 30 days;as the case may be',.afte'r we have given you a certificate in the.form of Exhibit 5 h'ereto, which exhibit forms an.integral part of:this: Letter of Credit, appropriately cas4pleted:
pra44lded that on ar before such expiration date you will'ave the right to draw once an amount not in excess of the Maximum Drawing Amount then in effect in accordance with the procedures described h'erein.The certificate referred to in the preceding sentenc'e shall be given by telex, or facsimile transmission or by overnight delivery service addressed to'ou at Chrysler Financial Corporation, c/o Chrysler.Capital Corp., Greenwich Office Park I., Greenwich, Connecticut 06836, Attention:
Vice President, Leveraged Leasing, with Telex:: (510)600-649., Telecopier:
(203)629-1466, with a copv.to: Manager,!Contract Administration (Leveraged Leasing)(or to such other address or telex or facsimile transmission number designated by you by written notice delivered to us at least 15 days prior to'the notice of early termination) and such certificate shall be effective upon the earlier of (i)receipt of the appiopriate answeiback or confirmation of the acsimile transaction and (ii).delivery to you of such certi"icate by.overnight delivery service or hand delivery.-This Letter of Credit shall be promptly surrendered.
to us by you, upon such.expiration..=
*,'..'.,This Letter" of Cr'edit sets forth",in.'full:the terms of our undertaking, and thi.s undertaking shall not in any way be modified, amended'or amplified by refeienc'e to-any document, instrument or.agreement referred-to herein (except"the Uni'form Customs: (hereinafter defined)and Schedule I.and Exhibits.1;2, 3'-,--4, 5-and,6 hereto and the".=.-'notices referred" toherein).or, in-which this Letter, of ,.Cred'it."is referred to or.to whichthis Letter o', Credit r'elates, and"anv-''such
'r'eference
'sh'all''not be'.deemed to-.inc'orporate" herein by, reference, any document,'.instrument or'agreem'ent."-
I 4~"';-.ll'~44~w,*4 J 4,4 9.Except so far as otherwise expressly stated, this Letter of Credit is subject to the Uniform Customs and'Practice for Documentary Credits (1983 Revision)Xnter-national Chamber of Commerce, Publication No.400, and, as to matters not covered therein, shall be governed by the laws of the State of New York, including without limitation the Uniform Commercial Code as in effect in such State.10.Communications to us with respect to this Letter of Credit shall be in writing and shall be addressed to us at our address set forth above, Attention:
Inter-national Division, Letter of Credit Department, Elizabeth Mallon (with a copy to The Bank of New York, Public Utilities Division, 48 Wall Street, New York, New York 10015 (Attention:
Guy Mule))and shall specifically refer to the number o this Letter of Credit.11.Notwithstanding Article 54 of the Uniform Cus-toms referred to above,.this Letter of Credit may be trans-ferred and assigned in its entirety more than once, but in each case.only to the successor Owner Participant under the Trust Agreement dated as of December 1, 1986 between your-self and The First National Bank of'oston and in each case effective only upon the transferor's and the transferee's compliance with the immediately following sentence.Upon receipt by us at the address for presentation of documents set forth above of an original of the instrument effecting=such transfer and assignment, signed by the transferor and by the transferee and a notice, in the form of Exhibit 6 hereto, which exhibit forms an integral part o: this Letter of Credit (which shall be conclusive evidence of such ,assignee's authority without',.anv inquiry by us into the terms of the Trust Agreement) then, in such case, we will, upon surrender of.this Letter of Credit,, issue an irrevocable transferable.letter of.credit in the name of the transfer'ee-and provi'ding.for notices to be sent to the.=tran'sferee'-;at..the addr'ess=set,'forth theiein and.in all other',.'.respects'dentical to;;,'th'is'etter of'redit'-'-and-the.'trans-"'-'.
feree',-instead of the"-tr'ansferor',, shall;;without'ecessitv-of further act, be entitled to all the benefits'f, and rights under, this Letter.-of Credit in the transferor's ,place.'Very.truly yours','HE.:BANK OF, NEW YORK',"P 1 g4 4 Bv:.'-*" Name: T"tie:,'lf~%!~'h jap";." AC*a,rk 0 C ,C I fl I: i'I 0 P 4 d/k I+t*1 r, 0 S, P\-'*.l l 1 I l'I Schedule I This Schedule Forms an Integral Part of Letter'of Credit No.Table of Maximum Drawin Armunts Applicable Period Maximum Drawing Amount 1988 7 t'I e December 18, 1986 through January 1, January 2, 1988 through July 1, 1988 July 2, 1988 through January 1, 1989 January 2, 1989 thigh July 1, 1989 July 2, 1989 through January 1, 1990 January 2, 1990 through July 1-, 1990 July 2, 1990 through January 1, 1991 January 2, 1991 through July 1, 1991 July 2, 1991 through January=1, 1992 January 2, 1992 through July 1, 1992 July 2, 1992 through January 1, 1993 anuary 2, 1993 through July 1, 1993 July 2, 1993 through January 1, 1994 Janua~2, 1994 through July 1, 1994 July 2, 1994 through January 1, 1995 January 2, 1995 through July 1, 1995 July 2, 1995 through January 1, 1996 January 2, 1996 through July 1, 1996 July 2, 1996 through January-l, 1997 January 2, 1997 through July 1, 1997 July,2, 1997 through'January 1,.1998 January,2, j.'998 through July'1, 1998 , July 2, 1998 through January 1, 1999,'January:2, 1999,,through
'Duly 1.';;1999.*.,'July 2',.-:1999 through January-1,-2000'anuary 2, 2000 through, July'1,.2000:: July 2, 2000 through January 1, 2001 January 2, 2001 through July 1, 2001*July 2, 2001 through Jan~:1,.2002 January 2;.2002-through.
July 3., 2002.July 2, 2002 through January:1, 2003'January-2,;2003 through July 1-:, 2003.July 2;-2003, through January., 1,=.,2004-January'2,-2008 through'.July-1,;.2004." July 2,-2004:~ugly January-,l.;,2005 anuary 2, 2005 through July 1;-2005'-$28,820,113 23,356,570 24,524,190 25,592,766 26,587,428 27,511,137 28,373,526 29,161.,795 29,882,187 30,521,687 31,091,138 31,587,077 32,016,197 32,367,823 32,646,710 32,842,120 32,974;233 33,095,060 33,220,365 33,350,718 33;486,561 33,628,203 33,793',345 34,01'4,390 33,918,669 33,503,935 33,217,403 32,775,855 32,473,879 32,006,086 31,687,.970 31', 193-, 041 30,857,659, 30,333,:158, 29,981,034 29,427,307 E
plicable Period Table of Maxirmm Drawin Amounts Maxirmm Drawing Amount e July 2, 2005 through January January 2, 2006 through July July 2, 2006 through January January 2, 2007 through July July 2, 2007 through January January 2, 2008 through July July 2, 2008 through January January 2, 2009 through July July 2, 2009 through January January 2, 2010 through July July 2, 2010 through January January 2, 2011 through July July 2, 2011 through January January 2, 2012 through July July 2, 2012 through January January 2, 2013 through July July 2, 2013 through October 1, 2006 1, 2006 1, 2007 1, 2007 1, 2008 1, 2008 1, 2009 1)2009 1, 2010 1, 2010 1, 2011 1, 2011 1, 2012 1, 2012 1, 2013 1, 2013 1, 2013$29,057,548 28,815,838 29,375,281 30,051,866 30,848,368 31,785,427 32;865,828 34,113,199 35,531,428 37,147,422 38,965,503 37,331,236 34,450,373 31,402,919 28,167,979 24,745,805 21,132,432 e\I~K'h~r)h h h h, P Exhibit 1'This Exhibit Forms an integral part of Letter of Credit No.14677[Date]The Bank of New York 110 Washington Street New York, New York 10005 Attention:
International Division, Letter of Credit Department
 
==Dear Sirs:==
Reference is made to that certain Irrevocable Letter of Credit No.14677 dated December 18, 1986, which has been established by you in favor of Chrysler Financial Corporation (the"Equity Participant").The undersigned, a duly authorized officer of the Equity Participant and a duly authorized officer of El Paso Electric, Company (the"Companv"), each hereby certifies that the Maximum Drawing Amounts shown on Schedule I to the~~~~~Letter of Credit should be[in case of reinstatement pursuant to paragxaph 3(b)of Letter of Credit-reinstated]
[in the case of modifications pursuant to paragraph 3(c)of.the Letter of Credit-modified], in accordance with the terms of Paragraph 3 of the Letter of Credit, to the Maximum~Drawing Amounts shown i'n Appendix A hereto, none of which are'reater than the Letter of Credit Amount.[Include only for.modifi;cation resulti'ng in qhange in Maximum Drawing Accounts--The Letter of Credit is returned herewith and we request that you issue an~irrevocable transferable letter of credit with the revised ScheduleI;.atta'ch'ed and'iver'all;.other'=respects.
identical to.'the'-Letter.'.of
.Credit-;]-.-.;:-..'.CHRYSLER FINANCIAL CORPORATION
'I'!,~%e't*w V By[Name and Title-.of Authorized:
Officer of Equity',Participant]
!.EL--PASO'ELECTRIC COMPANY.--:/B y<=-"[Name and-Title of Authorized'.
Officer of,the'Company],-
-~g4 i'>>r'C~.Appendix A to Exhibit'1 This Appendix to Exhibit 1 Forms an Integral Part of Letter of Credit No.14677 Su lemental Table of Maximum Drawin Amounts A licable Period Maximum Drawing Amount~'~IP'*P*P-\~,~r Exhibit 2 This Exhibit Forms an integral Part of Letter of Credit No.14677[Date)On Sight Pay to the order of Chrysler Financial Corporation U.S.(U.S.Dollars).Drawn under The Bank of New York Xrrevocable Transferable Letter.of Credit No.14677, dated December 18, 1986.The Bank of New York 110 Nashington Street New York, New York 10005 For value received.CHRYSLER FINANCIAL CORPORATION By[Authorized Officer Name:.,Title:
I~R f-I 4 I I r r I 1 r t R I h II 1 r,r r 1 r'\~R r h'I'l 1*'RI'I Exhibit 3 This Exhibit Forms an Integral Part of Letter of Credit No.14677 CERTXFZCATE CHRYSLER FXNANCIAL CORPORATlON (the"Companv"), through one of its duly authorized officers, hereby cer-tifies to The Bank of New York (the"Bank"), with reference to irrevocable Transferable-Letter of Credit No.14677 (the"Letter of Credit",)issued by the Bank in favor of the Company that:(1)(A)An Event of Default under that certain Facility Lease dated as of December 1, 1986 has occurred and is continuing or (B)any other amount payable under said Facility Lease or.any of the Transaction Documents referred to in said Facility Lease is owed by the Lessee thereunder and has not been paid (including without limitation in connection w'th anv Early Payment Obligation referred to in said Facility Lease,-or any amount dueunder said Lessee's purchase option under Section 10(b)(3)(xvii) of the Participation Agreement referred to in said Facility Lease or Section 13(c)of said Facility Lease).(2)The amount of the drawing under the Letter'f Credit being made hereby is (the"Drawing Amount"), and:such.amount does not, exceed,'the
.amount.-available to',be drawn..',.
=, under','.the'.Letter.'''o,'Cre'dit;-;on'.the.date he'reof;/as'etermined'n'," a/ccoidance wi'th the terms*of-the Letter'f.Cxedit.
: V Pr J-'/P*I'I I/*h d I~'I'P Please make payment of the Drawing Amount to[and address of commercial bank in New York Cit ,[title of account, if an], account no.IN WITNESS WHEREOF, the Company has executed and delivered this Certificate as of the day of 19 CHRYSLER FINANCIAL CORPORATION By Name and Title of Officer o'f Companyl 0 I I e**-4 I''~e'h I e.e I C I e Exhibit.4 This Exhibit.Forms an-Zntegral Part of Letter of Credit No.14677[Date]The Bank of New York 110 Washington Street New York, New York 10005 Attention:
Znternational Division, Letter of Credit Department
 
==Dear Sirs:==
Reference is made to that certain irrevocable transferable Letter of Credit bearing Letter of Credit No.14677, dated December 18, 1986 (the"Letter of Credit"), which has been established by you in favor of Chrysler Financial Corporation (the"Equity Participant").The undersigned, a duly authorized officer of the Equity Participant and a duly authorized officer of El.Paso Electric Company (the"Company"), hereby certify that the Equity Participant and the Company have agreed to the exten-sion of the expiration date of the Letter of Credit from January , 19 to January , 19 , and in connection therewith have agreed that the amounts shown on Schedule I to the Letter of Credit should be supplemented, in accor-dance with the terms of Paragraph 6 of the Letter of Credit, to include the Applicable Periods and Maximum Drawing Amounts shown'n Appendix A hereto (none of which Maximum.Drawing.Amounts are greater than the'etter of Credit Amount).The Letter of Credit is returned herewith and we request that y'ou issue an irrevocable transferable Letter of;Credit'ith
'the revised Schedule.-Z.
attached'and in all other'-respe'ct's'~i;den'tical to'.-the.,Letter of-.,Credit.'*
'CHRYSLER FZNANCZAL CORPORATZON By Name and Title of.Authorized Representative of Equity,-.-P.articipant], EL.PASO':.ELECTRZC
'COMPANY"~C 1 C*0't E.1%,;gory.Name and'.Title Of Authorized
.'.Represent'ati;ve of Company)'
I t t+t P t P\f rI d~'.P t*P P t Exhibit 5 This Exhibit Forms an Integral Part of Letter of Credit No.14677 DEFAULT CERTIFICATE The Bank of New York (the"Bank")hereby certifies to Chrysler Financial Corporation, with reference to the Bank's Irrevocable Transferable Letter of Credit No.14677 (the"Letter of Credit")that an Event of Default under[Section 9(f)or 9(g)][Section 9.(other than Section 9(f)or 9 (g)]of, and as def ined in, the Letter of Credit'and Security Agreement, dated as of December 18, 1986, between the Bank and El Paso Electric Company, has occurred and is continuing, and hereby gives notice that the Letter ofCredit will expire on IN WITNESS WHEREOF, the Bank.has caused this certificate to be executed on its behalf as of the day of 198 THE BANK OF, NEW YORK By.,(Name.and Title).~-e I e'Date,ten" business days after.giving, of certificate in'the, case of.an, Event o'" Default under Section 9,(f),'r.(g)of the-'.Letter'.of.
Credit,and S'ecuritv'Agreement and''0 days.after'the giving.'.of certificate
'in the ca'se*of, ,-an:,Event.
of Default'',un'der-".Secti'on 9-.(other'than.Section 9(f).or'(g)').r l!-,\*/4 a" C**,~a 0''I e I 5 4, I V l.e 1'1 E t'I F E'P J 4 ,t (A'l Exhibit 6 This Exhibit Forms an Integral Part of Letter of Credit No.14677 The Bank of New York 110 Washington Street New York, New York 10005 Attention:
Letter of Credit Department
 
==Dear Sirs:==
Reference is'ade to the certain Irrevocable Letter of Credit No.14677, dated December 18, 1986, which has been established by you in favor of[name of Equity Participant (the"Transferor")].
The Transferor has transferred and assigned (and hereby-confirms to you said transfer and assignment) all of its rights in and under said Letter of Credit to[name of Transferee](the"Transferee")and confirms that the Trans-feror no longer has any rights under or interest in said Letter of Credit.The Letter of Credit is returned herewith and we request that you issue an Irrevocable Transferable Letter of.Credit.in the name of the Transferee and providing for notices to be sent to the Transferee at the address set forth below and in all other respects identical to the Letter of'redit.Transferee hereby certifies that it is a duly autho-rized transferee under the terms of said Letter of Credit and is accordingly entitled, upon presentation of the drafts and certificates called for therein, to receive payment thereunder.
Notices under the'etter of Credit should be.sent to-us as follows:[Name],[Address,[Telex Number], Attention:
[Answerback].
I'.*1'.'"[Name.,'of-.Transferor.]
[Name and Title of Authorxz'ed Representative of Transferor]=
'I 5Name,'of Transferee
[Name.'and:-Title; of'uthorized-Representative of Transferee].
fq*i s t I l y/i I E P 1 4+\C"I~, 2'C P t 4" 4'4 r y'Jl I:
THE BA.~WE OF KZW YORE NCW YORK S flRST SANK-FOVHOCO lTSK SY*l.CXANOCR HAMI[.TOH 48 WALL STREET, HEW YORK,&#xc3;.Y.LOO!5 Irrevocable Trans f crab le Letter of Credit No.14677 CHRYSLER FINANCIAL CORPORATION Greenwich Office Park I Greenwich, Connecticut 0683 Attn: Leasing and Investment Services+December 18, 1986-
 
==Dear Sirs'.1.We hereby es b ish,==
at the request and for the account of El Pas'o-Elect'c,Company, a Texas corporation (the"Company"), this Irrevoca e Transferable Letter of, Credit, whereby we ir cably a orize you to draw on THE BANK OF NEW YORK, ew York, ew Yo (sometimes herein referred to as e"Bank")in yn amount not exceeding$45,000,000 (as ch amount ma@be reduced from time,to time bv drawings here nder or pursuan to the terms hereof, the"Letter of Credi Amount"), in c of an undivided i;terest in Unit Generating Statio to the Company Lease,'dated as of e'cember 1, 19 between the'Company nd The Firs nnection with the leasing of the Palo Verde Nuclear pursuant to a Facility 6 (the".Facility.
Lease."), National Bank of Boston, as Owner stee unde a Trust greement, dated as of December condition ,'-'1986 with=y'ccordance with the terms and here'in'after set'ort 4:;'-A'y.,drawing und-.this Let'ter o'f Credit'shall--'he 1'e'sser of.(a)'e=;Letter of Credit=-Amount and not exceed (b)the*amo nt.shown.oppo'sit the period including the date of such draw'ng (the"Date f-Drawing".)
in.the Table=of Maximum Drawi g Amounts a ached hereto as Sche'dule I which forms an'-integ al'art o this'Letter o Credit, as such'.":...amounts-are mod i;ed f time t'o.time.i': accordance with;the-next=paragraph.
.uch amounts', as mod'ified in acco'rdance
..with the=-next..'p'aiagraph=,-
are hereinafter referied to.collec-'tively*as the."Mavimum.Drawing, Amounts" and'ndi'vidually as the.-"Maximum-Drawing'mou'nt".;
J 3.The Maximum'Drawing'Amounts sha'll be modified from'time to time.as follows 1 t P~P~~0 (a)upon payment by the Bank of each drawing under this Letter of Credit, the Maximum Drawing Amounts appl able to the period of and each period subs quent to such-educed by an payment shall be automatically amount equal to the amount of t paid and shall not be reinstate accordance with clause+(b) belo e drawing so except in adjustments a e made to Casualty e (c)x,g Values undeh'ank's recei of Exhibit exhibit form of Credit, pu/the Fare.li+y L t of a certifi to this Letter , an integral p portedly sign ase, then upon th ate in the form of Credit, which rt of this Letter d by.authorized officers of t e Company and you, correspond-nt shall be m de to'"the-Maximum xng adgustme Drawing.Amount shown in chedule I (as then in effect), ro ed th if any such adjust-(b)after any paymen he Bank of a drawing under this Letter of Cre't, then.upon the Bank's receipt of a certificate in the-form of Exhibit this Letter f Credit,-.-which exhibit fo an int gral part o this Letter of Credit purporte y signed by authorized offi e s of the ompany and you,-the Maxim D wing unts applicable to the period o nd ch riod subsequent to such payment shall b r instated to the Maximum Drawing Amounts w ch would have been.'in effect immediately after uch payment had'.no reduction in iWe Di ing Amounts-been effected.pursuant clause)above;-'ent for:;;.Amou d'I Upon-surr would cause t ximum",Drawing Amount ny period to exceed.the Letter.of,Credi't the'.,Letter,-of-.'edit.Amount'hall..-
'.'for such''eriod'
'l der of this L ter of Credit together*.with, such ertificate, w wiI;1 promptly issue an irrevocable transferab
.-letter of credit contaioing=
a.'vised-hedule I-reflecting the adjustments.
co'in;such-.certifi'cate-and'iii.'all-other'respects:.identical"to
'this:Letter,'.of
'Credi't.-:
-;-;,=.'-".-".:,.-,';:.'*4..;Subject,.
to.the Xoregoiag'-:.an'd th'e further-"..,*"..:,.provisions, of, this..L'etter, of'Credit;,'.demand; for'pavment'-
.'.may-be.made,bv you..".by presentati'on"',to.
us-'at our address",,'ashington..Street-';
Vi ew.-York',', New-.Y'ork'10006';-(Attention':'..',~E'I I, w-~**I f International Division, Letter of Credit, Department, Elizabeth Mallon)or to such other address as we may specify to you in writing at least 1 ys prior to the effectiveness of such change in ddress, of (a)your draft in the form of Exhibit 2 hereto, hich exhibit forms an integral part of this Letter of C edi.t, and (b)your drawing certificate in the form of Exhibi 3 hereto,'which exhibit forms an integral part of this Le ter of Credit, each appro-priately completed and purportedl signed by one of your authorized officers.your dr ft and your drawing certif icate, so complete nd ortedly signed by one o f your authorized officers, are pres ted to us at our aforesaid office at or prior to 10:0 A.M., New York time, on a business dav, ent shall be-ma to vou of the ur close of bus ess on such tter of Credit a your drawing and purportedly s ned by one of are presented to us t our:00 A.M., New York time, on a 11 be made to you of the amount e of business on the next Payment under'this Letter of by wire transfer i.n same day amount specified fore business, day.this L certificate, s complete your authoriz ficers aforesaid office a ter 1 business day, payme sh specified before our o succeeding busi ss day.Credit to shall ma funds to count max tain by you with a commercial bank in the Ci.of-New.York a d sp ified in your drawing cer-tificate'presented to us.'"5.As used herein"business dav" shall mean anv day other than a Saturday, S nday or.a day on which banking institutions in the State of New York are authorized-or.required by, law to close.P 6.: 'his Letter o.Credit shall-expire at the earlier of (a);r close business at the aforesaid~~~~~~dress on'Januaiy 2;~rovided, however, that said'.xpiration date shall h extended wxthout rncrease-in the Xetter of;-Credit'-
Amoun'hen-'i;n-.effects or.-.any.other.;.amendment",.-.except-..'.as;,-
sciibed', in: th'.following.sentence, or one vear.from-'sai'expiiantfon.date,'or,'from, anv'future'irati.on date, if,'n or'before.the date thirty days prior t the date four ye s prior to such expiration'ate,.
we s ll,noti.fy you b registered mail of our election.(which is"'our sole.'creti'on)to, renew',this Letter-of Credit foi.such'a'i'onal-, period and-(b)the.date on'.which, we.: pay,a dr'under'h'i's Letter of: Credit, in'the'ull amount, of.the Maximum Drawing.Amount then in=effect.=-=In;the*event..that we elect'to renew this:;Letter:
of Credit.for anv.additional'erio'd, pursuant,,to clause'a)'bove, such renewal.sh'al'1 become effective onlv-if you-'aiid the Companv shall''.*'deliver-to us,=prior to December 31 in.'the year'we-so.elect't'o renew-.this Letter of Credit for the.relevant-peiiod,.notice in the form of Exhibit 4 hereto, which exhibit=forms~<V f I 1 II an integral part.of this Letter Credit, setting forth supplemental Table of Maximum Drawx Amounts for such period (none of which Maximum Drawing ounts shall exceed the Letter of Credit Amount).Upon su ender of this Letter of Credit together with said notice we ill promptly issue an irrevocable transferable letter of c dit containing a revised Schedule I reflecting the terms ontained in said notice and in all other respects identi al to this Letter of Credit.7.Notwithstandi any er p vision of this Letter of Credit, this Letter redit sha expire at our close of'business at our, esaid address on he date ten business days or,30 d , as he case may be, a ter we have given you a certific e in the form of Exhibit 5 ereto, which exhibit forms an int'egra part of.this Lette of Credit,.appropriat'-'complete
;rovided that on or efore such expiration d te you vill ave the right to draw o e an amount not in ex ss..of the M imum Drawing Amount then n effect'in a'ccor an..wit/the procedures described herein.The, certificate refe d to'he preceding sentence shall be given by telex=or'a mi e transmission or by overnight delivery service addressed you at Chrysler Financial Corporation, c/o Chrysler C p al Corp., Greenwich Office Park I, Greenw'icut 36, Attention:
Vice President, L raged Leasin with elex: (510)600-649I Telecopier:
(203)629-1466, wx, a v to: Manager, Contract Ad inistration (Leverage Leas ng)(or to such other addre s or telex or facsimile transmission number designated you by written notice elivered to.us,at least 15,days.prio to the.notice of early termination) and such certificate all be effective upon he.earlier of (i)r ceipt o the appropriate answ back or confirmation of the csimile ansaction and (ii)elivery to you of such cert'ficate by o night delivery*ervice or hand.delivery.This Letter of Cre'hall be p mptly surrendered to-us by'ou on'-such expirat.:-..--.-.,:..'.'~*, 8.." This Letter'of-;edit sets for'th=in full the terms of our undertaking,-an this undertaking shall not in any wa be modified, amended or amplified by reference to an'.doc ent, instrument or agreement referred to herein (except''Uniform, Custo (hereinafter defined)and Schedule I nd Exhibits ,.2,--.3, 4,-5 and,6.hereto and the noti;ces refer to-.ein)..or-in which.this Letter-of'redit-is referre to or to.which-this Letter of Credit re'lates;and, anv such-reference shall-not,be;deemed to-..*.-.incorporate herein by reference; any'ocument
=instrument nr".agreement.
~,~'I*
9.Except so far as oth wise expressly stated, thi;s Letter of Credit is subject to e Uniform Customs and Practice for Documentary Credits (198 Revision)Inter-national Chamber of Commerce, Publicat on No.400, and, as to matters not covered therein, shall e governed by the laws of the State of New York, includi g without;limitation the Uniform Commercial Code as in effe t in such State.10.Communicati s to us w respect to this Letter of Credit shall be writi a shall be addressed to us at our address set fort ove, Att tion: Inter-national Division, Letter of Credit Departm , Elizabeth Mallon (with a copy to e Bank of New York, lic Utilities Division, Wa Street, New York, Ne York 10015 (Attention:
Guy le))and hall specifically ref to the number of this L tter of Cre it.11.withstandin Article 54 of the Uniform Cus-toms ie f erred o ove, this Letter of Credit may be trans-ferred and assigne'ts tirety more than once, but in each case only to the cce sor Owner Participant under the Trust Agreement dated as December 1, 1986 between your>>self and The Fi on ank of Boston and in each case effective o upon the ans or's'and the transferee's complianc with the immedi ely llowing sentence.Upon receipt b us at the addres;for p entation of documents set fort above of an originil of the instrument effecting such tr sfer and assi nment.'signed by the transferor and g by the ansferee and a-noticg hereto, hich exhibit forms a of Credi (which,-shall.
be con assignee authori;ty without in the form of Exhibit 6 integral part of this Letter lusive evidence of such~nv inquiry by us into the terms of e Trust Agreement)
'then, in such case,,we will, upon surre er of this Lette of Credit, issue an of further.act, be enti ed to all the benefits'f, and rights under, this Let r of Credit in the transferor's ,place.irrevocable ansferable.le er of credit i: n the'name of the'ransfere'e-an.roviding.r notices to be sent to the;t'r'ansferee,=at
'th'e's'et'-..forth
'therein'nd.in.all.other-..~.'respects".identi.cal.-,t*o,.-thi
'-.Letter of.=,Credit''and the, trans'-,','..
feree, ins'tead of'the tr nsf'eroi;'shall",'withou't neces'sitv,'=-Very truly-yours, THE'-BANK OF NEW, YORK 0 By:.Name: Title: l' Schedule j:-'Ihis Schedule Forms an Int Part of Letter of Credi.No.14677 0 Table of Maxinmm Dr awin Anuunts licable Period Dr awing December 18, 1986 through-'J January 2, 1988 through July July 2, 1988 through January'anUary 2, 1989 through July July 2, 1989 through Jan Janu-~2, 1990 through J July 2, 1990 through JanuaryJanuary 2, 1991 through July July 2,'1991 through January'anuary.2, 1992 through July July 2, 1992 through Jan January 2, 1993 through y July 2, 1993 through uary January 2, 1994 thro July July 2, 1994 January ,January 2, 1995 July July 2, 1995 throu January January 2, 1996 , July July-2, 1996.thnxzp anuary January 2, 1997-throu July Jul 2 1997 through uary'1998 through uly anuary 1 1,.8 1'89 1989-1, 1990 1990 1, 991 l,,l<<1, 199 1, 1992 3 1, 1993 1, 1994 a, a994 1, 1995 1, 1995 1, 1996 1, 1996 1, 1997 1, 1997 1, 1998~1;1998 988 y January 2 July 2,'.January';:-July.:2,.'anuary July 2,.January July 2, 2 January'2 98 through Jari;,.;1999;,through'ul 999..thrxxYjh January-;;2000-through July 00 through January 2001'through July 1 through January , 2002 through July through January 03.through-;Juiy, 1, 1999.1999'.,"''t 1,-2000 1, 200 1, 20 1, 2 2 a',~003';-2003,', July 2;-2 JanUary-2', July'.2-;2003 ugh".Jan 1", 2004;*-'--;January 2., 2004.-, gh.-y 1.2004,...,.July 2,, 2004,.anuary, 1;2005 ,...January.
2, 2005-through July'1,,2005:,...,,$28,8 113 23,356, 0 24,524,1 25,592,766 26,587,428 27,511,137 28,373,526 29,161,795 29,882,187 30,521,687 31,091,138 31,587,077 32,016,197 32,367,823 32,646,710 32,842,120 32,974,233 33,095,060 33,220,365 33,350,718 33,486,561 33,628,203 33', 793 j" 345 34';014;.390.'-'-33*,"918,669 33,503,935 33,217,403 32,775,855 32,473I879 32,006,086 fl~,f 1*3ai687,970 31 193 041.29,427-,307 f t...~,.'.'I 30,857,659 30,333,158
.'9,981,034 1~It Table of Mmciram Dra Armunts Ap licable Period Maxiraxn Drawing Amount July 2, 2005 through January 1, 2006 January 2, 2006 through July 1, 2006 July 2, 2006 through January 1, 2007 January 2, 2007 through July 1, 2007 July 2, 2007.through January 1, 2008 January 2, 2008 through July 1, 2008 July 2, 2008 through January 1, 2009 January 2, 2009 through July 1 2009 July 2, 2009 through January 1, 010 January 2, 2010 through-July 1, 2 July 2, 2010 through Jan~1, 2011 January 2,'2011 through J, 011 July 2, 2011 through J ry 1, 2 2 January 2, 2012 July 1', 201 July 2, 2012 through anuary 1, 201 January 2, 2013 thro July 1, 201 July 2, 2013 through ber 1, 201$29,057,548 28,815,838 29,375,281 30,051,866 30,848,368 31,785,427 32,865,828 34,113,199 35,531,428 37,147,422 38,965,503
'7,331,236
,450,373 3 2,919 28,1 ,979 24,745,805 21,132,432
<<<<-*~"<<,"5*p ,<<<<~'.'),t.<<l<<', t 4 ,....Exhibit 1.This Exhibit Forms an integral part of Letter of Credit No.14677[Date]The Bank of New York 110 Washington Street New York, New York 10005 Attention:
International Division, T.etter of epartment I
 
==Dear Sirs:==
'Referenc'e i ade to at.certain Irrevo ble.'.'etter.'f.
Credit No.14 7 date December-18, 198'6, which has been.:established by y in'avor of Chrysler Financial Corporation (the"Equity Pa i ipant")....,The ndersigned, u.authorized.
officer of the Equity-Parti ipant and a duly ut ized officer of'.E2.Paso Electric Co ny (the"Companv , ea hereby certifies that the Maximum Drawing Amounts sho on S edule I to the Letter of C edit should be fin c e of reinstatement p'uxsuant to aragraph 3(b)of L'et er of, Credit-.reinstate
[in the case of modifications pur uant to paragraph 3(c)o the-Letter o Credit-modified], n accordance with the te Dr ar in s of Para aph 3 of the Lette of Credo.t, to the Maximum wing Amount shown in Appendi A hereto,-none of which greater tha the Letter of edit Amount.-[Include f dification resulting in change aximum Drawing Acco-The Letter of Credit is ret rned herewith and we r quest that you issue an'rr vocable transferable.
etter of credit with the revised Sch'e ule', attached,.and
'.'all other'espects"'identical.
to ,": the-.L'tter',o,f
'-'Credit.
]-',.;g RYSLER FINANCIAL CORPORATION By , Name" and Title o f Authorized Of ficer'-of"Equity Participant];,'3.=.C EL PASO ELECTRIC, COMPANY: Name,.-and Title:-of Authorized; O,f f icer,-of.*the Company,]'
'7 h Appendix A to E'xhibit 1 This Appendix to Exhibit 1 Forms an Integral Part of Letter of Credit No.14677 Su lemental Table of ximum Drawin Amounts A licable Period aximum Drawing Amount Exhibit 2 This Exhibit Forms an Xntegral Part of Letter of Credit No.14677[Datel On Sight Pay to the order of Chrysler Fx, ancial C rporation U.S.(U.S, Dollars).Drawn under The Bank o ew York rrevocable ansferable Letter of Credit No.4677, dated December 18, 86.The Bank of New York 11 Washington Street York, New York 10005 For value rec'ved.CH YSLER FINANCIAL CORPORATXON Authorized Officer Name: Title:
Exhibit 3" This Exhibit Forms an Integral Part of Letter of Credit No.14677 CERTIFICATE CHRYSLER FINANCIAL CORPO TION (the"Company"), through one of its duly authorized fficers, hereby cer-tifies to The Bank of Ne York (the"Bank"), with reference to Irrevocable Transferabl Lette Credit No.14677 (the"Letter of Credit" issued the Bank favor of the Company that: (1)(A)Event f Default under th t certain Facility ease ated'as of Decemb , 6 h curred and is continuing or (B any othe o t payable under said Faci ity Lease or., the Transaction Doc ents referred t in aid Facility Lease is o ed by the Lessee ther der and has not been ai;d (including
'thout imitation in conne tion'with any Ea y Payment Obligation refer d to in said Fa lity Lease, or any amount ue.under said ssee's purchase option der Section 1 (b)'(3)(xvii) of the Participa on Agreeme referred to in said Facility L se or Se ion 13(c)of said.Facility Lea ,(.2),The ount of the drawing under the*Letter'o'f=
Cred'eing made.hereby is 4-,..., (the,,:"Drawing, ount"), and such amount does'.,';",-'.'"., n'ot e'xceed..amount;available to,be:-drawn'unde'r..the-LI''er,: o"".Cr'ed'i.t on'the date her'eof--as determi d in accordance with the terms of ,of Credit.I'h I~*r I r F I r*V r I'*r"r%,~*I I'r, Please make payment, of the Drawing Amount to[N and address of commercial bank in New York Cit,[ti tie of account if an], account no.IN WITNESS WHEREOF, 0he Company has executed and delivered this Certificate as of e day of 19 CHRYS R FINANCIAL CORPORATION B N and Title of Offi.r of Companyj Exhibit 4 This Exhibit Forms an Integral Part of Letter of Credit No.14677[Date 1 The Bank of New York 110 Nashington Street New York, New York 10005 Attention:
International Dx, ision, Letter of Credi epa e
 
==Dear Sirs:==
Refer ce is made to transferable L t of Credit No.14677, date De mber 18,'hich-has been establ hed by Financial Corporation he"E that certain.irr ocable earing Letter of dit 986 (the"Letter of edit")-, ou in favor of Chrysler ity Participant").T under ed, duly authorized officer of the Equity-Part cipant and dul authorized officer of El Paso Electric Co pany (the"Co any hereby certify that the Ecgxity Par icipant, and the mpa have agreed to the exten-sion of th expiration da'te the etter of Credit from January 19 to January 19 , and in connection erewith ve agreed that the amounts shown on Schedule I o the Lett r of Credit should e supplemented, in accor-ance with e terms of Paragr h 6 of the Letter.'of; Credit, o include t e Applicable Peri ds and Maximum Drawing ounts shown-n Appendix A h eto (none of'which=Maximum Drawing Amount'e.greater an the Letter of Credit Amount).,.The" Letter of,C editis returned herewith and'we'-,, equest tha/t you,,issue a irrevocabl'e transferable=
Letter of-edit..'with
'-the,.rev'ised chedule,'..I; attached;an/d;.in,'all:other'..":".'-;.".'
r spects ident'ical"to.
t e L'etter'f'.Credit.-CHRYSLER FINANCIAL CORPORATION
'~*I-r h f/4.Name",'and;.-Title-o Authorized
.Representative of Equity~, Partici;pant)
//'-.-'EL.PASO.ELECTRIC.COMPANY B'y','.Name and Title.of Authorized Representative of.Company]'
Exhibit 5 This Exhibit Forms an Integral Part of Letter Credit No.14677 t DEFAULT CERTIFICATE The Bank of New York (the"Bank')hereby certifies to Chrysler Financial Corporation, with erence to the Bank's Irrevocable Tran ra Letter of Cre't No.14677 (the"Letter of Cre t")that an vent of Defaul under tSection 9(f)or g[Section 9 (other than Sectio 9(f)or 9(g)I of, and as def ed in, he Letter of Credit an Security Agreeme ted a the Bank and Paso Elec'c December 18, 1986, between pany, has occurred and is continuing, nd hereby gives otic that the Letter of Credit will expire on IN WITNESS WHEREOF, certificate t be executed on 19 t e Bank has caused this l behalf as of she day THE BANK OF NEW YORK By Name and Title)*Date ten business'days after giving of certificate in the case of an Event of Default under Section 9(f)or (g)of the Letter of Credit and Security Agreement and 30 days after the giving of certificate in the case of an Event of.Default under Section 9 (other than Section 9(f)or (g)).
hh Exhibit 6 This Exhibit Forms an Integral Part of Letter f Credit No.14677 The Bank of New York 110 Washington Street New York, New York 10005 Attention:
Letter of Credit Departm t
 
==Dear Sirs:==
Reference is made to the certain rrevocable Letter of Credit No.1 , ated December 1.1986, which~has been establishe y you z favor of[name og Equity Participant (the" ansferor"].-The,T sferor has ansferred and assigne and hereby confirms o ou said t ans f er and assigrimerit) aM o f hits rights in and un r said etter of Credit to[name of Transferee](the"Tran cree)and confirms that the Trans-=''feror no longer has any g ts under or interest in said.;Letter of Credit.T request tha Credit in t to,be sent;and in all etter o edit'eturned herewith and we you issue an revoc'Transferable Letter of e name of the Tr sferee nd providing for notices, o the Transferee a the,ad ress set forth below ther respects ident cal to the Letter of Credit.Tr sferee, hereby cert ized trans'fe ee under.the terms.nd is accordi ly entitled;upo and certificate called for ther.thereunder; Noti under'the sent to us as follow'N Attention:
ies that it is a duly autho-f said Letter of Credit presentation of the drafts n, to receive'payment tter of Credit should be[Address,[Telex Number],[Answ'erback].
*hh-"".'-.': '-;";,, Name of'Transferor h.'9 ,h*9~h Name and Title of Authorized-Representative
'of-Transferor]
*9 h h 9 h~".:.',..', Name, of=Transferee
~h h , h h'[Name and:, Title of;Authorized
"'',.Representative of Transferee]'
h'I I 9 9'h'h.~
 
ASSIGNMENT, ASSUMPTION AND FURTHER AGREEMENT dated as of'ecember 1, 1986 between EL PASO ELECTRIC COMPANY, and THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity.but solely as Owner Trustee under a Trust Agreement dated as of December 1.1986 with Chrysler Financial Corporation Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities 0 h THIS ASSIGNMENT, ASSUMPTION AND FURTHER AGREEMENT, dated as of December 1, 1986, between EL PASO ELECTRIC COMPANY, a Texas corporation (El Paso), and THE FIRST ATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee (the wner Trustee), under a Trust Agreement, dated as of December 1, 1986, with Chrysler Financial Corporation, a Michigan corporation, as Owner Participant (the Owner Participant).
WITNESSETH:
WHEREAS, El Paso and the other ANPP Participants are parties to the ANPP Participation Agreement (such terms and all other terms used in these recitals without definition having the respective definitions to which reference is made in Article I below);and WHEREAS, El Paso has sold, and the Owner Trustee has purchased, the Undivided Interest and the Real Property Interest for and in consideration of the payment to El Paso by the Owner Trustee of the Purchase Price, the purchase price of the Real Property Interest and the assignments and assumptions herein set forth;NOW, THEREFORE, in consideration of the premises and of other good and valuable considera-tion, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SEGTIoN 1.01.General.For purposes hereof, unless otherwise defined herein capitalized terms used herein shall have the meanings assigned to such terms in Appendix A hereto.References in this Agreement to articles, sections and clauses are to articles, sections and clauses in this Agreement unless otherw'ise indicated.
SEGTION 1.02.Undivided Interest and Real Property Interest.Attached as Exhibit A hereto is a escription of the Real Property Interest and attached as Exhibit B is a description of the Undivided terest.ARTICLE II NONPhRTITIONMENT SECTIoN 2.01.Nonpartitionment.
The Owner Trustee hereby waives any rights it may have to partition Unit 2, whether by partitionment in kind or by sale and division of proceeds, and further agrees that it will not resort to any action in law or in equity to partition Unit 2, and it waives the benefits of all laws that may now or hereafter authorize such partition, for a term (i)which shall be coterminous with the ANPP Participation Agreement or (ii)which shall be for such lesser period as may be required under Applicable Law.ARTICLE III ASSIGNMENTS; EXERCISE OF RIGHTS SECTION 3.01.Assignment of Warranties.
El Paso hereby ASSIGNS to the Owner Trustee an.undivided interest equal to the Applicable Unit 2 Percentage to and under any and all warranties of and other claims against dealers, manufacturers, vendors, contractors and'subcontractors relating to Unit 2.SEGTIQN 3.02.Assignment of the ANPP Participation Agreement.(a)El Paso hereby ASSIGNS to the Owner Trustee an undivided interest equal to the Applicable Unit 2 Percentage in, to and under all of El Paso's rights under the ANPP Participation Agreement, to the extent that such rights relate to I Unit 2 (including, but without limitation, a 2.183647%entitlement to the Net Energy Generation and Available Generating Capability (as each such term is defined in the ANPP Participation Agreement) f Unit 2).
(b)The Owner Trustee hereby ASSIGiVS to El Paso the rights assigned u>>der paragraph (a)>>>>til the Lease Terminatio>>
Date.Sv<rr>>ii 3.03.Exercise of Rights as Participant
>>>>der the ANPP Pnrticipation Agree>>tc'>>i.
Except as provided in Sections 15.2.2.15.6.4 and Section 15.10 of the ANPP Participatio>>
Agree>>i (or<<ny co>>iparable successor provision), El Paso shall be and remain the sole-Participant-for a purposes of the ANPP Participation Agreement and the sole representative (with power to bind)in all dealings with the other ANPP Participants in relation to the Undivided Interest.the Real Property Interest and the rights assigned to the Owner Trustee pursuant to this Agreement:
proridcd, hou;ceer, that the foregoing shall not limit in any way any liability or obligation that El Paso may incur to the.Owner Trustee or the Owner Participant under any Transaction Document as a result thereoF.(b)Unless the ANPP Participation Agreement shall otherwise permit, any right conferred on the Owner Trustee by Section 15.2.2 of the ANPP Participation Agreement shall be exercised as required by Section 15.6.3.3 of said Agreement.(c)The provisions of this Section 3.03 shall remain in full force and eff'ect until such time as the ANPP Administrative Committee or the ANPP Participants shall otherwise consent by amendme>>t to'he ANPP Participation Agreement or otherwise.
ARTICLE IV Asst'sled"r>>)A:
REI.!'.Asl St:.i.r>>ii 4.01.Asw<<nption by Ou:ner Tr>>stee.Except as contemplated by Section 5(a)of the Facility Lease.the Ow>>er Trustee agrees that.eH'ective on anti as of the Lease Termination Date (unless a Transferee (Transferee) shall have qualiAed under Section 15.10 of the ANPP Participatio>>
Agreement or any comparable successor provision), unless a Default or Eve'nt of Default shall have occurred and be continuing or an Event of Loss shall have occurred or a Deemed Loss Event shall have been declared, the Owner Trustee shall assume and agree to pay.perform and dischar percentage equal to the Applicable Unit 2 Percentage of all liabilities a>>d obligations of El Paso u>>or with respect to.the ANPP Project Agreements, attributable to U>>it 2.other than a>>y a>>tl all costs relati>>g to.allocable to, or incurred in connection with, Decommissioning.
S>xrnie, 4.02.Release.Upon the assumption and agreement by a Transferee pursuant to Section 4.01 (whether at the Lease Termination Date or thereafter).
the Owner Trustee shall therewith and thereupon be released and discharged from its obligations under Section 4.01 arising on or after such assumption and agreement.
ARTICLE V No REl.l':Asl'.
OF EL PAS(3'EIWI>>u>>sRXIRNT Sv(w>>)w 5.01.No ReIease of El Paso.Notwithstanding the provisions of Articte IV or any other provision hereof or of any other Transaction Document, and except to the extent provided in Section 15.10 of the ANPP Participation Agreement (or any comparable successor provision), El Paso shall not be released from any liability or obligation under the ANPP Project Agreements.
or otherwise.
with respect to PVNGS, and El Paso shall remain liable for the payment and performance oF all such liabilities and.obligations, including, without limitation, any and all liabilities and obligations not assumed by the Owner Trustee or a Transferee pursuant to Section 4.01.Sl:.<rr>>>i 5.02.Beimb>>rsement.
Unless a Default or an Event of Default shall have occurred and be continuing or an Event of Loss shall have occurred or a Deemed Loss Event shall have been declared.fro>>)and after the Lease Termination Date.upon the payment or performance by El Paso of any liability or obligation in respect of which the Owner Trustee shall also have beco>>>e obligatetl in co>>seq>>e>>ce of Article IV, a>>d for so long as the Owner Tr>>stee shall be so liable.El Paso shal entitled to prompt reimbursement by the Owner Trustee from the Trust Estate for all amounts expended in connection with such payment or performance.
ARTICLE VI FURTHER ACREE~IENTS OF EL PhSO SECTioN 6.01.Agreement to Sell or Lease Unit 2 Retained Assets.Upon a transfer to a Transferee, El Paso agrees in respect to the Undivided Interest and the Real Property Interest, (i)if such Transferee is a purchaser of the Undivided Interest and the Real Property Interest, to sell to such Transfe'ree, at a price equal to the then Fair Market Sales Value thereof (determined on the basis of the then actual condition of the Unit 2 Retained Assets), a.727881%undivided interest in and to the Unit 2 Retained Assets, or (ii)if the Transferee is a lessee of the Undivided Interest and the Real Property Interest, to lease or otherwise make available to the Transferee, at a rent equal to the then Fair Market Rental Value (determined on the basis of the then actual condition of the Unit 2 Retained Assets)a.727881%undivided interest in and to the Unit 2 Retained Assets.Any such sale or lease by El Paso shall be accomplished by an appropriate bill of sale or lease.The Bill of Sale referenced in the definition of Unit 2 Retained Assets as set forth in Appendix A hereto was recorded December, 1986 as Instrument No., records of Maricopa County, Arizona, and is hereby incorporated herein by reference.
SECTION 6.02.Agreement to Assign or Make Available ANPP Project Agreements.
Upon a transfer to a Transferee, El Paso agrees in respect of the Undivided Interest and the Real Property Interest, (i)if the Transferee is a purchaser of the Undivided Interest and the Real Property Interest, to assign to ,,such Transferee an undivided interest equal to a.727881%undivided interest'n the ANPP Project'Agreements (other than the ANPP Participation Agreement) to the extent relating to Unit 2 and the ,.Unit 2 Retained Assets, and (ii)if the Transferee is a lessee of the Undivided Interest and the Real Property Interest, to assign for the term of such lease to such Transferee an undivided interest equal to , a.727881%undivided interest in the ANPP Project Agreements (other than the ANPP Participation
~~~~~greement)to the extent relating to Unit 2 and the Unit 2 Retained Assets.Any assignment pursuant this Section 6,02 shall be accomplished by an appropriate instrument of assignment.
SECTION 6.03.Agreements to Seek Amendment to the ANPP Participation Agreement and the License.,;El Paso agrees to use its best eH'orts to obtain any required amendments to the ANPP Participation Agreement and the License to permit El Paso to act as Agent of the Owner Trustee in the manner"*contemplated by Section 7.01 hereof, if (i)El Paso shall not have elected to purchase the Undivided'nterest and the Real Property Interest as provided in Section 13 of the Facility Lease and (ii)there shall not be a Transferee in respect of the Undivided Interest and the Real Property Interest.SECTIoN 6.04 Sale Proceeds.If, on or after the occurrence of a Determination Event (as such term is defined in the Deed), the Lessee shall sell or otherwise convey all or any portion of the Undivided Interest (or any interest therein), the Lessee shall pay, upon demand (but in no event later than 10 days after such sale or conveyance), the proceeds of such sale or conveyance to the Owner Participant.
ARTICLE VII INTERIM AGENCY ARRANGEMENTS SEGTION 7.01.Designation of Agent.From and after the Lease Termination Date and until a transfer to a Transferee in respect of the Undivided Interest and the Real Property Interest (such period being referred to as the Agency Period), El Paso shall be, and the Owner Trustee hereby designates El Paso as, the initial agent (the Agent)of the Owner Trustee in the exercise of all'rights assigned to the Owner Trustee hereunder.
The Owner Trustee may terminate such agreement and the Agency Period at any time.SEcrioN 7.02.Operation of Unit 2.During the Agency Period, the Agent shall administer the operation of the Undivided Interest and the Real Property Interest in accordance with this Agreement and all instructions of the Owner Trustee in accordance with Applicable Law.If, however, the Owner Trustee shall, prior to or at any time during the Agency Period, enter into any joint ownership and operating agreement with other Persons having a legal right to, or right to use, any other undivi interest in Unit 2, the Agent agrees to join in, and be bound by, the terms of such agreement if Agent's performance thereunder shall not violate, or result in a violation of, any Applicable Law or t License.The Owner Trustee agrees to give the Agent reasonable prior written notice of the commencement of the negotiation of any such agreement.
SEcrtoN 7.03.ANPP Participation Agreement.
El Paso agrees that, at all times during the Agency Period, it will perform all obligations and discharge all liabilities for which it is responsible as a"Participant" under the ANPP Participation Agreement in respect of the Undivided Interest and the Real Property Interest.In the performance of the foregoing agreement, El Paso shall not exercise its rights as an ANPP Participant to cause Capital Improvements to be made to Unit 2 unless the Owner Trustee shall have agreed to provide funds for the payment of the Owner Trustee's share of the cost of such Capital Improvements to El Paso prior to the date on which such amounts shall be due with respect thereto under the ANPP Participation Agreement.
SEcrtoN 7.04.Support.Except with respect to the Unit 2 Retained Assets for which provision is made in Section 7.06, El Paso covenants and agrees that, at all times during the Agency Period, it will provide, or make available, to the Owner Trustee all El Paso's rights in and to other assets owned by El.Paso and the ANPP Project Agreements to the extent necessary for the operation, servicing and use of the Undivided Interest and the Real Property Interest.Sscrrox 7.05.Compensation.
As compensation for its obligations under Sections 7.02, 7.03 and 7.04 and so long as no Event of Default shall have occurred and be continuing, El Paso shall be entitled to receive, and the Owner Trustee hereby agrees to pay, an amount equal to the sum of (i)the Owner Trustee's share of (a)the aggregate of amounts paid by El Paso as provided in Section 7.03 to the extent reasonably allocable to Unit 2, and (b)reasonable compensation for the Unit 2 Retained Assets and (ii)out-of-pocket expenses incurred by El Paso or the Agent, as the case may be, in connec with the performance of its agreements in this Article VII.Compensation under this Section 7.05 be paid promptly upon receipt of an invoice from El Paso.Secrtox 7.06.Transmission; Transmission Agreement.(a)El Paso covenants and agrees that.at all times during the Agency Period, the Owner Trustee shall have the right to wheel, under normal transmission operating conditions, the Owner Trustee's share of up to 1270 MW of power and energy, under normal transmission operating conditions, over transmission equipment in which El Paso now owns or may hereafter acquire an ownership interest, between Unit 2 and the ANPP Switchyard.(b)If El Paso shall fail or decline to give the notice of renewal of the Facility Lease or purchase of the Undivided Interest, in each case as provided in Section 13 of the Facility Lease, El Paso and the Owner Trustee shall forthwith commence the negotiation in good faith of a definitive transmission agreement, not inconsistent with the terms and provisions of Section 7.06(a), but containing sufBcient detail for the proper wheeling of power and energy, under normal transmission operating conditions, over the equipment of El Paso referred to in such Section 7.06(a)under then existing circumstances.
El Paso and the Owner Trustee shall complete such negotiations and execute such definitive transmission agreement prior to the Lease Termination Date and such definitive transmission agreement shall provide for compensation to El Paso for the transmission services so provided at the Fair Market Sales Value thereof.ARTICLE VIII MtscE~NEous SEGTloN 8.01.Successors and Assigns.This Agreement shall be binding upon the successors and assigns of each of El Paso and the Owner Trustee.
Sorrow 8.M.Concerning Law.The interpretation of this Agreement and the rights and obliga-tions of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of New York.St:.<xi<>s 8.03.Counterpart Execution.
This Agreement may be executed in any number of~~ounterparts and by each of the parties hereto on separate counterparts.
all such counterparts together nstituting but one and the same instrument.
Ss<vtos 8.04.Amendments.
The terms of this Agreement shall not be waived,'altered, modified.amended, supplemented or terminated in any manner whatsoever, except by written instrument signed by El Paso and the Owner Trustee.SEFTloN 8.05.Severability of Prauisions.
Any provision of this Agreement which may be deter-mined 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, and no such prohibition or unenforceability in any jurisdiction shall invalidate or render unenforceable such provisions in any other jurisdiction.
To the extent permitted by Applicable Law, El Paso hereby waives any provision of law which renders any provision hereof prohibited or unenforceable in any respect.Sacvtoe 8.06., Headings.The division of this Agreement into sections,'the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.
SFc:TloN 8.07.Disclosure of Beneficiary.
Pursuant to Arizona Revised Statutes 33.401, the beneficiary of the Trust Agreement is Chrysler Financial Corporation, a Michigan corporation.
whose address is Greenwich Office Park I, Greenwich, Connecticut 06836.A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachu-setts 02110, Attention of Corporate Trust Division.IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed in New York, New York by their respective oRcers thereunto duly authorized.
EL PASO ELECTRIC COMPANY Vice President THE FIRST NATIONAL BANK OF BOSTON.not in its individual capacity.but solely as Owner Trustee under a Trust Agreement, dated as of December 1, 1986, with Chrysler Financial Corporation By: Assis ant STATE OF NEW YORK COUNTY OF NEW YORK The foregoing instrnntent wns noknowledged before me this/~C dnv of Deeeteber, igg Williani J.Johnson.Vice President of EL PASO ELECTRIC COMPANY.a Texas corporation.
on be of the corporation.
DELIA T ry" Pcblic t)otary Public, Stats of thew York STATE OF NEW YORK COUNTY OF NEW YORK J The foregoing instrument was acknowledged before me this d 4 day of December.19S6.by Martin P.Henry.an Assistant Vice President of THE FIRST NATIONAL BANK OF BOSTON.a national banking association.
on behalf of the banking association under that certain Trust Agreement dated as of December 1, 19S6./Notarv Public DCL!A T'ANTiAGQ Notary Public, Stc:s or N~w York No.4 t.345 (!30 Qualified in Queens Ccurty COmm!SSinn EXpireS tYsorCh 30.t&p vs EXHIBIT A TO ASSIGNMENT, ASSUMPTION AND FURTHER AGREEMENT DESCRIPTION OF REAL PROPERTY INTEREST The Real Property Interest consists of a.727881%undivided interest in the following:
1.PVNGS PLANT SITE.PARCEL NO.1: Lot Four (4);the Southwest quarter of the Northwest quarter;and the West half of the Southwest quarter, all in Section Two (2), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.2: All of Section Three (3), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.3: The East half of Section Four (4), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.4: The West half of Section Twenty-six (26), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.5: Section Twenty-seven (27), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the Northwest quarter of Section 27.PARCEL NO.6: The Southeast quarter of Section Twenty-eight (28), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT 50%of all oil, gas and other mineral deposits and geothermal resources recovered from or developed on the property, as reserved in instrument recorded May 10, 1974 in Docket 10647, page 136.ARCEL 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-Bve (35), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.10: The Southeast quarter of Section Nine (9), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the Northwest quarter thereof.PARCEL NO.11: All of Section Ten (10), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the East half of the Southeast quarter thereof;and EXCEPT the North half of the South half of the Northwest quarter of the Northwest quarter thereof.PARCEL NO.12: That part of the East half of the Southwest quarter of Section Twenty-three (23), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona, more particularly described as follows: BEGINNING at the Southeast corner of the said East half of the Southwest quarter of Section 23;thence West, an assumed bearing along the South line of the said East half of the Southwest quarter of Section 23, for a distance of 762.04 feet;thence North 0 degre'es 03 minutes 39 seconds West;parallel to the East line of the said East half of the Southwest quarter of Section 23, for a distance of 1946.46 feet to a point on the South right-of-way line of the 200 foot wide HASSAYAMPA-SALOME HIGHWAY, as recorded in Book 12 of Road Maps, page 82, Maricopa County Recorder.Mnricopa County.Arizona thence continuing North 0 degrees 0:3 niinutes:39 seconds West for a distnnce of 234.15 feet to a point on the North right-of-way line oF sai<l highway: thence South 58 degrees A3 minutes 35 seconds East.along said North right-of-wny li for a distance of 892.17 feet to a point on the snid East line of the Enst hnlf of the Southwi qunrter of Section 23: thence South 0 degrees 03 niinutes'39 seconds East.along snid East line f'r a distnnce of 234.15 feet to a point on the said South right-of-wny 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 E tst'305 feet of the South'305 feet thereof: nnd EXCEPT one-half of the minerals nn<l mineral rights and mineral estates of every kind and nature, as set forth in Deed recorded in Docket 11652, page 52, Mnricopa County Records.PARCEL NO.13: The North hnlf of the South hnlf of the Northwest quarter of the iVorthwest qunrter of Section Ten (10).Township One (1)South.Range Six (6)West of the Gila and Salt River Bnse nnd iVferidinn.
Mnricopa County, Arizona II.HASSAYAh1PA PUiVIPING STATION AND EFFLUENT PIPELINE.All renl property.leases.licenses.easements, rights-oF-way an<i other property hel<l by Title USA Compnny of'rizona Trust No.530 established by thnt certain Trust Agreen>ent dated October 15.1975.as nmended.but excluding therefrom all iinprovements.
III.iMISCELLANESUS REAL PROPERTY INTERESTS.
Those ANPP Project Agreements (ns defined in the ANPP Participntion Agreeme>>t).
other than the Trust Agreement for Title USA Company of Arizona Trust 530, consisting oF lenses.licenses.easements, and permits, which provide land and land rights for (a)the pipeline to supply waste wn effluent to PYNCS from the 91st Avenue sewage treatment plnnt serving the Phoenix metropolitan a and (b)rnilroad access to the Nuclear Plant Site (as defined in the ANPP Participation Agreemeni,.
EXHIBIT B TO ASSIGNMENT, ASSUMPTION AND FURTHER AGREEMENTBUT EXCLUDING:
I.Nuclear fuel for Unit 2, including spare fuel assemblies, and nuclear waste.II.Spare Parts (Unit 2).III.Transmission facilities (including any and all facilities and equipment providing intercon-nection between the Unit 2 turbine generator and the ANPP High Voltage Switchyard, including step-up transformers and standby equipment and systems).IV.Oil and diesel fuel inventories (Unit 2).I DESCRIPTION OF UNDIVIDED INTEREST The Undivided Interest consists of a 2.183647%undivided interest in and to the property described under A belo'w and a.727881%undivided interest in and to the property described under B belo~.A.Unit 2 of the Palo Verde Nuclear Generating Station (PVNGS), located in Maricopa County, Arizona, approximately 55 miles west of the City of Phoenix, Arizona, and approximately 16 miles west of the City of Buckeye, Arizona, consisting of: I.Unit 2 Combustion Engineering"System 80" pressurized water reactor nuclear steam supply system (the iVSSS).The NSSS is comprised of a reactor vessel containing 241 Fuel assemblies with approximately 100 tons of enriched uranium (fuel assemblies, however, are not part of Unit 2 and are not included in the Undivided Interest being sold), two steam generators.
four reactor coolant pumps and various additional systems and subsys-tems.The licensed thermal rating of the NSSS is 3800 MW.II.Unit 2 GE TC6F-43.1800 RPM tandem-compound, six flow, reheat turbine-generator including turbine.gene'rator, moisture separator-reheaterexciter.
controls, and auxiliary subsystems.
The turbine-generator is conductor cooled and rated at 1,554 MVA at 24,000 V, 3 phase, 60 Hz, 1.5 in Hg ABS back pressure, and approximately 1,363 MW maximum gross electric output.III.'nit 2 146 ft.inside diameter, steel-lined, pre-stressed concrete cylindrical containment building with a hemispherical dome designed for 60 psig.The containment building houses the reactor system.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, makeup 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 instrumenta-tion systems and other equipment.
VIII.Unit 2 internal communication systems, including associated interconnections and com-puter data links.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 for supply of waste water efBuent.
III.Related storage facilities and equipment (excluding Warehouses).
l BUT EXCLUDING:
I.Nuclear fuel.including spare fuel asseinblies.
and nuclear waste.II.Electrical power facilities including Construction Switchyard an<i all tra>>submission 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 coinputer data links.VIII.Parking lot improvements.
road improvements.
site hnprovements.
fencing an<1 dikes.IX.'Spare parts (Common Facilities).
'.Sin>ulator.
XI.Oil an<i diesel fuel inventories.
XII.Evaporation Pond.XIII.Guard house.XIV.XV.XVI.Coating facility.Fire pump house.Radiation Instrument calibration lab.XVII.Service building.XVIII.Water treatn)ent building.XIX.Shooting range.XX.WRF operations building., XXI.Warehouses.
XXII.Real Property, beneAcial interest in Title USA Company of Arizona Trust 530.and Project Agreement interests described in Exhibit A.
When recorded, return to: Greg Nielsen Snell&Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 DEED AND BILL OF SALE dated as of December 18, 1986 between EL PASO ELECTRIC COMPANY, a Texas corporation as Seller and THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not in its individual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 1, 1986, with Chrysler Financial Corporation, as Buyer.
Uf'4 N J' DEED AND BILL OF SALE.dated as of December 18.1986 between EL PASO ELECTRIC COMPANY.a Texas corporation (the Seller).a>>d THE FIRST NATIONAL BANK OF BOSTON.a imtio>>al ba>>king association.
not in its individual capacity.but solely as Owner Trustee (in such c;ipacity.
the Owner Trustee)un<ler the Trust Agreement, dated as of Decer>>ber 1.1986.with Chrysler Fi>>ancial Corporation (such Owner Trustee being herein referred to as the Buyer).W ITN ES S ETH: WHEREAS.the Seller desires to sell, and the Buyer desires to purchase.the Undivided Interest.for and in consideration of the amounts paid by the Buyer to the Seller pursuant to the Participatio>>
Agree>>ient (as hereinafter
<lefined);
NOW.THEREFORE.
iri consideration of the premises and of other good and valuable considera-tio>>.receipt of which is hereby acknowledged, the parties hereto agree as follows: 1.For the purpose hereof;capitalized terms used herein, unless otherwise defined herein.shall have the niea>>i>>gs assigned to such terms in Appendix A attached hereto.Tlie property described on Exhibit B hereto is collectively referred to herein as Unit 2 a>>d the u>>divide<i iiiterests therein being conveyed pursuant hereto are referred to collectively herein as the U>>divided Interest.Tlie Undivided Interest is located on the PVNGS Site described in Part I of Exliibit A hereto and the la>>d subject to the agreements described in Parts II and III of said Exhibit A.2.The Seller<loes hereby GRANT, BARGAIN.CONVEY.SELL.ASSIGN, TRANSFER AND SET OVER onto the Buyer (i)a 2.183647%undivided ihterest in and to the property described in Exhibit B, Section A hereto (the Generating Unit)and (ii)a.727881%undivided interest in and to all of the property described in Exhibit B, Section B hereto (the Common Facilities), TO HAVE AND TO HOLD the same unto the Buyer, its successors and assigns, FOREVER.It is the intent of this Deed and Bill of Sale.that, from and after the date as of which this Deed and Bill of Sale is executed an<I delivered.
Buyer will own an undivided 2.183647%interest in the Generating Unit.as a tenn>>t in co>>imo>>with the owners of the remaining undivided interests in the Generating Unit.and an.u>>divided.727881%
interest in the Common Facilities, as a tenant ig common with the owners of the re>>iai>>ing undivided i>>terests in the Common Facilities.
'3.The Seller does hereby WARRANT AND COVENANT that it is the true and lawful owner of the Undivided Interest and has good right to sell the Undivided Interest, that title to the Undivided Interest is on the date of execution hereof free and clear of all claims, liens, security.interests and encumbrances of any nature, other than Permitted Liens described in clauses (i), (v)(aggregating not niore than 14.00%of$5,000,000), (vi), (ix), (x)and (xi)of the definition thereof and 1986 taxes not yet due and payable, that good, marketable and indefeasible title to the Undivided Interest is hereby conveyed to the Buyer, and that the Seller will forever warrant and defend such title against the claims of all Persons.The foregoing warranties of the Seller are to the restraint of any other covenant of the Seller otherwise arising by implication by virtue of Arizona Revised Statutes Section 33-435.4.The Seller and the Buyer hereby acknowledge and confirm that, as between the Seller and the Buyer, the Undivided Interest is and will remain personal property, and is not, and will not become.an accession to the PVNGS Site or to the Real Property Interest, title thereto being separate and distinct from title to such real property.The Buyer hereby waives any rights it may have to partition Unit 2, whether by partitionment in kind or by sale and division of proceeds, and further agrees that it will not resort to any action in law or in equity to partition Unit 2 and it waives the benefits of all laws that may>>ow or hereafter authorize such partition for a term (i)which shall be coterminous with the ANPP Participation Agree>>ient or (ii)which shall be for such lesser period as may be required by Applicable Law.~i~~5.P<<rs>>a>>t to tlie Particip;ition Agreemeiit a>>d the Assignnie>>t;>>id Ass>>niption.
the Seller has<<gree<I to p;iy cert;ii>>costs;i>>d expenses relating to Unit 2.including.
without lii>>itatio>>.
witli respect to decommissioning and retirement of Unit 2, and to perform and comply with certain obligations relating to transfers of interests in Unit 2.All such agreements and obligations of the Seller are hereby incorporated by reference in this Deed and Bill of Sale as if set forth in full herein.6.Pursuant to Arizona Revised Statutes Section 33-401, the beneBciary of the Trust Agreement Chrysler Financial Corporation, a Michigan corporation, whose address is Greenwich OfBce Park I, Greenwich, Connecticut 06836.A copy of the Trust Agreement is available for inspection at the ofBces of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.IN WITNESS WHEREOF, the parties hereto have caused this Deed and Bill of Sale to be executed as of the 18th day of December, 1986.EL PASO ELECTRIC COMPANY, a Texas corporation By Vice President THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement By ssista Vice Pr Sa'u't".(>t: Nt:.w Y()ttt's~'.C<tt i'ty ()v Nvw Yottv.The foregoing instrument was acknowledged before me this 44day of December.19SG.by WILLIAM J.JOHNSON.Vice President of EL PASO ELECTRIC COMPANY, a Texas corporation.
on behalf of the corporation.
Ss;n't'.<)v Nvw Yottt;ss.: C<)t'i"ty ()t'vw Yottv.Notary Public DAVID A.EPIVAK Notary Public, State of New York No.314693468 Quaftffed in New York County Commission Ezpizea March 30, 1++The foregoing instrument was acknowledged before me this~day of December, 19SG.by MARTIN P.HENRY, Assistant Vice President of THE FIRST NATIONAL BANK OF BOSTON.a national banking association, on behalf of the banking association as trustee under that certain Trust Agreement dated as of Decentber 1.19SG.Notary Public g+~A, SPShX SNOP Pablo, State of New Yori Na 31~468 Qirafffted in New York County Cornmfmfoa Eegtsc>>bhrch 30, 1+~
~',I EXHIBIT A to DEED AND BILL OF SALE PVNGS SITE DESCRIPTION 1.PVNGS PLANT SITE.PARCEL NO.1: Lot Four'4): the Southwest quarter of the Northwest quarter: and the West)ralf of the Southwest quarter, all in Section Two (2), Township One (I)South.Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.2: All of Section Three (3), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.3: The East halfof Section Four (4), Township One (I)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 (I)North, Range Six (6)West of the Gila and Salt River Base and ivieridian, lilaricopa County, Arizona.PARCEL NO.5: Section Twenty-seven (27), Township One (I)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 (I)North.Range Six (6)West oF the Gila and Salt River Base and Meridian, Maricopa County, Arizonm EXCEPT 50%of all oil, gas and other mineral deposits and geothermal resources recovered from or developed~~on the property, as reserved in instrument recorded May 10, 1974 in Docket 10647, page 136.PARCEL NO.7: The East half oFSection 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 (I)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 (I)North.Range Six (6)West oF the Gila and Salt River Base and Meridian, Maricopa County, Arizona PARCEL NO.10: The Southeast quarter of Section Nine (9), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the Northwest quarter thereof.PARCEL NO.11: All of Section Ten (10), Township One (I)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 (I)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona, more particularly described as follows: BEGINNING at the Southeast corner of the said East half of the Southwest quarter of Section 23: thence West, an assumed bearing along the South line of the said East half of the Southwest quarter of Section 23, for a distance of 762.04 feet;thence North 0 degrees 03 minutes 39 seconds West: parallel to the East line of the said East half of the Southwest quarter of Section 23, for a distance of 1946.46 Feet to a point on the South right-of-way line of the 200 foot wide HASSAYAMPA-SALOME HIGHWAY, as recorded in Book 12 of Roatl Maps.page 82.Maricopa County Recorder.Maricopa County, Arizona: thence continuing North 0 degrees 03 tni>>utes 39 seconds West for a distance of M4.15 feet to a point on the North right-of-way li>>e of said highway: thence South 58 degrees 43 minutes 35 seconds East, along said North right-of-way linr for a distance of 892.17 feet to a point on the said East line of the East half of the Southwe.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 52, Maricopa County Records.PARCEL NO.13: The North half of the South half of the Northwest quarter of the Northwest quarter of Section Ten (10), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.II.HASSAYAMPA PUMPING STATION AND EFFLUENT PIPELINE.All real property, leases, licenses, easements, rights-of-way and other property held by Title USA Conipany of Arizona Trust No.530 established by that certain Trust Agreement dated October 15.1975.as amen'ded.but excluding therefrom all improvements.
III.MISCELLANEOUS REAL PROPERTY INTERESTS.
~;Those ANPP Project Agreements (as defined in the ANPP Participation Agreement), other than the Trust Agreement for Title USA Company of Arizona Trust%0, consisting of-lenses, licenses, easements, and permits, which provide land and land rights for (a)the pipeline to supply waste water elHuent to PVNGS from the 91st Avenue sewage treatment plant serving the Phoenix metropolitan ar and (b)railroad access to the Nuclear Plant Site (as defined in the ANPP Participation Agreement EXHIBIT B to DEED AND BILL OF SALE UNIT 2 DESCRIPTION A.Unit 2 of the Palo Verde Nuclear Generating Station (PVNGS), located in Maricopa County Arizona.approximately 55 miles west of the City of Phoenix, Arizona, and approximately 16 miles west of the City of Buckeye, Arizona, consisting of: VI.VII.VIII.Unit 2 Combustion Engineering"System 80" pressurized water reactor nuclear steam supply system (the NSSS).The NSSS is comprised of a reactor vessel containing 241 fuel assemblies with approximately 100 tons of enriched uranium (fuel assemblies, however.are not part of Unit 2 and are not included in the Undivided Interest being sold).two steam generators.
four reactor coolant pumps and various additional systems and subsys-tems.The licensed thermal rating of the NSSS is 3800 MW.Unit 2 GE TC6F-43, 1800 RPM tandem-compound, six flow, reheat turbine-generator including turbine, generator, moisture separator-reheater.
exciter.controls.and auxiliary subsystems.
The turbine-generator is conductor cooled and rated at 1.554 MVA at 24.000 V.3 phase, 60 Hz.1.5 in Hg ABS back pressure, and approximately 1.363 MW maximum gross electric output.Unit 2 146 ft.inside diameter.steel-lined.
pre-stressed concrete cylindrical containment building with a hemispherical dome designed for 60 psig.The containment building houses the reactor system.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.
Unit 2 cooling tower system consisting of three (3)mechanical'draft cooling towers.including a closed cycle circulating water system, makeup water systems and essential spray ponds.Unit 2 radioactive waste treatment system, including liquid, gaseous.and solid waste subsystems, controls, instrumentation, storage, handling and shipment facilities.
Unit 2 emergency diesel-generator system, including a diesel-generator building which contains two diesel generators, fuel oil systems, storage tanks, control and instrumenta-tion systems and other equipment.
Unit 2 internal communication systems, including associated interconnections and com-puter data links.BUT EXCLUDING:
I.Nuclear fuel for Unit 2, including spare fuel assemblies, and nuclear waste.II.Spare Parts (Unit 2).III.Transmission facilities (including any and all facilities and equipment providing intercon-nection between the Unit 2 turbine generator and the ANPP High Voltage Switchyard.
including step-up transformers and standby equipment and systems).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 for supply of waste water eNuent.
III.Related storage facilities and equipment (excluding Warehouses).
BUT EXCLUDING:
I.Nuclear fuel.including spare fuel assemblies.
an<1 nuclear'waste.II.Electrical power facilities including Construction Switchyard and ANPP High Voltage Switchyar<l facilities.
III.Administration Building.IV.Administration Annex Building.V.Technical Support Center.all transmission and VI.Visitor Center.VII.External communication systems and equipment,'including associated interconnections and computer data links.VIII.Parking lot improvements, road improvements, site improvements.
fencing and dikes.IX.Spare parts (Common Facilities).
X.Simulator.
XI.Oil and diesel fuel inventories.
XII.Evaporation Pond.XIII.Guard house.XIV.XV.XVI.Coating facility.Fire pump house.Radiation Instrument calibration lab XVII.Service building.XVIII.Water treatment building.XIX.Shooting range.XX.WRF operations building.'XI.Warehouses.
XXII.Real Property, beneAcial interest in Title USA Company of Arizona Trust 530, and Project Agreement interests described in Exhibit A.
When recorded.return to: Greg R.Nielsen Snell R Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 DEED For the consideration of Ten Dollars (810.00)and other valuable considerations, EL PASO ELECTRIC COMPANY, a Texas corporation
(" Grantor"), hereby grants, conveys, sells, transfers and assigns to THE FIRST NATIONAL BANK OF BOSTON, a national banking association, as Owner Trustee (the"Owner Trustee")under that certain Trust Agreement (the"Trust Agreement"), with the beneficiary identified below, dated as of December 1, 1986 (the Owner Trustee being hereinafter referred to as"Grantee"), (A)an undivided.727881%interest in the land that is more particularly described on Exhibit A attached hereto and by this reference incorporated herein until the occurrence of the Determination Event, as hereinafter defined, and (B)an undivided.727881%interest in those ANPP Project Agreements (as defined in the Arizona Nuclear Power Project Participation Agreement dated August 23, 1973, among Arizona Public Service Company, Salt River Project Agricultural Improvement and Power District, Southern California Edison Company, Public Service Company of New Mexico, El Paso Electric Company, Southern California Public Power Authority and Los Angeles Department of Water and Power, as amended, recorded on December 31, 1985 as Instrument No.85-620132, records of Maricopa County, Arizona (the"ANPP Participation Agreement"), other than the Trust Agreement for the 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 efHuent to the Palo Verde Nuclear Generating Station (as defined in the ANPP Participation Agreement) from the 91st Avenue sewage treatment plant serving the Phoenix, Arizona metropolitan area and (b)railroad access to the Nuclear Plant Site (as defined in the ANPP Participation Agreement)(such ANPP Project Agreements being hereinafter referred to as the"Assigned Project~~~Agreements", and the land described in Exhibit A together with the land subject to the Assigned Project Agreements being hereinafter collectively referred to as the"Land"), together with all rights and privileges of Grantor appurtenant thereto, including but not limited to the perpetual (subject to the Possibility of Reversion, as hereinafter defined)right to locate, maintain and use the Improve-ments (as hereinafter defined)on the L'and and the perpetual (subject to the Possibility of Reversion) right of ingress and egress over, upon and across the Land to the Improvements, BUT excepting and excluding from the transfer being made pursuant to this Deed any and all facilities, structures, improvements, equipment and property of whatever kind and nature now or hereafter constructed, placed or affixed on the Land (collectively, the Improvements), Grantor and Grantee hereby acknowledging and agreeing that the interest in the Improvements was acquired by Grantee pursuant to a separate Deed and Bill of Sale dated as of the date hereof between Grantor and Grantee.and not pursuant to this Deed.1.The interest being'transferred pursuant to this Deed is subject to the ANPP Participation Agreement, the Project Agreements as defined in said ANPP Participation Agreement, any Permitted Liens described in clauses (i), (v)(aggregating not more than 14.00%of$5,000,000), (vi), (ix), (x)and (xi)of the definition thereof and to the matters set forth on Exhibit B attached hereto and incorporated herein by this reference.
2.Grantor hereby warrants that it is the true and lawful owner of the undivided interest conveyed hereby in the property described on Exhibit A attached hereto and has good right to sell the undivided interest in such property;that Grantor has good and marketable title to the undivided interest in the property described in Exhibit A and that title to such property is on the date of execution hereof free and clear of all claims, liens, encumbrances, security interests, covenants, assessments, rights, reservations, easements, restrictions and conditions save and except for any Permitted Liens described in clauses (i), (v)(aggregating not more than 14.00%of$5,000,000), (vi), (ix), (x)and (xi)and those matters set forth on Exhibit B attached hereto.Grantor hereby warrants that good and marketable title to the undivided interest in the property described on Exhibit A is hereby conveyed to Owner Trustee subject to the Possibility of Reversion; and that the title to the undivided interest in the property described on Exhibit A conveyed to the Owner Trustee is determinable to the extent that such title shall automatically terminate and revert to the Grantor, it successors and assigns, without any further act or deed by any person whatsoever upon the occurrence of the Determination Event (such possibility of automatic termination and reversion being herein referred to as the"Possibility of Reversion").Subject only to the Possibility of Reversion and to the matters set forth on Exhibit B attached hereto, Grantor hereby warrants, and will forever defend, the title to the undivided interest in the property described in Exhibit A conveyed hereby against all persons whomsoever.
Any attempt by Grantor or its successors and assigns to release to Grantee or otherwise terminate the Possibility of Reversion shall be null, void and of no force and eff'ect whatsoever.
3.Grantor intends by this Deed that (i)from and after the date as of which this Deed is executed and delivered, but subject to the Possibility of Reversion, Grantee will own an undivided.727881%interest in the property described in Exhibit A, as a tenant in common with the owners of the remaining undivided interests in such property and (ii)from and after the date as of which this Deed is executed and delivered, Grantee will own an undivided.727881%interest in the Assigned Project Agreements as a tenant in common with the owners of the remaining undivided interests in the Assigned Project Agreements.
4.Determination Event as used herein means the commencement of Decommissioning.
5.Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is Chrysler Financial Corporation, a Michigan corporation, whose address is Greenwich Olfice Park I, Greenwich, Connecticut 06836.A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.6.Terms used herein and not otherwise defined herein shall have the meanings set forth'ppendix A attached hereto.IN WITNESS WHEREOF, Grantor has caused this Deed to be executed as of the 18th day of December, 1986.EL PASO ELECTRIC COMPANY, a Texas corporation By: Vice President ACCEPTED AND AGREED TO: THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not in its individual capacity, but solely as Trustee under the Trust Agreement.
By Assistant resi ent Sa'u'i: ru'<:.w Y(n<v ss.: C(n,x'rv<n't w Yonv.The foregoing instrument was acknowledged before me this~~@day of December.198G.by WILLIAM J.JOHNSON.the Vice President of EL PASO ELECTRIC COMPANY.a Texas corporation.
on behalf of the corporation.
Notary guglio>>y>r.
OAV ate 0i New Yo~~Co;Ivy S't'n't.'>t'Vt:ti Y<>ttt;ss.: Ct>t x't'v<>tr Nvw Yottt The foregoing instrument was acknowledged before me this/~Aday of December.19SG.l.WIARTIN P.HENRY.an Assistant Vice President of THE FIRST NATIONAL BANK OF BOSTON.ttation;tl banking association.
on behalf of the banking association as trustee under that certain Trust Agreement dated as of December 1.1986.Notary Public MVID A, 8m'otarY Ptibttc.State of New York No.314693468 Quailed ax New York Cotirtty~ttttttfII100
~March 3O JQP-EXHIBIT A PVNGS Plant Site PARCEL NO.1: Lot Four (4);the Southwest quarter of the Northwest quarter;and the West half of the Southwest quarter, all in Section Two (2), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.2: All of Section Three (3), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.3: The East half of Section Four (4), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.4: The West half of Section Twenty-six (26), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.5: Section Twenty-seven (27), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the Northwest quarter of Section 27.PARCEL NO.6: The Southeast quarter of Section Twenty-eight (28), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT 50%of all oil, gas and other mineral deposits and geothermal resources recovered from or developed on the property, as reserved in instrument recorded May 10, 1974 in Docket 10647, page 136.PARCEL NO.7: The East half of Section Thirty-three (33), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.8: All of Section Thirty-four (34), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.9: The West half of Section Thirty-Ave (35), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARCEL NO.10: The Southeast quarter of Section Nine (9), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the Northwest quarter thereof.PARCEL NO.11: All of Section Ten (10), Township One (1)South;Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;EXCEPT the East half of the Southeast quarter thereof;and EXCEPT the North half of the South half of the Northwest quarter of the Northwest quarter thereof.PARCEL NO.12: That part of the East half of the Southwest quarter of Section Twenty-three (23), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona, more particularly described as follows: BEGINNING at the Southeast corner of the said East half of the Southwest quarter of Section 23;thence West, an assumed bearing along the South line of the said East half of the Southwest quarter of Section 23, for a distance of 762.04 feet;thence North 0 degrees 03 minutes 39 seconds West;parallel to the East line of the said East half of the Southwest quarter of Section 23, for a distance of 1946.46 feet to a point on the South right-of-way line of the 200 foot wide HASSAYAMPA-SALOME HIGHWAY, as recorded in Book 12 of Road Maps, page 82, Maricopa County Recorder, Maricopa County, Arizona;thence continuing North 0 degrees 03 minutes 39 seconds West for a distance of 234.15 feet to a point on the North right-of-way line of said highway;thence South 58 degrees 43 minutes 35 seconds East, along said North right-of-way lin for a distance of 892.17 feet to a point on the said East line of the East half of the Southwe 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 52, Maricopa County, Records.PARCEL NO.13: The North half of the South half of the Northwest quarter of the Northwest quarter of Section Ten (10), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
EXHIBIT B 1.The right to enter upon, occupy and use, any part of all of that portion of the West half of the West half of Section 27, lying within 20 feet of the center line of the transmission line right of way of the Central Arizona Light and Power Company for the purposes provided in the Act of June 10, 1920 (41 STAT., 1063), and subject to the conditions and limitations of Section 24 of said Act, as amended by the Act of August 26, 1935 (49 STAT., 846), as reserved unto the United States of America in instrument recorded September 30, 1949 in Docket 442, page 577.(Part of Parcel 5-South half of said Section 27)2.Roadway over the South 65 feet of said Sections 9 and 10, as shown on Book 13 of Road Maps, page 48.(Parcels 10 and 11)3.Easement and rights incident thereto for electric lines approximately 28 feet South of the North line of said Section 34, as set forth in instrument recorded February 20, 1952 in Docket 878, page 548.(Parcel No.8)4.All the Oil and Gas in said lands, as reserved unto the United States of America, and the right to prospect for, mine and remove such deposits from the same upon compliance with the conditions and subject to the provisions and limitations of the Act of June 17, 1914 (38 Stat.509), as set forth in Patent recorded June 4, 1957 in Docket 2194, page 409.(Part of Parcel No.11)5.Easement and rights incident thereto for transmission line over said Section 34, said easement being 10 feet in width, the centerline described as follows: Beginning at a point approximately 28 feet South and 2445.5 feet East of the Northwest corner of said Section 34;thence Southerly along, parallel to and approximately 2620 feet to a point;thence Easterly along, parallel to, and approximately 2648 feet South of the North line of said Section 34, a distance of approximately 1556 feet to a point, as set forth in instrument recorde'd January 15, 1962 in Docket 3992, page 49.(Parcel No.8)6.One-Sixteenth of all gas, oil, metals and mineral rights as reserved unto the State of Arizona, in Patent recorded January 11, 1974 in Docket 10473, page 477.(Parcel 1)7.Easement and rights incidents thereto for highway purposes over the West 55 feet of the East half of said Section 4, as set forth in the instrument recorded October 10, 1975 in Docket 11370, page 142.(Parcel 3)8.Easement and rights incident thereto for highway purposes over the West 55 feet of the Southeast quarter of said Section 28, as set forth in instrument recorded October 10, 1975 in Docket 11370, page 142.(Parcel 6)9.Easement and rights incident thereto for highway purposes over the West 55 feet of the East half of said Section 33, as set forth in instrument recorded October 10, 1975 in Docket 11370, page 142.(Parcel 7)10.Easement and rights incident thereto for highway purposes over the West 55 feet of the Southeast quarter of said Section 9, as set forth in instrument recorded October 10, 1975 in Docket 11370, page 142.(Part of Parcel 10)11.Easement and'rights incident thereto for electric lines over the North 10 feet of the following described property: The Southeast quarter of Section 28, Township 1 North, Range 6 West Except the West 55 feet thereof for roadway, as set forth in instrument recorded June 25, 1976 in Docket 11736, page 1089.(Parcel 6)12.Easement for highway purposes over said premises, as granted to Maricopa County, a Political Subdivision, by instrument recorded December 15, 1977 in Docket 12602, page 575, described as follows: The South 40 feet of the East one-half of the Southeast quarter of Section 9;the South 40 feet of the Southwest quarter of Section 10;the South 40 feet of the West one-half of the Southeast quarter of Section 10;the South 40 feet of the Southwest quarter of the Southeast quarter of Section 9; All being in Township 1 South, Range 6 West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.13.A roadway of a width consistent with the right of way over the Southerly portion of Sectio 9 and 10 of the within described property, and other property designated County Road on Book 25 Road Maps, page 47, recorded December 26, 1978.(Also known as Ward Road from the Hassayampa-Salome Highway to the South entrance of the Palo Verde Nuclear Generating Station)14.1986 taxes not yet due and payable.15.Easement and rights incident thereto for transmission lines over a portion of said premises, as set forth in instrument recorded November 15, 1985 in Document No.85-544604.(Parcels 1, 2, 8, 9 and 11)16.Easement and rights incident thereto for highway over a portion of said premises, as set forth in instrument recorded February 3, 1959 in Docket 2740, page 309, and as shown in Book 12 of Road Maps, page 82.(Parcel 12)17.Easement and rights incident thereto for roadway 20 feet in width, over the East 20 feet of the within described property, by instrument recorded October 19, 1976, in Docket 11907, page 115.(Parcel 12)
DEED AND ASSIGNMENT OF BENEFICIAL INTEREST TITLE USA TRUST NO.530 EL PASO ELECTRIC COMPANY, a Texas corporation (the"Assignor"), as the present owner of an undivided 4.181673%of the entire beneficial interest under Title USA Company of Arizona Trust No.530.formerly known as US Life Title Company of Arizona Trust No.530 (" Trust 530")established by that certain Trust Agreement dated October 15, 1975 (the"Trust 530 Agreement"), for and in consideration of the sum of Ten and no/100 Dollars ($10.00)and other valuable consideration, does by these presents sell, assign, convey, transfer and set over to THE FIRST NATIONAL BANK OF BOSTON.a national banking association, not in its individual capacity, but solely as Owner Trustee (the"Owner Trustee")under that certain Trust Agreement (the"Trust Agreement")with the beneficiary identified below, dated as of December 1, 1986 (the Owner Trustee being referred to herein as the"Assignee")an undivided.727881%beneficial interest in Trust 530.1.It is the intent of this Deed and Assignment of Beneficial Interest that, from and after the date as of which this instrument is executed and'delivered, Assignee will own an undivided.727881%of the entire beneficial interest in Trust 530, as a tenant in common with other beneficiaries.
2.Assignor hereby warrants that it is the true and lawful owner of the beneficial interest being transferred hereby and has good right to sell such interest;that Assignor has good and marketable title to such beneficial interest and that title to such beneficial interest is on the date of execution hereof free and clear of all claims, liens, security interests, covenants, rights, restrictions, conditions and encumbrances of any nature, save and except only those matters set fo'rth in paragraph 3 below;that good.marketable and indefeasible title to such beneficial interest is hereby conveyed to Owner Trustee: and that, subject only to the matters set forth in paragraph 3 below, Assignor warrants and will forever defend such title against the claims of all persons whomsoever.
3.This Deed and Assignment of Beneficial Interest is given and accepted with the understanding and agreement that Assignor and Assignee hereby ratify, confirm and approve all proper actions heretofore taken by Title USA Company of Arizona, as Trustee of Trust 530 (the"Trustee")and all proper disbursements heretofore made by the Trustee, and is given and accepted with the understand-ing and agreement that the interest in Trust 530 which is being transferred hereby is being transferred and assigned, and the property held under Trust 530 is, subject to all the terms and conditions of (i)the Arizona Nuclear Power Project Participation Agreement dated August 23, 1973, among Arizona Public Service Company, Salt River Project Agricultural Improvement and Power District, Southern California Edison Company, Public Service Company of New Mexico, El Paso Electric Company, Southern California Public Power Authority and Los Angeles Department of Water and Power, as amended, (ii)the Project Agreements as defined in said Arizona Nuclear Power Project Participation Agreement and (iii)the Trust 530 Agreement, i'ncluding all supplements and amendments thereto;and is subject to all obligations and liabilities under the Trust 530 Agreement heretofore accrued or hereafter arising under the terms thereof.Assignee hereby accepts, assumes and agrees to be bound by all of the terms, conditions, stipulations and obligations of the Trust 530 Agreement.
Trustee is authorized to substitute Assignee in place of Assignor under the Trust 530, to the extent of the interest hereby assigned to Assignee.
0 4.Assignee hereby advises the Trustee that, until further notice, Assignee's address for all Trust 530 purposes is: 100 Federal Street Boston, Massachusetts 02110 Attention of Corporate Trust Division 5.Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is Chrysler Financial Corporation, a Michigan corporation, whose address is Greenwich Office Park I, Greenwich, Connecticut 06836.A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110;Attention of Corporate Trust Division.Assignee is entering into this Deed and Assignment of Beneficial Interest solely as trustee under the Trust Agreement; only the Trust Estate thereunder, and not Assignee in its individual capacity nor the beneficiary of the Trust Agreement, is liable For any of the obligations of Assignee hereunder.
IN WITNESS WHEREOF, Assignor has caused this Deed and Assignment of Beneficial Interest to be executed as of the 18th day of December, 1986.EL PASO ELECTRIC COMPANY, a Texas corporation By:~V Vice President SThTE OF NEW YORK COUNTY OF NEW YORK The foregoing instrument was acknowledged before me this/L day of December, i986.by WILLIAM J.JOHNSON, the Vice President of EL PASO ELECTRIC COMPANY, a Texas corporation, on behalf of the corporation.
N ry Public DEL T.SANTIA(s NotarY P.".Iic.Ela:e of New York QUaiified in 0 seen,", CosJnty Con'.isaicn Exv',;""'s'.arch"t), i9$2 0
ACCEPTANCE BY ASSIGNEE The foregoing Deed and Assignment of Bene8cial Interest is,.hereby accepted and all terms and conditions are hereby approved, and Assignee hereby acknowledges receipt of a copy of the Trust o30 Agreement and all amendments and supplements thereto, and hereby agrees to be bound by and to comply with all the terms and obligations of the Trust 530 Agreement.
Dated<<s of December 18.1986.THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not in its individual capacity but solely as Trustee under the Trust Agreement By: Assistant Vice STATE OF NEW YORK COUNTY OF NEW YORK)-The foregoing instrument was acknowledged before me this day of December, 1986, by Martin P.Henry, 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 cer'tain Trust Agreement dated as of December I.1986.~/N ary Public Qua!ii ed!n Oe:a>.cur.'.y~omm!s:>'cn Hxg'.-.i~s
'.'.-:;"t:
30.19'
 
ENDORSEMENT OF TRUSTEE The foregoing Deed and Assignment of Be'neficial Interest is hereby accepted, and filed in the.Trust Department of TITLE USA COMPANY OF ARIZONA this day of December, 1986.TITLE USA COMPANY OF ARIZONA, Trustee By: Authorized Signature NOTE: Trustee's endorsement hereon shall be efFective only after all assignment fees and other fees currently due Trustee with respect to the interest being assigned have been paid in full.STATE OF ARIZONA ss.: COUNTY OF MARICOPA The foregoing instrument was acknowledged before me this day of December, I986, by , a trust ofBcer of TITLE USA COMPANY OF ARIZONA, an Arizona corporation, on behalf of the corporation, as Trustee under the Trust 530 Agreement.
Notary Public
 
December 18, 1986 FIRST CITY NATIONAL BANK OF HOUSTON not in its individual capacity, but solely as Collateral Trust Trustee First City Financial Center 1301 Fannin Street, 21st Floor Houston, Texas 77002 Attention:
Corporate Trust Department EL PASO ELECTRIC COMPANY PALO VERDE NUCLEAR GEN1~TING STATION UNIT 2 LEASE
 
==Dear Sirs:==
Reference is made to the Participation Agreement, dated as of December 1, 1986 (the Participation Agreement), among the parties whose signa-tures appear at the foot hereof.All capitalized terms used herein without definition shall have the meanings set forth in Appendix A to the Participation Agreement.
1.Representations, Warranties and Agreements.
The Loan Participant, the Owner Participant, FNB, the Owner Trustee, the Indenture Trustee and El Paso Electric Company (EL Paso)hereby confirm for your benefit that their respective represen-tations and warranties (in the capacity.given therein)and, in the case of EL Paso, agreements contained in Sections 6, 7, 8, 9, 10, 13 and 14 of the Participation Agreement and, in the case of the Owner Participant, the agreements contained in Section 14 (a)of the Participation Agreement, are true and correct and hereby respectively repeat such representations, warranties and agreements,, in the case of EL Paso and the Owner Participant, to the same extent as if such 1021.CHRYSLER.DECEMBER.77: 1~~
 
representations, warranties and agreements were set forth herein in full, whether or not the same are~~~~~amended after the date hereof.2.Survival of Representations, Warranties and Agreements.
All representations, warranties and agreements contained herein shall survive the execution and delivery of this letter.3.Successors and Assigns.A l 1 t e rm s a n d provisions of this.letter shall inure to your benefit and the benefit of your successors and assigns and each holder from time to time of each Bond, 4.Consequences of Breach.A breach of the representations, warranties and agreements contained herein, will not entitle you or any holder of a Bond to exercise remedies or take other action under the Participation Agreement or any other Transaction Document, but you may pursue all other rights you have at.law or in equity in consequence of such a breach.5.Governing Law.This letter shall in all respects be governed by, and construed in accordance with, the laws of the State of New York.1021.CHRYSLER.
DECEMBER.77:1
~~
 
CHRYSLER FINANCIAL RPO TION By: Attor e-'ct EL PASO FUNDING CORPORATION By: Vice President FIRST CITY NATIONAL BANK OF HOUSTON, as Inde tur Trust By: Assist Vice resident.EL PASO LECTRIC COMPANY e President THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee By: Assista ic 1021.CHRYSLER;DECEMBER.77:1
 
EL PASO ELECTRIC COMPANY Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities COMMERCIAL FEDERAL INVESTMENT CORPORATION December 18, 1986 TRANSACTION DOCUMENTS Description Participation Agreement Appendix A-Definitions Trust Agreement Facility Lease Tab Trust Indenture, Mortgage, Security Agreement and Assignment of Rents (with forms of Initial Series Notes attached)Initial Series Notes Collateral Trust Indenture Series 1986A Bond Supplemental Indenture Assignmcnt, Assumption and Further Agreement Deed and Bill of Sale 10 Deed Deed and Assignment of Beneficial Interest Extension Letter (Collateral Trust Trustee)12 13
.PARTICIPATION AGREEMENT dated as of December 1, 1986 among COMMERCIAL FEDERAL.INVESTMENT CORPORATION, as Owner Participant EL PASO FUNDING CORPORATION, as Loan Participant THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee under a Trust Agreement, dated as of December 1, 1986 with Commercial Federal Investment Corporation, as Owner Trustee FIRST CITY NATIONAL BANK OF HOUSTON, in its individual capacity and as Indenture Trustee under a Trust Indenture, Mortgage, Security Agreement'nd Assignment of Rents, dated as of December 1, 1986 with the Owner Trustee, as Indenture Trustee and EI PASO ELECTRIC COMPANY, as Lessee C Sale and Leaseback of a>>Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities
 
TABLE OF CONTENTS ection 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15 Section 16 Section 17 Section 18 Section 19 Definitions Participation by the Loan Participant; Releveraging; Refunding; Reoptimization; Issuance of Initial Series Bonds Participation by the Owner Participant; Partial Refund of the Investment........
Purchase, Sale, Financing and Lease of the Undivided Interest and the Real Property Interest.Notice of Closing;Closing.Representations, Warranties, Agreements and Directions of the Loan Participant
.Representations, Warranties and Agreements of the Owner Participant
.......'...
Representations, Warranties and Agreements of the Owner Trustee and FNB....Representations, Warranties and Agreements of FCNB.Representations, Warranties and Agreements of the Lessee Conditions Precedent.
Consent to Assignment of the Facility Lease;Consent to Indenture.......'......
Lessee's Indemnities
..Transaction Expenses.Owner Participant's Transfers.Brokerage and Finders'ees and Commissions
.Survival of Representations and Warranties:
Binding EH'ect.Notices Miscellaneous 8 li 28 34 35 54 o J 56 56 ppendix A-Definitions.APPEiVDIX SCHEDULES Schetlule 1-Notice of Closing Schedule 2-Pricing Assumptions Schedule~M-Initial Series Note Amortization Schedule 3-Recordations and Filings EXHIBITS Exhibit A-Form of Bill of Sale and Assignment Exhibit B-Affidavit of Trustee f'I PARTICIPATION AGREEMENT PARTICIPATION AGREEMENT, dated as of December 1, 1986, among COMMERCIAL FED-RAL INVESTMENT CORPORATION, a Nebraska corporation (the Owner Participant), EL PASO FUNDING CORPORATION, a Delaware corporation (the Loan Participant), THE FIRST NATIONAL BANK OF BOSTON, a national banking association, in its individual capacity (FNB)and as Owner Trustee (the Owner Trustee)under a Trust Agreement, dated as of December 1, 1986, with the Owner Participant, FIRST CITY NATIONAL BANK OF HOUSTON, a national banking association, in its'individual capacity (FCNB)and as Indenture Trustee (the Indenture Trustee)under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 1, 1986.with the Owner Trustee, and EL PASO ELECTRIC COMPANY, a Texas corporation (the Lessee).WITNESSETH:
WHEREAS, the Owner Participant desires to cause the Trust to acquire the Undivided Interest and the grant of the Real Property Interest and to lease them to the Lessee'under the Facility Lease: WHEREAS, the Lessee desires to sell the Undivided Interest and gra'nt the Renl Property Interest to the Trust and lease them back froin the Trust under the Facility Lease: WHEREAS, the Owner Trustee and the Lessee will enter into the Purchase Documents with respect to the sale and purchase of the Undivided Interest and the grant oF the Real Property Interest: WHEREAS, pursuant to the terms and provisions of.the Indenture, t'e Owner Trustee will authorize the creation, issuance and sale nnd delivery of the Initial Series Notes nrrd the grnrrti>>g of tire security therefor, and the Indenture Tr>>stee will arrthenticate the lrritial Series Notes: a>>d WHEREAS, the Loan Participant is willing to.purchnse the Initial Series Notes o>>the terr>>s;rrrd conditions set forth herein;NOW, THEREFORE, in consideration of the premises and of other good nnd valuable corrsidern-
'tion, receipt of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1.Definitions.
For the purposes hereof, capitalized terms used herein shall have the men>>ings<<ssigned to sgclr terms in Appendix A;provided, however, that, For all purposes of this Participation Agreement.
to the extent difFerent from Appendix A hereto, the terms Deemed Loss Event.Event of Loss.Econo'mic Useful Life and Final Shutdown (including for purposes of such definitions.
all defined ter>>rs contained in or relating to any of such definitions) shall have the respective r>>ea>>i>>gs set 1'ortlr or appended to the Facility Lease as amended from time to time in accordance with its terms.References in this Participation Agreement to sections, paragraphs and clauses are to sections.parngrnphs nrrrl clauses in this Participation Agreement unless otherwise indicated.
r SECTION 2.Participation hy the Loan Participant; Relcvcrnging; R<<i'u>>ding; Rcrrpti>>riznti>>>>r Issuance of Initial Series Bonds.(n)Loan Participants Corrrmitrrrent.
Subject to the satisfnctiorr of'the corrrlitiorrs irr S<<ctiurrs.>t;r) a>>d 11(a), on the Closing Date the Loan Participant agrees to lend to the'.Ow>>er Trustee.o>>;r nonrecourse basis, an amount (the Loan)equal to the Loan Per'centage of the Purchase Price;>>rd to issue t re Initial Series Bonds in a public offering to be consummated on the Closing Date for the purposes of fundin'g the Loan.(b)Pa@me>>t;Terms of the Initial Series Notes.Proceeds of the Loan shall be made<<vailable i>>srrch mnrrne'r ns the parties may agree upon.The Loan shall be evidenced by the Initial Series Notes.Tire Initial Series iVotes shall be issued by the Owner Trustee under;md pursuant to t)re lrrderrture.
sir;rll be tire aggregate principal amount of the Loan and shall bear interest nt the rate or rates per;rr>>rur>>
rd shall be payable as set forth in the Indenture.
(c)Relever<)ging.
Upon the occurrence of an adjustment pursuant to Section 3(d)of the Fac'ease.subject to the conditions set forth in Section 11(c), on the Releveraging Date the L~Participant agrees to lend to the Owner Trustee, on a nonrecourse basis.an additional amount (;i Releveraging Loan)equal to the applicable Releveraging Amount.There may be up to two Releverag-iiig Loans under this Section 2(c), the Releveraging Date or Dates oF which shall be mutually acceptable to the Lessee.the Owner Participant and the Loan Participant.
Proceeds of each Releveraging Loan shall be paid directly to the Indenture Trustee.in immediately available f>>>>ds.at the Indenture Trustee's OfRce.and such proceeds shall be applied fortliwith as a partial refuo<l of tl>e Investment.
Each Releveraging Loan shall be evidenced by a Releveraging Note.which Note shall be iss<<ed by the Owner Trustee under and pursuant to the Indenture.
be in the principal m>>oiint of tl><Releveraging Loa>>in respect of which it is issued.and bear interest;>t tl>e rate or rates per;>>>iiii>>>;i>i<I be pay;>ble as set l'orth i>>tlie In<le>>ture.
No releveraging shall iiicrease tl>e pri>>cipal;ioio<<>>t i>l'ill.Notes above 80 percent of the Purchase Price.(<I)Refimdin<<.
Subject to the satisfaction of the conditions set l'orth i)i Section l I (<I).if El P:is<i a>id the Owner Participant agree that the Initial Series Notes shoiild be ref<<>>ded on the Ref<<o(li>>>:
D;ite.if ai>y.tlie Lo;i>>Participant.agrees to le)id to tlie Owner Tnistee.o<<;i iioi)r<<coiirs<<b;isis.;i>i.
<<r>>ouiit (the Refunding Loan)equal to the sum of (i)the aoio>int necessary to ref'<<iid tlie pri>><<ip;il amounts ol'the Initial Series Notes plus any premium thereon and each Releveragi>>g Note theretol'ore issued and to pay accnied interest on each thereof from.an<1 indudi>>g.the last date;is of wlii<<h interest was payable thereon (or, if no such date has occurred the date of issue thereof)to.b<<t excl<<(liiig.
the Refun(li>>g'Date an<I (ii)if any releveraging is to o<<c>>r o>>tlie Rrf<<>>(liiig D;it<<.iil>ai>>oi>>it e(tu<<l to tli<.;ipplic;>hie Releveragi>>g A>>ion>it.Proc<<<<(ls oi'li<<R<<l'<<ii(li>>g Lo;>>>sli;ill bi p:ii<l (lirectly to tlie Io(le>>t<<re Tnistee;it th>>I>><leiitiire Tnistces OH><<<<;i>><l;>ppli<<(l (x)t<>tli<<<<st<:>>t iiecessary to ref<<>><1 the ii>>paid principal ol: a>>(l siich preiiiiiini a>><l;iccnic(l i>>ter<<st oi>.tli<<liiiti Sc.'ries iVotes ao(l eacli R<.levenagii)g Note (if therctof'ore issu<<<l).;ui(l (y)to tl><<<xt<<>>t<>i'Releveragi>>g A>>iou>>t.for the accou>>t of tlie Ow>>er Tn>stee.;>s
<<p;irti;il rcf<<ii(l<)l tli<<liiv<.st>>i<<>>t.
each case in immediately available funds.The Refunding Loai>shall be evide>>ced by tlie Rel'<<>>(li>>g Note or Notes.which, Note or Notes shall be issued by the Owner Trustee u>><ler and p<<rsiiant to tlie l>>deiitore, be in the principal;miount of the Refun<li>>g Lo;ui.a>><l b<<;ir iiitcr<<st;it tlie r;it<<or r;it<<s p<<l.;uiiiui>>aii(l be payable<<s set forth io the 1>><lent<<re.
O)i the Refii>>(li>>g D;it<<tli<<R<<f>>>><li>>>:
V>>t<i>r Notes shall be exchanged by the Owner Trustee for tlie Iiiitial Series N<)tes aii(l eacl>Relev<<r:>i>>>!
Note theretofore issued.The Lessee shall give the parties hereto written notice of the Refunding Date (if a refunding shall have been agreed to by the Owner Participant) no less th:u>seven Biisi>>css D:>ys prior thereto.Not less th;ui (our Business Days prior to the Refiiii(liiig D;it<<.tlie Lan>>P:irti<<ipa>>t sli;ill deliver to the Owner Participant aod the Lessee a certific;>te settiiig fortli tli<<i>>fon>><<tioi>>i<<<<css;ivy t<>co>1)piete the form oF Refunding Notes (including the sche(hiles thereto).Upon s<<cli<lelivery.;>>i<l upon<<pproval by the Lessee aod the Owner Particip;int of the tcn>>s tli<<r<<ol'.
tli<<Ow>><<r Parti<<ip:>lit a>>d the Lessee shall cause the For>>>oFRefun<liog iVotes to be co>>iplet<<(l.
Tli<<p;>rtiei l><<r<<t<)sli:ill>>I'>4<;i goo<I f>itli<<lfort to cooper;ite to eH'ect siich;ii>>eii<li>>eiits ol tlic Tr<<iis:i<<tin>>
Dn<<ii>>i<i>ts ils lllii)b(~>><<<<<<ss;iry or;ii)i)roi)ri;it<<
t()<<II'<<ct siicli>'cfu>>(li>><!.
so l()>>g;>s sii<<li;iiii(~>i<I>>><<>>ts
<I<<>i<it.iii t i>i<<i)iiii>>ii
<)f C:r;>v;>tl>.
Sw;ii>>e iM lloore.;><lversely;>lfect tlii.tax b<<ii<.Iits<<oiit<<>>iphit<<<l by tli<<On>>(r i;irti<~it):<<>t'ii<<>>t<<ri>>g i>>to tlie tr;ii>sactioiis coiitei)iphited by tliis P<<rticipitio>>
Agr<<<<iii<<iit:iii<l tli<<<>tliir Tra>>sactio)i Docunieots.
No refunding shall iiicre;ise the priiicip;il;ii>ioiiiit ot'li<<N<<t<<s:>l)<>i<<4<)
perce>>t of tl>e Purchase Price.(e)Reot)ti>>>i=ation.
Subje'.to the satisfaction of the conditions set Forth in Section 1 l (e).if tl)e Lessee.in a timely>>><<oner.
provides the Owner Trustee;ind the Owner Particip;int witl>ii)fon>>;itioii s<<ll>cie>>t for the Ow>>er Trustee to direct the adjustments
<lescribe(l i>>Sectioi>.'3.l2 of tlie Iii(lc>>t<<rc.
togetl>er witli a certific:>te (ii>fon>>ao(l sobstaiice reason;ibly satisf;ictory to tl>e Owi>er P:irti<<ip;iiit) ti>tl>e ell'<.'ct tl>it such adjustnieots o>i>>i>>>ize the aggregate increase iii 8;>sic Rei>t occiirrillg iis ii I'<<s<<lf tlie oper;itioi>
of Sectioii:3(<l) of the Facility Lease while preservi>>g iVet Ecoooniic Retiini.tlie Owi Tr<<stee'l>;ill (leliver to the fiideiiture Tnistee a certif>c:>te p>>rsii;i>>t to siicli Se<<tioii'3.12.N<>t<vitti-st;<<><li>>I!
tlie t'ore'oiog.
the Owner Participant
<<i>d the Ow>ier Tnistee>>>ay rely oi>the certiC><<at<<
delivered by the Lessee and shall have no obligation to verify the same.No rcoptirnization p<<rsuant to s Section 2(e)shall occur without the conse>>t oF the Owner Participant during tlie>>io>>tli of May or e of any year.ECTION'3.Participation by the Owner Participant; Partial Refund of the Investment.(a)0<oner Parficip<r>>t's Corrrrrritrrrcrrt.
Subject to the satisfactio>>
of tlic co>><litioiis iii Sectioiis 5(a)and ll.(a), on the Closing Date tlic Owner Participa>>t agrees to (i)cause tlie Triist to>>iake aii equity investment in the Undivided Iiiterest in an amouiit (tlie l>>vest<<icnt) equal to tlic Iiivestmeiit Percentage oF the Purchase Price and (ii)cause the Trust to make an eq>>ity i>>icstrncrrt in the Real Property Interest for the amount set forth in Schedule 2 as the-Real Estate bivcsti>>crit-(tlic Rcrrl Estate lrroestrncnt).
On tlie Closi>>g Date, the Owner Participant shall provide to t)ie O>>rr<ir Tnistce i<<i.amount equal to the Estimated Transaction Expenses.Proceeds of tlic Irrvcst>><crit an<)tlie Real Estat<.'nvestment shall be made availablc in sire)i iiia>>ner;is t)ie p;irtics i>>ay agree iipoii.(b)Partial Befirnd.In the event tliat the Indenture Tnistce shall)rave received the proceeds of'a Releveraging Loan or that portioii of the Refunding Loan cqiial to tlic applicablc Rcleveragiiig Amount, tire Indenture Tnistce sliall.imrncdiately iipon its rcccipt tlicrc<if.
rct>>rn tlie sainc to tlic ,Owner Participant as a partial refund of tire Investment, anil for piirposcs licrcoF tire-Invcsti>>crit" s)iall tliereupo>>
be re<i<<cc<l accordi>>g)y.
SECTION 4.Purchase.Sale, Financing and Lease o)the Undivided Interest and the Real Pniperty Interest.(a)The Undivided l>>tcicst.Subject to the satisfactio>>
of'lic con<litioris i>>Scctiorrs 5(ir)air<),,11(a).receipt from thc Owiicr Participant of'the Investmerit;i>><l receipt frorri tlic Loa>>P;irticipa>>t
<if'.thc procccds oF tlic L<.iui.t)r<.'wner Tnistce sliall (i)on tlic Cl>>si>>g D;itc c;<<isc tlic Tnist to piircli;isc
;,the Un()i~i<le<i 1>>tcrcst f'roni tlic Lessee f'r tlic arno<<iit spccilic<l iri Sc)rv<)<<)c Z as t)ic-P<<re)i;isc Price" (tlie Pi<i'el<ave Prlcc).;rrr<)(ii)pr>>r>>ptly after receipt of t)rc airi>>iiiit t)r<.r<<of'n>>>>
tlic 0>>'rrcr P;irticip;iiit iiirse tli<.Estimate<I Traiisactioii Expe>>scs.in cacli case iii acconl;i>>cc>>it)i tlic payiric>>t iiistnic.s in tlic Notice of Cl<ising.Siibjcct to tli<.satisf<etio<i oF tlie co>><litioiis i>>Scctioii 11(b).<iii t)r<osing Date the Lessee~)L'c))'se))
tlie Un<lividcd Interest to tlic Tnist for tlic Piircliase Price..'Concurrently with sucli pur'cliasc and sale.the Trust shall lease the Un<livided Interest to tire Lessee.and tlie Lessee shall lease the Un<tivi<lcd Irrtcrest Froin t)k Trust.p<<rsiia>>t to thc Facilitv Lease.(b)The Real Property lrrtcr<st.
Subject to t)ie satisfactioii of tlic co>>ditio>>s i>>Sectioiis 5(a)arrr)II(a)and receipt from the Owner Participa>>t of the Real Estate Irrscstnrcnt.
on the Closi>>g Date tlic Owner Participant shall cause tlie Trust to acqiiire the Real Property Interest from tlie Lessee for a purchase price equa)to the amo<<nt sct Forth in Schedule 2 as the"Real Estate Investment." Siibjcct to the satisfaction of'he conditions i>>Section 11(b), on the Closing Date tlie Lessee s)iall gra>>t t)rr: Rc;il Property Interest to the Trust for the amount set fortli in Schedule 2 as tlie-Real Estate Irriestrrrerrt.-
Concurrently with such acquisition by the Trust, the Trust shall lease the Real Property Iiitcrcst to t)ic Lessee.and the Lessee shall)case the Real Property Interest from the Tnist.p<<rsrrarrt to t)rr.F;icility Lease.SECTION 8.Notice of Closing;Closing.(a)'v'<iticc of Closi>>.Not later tlia>>two B<<si>>css Days prior to tlu.'losi>>g D:itc tlic Lcssi c sliall dc)incr to tire Ow>>cr Participant, tlie Owner Trustee.tlic Loaii Participaiit.
tlic<:<ill<<ten<)
Triist Tnistcc a>>d the I>>denture Trustee a notice, substa>>tially in the f'onn of'clic<liilc 1 (tlic N<rti<.c<if Closi>>g), w)rich shall (i)state that the Closing Date shall occur on t)ie date specific)tlicrci>>.(ii)list the then known Transa">ion Expenses payable by the Owner Trustee pursua>>t to Scctioii 14(a)(the Estinrated Transaction Expenses), and (iii)provide payiiie>>t instnictioiis in respect of tlic dispositio>>
oF the Purchase Price and acquisition price of tlie Real Property lrrtercst.(b)Closirrg.Upon satisFactioii of'the conditions i>>Section 5(a)alrd 11(a)aiid receipt from tlie wner Participant of the Invcstme>>t and t)ie Real Estate I>>vestlllcllt all<i receipt from tlie Loaii Participant of the proceeds of the Loan,'n the Closing Date the Owner Trustee shall cause the Purchase Price to be paid and the acquisition price of the Real Property Interest to be paid, in e~case in accordance with the payment instructions in the Notice of Closing.Upon satisfaction of~conditions in Section ll (b), on or as of the Closing Date the Lessee shall deliver to the Owner Trustee the Purchase Documents.
SECTIOiV 6.Representations,>Varranties, Agreements and Directions of the Loan Participant.(n)Representations rrnrl Wr>rranties.
The Loan Participant represents and wnrrants that: (I)Due Orgaoi~tion.
The Loan Participant is a corporation duly organized;md v<<li(lly existing in good standing under the laws of'the Stnte of Delaware nnd has the corporate popover;u><l aiitl>ority to carry on its biisiness as presently co>>ducte(l.
own its properties.
nii(1 (>>tcr iiitn a>><l perform its obligations under this Participation Agreement and each other Tr<<>>snction Dociio>e>>t no(l ench Financing Document to which it is a party.(2)Due Authorization.
This Participation Agreement and ench other Transaction Docii-oicot nod e;ich Fio<<nci>>g Document to which the Loan Particip;u>t is a p;>rty li;is 1)<<<<>>(l>>li authorized by all necessary corporate actioi>on the pnrt of the Lono P;irticipa>>t;i>>(l
<lo<<s>><it require the consent or approval of its stockholders or any trustee or holder of<<iiy of'ts indebtedness or other obligations, except such ns have been.or on or bef'ore the Closi>>g D;ite ivill have been, duly obtained, given or accomplished.
('3)Erecutio>>an<i Enforcerrhilitg.
Tliis P;irticip;itio>>
Agrcn>><<ot ii>><l<<;i<<li otli<<r Tr;>>is;i<<ti<>>i Dociiioeot iui(l c;ich Finn>>ci>>g Doc>>i>>ei>t to whicli tl>e Loai>P;irticip:i>>t is;i p;irty li;is l><<<<ii<l<<ly execute<I ai>d delivered by tl>e Loa>>P;irticipa>>t a>><l coiistitiit<<s its l<<<<al.v;iIi<1;iii<1 l)i>><liiig agreement.
enforceable
<<gai>>st it in accor<hince witl>its ten>>s.(4)No Violation.
Neither the execution.
delivery or pcrforo><<>>cc by tli<<Lo;i>>P<<rti<<ip:i>>>
this Participation Agreen>ent, any other Traosaction Document or any Fine>>>cing Docuoieiit to which it is a party.nor the consummntion by the Lonn Participant of the traosnctioi>s co>>tciii-pli)te(l hereby or thereby, nor compliance by the Loan Particip;uit with tlie provisio>>s l>cr<<<)f<)r thereof, conflicts with.or results or will result in tl>e bre;ich of'i>>iy provisii>>i
<)1'.>>r is i>><<<>>isist<<>>t with, the Certificate of Incorporation or ByLaws of the Lo<<>>P<<rticipa>>t or co>>tr;>ve>><<s;i>>>.
Federal, Delaware or New York law applicable to it, or any indenture.
mortgage or agreement to which.the Loan Participant is a party or by which it or its property is boui>d: or reri>>ir<<s a>>y Governmental Action with respect to the Loan Participant o>>(ler ai>y Fe<leral.Del;iw;irc or N<<ii York law applicable to it, except such as have been, or on or before tl>e Closiog D;ite will lmv<<been.duly obtained.given or accomplished.
(5)No Other Business.Except as contemplnted by tliis Participatio>>
Agree>>ic>>t.
tli<<>>tl><<r Trio>s<<etio>>
Doc>>ments;ui(l the Financing Dociioieiits
<<n(l except as otf><<avis<<(<)>it<'iiii)l;it<<
I l)x tlic S<<etio>>(i(c)Applic;itio>>.
the Loai>P;irticip;i>it 1><<s ii<)t<<>><',ig<<<<l i>>;>>>i l)<<xiii<ss i)r:>>>i>i>i>>f;i>iy type or kiii<l wl><<tever.
(6)EBISA.'The Loan P<<rticipaiit is iiot acquiri>>g.
aii<l ivill>>ot;ic<i<<irc.:>>iy N<)t<<ivitl>tli<<"pl<<>>assets" of any"employee benefit plan.-withi>>tlie meaning ofsectioii:3(:3) of EHISA.or:iiiy"plan." within the meaning of section 4975(e)(I)of the Code.(7)Io<<estmeot Represent<>tio>>, The Loan Participant is;icquiriog.
<<od will ncqoire.e:icli Note to be acquired by it hereunder<<nd under the Indenture solely for purposes of'pie(fgi>>g s>>cli iVotes to the Collateral Trost Trustee to secure Boii(ls issue<I fro>>i tii>ie to ti>>ie i>>i<l<<r tli<<Collateral Trust Indenture.
The Lo;>o Participant
>>>>(lerstan<ls th;it>>o iVote to be;ic(iiiire<l I)liereuii<ler or>>>icier tlie I>>de>it>ire will linve been registered
>>>icier tlie Seciirities Act;iii<1 t e;ich such Note will be;ir the le<<eod set f'orth in Sectio>>4.5 of tl>e I>>deoture.
(b)Agreements.
The Loan Participant agrees that: (I)Tr<rnsfers of Notes, Any transfer or assignment of any Note or of all'or any part of the Loan Participant's interest hereunder or under any other Transaction Document or any Finnncii>g Document'shall be eff'ected in a transaction constituting an exenipted trnnsnction under the Securities Act and on the express condition that each transferee.
assignee or pnrticipnnt shall agree to be bound by the terms and provisions hereof and thereof.Neither the Loan Particip;i>>t nor any subsequent Holder of a Note may sell, exchange or transfer any Note to any other Person (other than the Collateral Trust Trustee)unless such transferee delivers to the other parties hereto a representation and warranty (nnd an opinion of counsel satisfactory to each of tlie otlicr parties hereto)to the efFect that neither the transfer of such Note to.nor the ownership of so<<i>Note by.such transferee will cause such transferee.
or any other party hereto.to be engage(l iii a"prohibited tra>>snctior)." as defioedln section 406 of ERISA or section 497''of tire Co(l<<.wl>i<<li i>>not at such time subject to an exemption contained in ERISA or in the rules.reguhitio>>s.
releases or biilletins adopted thereunder.
(2)P<rgment of Bonds.Except as provided in this Participation Agreemeot.
witho>>t tlic consent'of the Owner Participant nnd the Lessee.the Loan-Pnrticip:iot will>>ot r<<f>>>><l>>r option;illy prepay any Bond issued in respect of ar)y Note except i>>co>>r>ectioii witl>tl><<r<<l'iiii(li>>
'r optional prepayment of an equal principal amount of the correspon(ling Notes ple<lged pursuant to the Collateral Trust Indenture in respect thereof.(3)Quiet Enjoyment.
The Loan Participant acknowledges Section 6(;>)of the Facility Lense.(0)r'>Io Otlrer Business, Diiriog sucl>time;is any iVote is oiitst;iii(liiig;>i><l li<<l<l l)y tli<<L<>>ii>
Participant or the Coll'>terai Trrrst Trustee.the Loaii Particip;i>>t will i>ot.(i)<<>><>r:<i>>;iiiy biisioess or activity other th;in (1)in co>>i>ectio>i witl>tli<<Tr;iiis;i<<tioii Do<<iii>><<iits>>r tl><<, Financing Documents or (2)ns otherwise coi>teioph>tc(l bv tli<<S<.'etio>i 6(<<)Appli<<;ltin>>
<>r (ii}aniend or engage in any activity or take any<<ctioii not per>>>itted by Article THIRD.FOURTII<>r SIXTH of its Certificate of Incorporation, as.in effect on the date of execution a>>d delivery hereof;withput.in each case.the consent of the other parties hereto.(c)Direction to the Indent><re Trustee.The Loan Particip;>ot.;>s purchaser ol'a<<l>.'i<)t<<.(i}.anti>orizes and directs the Indenture Trustee to execute.deliver i>)i(l peri'ori>>tliis P;irti<<ip;iti<>>i Agreement,.(ii) autborIzgs and directs the Indenture Trustee to register such iVote in the o;ime of the Lonn Participnnt and.upon-nuthentication and delivery thereof p>>rsoaot, to this Pnrti<<ip;itin>>
Agreement aod the Indenture.
to deliver such Note (upoo con>pletio>>
by tlie Loa>>P:irticipaiit
<>i'tl><<nssignmeot attached thereto)to the Collateral Trust Trustee p>>rsui>>>t to t)ie Collateral Triist Indenture.(iii)acknowledges and agrees that, in coonection with this Participatio>>
Agree>>ieiit.
tli<<Iii(lent>>re Trustee shall have the benefits ao(l protections of Arti<<le VIII of'l><<I>>(l<<>>tiir<<;i>><l ii<<}agrees that.in the event of a co>>flict between the provisioiis of tliis P;irticii);itiol>
Agr<<e>>><<>>t;>I><l tll<<Iii(leotiire.
the In<le>>tiire Tr>>st<<e shall.<<s between tlie Ii>(leotiir<<Tr>>st<<<<nii(l tli<<L<)aii P:irti<ip:>r>t.1><~f'iilly p>'ot<<<<t<<(l iii r<<lyii>g oi>tli<.'xpr<<ss t<<r>>>s oi'li<<I>>(l<<i>t>>>'<<.
SL(:TION 7.Representations.
narra>>tie>>
and Agreement>>
of thc O>i>><<r Particip:ii>t.
('a)Representntions anrl'>Varr<rnties.
The Owner Pnrticipniit represents;ii>(l w:irr;i>its tl>>it (I)Due Organimtiorr, The Owner Participant is a corporation (inly orgni>ize(l ni><l v;ili(lly existiog in good stnnding under the laws of the State of Nebraska;>nd has tlie corporate pow<<r;>>i(l n>>thority to enter into and perform its obligations under this Participatioi>
Agree>>>eiit;iii(l encl>other Transaction Docuroeot to which it is n party.(2)Due Authorization.
This Participation Agree>>)ei>t;uid encl>other Trn>>s;ictio>>
Do<<ii-i~>>>ei>t to which tlie Owner Participant is a party has beeri (luly;>>ithorize<l by;ill ii<.<<<<ss;iry corpor;ite nctioii oo the.part of the Owner Participant
<<o<l<loes>>ot require tlie cor>s<<ot>>r approval of its stockholders or any trustee or holder of any of its indebtedness or other obligations, except such as have been duly obtained, given or accomplished.
(3)Zxecutiorr and Znforceabilitg.
This Participation Agreement and each other Transac Document to which the Owner Participant is a party has been duly executed and delivered by the Owner Participant and constitutes its legal, valid and binding agreement.
enforceable against it in accordance with its terms.(4)No Violation, Neither the execution, delivery or performance by the Owner Participa>>t of this Participation Agreement or any other Transaction Document to which it is a party.nor the consummation by the Owner Participant of the transactions conten)plate<I hereby or thereby.>>nr col>>pliance by the Owner Participant with the provisions hereof or thereof.conflicts with.or res<<lts in the breach of any provision of, or is'inconsistent with.its doc>>>>rents oF incorporatiol) nl Bv-Laws or contravenes any Applicable Law applicable to it.or;>>iy i>>de>>tirre.
r>>ort<',)ge or agreement f'r borrowed money to which the owner Participant is a party or any other;)gree>>ieiit or i>>str<<nie>>t to which the.Owner Participant is a party or by which it or its property is bn<<ii<1 nr requires any Governmental Aetio>>with respect to the Owner Participant u>><ler Fe<leral.Tex;rs or Nebraska Iaw applicable to it on or before the Closing Date.except s>>ch as are coiiter>>plate<I l)y the Trai)sactior)'Doer)i>>ents or tlie Fiim>>ci>>g Dociir>>ei)ts or sii<<h;is li;ivc I)<<<<>>.or n>>nr I)<<I'nr<<tli<~Closit)g Date will have been, duly obtained, giver)or accon)plishe<l:
provide<1.
however.th;it tli<<Owner Particip'ant makes no representation or warranty as<o any Applicable Law or Cover>>me>>-
tal Action relating to the Securities Act, the Sec<<rities Exchange Act.the Trrrst lr)<lcr)t<<re Act.tl)<<Federal Power Act, the Atomic Energy Act, the Nuclear Waste Act.the Holdi>>g Cni>>p:illy A<<t.the New Mexico Public Utility Act.the Texas Public Utility Regrrlatory Act.the Ariznn:i P<<l)lic Utility Act.energy or iiiicle;ir i>>;itters.
public iitilities.
the er)viror>>>><<r)t.
Iic;iltli:iii<1 s;ii'<.ty nr Urrit (5)No Orr)ner Particip<rnt's Liens.'Veitlier tire ex<<c>>tinii;i>><l
<1<.liv<<ry l)y tli<<Oiv Participant of this Particip;ition Agre<<i)in>>t nr;iiiy nthcr Tr;i)is ictinii Dn<<ii>>i<<>>t tn ivhi<<h Owner Participarit is ol.is to beco>>ie;i party.>>or the peri'or>>i;<<ice by th<Ow>>er Pirti<<ip;>>it ni'i.~obligations hereunder or thereunder, will subject the Trust Estate or the Lease l>>de>>ture Est;)te.or any portion of either thereof.'to any Owner Participant's Lien.(6)Acquisition for I>>r;est))rent.
The Owner Participaiit is acq<<iririg tl)e l)cii<<ficial irit<<r<<st i>>" the Trust and the Trust Estate f'o r its ow>>account.for i>>vest>>ierit arid>>nt witli;i view tn.nr I'nr, sale in connection with, any distribution thereof in violation of Sectiori 5 of'he Securities Act.b<<t subject.nevertheless, to any requirement of law that the<lispositio>>
of'he Ow>>er Particip;iiit's property shall at all tinies be within its control.(7)No Prior Security Interest.There exists no security i>>terest i>>or'other Lieii n>>tli<<Lease l>>dent<<re Estate in the States of'Texas, New Mexico.Ariznr)a or iVel)r;isk;i;irisi>>g;)s;r r<<xiii t of'laii>>s agai>>st the Ow>>er Particip;iiit
>>iirel;ite<l to tlie tr;iiis:ictiniis c<>>it<<>>ipl:itc<l I)i tli<<Transaction Doc<<>>ieiits or the Fi>>:>>icing Doc<<nieiits which is pri<ir tn tli<.l>><l<<>>t>>r<<Tr>>st<<
'>>s<<<<<<ritv i>>t<<rest i>>tire Le:is<<l>><lc>>t<<re Est;it<<.('))Secrrrities:r)<:t.
Neitlier tire Owr)er P:irticip;i>>t iinr;iiiynii<<;iirtlinriz<<<l t<)<<<<r<>>i i<i I)<'l)!ill'<<is
<lirectlv or i>>directly oifere<l or sol<l ariy seciirity iss<<c<l or tn I)<<issiic<I tn firi:iiic<<
I:>>ii'.ni'a>>y security the offering of which for the purposes of'he Sec<<rities, Act wo<<l<l be<I<.<<>>i<<<i tn I)<<part of the offerings contemplated by the Tra>>sactio>>
Docunie>>ts;iii<1 the Fi>>a>>ci>>g Dncii<<ic>>ts.
or solicited any ofFer to acquire any such security from any Person.in violatior:
of'Sectio>>
~of the Securities Act.(9)ERIS~i.The Owner Participant is not acquiring its i>>terest i>>the Tnrst witti tlie-pl;<<i;issets-of a>>v-er>>plo'yee'benefit pla>>-within the r>>eai)i>>g of sectior)3(3)oi'ERISA or;iiiy-pl;iii-within the r>>eanirig of"sectio>>
49"r5(e)(l)of the Code.
(b)Ay.eements.
The Owner Participant agrees that: (1)No Owner Participant's Liens.The Owner Participant will not create or permit to exist, and,'at'ts own cost and expense, will promptly take such action as may be necessary duly to discharge, all Owner Participant's Liens.~(2)Quiet Enjoyment.
The Owner Participant acknowledges the provisions of Sectiori 6(a)of the'Facility Lease and Section 8(c)of this Participation Agreement.
(3)No Petition Agreement, Prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture.
the Owner Participant agrees that it will not file a petition, or join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition of, or in respect of, the Loan Participant under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia.(4)Transfer of Interest in the Trust Estate.If the Lessee shall not have assumed the Notes as-contemplated by Section 3.9(b)of the Indenture and the Lessor shall not have Transferre<l the Undivided Interest and the Real Property Interest to the Lessee in accordance with Section 9(c).9(d), 13(c)or 16(e)of the Facility Lease or Section 10(b)(3)(xvii)hereof.the>>.<<po>>receipt by the Owner Participant, from the Indenture Trustee or otherwise.
of the payments specified i>>Sections 9(c), 9(d), 13(c)or 16(e)of the Facility'Lease or Section 10(b)(3)(xvii)hereof, the Owner Participant shall assign, convey and transfer (the Special Transfer)to the Lessee all of the Owner Participant's right, title and interest in, to and under the Trust Estate (except the right to receive Excepted Payments), such transfer to be effected by the execution and delivery by the Owner Participant of a Bill of Sale and Assignment substantially in the form of Exhibit A hereto but without any further act (whether under any Transaction Document or oth'erwise) by the Owner Trustee, the Owner Participant, the Lessee, the Indent<<re Tr<<stee or a>>y other Perso>>.whereupon the Lessee shall be deemed for all purposes to have assume<l.a>><l the Ow>>er Participant shall be de<M>>ed for all purposes to have been released 1'rom.all obligatio>>s a>><l liabilities of the Owner Participant under this Participation Agreement and the other Transactio>>
Documents.
At any time following the occurrence of an Event of Loss or the declaration of a Deci>>e<l Loss Event, or at any time when an Event of Default shall have occurred and be continuing, the Owner Participant may, in lieu of a Transfer referred to in Section 9(c), 9(d)or 16(a)of the Facility Lease, as the case may be, effect the Special Transfer, whether or not the Owner Participant shall have received the payments referred to in the preceding sentence or the payments specified in Section 16(a)of the Facility Lease, as the case may be.The Lessee hereby agrees to accept and cooperate in receiving the Special Transfer.If at the.time of the Special Transfer the Owner Participant shall not have received the payments specified in the first sentence of this Section 7(b)(4)or the payme>>ts specified in Section 16(a)oi'he Facility Lease, as the case may be, the obligation of the L'essee to make such payme>>ts (together with interest thereon at the Penalty Rate)shall co>>ti>><<e until so receive<l.
a>><l s<<ch oliliuati>>>>
shall be sec<<red by (a>>d the Lessee hereby gra>>ts to the Ow>>cr Parti<<ipa>>t a scc<<rity i>>t<<r<it iri a>>d general lien upon)all the Lessee's right.title a>><l interest i>>.to a>><l<<>><ler thc Tr<<st Est<<t<.1>>connection therewith, the Lessee hereby agrees that (i)the Owner Participa>>t shall have<<II the rights and remedies of a secured party under the UCC and the Texas Business and Co>>>>>>erce Code, (ii)the Lessee hereby appoints the Owner Participant as its attorney-in-fact, irrevocably, with full power of substitut'on, to ask, require, demand, receive and give acquitt" nce for any and all moneys and claims for moneys due and to become due to the Lessee under or arising out of the Trust Estate, to endorse any checks or other instruments or orders in connection therewith.
and to take any action (including the filing of financing statements or other documents and the delivery of written instructions to the Owner Trustee and the Indenture Trustee specifying that all payments to be made to the Lessee under the Trust Agreement and the Indenture shall be made directly to the Owner Participant) or institute any proceedings which the Owner Participant may deem necessary or appropriate to protect and preserve such security interest and the rights of the Owner Participant to receive payments thereunder, (iii)until all amounts due to the Owner Participant have been received by the Owner Participant, the Lessee (in its capacity as such a as transferee under the Special Transfer)shall not, without the prior written consent of t'wner Participant, take any action under, accept or approve any amendment to.or deliver any instruction under, any Transaction Document the efFect of which would be to (A)relieve or otherwise affect the obligation of the Lessee to make such payments.(B)terminate the Trust Agreement, (C)terminate or rescind the Facility Lease or (D)sell, assign, transfer or deliver the Trust Estate to any Person and (iv)the Lessee agrees, from time to time, to do all such acts and execute all such instruments of further assurance as shall be reasonably requested from time to time by the Owner Participant for the purpose of fully carrying out and efFectuating this Section 7(b)(4)and the intent hereof.On the date which is 100 days after the receipt by the Owner Participant of all amounts due to the Owner Participant, the security interest and lien hereinabove provided shall, so long as the Lessee is not then the subject of any bankruptcy, insolvency or similar proceeding, terminate, and the Owner Participant, at the request of the Lessee, shall execute and deliver to the Les'see such termination statements, releases or other instruments presented to the Owner Participant as shall be reasonably required to efFect, such termination.
(5)Letter of Credit Dratvings.
The Owner Participant will, not later than the later of (a)a reasonably practicable period after delivery of a notice under Section 9(c)or 9(d)of the Facility Lease and (b)the time when a failure of the Lessee to pay the amounts speciBed in such section.in and of itself becomes an Event of Default under the Facility Lease, attempt once to draw under the Letter of Credit, if one is in efFect and drawable in an amount at least equal to the applicable Equity Portion of Rent;provided, hoivever, that the failure of.the Owner Participant so to attempt to draw shall have no consequence but to limit its claim against the Lessee to an amount equal to what the Owner Participant would have been entitled to had such failure to pay of the Lessee not in and of itself become an Event of Default.SECTION S.Representations, warranties and Agreements of the Owner Trustee and FNB.(a)Representations and warranties.
FNB, as Owner.Trustee and (except as otherwise provided in the last sentence of this Section S(a))in its individual capacity, represents and warrants that: (1)Due'Organimtion.
FNB is a national banking association duly organized and validly existing in good standing under the laws of the United States of America and has all requisite corporate power and authority to enter into and perform its obligations under (x)the Trust Agreement and, to the extent it is a party hereto in its individual capacity.this Participation Agreement and (y)acting as Owner Trustee, this Participation Agreement and each other Transaction Document to which FNB is a party as Owner Trustee.(2)Due AutIiorimtion; Enforceability; etc.This Participation Agreement and each other Transaction Document to which FNB is a party have been duly authorized by all necessary corporate action of FNB (in its individual capacity or as Owner Trustee, as the case may be)and, upon execution and delivery hereof and thereof, each of this Participation Agreement and each such other Transaction Document will have been duly executed and delivered and will be a legal, valid and'binding agreement of FiVB (in its respective capacities), enforceable against it (in its respective capacities) in accordance with its terms;it being understood that FViB is not making any representation or warranty as to the priorities of the Liens created or to be created under any Transaction Document, title to the Trust Estate or recordings or Slings necessary in connection therewith.
(3)Notes.Upon execution of the Initial Series iVote, authentication thereof pursuant to the Indenture and delivery thereof against payment.therefor in accordance with this Participation Agreement, such iVote will be a legal, valid and binding obligation of the Owner Trustee, enforceable against the Owner Trustee in accordance with its terms.
(4)No Violation.
Neither the execution and delivery by (x)FNB of the Trust Agreement and, to the extent FNB is a party hereto in its individual capacity, this Participation Agreement and (y)the Owner Trustee of this Participation Agreement and each other Transaction Document (other than the Trust Agreement) to which the Owner Trustee is a party, nor the performance by FNB, in its individual capacity or as Owner Trustee, as the case may be, of its obligations under each thereof, conQicts with, or results in the breach of any provision of, its Articles of Association or By-Laws and does not contravene any Applicable Law of the United States of America or The Commonwealth of Massachusetts governing the banking or trust powers of FNB, and does not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument to which FNB is a party or by which it is bound or require any Governmental Action with respect to the Owner Trustee under any Federal or Massachusetts law, except such as are contemplated by the Transaction Documents or the Financing Documents or such as have been duly obtained, given or accomplished provided, however, that no representation or warranty is made (i)with respect to the right, power or authority of FNB or the Owner Trustee to act under the ANPP Participation Agreement or the License in respect of the Undivided Interest or Unit 2, or (ii)as to any Applicable Law or Governmental Action relating to the Securities Act, the Securities Exchange Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy A~t.the Nuclear Waste Act, the Ifolding Company Act, the New Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona Public Utility Act, energy or nuclear matters, public utilities, the environment, health and safety or Unit 2.(5)Defaults.To the best knowledge of the Owner Trustee, no Indenture Default or Indenture Event of Default has occurred and is continuing.
The Owner Trustee is not in violation of any of the terms of this Participation Agreement.
or any other Transaction Document to which it is a party.(6)Litigation.
There is no action, suit, investigation or proceeding pending or.to the knowledge'of FNB, threatened against FNB (in any capacity)before any court, arbitrator or administrative or governmental body and which relates to its banking or trust powers which.individually or in the aggregate, if decided adversely to the interests of FNB in such capacity, would have an adverse effect upon the ability of FNB.(in any capacity)to perform its obligations under this Participation Agreement or any other Transaction Document to which it (in any capacity)is a party.(7)Location of the Chief Place of Business and Chief Executive Once, etc.The chief, place of business and chief executive ofBce of the Owner Trustee and the oSce where its records concerning the accounts or contract rights relating to the transactions contemplated hereby are kept are located in Boston, Massachusetts.
(8)No Prior Security Interest.There exists no security interest in'the Lease Indenture Estate in the States of Texas, New York or Arizona or in The Commonwealth of.Massachusetts arising as a result of any claim against FNB unrelated to the transactions contemplated by the Transactio>>
Documents or the Financing Documents which is prior to the l>>de>>ture Trust<<<<'>>s<<<<>>rity interest in the Lease Indenture Estate.(9)No Lessor's Liens.Neither the execution by FNB (in any capacity)of this Participatio>>
Agreement or any other Transaction Document to which it (in any capacity)is a party, nor the performance in such capacity by it of its obligations hereunder or thereunder, will subject the Trust Estate or the Lease Indenture Estate, or ny portion thereof, to any Lessor's Lien.The representations and warranties in Section 8(a)(2)and Section 8(a)(3), as to Transaction Documents and each Note being legal, valid and binding obligations enforceable in accordance with their respective terms, are given only by FNB in its capacity as Owner Trustee and not in its individual apacity, except that FNB does represent in its individual capacity that it is authorized under the laws'the United States of America and The Commonwealth of Massachusetts to execute and deliver the ransaction Documents to which it is a party.
(b)Agreements.
FNB agrees, in its individual capacity, that: (1)Discharge of Liens.FNB will not create or'permit to exist, and will, at its own cost expense, promptly take such action as may be necessary duly to discharge, all Lessor's Liens.(2)Certain Amendments.
Unless'a Default or an Event of Default has occurred and is continuing or an Event of Loss has occurred or a Deemed Loss Event has been declared, FNB will not amend any of the payment terms of any Note or take any action to refund any Note after the date of issue thereof pursuant to the terms of this Participation Agreement and the Indenture without the prior written consent of the Lessee.Except for amendments or supplements made pursuant to Article X of the Trust Agreement or contemplated by Section 7(b)(4), FNB will not amend or supplement, or consent to any amendment of or supplement to, the Trust Agreement without the prior written consent of the Lessee unless a Default or an Event of Default has occurred and is continuing or the Lease Termination Date has occurred or an Event of Loss has occurred or a Deemed Loss Event has been declared, if such amendment would materially and adversely affect the rights of the Lessee under the Facility Lease or this Participation Agreement.
(3),Change in Location of Chief Palace of Business and Chief Executiue Once, etc, FNB shall notify the Lessee, the Loan Participant and the Indenture Trustee promptly after any change in" the location of its chief executive oiHce, principal and chief place of business or place where its records concerning the accounts or contract rights relating to the transactions contemplated hereby are kept.(4)No Petition Agreement.
Prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Intlenture.
FNB (in any capacity)agrees that it will not file a petition, or join in the filing of a petition.seekiiig reorganization, arrangement, adjustment or composition of or in respect of the Loan Particip;int under the Bankruptcy Code or any other applicable Federal or state law or the law of the Dis of Columbia.(5)Quiet Enjoyment.
FNB acknowledges Section 6(a)of the Facility Lease.(c)Agreements.
The Owner Trustee agrees that: s (1)Rights in Relation to ANPP Participants, The rights and remedies of the Owner Trustee and the Owner Participant in the Undivided Interest and in the Real Property Interest are subject and subordinate to the rights and remedies of the ANPP Participants (other than (i)the Lessee or (ii)any Person who shall become an ANPP Participant in respect of the Lessor's Interest)under the ANPP Project Agreements.
(2)Lessee to be Participant.
Except as provided in Sections 15.2.2, 15.6.4 and 15.10 (or any comparable successor provisions) of the ANPP Participation Agreement.
the Lessee shall be an<I remain the sole"Participant" for all purposes of the ANPP Participation Agreement and the sole'epresentative (with power to bind the Lessor and the Indenture Trustee)in all dealings with the other ANPP Participants in relation to the property.rights.titles aiul interests nf tlie L<<ss<<i.transferred to the Lessor pursuant to the Transaction Doc<<i>>eiits:
pi.acid<<cl.
hoi<<<<cei;tli:it th<<foregoing shall not limit in any way any liability or obligatioii that tlie Lessee nray i>>ciir to tile Owner Truste'e or the Owner Participant under any Transaction Document as a result thereof.(3)Cash Bids.On the Lease Termination Date and upon the Lessee failing to purchase or otherwise reacquir all the right, title and interest in PVNGS and contractual rights related thereto necessary for the operation of the interest (the Lessor's Interest)acquired by the Lessor pursuant to the Transaction Documents, the Lessor shall, and, subject to the rights of the Lessee under Sections 12 and 13(b)of the Facility Lease, at any time prior.to the Lease Termination Date the Lessor may, entertain cash bids.from each ANPP Participant for the Lessor's Interest.
(4)Survival.The provisions of Sections 8(c)(1), (2)and (3)shall remain in full force and efFect until such time as the ANPP Administrative Committee or the ANPP Participants shall otherwise consent, by amendment to the ANPP Participation Agreement or otherwise.
The Owner Trustee acknowledges that before taking possession of the Undivided Interest or any part thereof or of any other interest in PVNGS, either of the following may be required: (i)the issuance of an appropriate license from the NRC, whether by amendment to the License or otherwise, or (ii)a partial transfer of the License authorizing the Lessor to possess its interest in PVNGS, to the extent of the Undivided Interest, upon application for partial transfer of such License to such extent Bled pursuant to Applicable Law.(5)A+davit.The Owner Trustee will, upon the request of the Owner Participant, execute and cause to be Bled with the County Recorder, Maricopa County, Arizona, a duly completed aSdavit in substantially the form of Exhibit B.(6)Reimbursement for Certain Insurance Costs.The Owner Trustee will reimburse the Lessee, or shall cause the Lessee to be reimbursed, for the incremental costs incurred by the Lessee in obtaining the nuclear liability insurance required by Section 10(a)(2)(ii)of the Facility Lease to be maintained after the Lease Termination Date to the extent such costs are attributable to the marginal cost of providing such coverage for the Owner Trustee and the Owner Participant; provided, however, that the Owner Trustee's obligation for such reimbursement shall not include any" costs of such insurance attributable to coverage for the Lessee's continuing obligations set forth in Section 10(b)(3)(xi)or 13(a)or attributable to the Lease Term."'SECTION 9.Representations, Warranties and Agreements of FCNB.(a)Representations and Warranties.
FCNB represents and warrants that: (1)Due Organimtion.
FCNB is a national banking association clidy organized anti vali<lly existing in good standing under the laws of the United States of America and has the corporate power and authority and legal right to enter into and perform its obligations under the Indenture, this Participation Agreement and each other Transaction Document to which it is a party.C (2)Due Authorization; Enforceabilitg; etc, This Participation Agreement a<<d each other Transaction Document to which FCNB is a party have been or will be duly authorized by all necessary corporate action on the part of FCNB and each has been duly executed and delivered by FCNB.(3)Authentication of Each Note.The individual who shall on behalf of FCNB a'uthenticate each Note to be issued pursuant to the Indenture shall be, at the time of such authentication, an Authorized OfHcer.(4)No Violation.
Neither the execution and delivery by FCNB of this Participatio>>
Agreement or the Indenture, nor the authentication on its behalf of<<ny Note.nor the co<<s<<mma-tion by it of the transactions contemplatetl hereby or thereby.>>or the co~<<plia<<cc by it ivith the provisions hereof or thereof.will contravene any Applicable Law gover<<i>>g its ba<<ki<<g or ti<<st powers, or contravene or result in a breach of, or constitute a defa<<k<<<<der.its Articles of Incorporation or By-Laws, or require any Governmental Action under any Federal or Texas law, except such as have been, or on or before the Closing Date will have been, duly obtained, given or accomplished; provided, however, that no representation or warranty is made as to any Api" icable Law or Governmental Action relating to the Securities Act, the Securities Exchange Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act, the Nuclear Waste Act.the Holding Company Act, the New Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona Public Utility Act, energy or nuclear matters, public utilities, the environment, health and safety or Unit 2.
(b)Agreements.
FCNB agrees that: (1)Agreement to Discharge Liens.FCNB will not create or permit to exist, and will prom take such action as may be necessary duly to discharge, all Indenture Trustee's Liens.(2)No Petition Agreement.
Prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture, the Indenture Trustee agrees that it will not file a petition, or join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition of or in respect of the Loan Participant under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia.(3)Quiet Enjoyment.
The Indenture Trustee acknowledges Section 6(a)'of the Facility Lease.SECTION 10.Representations, Warranties and Agreements of the Lessee.(a)Representations and Warranties.
The Lessee represents and warrants that, as of the date of execution and delivery hereof and as of the Closing Date (1)Due Organ~tion.
The Lessee is a corporation duly organized and validly existing in good standing under the laws of the State of Texas and has the corporate power and authority to carry on its business as presently conducted, to own or hold under lease its properties and to enter into and perform its obligations under this Participation Agreement and each other Transaction Document and Financing Document to which it is a party.The Lessee is duly qualified and iii good stan'ding to do business as a foreign corporation in the States of iVew Mexico and Ariz'o>>;i and has not failed to qualify to do business or to be in good standing in any other jurisdictio>>
where failure so to qualify or be in good standing would materially and adversely aH'ect t financial.
condition of the Lessee or its ability to perform any obligations under this Participa Agreement, any other Transaction Document or any Financing Document to which it is a pa (2)Due Autho~tion.
The execution, delivery and performance by the Lessee of this Participation Agreement and each oper Transaction Document and Financing Document to which it is a party have been duly authorized by all necessary corporate action on the part of the Lessee and do not, and will not, require the consent or approval of the stockholders of the Lessee or any trustee or holder of any indebtedness or other obligation of the Lessee, other than (i)the Mortgage Releases, (ii)the finding of the ANPP Administrative Committee described in Section.15.6.2 of the ANPP Participation Agreement and (iii)such other co>>sents and approvals as have been duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant.
(3)Execution, This Participation Agreement has been.and each other Transactioii Doc>>-ment and Financing Document to which the Lessee is a party and which is to be executed oii or prior to the Closing Date have been duly executed and delivered by the Lessee.:i>>d c:ich Transaction Document to be executed a>>d delivereil subseq>>eiit to t)ic Closiii~D;itc i<<ill l><<iliily executed and delivered by the Lessee.a>>d this Participatio>>
Agreei>>e>>t co>>stitutes.:iiiil c:i<<li such Transaction Document and Financing Document constitutes, or will co>>stitute upon the diie execution'thereof, the legal, valid and binding'agreement of the Lessee, enforceable against it in accordance with its terms.(4)iVo Violation, etc.Neither the execution, delivery or performance by the Lessee of this , Participation Agreement or any other Transaction Document or Financing Document to which it is a party, nor the consummation by the Lessee of the transactions contemplated hereby or thereby, nor compliance by the Lessee with the provisions hereof or thereof, conflicts or will conflict with, or results or will result in a breach or contravention of any of the provisions of~Restated Articles of Incorporation or By-Laws of the Lessee or any subsidiary of the Lessee o~the best of its knowledge, any other Alllliate of the Lessee, or any Applicable Law applicable to ii, or any indenture, mortgage, lease or any other agreement or instrument to which the Lessee or any subsidiary of the Lessee or, to the best of its knowledge, any other ASliate of the Lessee, is a party or by which the property of the Lessee or any such subsidiary or, to the best of its knowledge, any other AIBliate of the Lessee, is bound, or results or will result in the creation or imposition of any Lien (other than Permitted Liens)upon any property of the Lessee, any such subsidiary or, to the best of its knowledge, any other Afhliate of the Lessee.There is no provision of the Restated Articles of Incorporation or By-Laws of the Lessee, or any Applicable Law applicable to it, or any such indenture, mortgage, lease or other agreement or instrument which materially adversely afFects, or in the future is likely (so far as the Lessee can now foresee)to materially adversely afFect;the business, operations, afFairs, condition, properties or assets of the Lessee, or its ability to perform its obligations under this Participation Agreement or any other Transaction Document or Financing Documerit to which it is a party.(5)Governmental Actions.No Governmental Action under any Federal, Texas, New Mex-ico, Arizona or New York law is or will be required in connection with the execution, delivery or performance by the Lessee of, or the consummation by the Lessee of the transactions contem-plated by, this Participation Agreement or any other Transaction.Document or Financing Document to which it is a party, except such Governmental Actions (i)as have been.or on or before the Closing Date will have been, duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant and the Loan Participant, (ii)as may be required under existing Federal, Texas, New Mexico, Arizona or New York law to be obtained, given or accomplished from time to time after the Closing Date in connection with the maintenance, use.possession or operation of Unit 2 or otherwise with respect to Unit 2 and the Lessee's or the Operating Agent's involvement therewith and which are, for PVNCS, routine in nature anti whi<<h the Lessee has no reason to believe will not be timely obtainetl and (iii)as may be require<1 un<ler 1 Applicable Law not now in effect.No Governmental Action by any Federal.Texas.New Mexico.Arizona or New York Governmental Authority relating to the Securities Act.the Securiti<<s Exchange Act, the Trust Inde'nture Act, the Federal Power Act, the Atomic Energy Act.the Nuclear Waste Act, the Holding Company Act, the New Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona Public Utility Act, energy or nuclear matters, public utilities, the environment, health and safety or Unit 2 is or will be'required: (a)by virtue of the participation by the Owner Trustee, the Indenture Trustee, the Owner Participant, or the Loa>>Participant in the consummation of the transactions contemplated by this Participation Agree-ment, any other Transaction Document or any Financing Document or (b)to be obtained with.respect to Unit 2 by any of such Persons during the Lease Term.except such Governine>>tal Actions (i)as have been, or on or before the Closing Date will have been.duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant and the J.oan Participant, (ii)as may be required by Applicable Law not now in efFect, (iii)as may be required in consequence of any transfer of ownership of any Note or Bond by the Holder thereof.the beneficial interest in the Trust by the Owner Participant, or the Undivided Interest or the Real Property Interest by the Owner Trustee.(iv)as may be require(l in consequence of the issuanc<<.sale or exchange and delivery of Bonds (other than the Initial Seri<<s Bonds).(v)as wo<<l<l b<<required by Applicable Law existing on the Lease Terniination Dat<<in connection with taking possession of an interest in Unit 2, (vi)as may be required by existing Applicable Law if.;ifter the Lease Termination Date, the Lessee should provide transmission services for the Owner.Trustee or cease to be agent for the Owner Trustee as provided under the Assignment and Assumption, or (vii)as may be required in consequence of any exercise i.remedies or other rights by any such Person in connection with taking possession of an interest in Unit 2.Nothing in the License or the License Amendment or any other Governmental Action with respect to the NRC will materially interfere with the ability of the Owner Trustee to transfer or convey the Undivided Interest and the Real Property Interest to a person, partnership, corporation or governmental corporation or agency engaged in the generation, transmission or distribution of energy who will be in a position to enjoy all the benefits of, have all the rights of, and be an ANPP Participant, so long as such person, partnership, corporation or governmental corporation or agency complies with~licensing requirements of the iVRC and obtains, or becomes a transferee of.a license from~NRC.(G)Securities Act.Neither the Lessee nor anyone acting on its behalf has directly or indirectly ofFered or sold any Bond.any interest in any Note.any note issued with respect to;i>>y other undivided interest in Unit 2, th'e Undivided Interest or any other undivided interest i>>U>>it 2.the Facility Lease or any other lease of an undivided interest i>>Unit>.or any si>>iilar security or lease.or a>>y interest in any security or lease the olferi>>g of which.f'r purposes of'lie Scciiriti<>s Act.would be deemed to be part of the same ofFering as the ofFering of the aforeme>>tio>><<<1 securities or leases.or solicited any offer to acquire any oF the aforementio>>ed seciirities or leases.in violation of Section 8 of the Seciirities Act.and.except as co>>ten)pl;lted by this P;irticip<<ti<iii Agreement.
neither the Lessee nor a>>y one authorized to act on its'beh<<lf w'ill take<<>>y;ictioii wliich woiild siibject the issiiaiice or sale of;my Note or any i>>ter<<st iii tlie F;i<<ility L<<ils<<<>>:<<Iy otlier debt i>>str<<>>ie>>t (other than the Bo>>ds)issued or to be iss<<e(l to Ai>>;i>>ce tli<<U>>(livi<l<<<l Interest to the registration requirements of such Section 5.(7)Title to tile Un(lit;i<le<t Interest(Real Property Interest(.'>ecnrit>y Interest.0>>tli<<CI(>sill<
Date, (i)good and marketable title to the Undivided Interest will be (luly.validly<<>>d effectiv<<ly conveyed and transferred to the Owner Trustee, free and clear of all Lie<Is.except (A)Peri>>ittc(l Liens described in clauses (i).(vi).(ix), (x)and (xi)of'he definition of'siicli tcn>>.(B)tli<<matters set forth in the exceptions to the'title report delivered ptirs<<<<lit to Section 11(;i)(10)(which.in the case of<<ccnie(l taxes shall iiot excec(l I'>En%of SI.750.000);t>>(l (C)P<1<<iitt<<I Liciis (lcscribe(l iti cl;>>isc (v)of tile (lcA)iitio>>
of sii<<li t<<n>><<g r<<',tti>>t.
iiot>>i<)r<<tli:i>>I'.<>>.",i I>f'>.000.000.(ii)goo(l;<<i(l
>>I;irkct;iblc title to tlic Real Property 1>>t<<r<<st will l)<<(liily.
v;ili<lly;li><1 eff'ectivcly coiiveye(l
<<ii(l traiisf'<.rrc(l to tile Ow>>cr Tr<<stc<<.;ts provi(l<<(l i>>tli<<D<<<(I:iii<1 I Assig>>>>ieiit of'e>>eAci;il I>>tcrest.(iii)Kl Paso will li;iv<<goo<1;iiul
>>i;irk<<t;ilil<<
titl<<t<>.,ow>>clslilp l>>tcrcst I>>thc Rctlll>>cd Assets, fl<.'c i<<ld clcill'f till LIL'Iis<<xc<.'pt P<<1'>>litt<<<I Li<<>>>>.t)I Lien of the Existing Mortgages and matters disclosed in the title report referred to in Scctio>>11(a)(19).(iv)the Lessee will have good and valid title to its ownership i>>terest in the PVNGS Site.(v)Unit will be wholly located on the PVIVGS Site witlioiit:>>iy>>i;it<<ri<<l
<<li<<ro;1<<l>>>><<>>ts I>L;tt)y portion tliereof o>>;<<iy otlier property, (vi);tll fili))gs;t<<<l r<<<<<>r(fi>>t',s ti<<<<<<ss;lry
<O';I<liis;Il>IL ti>perfect the Ow>>er Trustee's right, title and i>>terest i>>a>>d to tlie Uii(livi(lc(l I>>terest:iii(l'th<<R<<:il Property'nterest, and to perfect for the benefit of the Indenture Trustee a>>d the Holder of the Notes thc Arst priority scctlrltv lntcfcs't.
>>)ortglgc;1>>d;lsslg>>I)le>>t of ro<<ts provl(IL'<I tor I<<tllL'1>>de>>ture.
will have been (hily made a>>d (vii))io other iictioil.incl<<(liiig;il)y;ictioi) iili<l<<r:<<iy fraud<<le>>t coilveyance statute, will be required to protect the right.title;t>>(l iiitcr<<st of tht.Owner Tr<<stee in<<>>d to the U>>divided Interest a>>(l tlie Real Property Iiit<<r<<st.
i>><<;i<<li<<;is<<;igai>>st the cl;linis of;ill Persoiis (other tha>>tlie'Perniittc(l Licii (les<<rib<<<1 iii cl<<iis<<(xi)
(>1'li<<(lefi>>itio>>
thereof).or to perfect such first priority seciirity il)terest.
>>)ortg;tt:<<;t<<(l;tssif
<<<<l<<lit<>I''<.'tits I>>filvor of thL'>>(l<.'>>t<<rL'r<<stet.'>>1(lt.'I;ul(l p<<rs<<lt>>t t<>tll<')I<1<
iit<<r<.(l>)Son-Interferen<<e.
No>><<of'tile P<<n>>itt<<<l Li<<>>s<l<<s<<ril><<<l i>><<I;<<is<>>Iii).<iii>.lit>.1)i (vii).'(viii);itl(l (xii)of'tile (lcfi>>itio>>
of sitcli tcn>>will.oli;iii<1<<t't<<r tli<<Closiiig D;it<<.>>i:it<ii;Illi interfere with the use or possession oF the Undivided Interest or the Re;il Property 1>>t<<r<<st I>r tli<<use of'or the exercise by the Owner Trustee of its rights u>>der the P<<rcli;ise Doc<<i>>L>>ts;i>><l tli<<Assignment and Assumption with respect to t".interests in PVNGS gra>>ted.or to bc r:i>>t<<<l<<nder:he Purchase Documents and the Assignment and Assumption.
Nothing iii the AIVPP Participation Agreement or in any AiVPP Project Agreement will>>1<<terially i>>terfcre witli tile ability of the Ow>>er Tr<<stee.subject to Applicable Law.to tr<<llsfer or coiiycy tile Uii(livi(l<<(l 1>>tercst a>>d the Real Property Interest to<<persol), part>>ership.
corporatioii or gover<<>>)c>>
corporation or;lgency engaged in the generatio>>.
transmissio>>
or distrib<<tioii of e>>ergy.who l)c iii;i positio>>to e>>joy;ill the beneAts of;h<<ve<<ll the rights of'.<<iid be<<ii AIVPP P;lrticip;i>>
(9)Personal Property.Unit 2, based on the agreements of El Paso and the other ANPP Participants in the ANPP Participation Agreement and of the Lessee and the Owner Trustee her'ein and in the other Transaction Documents, is to the full extent permitted by Applicable Law, personal property.(10)Location of Chief Executive Once.The chief executive office and place of business of the Lessee and the office where it keeps its records concerning its accounts or contract rights is located at 303 North Oregon Street, El Paso, Texas 79901.(11)Financial Statements.
The consolidated balance sheets of the Lessee and subsidiary (A)as of December 31, 1985 and 1984, respectively, and the related consolidated statements of income, retained.earnings and sources of funds invested in utility plant and other plant for each of the years in the three-year period ended December 31, 1985, together with the notes accompany-ing such financial statements, all certified by Peat, Marwick, Mitchell R Co., and (B)as of September 30, 1986 and 1985, respectively, and the related consolidated statements of inco>>ie.retained earnings and sources of funds invested in utility plant and other plant for the nine-mo>>th periods ended September 30, 1986 and September 30, 1985, respectively, together with the notes accompanying such financial statements, all certified by the Chief Financial Officer.the Co>>trol-ler or an Assistant Controller of the Lessee, as furnished to the Owner Participant, fairly present the financial position of El Paso and its subsidiary taken as a whole at each such date and the results of their operations for each of the periods then ended, in conformity with generally accepted accounting principles applied on a consistent basis, subject in the case of the consoli-dated balance sheets and the related consolidated statements described in clause (B)above.to the condensation of certain financial information and the omission oF certain Footnote disclos>>res as permitted by the rules and regulations oF the SEC ancl to year-e>>cl auclit<<djusti>>e>>ts.
The Lessee knows of no such adjustments which would, if made on the date hereoF, be material.(12)Disclosure.
Neither any of the financial statements to which reference is macle i>>paragraph 11 above, nor the reports to which reference is..made in this paragraph 12,>>or a>>y , certificate, written statement or other document prepared by or for, or at the direction of, the Lessee and furnished to the Owner Participant in connection with the transactions contemplated I hereby (under the circumstances at the time and for the purposes for which any statement macle therein was made)contains any untrue statement of a material Fact or omits to state a material Feet necessary to make the statements therein not misleading.
There is no fact known to the Lessee that materially and adversely afFects or, so far as the Lessee can now reasonably foresee, is likely to materially and adversely afFect, the business or financial condition of the Lessee or any material portion of the properties of the Lessee or the ability of the Lessee to perform its obligations under this Participation Agreement or any other Transaction Docume'nt or Financing Document to which the Lessee is a party, except as disclosed in the Lessee's Annual Report on Form 10-K for the year ended December 31,"1985, as amended by Amendment No.1 on Form 8 dated April 2.1986, the Lessee's Quarterly Reports on Form 10-Q for the quarters ended March 31.1986.J<<>>e 30.1986 and September 30.1986 and the Lessee's Current Reports o>>For>>i 8-K clat<<el J>>>><<16.1986.July~~.1986, August 29, 1986.September 11.1986 ancl October I.19b6.copi<<s.of ivliich I>>lvc been provided to the Owner Participant.
(13)Litigation.
There is no action, suit, investigation or proceeding pending or, to the knowledge of the Lessee, threatened against the Lessee before any court, arbitrator or admi>>istra-tive or governmental body which questions the v..lidity or enforceability of this Participation Agreement or any othe+Transaction Document or Financing Document to which the Lessee is a party, and, except as disclosed in the reports to which reference is made in paragraph 12, there is no action, suit, investigation or proceeding pending or, to the best knowledge of the Lessee.threatened against the Lessee before any court, arbitrator, or administrative or governmental body which, individually or in the aggregate, if decided adversely.to the interests of the Lessee.would have a material adverse eEect on the business or financial condition of the Lessee or materially and adversely afFect the ability of the Lessee to perform its obligations under this Participation Agreement or any other Transaction Document or Financing Document.(14)Tax Returns.The Lessee has filed all Federal, state, local and foreign, if any, tax retu which were required to be Bled, and has paid all Taxes shown to be due and payable on such returns and has paid all other Taxes in respect of the Lessee's interest in Unit 2 and in the real property described in the Real Property Interest which are payable by the Lessee to the extent the same have become due and payable and before they have become delinquent, except for (i)any Taxes the amount, applicability or validity of which may be in dispute and which are currently being contested in good faith by appropriate proceedings and with respect to which the Lessee has set aside on its books reserves (segregated to the extent required by generally accepted accounting principles) deemed by it to be adequate and (ii)any Taxes relating to PVNGS in respect of which the Operating Agent has not given notice to the Lessee that the same are due and payable.The Federal income tax returns of the Lessee have been audited by the IRS t'or taxable years through 1973.(15)ZRISA.-In reliance upon, and subject to the accuracy of the representations made by the Loan Participant in Section 6(a)(6)and the Owner Participant.
in Section 7(a)(9).the execution and delivery of this Participation Agreement and the other Transaction Documents a>>tl Financing Documents to which the Lessee is a party will not involve any prohibited transaction within the meaning of ERISA or section 4975 of the Code.(16)Regulation.
So long as the Facility Lease is in effect, assuming the proper filing of Form U-7D with the SEC on or within 30 days after the Closing Date, under Applicable Law now in effect, neither the Loan Participant.
the Owner Participant, FNB nor the Owner Trustee will b~or become, solely by reason of either its entering into this Participation Agreement or any other Transaction Document or Financing Document to which any of them is a party, or transactions contemplated hereby or thereby, subject to regulation (i)as an electric utili public utility or a holding company of a public utility or an electric utility by any Fetleral.stat local public utility commission or other regulatory body, authority or group (including, without limitation, the SEC, the FERC, the NMPSC, the Arizona Corporation Commission or Texas Public Utility Commission')
or (ii)in any manner by the NRC.The Lessee is not'subject to regulation by the Arizona Corporation Commission as a public utility or a public service corporation.
(17)Authorizations, etc.The Lessee has not failed to obtain any Governmental Action or other authorization, license, approval, permit, consent, right or interest where a failure to obtain such would materially and adversely affect the ability of the Lessee to carry on its business as presently conducted.
(18)No Default, etc.The Lessee is not in default, and no condition exists that, with the giving of notice or lapse of time or both, would constitute a default by the Lessee, untler either Existing Mortgage or any other material mortgage, deed of trust.indenture, lease, contract or'ther instrument or agreement to which the Lessee is a party or by which it or<<ny of its properties or assets may be boun<i.(19)Certain Documents.
True and correct copies of the AiVPP Participation Agree>>ient.
the Material Project Agreements and the Existing Mortgages have'een delivered to Cravath, Swaine R Moore.No ANPP Project Agreement will, on and after the Closing Date, materially anti adversely interfere with (i)except, in the case of the Generation Entitlement Share only, for the ANPP 1articipation Agreement, the title nf the Owner Trustee to the Undivided Interest or the Real Property Interest or (ii)except for th'e ANPP Participation Agreement, the use of, or the exercise by the Owner Trustee of its rights under the Facility Lease.the Purchase Documents and the Assignment and Assumption with respect to.the Undivided Interest and the interests in the PVNGS Site (including the Real Property Interest)granted or to be granted under the Pure Documents and the Assignment and Assumption.
No payment default or other default material nature by the Lessee has occurred and is continuing under either Existing Mortgage or any ANPP Project Agreement.
Each of the ANPP Participation Agreement and the other ANPP Project Agreements is in full force and effect, and no breach of any thereof, to the Lessee's knowledge, by any other party thereto has occurred and is continuing, except where the failure to be in force and effect or such breach would not have a material and adverse effect on the Undivided Interest, the Real Property Interest, Unit 2 or the rights, interests and benefits of the Owner Trustee or the Owner Participant under any Transaction Document.Upon execution and delivery of the ivlortgage Releases and the recordation thereof or of UCC-3 releases in respect thereof, (i)the respective mortgagees and secured parties thereunder will have released the lien of the Existing iVlortgages on the Undivided Interest and the Real Property Interest and (ii)the rights of the Owner Trustee in the Undivided Interest and'the Real Property Interests will not be.and will not become, subject or subordinate to the rights of any Person, except the Indenture Trustee under the Indenture and the ANPP Participants under, and to the extent expressly set forth in, the.ANPP Participation Agreement (as in effect on the Closing Date), and except as may otherwise expressly be permitted by the Facility Lease.The lien of the Existing Mortgages does not extend to rights of the Lessee under any Transaction Document (other than the Lessee's leasehold interest under the Facility Lease), or to the Generation Entitlement Share included in the Undivided Interest.(20)Unit 2.The description of Unit 2 set forth in Exhibit B to the Bill of Sale, as deliveretl on the Closing Date, will be correct and sufFrciently complete to identify such property.(21)Irrvestment Company Act, Etc.The Lessee is not (a)an"investment company," or a company"controlled" by an"investment company," within the meaning of the Investment Compan'y Act or (b)a"holding company" or a"subsidiary company" or an afirliate of;r"holdi>>g company," within the meaning of the Holding Company Act.~~i (b)Agreements.
(1)Delivery of Documents.
The Lessee shall deliver to the Owner Participant air<1 the L'oar>Participant (and, in the case of Sections 10(b)(1)(iii)and 10(b)(1)(iv), the Owner Trustee)(i)FINANGIhL SThTEMENTs: (A)as soon as practicable, and in a'y event within 120'ays, after'the end of each fiscal year of the Lessee, a consolidated balance sheet of the Lessee as of the end of such fiscal year and related consolidated statements of income.retained earnings and sources of funds invested in utility plant and other plant for such year.r Iall in reasonable detail and certified in an opinion by a nationally recognized firm of independent public accountants, and the annual and interim reports of the Lessee to its stockholders as soon as the same have been mailed to such stockholtlers.(B)as soorr as practicable, and in any event within 60 days, after the end of each fiscal quarter (other than the last fiscal quarter)of each fiscal year of the Lessee, a consolidated balance sheet of the Lessee as of the end of said period and a,related consolidated statement of income.retairred earnings and sources of funds invested in utility plant and other pl;mt for said period.<<Il i>>reasonable detail.and certified by the Chief Financial OfRcer.the Co>>troller or;ur Assistant Controller of the Lessee and (C)as soon as practicable after the s;r>>re lr:rve l>ee>>fil<<r I.a<<i>py of all documents filed by the Lessee with the SEC pursuant to the reporting reqiiir<<r>>ellts ot'the Securities Exchange Act;I w (ii)OTHER REPORTS: promptly upon their becoming available, any registration state-ment, ofFering statement, investment memorandum or prospectus prepared by the Lessee in connection with the public offering of securities (oiner than public offerings of securities under employee benefit plans, customer stock purchase plans or dividend reinvestment plans);(iii)NQTIGE QF DEFAULT: promptly upon the Lessee becoming aware of the existence thereof, written notice specifying any condition which constitutes a Default or an Event of\
Default or a default by any ANPP Participant under the ANPP Participation Agreement, and, in each case, the nature and status thereof;(iv)ANNum CEETtFLChTE:
within 120 days after the end of each Bscal year of t.Lessee, a certificate of the Lessee, signed by the Chief Financial OfBcer, the Controller or an Assistant Controller of the Lessee, to the efFect that such ofBcer has reviewed,.or caused to be reviewed by individuals under his supervision, this Participation Agreement and each other Transaction Document and each Financing Document to which the Lessee is a party, and has made, or caused to be made under his supervision, a review of the transactions contemplated hereby and thereby and the condition of the Lessee during such preceding Bscal year, and such review has not disclosed the existence during such fiscal period, nor does such officer have knowledge of the existence as of the date of such certificate.
of any condition or event that constitutes a Default or Event of Default or, if any such condition or event exists.specifying the nature and period of existence thereof and any action the Lessee has taken, is taking, or proposes to take'with respect thereto;(v)OPINION OF COUNsEL: within 120 days after the end of each fiscal year of the Lessee, an opinion or opinions, satisfactory to the Owner Participant, the Owner Trustee.the Collateral Trust Trustee and the Indenture Trustee, of Kemp, Smith, Duncan R Hammond.counsel for the Lessee, Snell R Wilmer, special Arizona counsel for the Lessee, and/or other counsel acceptable to the Owner Participant (A)either to the effect that (1)all filings and recordations (or refilings and rerecordations) required to (i)convey to the Owner Trustee, and preserve the title of the Owner Trustee to, the Undivided Interest and the Real Property Interest, and (ii)so long as any Note is Outstanding, grant.perfect.and preserve the sec<<rity interest of the Indenture Trustee in'the Lease Indenture Estate.have been duly macle.or (')no such additional flings, recordings, refilings or rerecordings are necessary to (i)convey to the Owner Trustee, and preserve the title of the Owner Trustee to.the Undivided Inte and the Real Property Interest, and (ii)so long as any Note is Outstanding, grant.perfect preserve the security interest of the Indenture Trustee in the Lease Indenture Estate and (specifying the particulars of all action required during the period from the date of such opinion through the last day of the next succeeding calendar year, including, in the case of each UCC continuation statement required to be filed during such period.the oiBce in which each such continuation statement is to be Bled and the filing date and filing number of the original Bnancing statement or Bxture fling to be continued, and the dates within which such continuation statement may be Bled under Applicable Law;such opinion shall address such additional matters relating to actions to be taken by the Lessee pursuant to Section l0(b)(2)as the Owner Participant or the Loan Participant may reasonably request: (vi)ANPP INFORMhTIQN:
upon receipt by the Lessee, unless prohibited by Applicable Law and subject to applicable confidentiality undertakings.
with respect thereto.copies of (A)minutes of all committee meetings of the ANPP Administrative Committee.
the ANPP Engineering and Operating Committee, the ANPP Auditing Committee and any other committee composed of the ANPP Participants.(B)<<II a<<<<<<al capital b<<(loots.<<r>>i<<:il operation and maintenance budgets and mb<<thly statistical reports o<<the operatio>>oi'VNGS and (C)all notices to or from the NRC with respect to violations or other<<l<<terial occurrences with respect to PVNGS.(vii)REQUESTED INFORMhTlON:
with reasonable promptness, unless prohibited by Appli-cable Law, such other data and.information as to the business and properties of the Lessee or as to Unit 2, PVNGS or the PVNGS Site as from time to time may be reasonably requested by the Owner Participant, subject, however, to applicable confidentiality undertakings with respect thereto.(2)Further Assurances, The Lessee shall cause to be promptly and duly taken, exec acknowledged and delivered all such further acts, documents and assurances as the Oi-is-Participant may from time to time reasonably request in order to carry out more efFectively the intents and purposes of this Participation Agreement, the other Transaction Documents and the Financing Documents, and the transactions contemplated hereby and thereby.The Lessee shall.cause the Bnancing statements (and continuation statements with respect thereto)and the documents enumerated and described in Schedule 3, and all other documents necessary or advisable in that connection, to be recorded or Bled at such places and times, and in such manner, and will take all such other actions or cause such actions to be taken, as may be necessary or reasonably requested by the Owner Participant, the Collateral Trust Trustee, the Owner Trustee or the Indenture Trustee, in order to establish, preserve, protect and perfect the title of the Owner Trustee to the Undivided Interest and in order to protect the Owner Trustee's interest in the PVNGS Site granted by the Real Property Interest, and the Owner Trustee's rights and interests under this Participation Agreement and the other Transaction Documents and, so long as any Note is.Outstanding, the Brst and prior security interest of the Indenture Trustee in the Lease Indenture Estate.(3)Covenants.(i)MhINTENhNcE QF CoRPQRhTE ExIsTENcE, ETc.The Lessee shall at all times maintain its existence as a corporation under the laws of the State of Texas, except as permitted by paragraph (ii)below (including any consent given by the Owner Participant pursuant to such pangnph (ii)), and qualify and remain qualified to do business in each jurisdiction where the conduct of its business or the ownership of its properties requires such qualification.
The Lessee will do or cause to be done all things necessary to preserve and keep in full force and efFect its rights (charter and statutory) and Franchises; prooirted.
hou:ecer, that the Lessee may discontinue
'any right or fnnchise if its board of directors shall deter>>~i>>e that shch discontinuance is necessary or desirable in'the conduct of its business and does>>ot materially and adversely afFect or diminish any right of the Owner Participant or the Loan Participant.(ii)MEROER, ShLE, Ei'c.: OwNER PhRTIGIPhNT.
Without the consent of the Ow>>er Participant, the Lessee shall not, and shall not permit any of its subsidiaries to, convey, transfer or lease to any Person any asset except for fair value.Without the consent of the Owner Participant, the lessee shall not, and shall not permit any of its subsidiaries to, (1)consolidate with any Person, (2)merge with or into any Person or (3)except for (i)payments, in accordance, with normal dividend policy of the Lessee, of cash dividends to~I holders of common stock~and preferred stock, (ii)exchanges of Bxed assets for other Bxed assets whose fair value is equal to or greater than the fair value of the fixed assets exchangetl or (iii)conveyances, transfers or leases of assets for cash where such cash is to be recorded I by the Lessee, convey, transfer, lease or dividend to any Person, in any single transactio>>
or series of related transactions, any asset or assets if the book value of such asset or assets exceeds 5%of its total assets is shown on the most recent consolidated balance sheet of the Lessee delivered to the Owner Participant pursuant to Section 10(b)(1')(i)(A):
unless immediately after giving effect to such transaction: (A)the Person who is the"Lessee" under the Facility Lease i>>u>>e<liately t'ollowiiiII such consolidation, merger, conveyance, transfer, lease or<livide>>tl (the Swicicin<<Lessee)shall be a corporation which (i)is organized under the laws of the United States of America, a state thereof or the District of Columbia, (ii)is a"public utility" under applicable law, (iii)is an ANPP Participant under the ANPP Participation Agreement with respect to Unit 2 (including the Undivided Interest), (iv)shall h ae assumed e;:ch covenant and condition of the Lessee under the ANPP Participation Agreement and each'ther ANPP Project Agreement and (v)holds a valid and subsisting license from the NRC to possess Unit 2 (including the Undivided Interest): (B)the Surviving Lessee, if other than the Lessee immediately prior to such transaction, shall execute and deliver to the Owner Participant an agreement.
in form and substance reasonably satisfactory to the Owner Participant, containing the assump-tion by the Surviving Lessee of each covenant and condition of this Participa Agreement, each other Transaction Document and each Financing Document to wl.the Lessee immediately prior to such transaction was a party immediately preceding suc i transaction;(C)no Default (other than failure to deliver documents and other information specified in Section 10(b)(1)(vi))and no Event of Default shall have occurred and be continuing, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared;(D)the Bonds (or, if the Bonds are not then rated, the preferred stock of the Surviving Lessee)after giving effect to such transaction, (1)shall be rated at least"investment grade" by Standard h Poor's Corporation and Moody's Investors Service, Inc.and (2)shall have an investment rating by Standard h Poor's Corporation and Moody's Investors Service, Inc.not less than one"smnllest notch" below the rating assigned to the Bonds (or, if the Bonds are not then rated, the preferred stock of the Surviving Lessee)immediately prior to such transaction (or,.if neither of such rating organizations shall rate the Bonds (or, if applicable, the preferred stock of the Surviving Lessee)at the tinie.by any nationally recognized rating organization in the United States of America);(E)the Surviving Lessee shall have a Net Worth equal to or greater than the iNet Worth of the Lessee immediately prior to such transactions and equal to or greater than$500,000,000;(F)the Surviving Lessee shall have delivered to the Owner Participant and tlie Indenture Trustee an OfBcers'ertificate and an opinion, reasonably satisFactory to the Owner Participant, of counsel to the Surviving Lessee.each stating that (I)si transaction complies with this subparagraph (ii)and (2)all coriditions precetleiit to consummation of such transaction have been satisfied and any Governmental Acti required in connection with such transaction has been obtained, given or accomplished: (G)the Surviving Lessee shall have delivered to the Owner Participant an opinion, reasonably satisfactory to the Owner Participant.
of independent counsel to the Surviv-ing Lessee stating that such transaction would not result in a loss of any of the tax benefits described in Section 13(c)(1);(H)such transaction is otherwise permitted by and in compliance with the ANPP Participation Agreement;(I)the Coverage Ratio of the Surviving Lessee shall be at least 1.6 to 1: anti (J)such transaction does not afFect the term or coverage of the Letter of Credit.if in efFect at the time, or, if such term or coverage is affected.the Surviving Lessee.if other than the Lessee immediat'ely prior to such transaction.
shall have provide<i to tlic Owiicr Participant a Letter of Credit, if required by Section 10(b)(3)(xvii).which>>>>cuts tlic requirements set forth in Section 10(b)(3)(xvii)and is in the sanie iinount as tlie Letter of Credit in e6'ect immediately prior to such transaction.
Upon the consummation of such transaction the Surviving Lessee, if other than the Lessee, shall succeed to, and be substituted fc e, and may exercise every right and power of, the Lessee immediately prior to such transaction under this Participation Agreement, each other Transaction Document and each Financing Document to which the Lessee immediately prior to such transaction was a party immediately prior to such transaction, with the same efFect as if the Surviving Lessee had been named herein and therein.(iii)MERGER, SALE, ETc.: BQNDHoLDERS.
The Lessee shall not enter into any transa constituting a consolidation, merger, conveyance, transfer, lease or dividend not permitte Section 10(b)(3)(ii), irrespective of any consent or waiver of the Owner.Participant, unless immediately after giving effect to such transaction, the Bonds (or, if the Bonds are not then rated, the preferred stock of the Surviving Lessee)shall be rated at least"investment grade" b'y Standard R Poor's Corporation and Moody's Investors Service, Inc.(iv)PRIoR NoTIGE To RATING AGENclEs.Prior to entering into any transaction as to which the conditions set forth in paragraphs (ii)and (iii)above shall be applicable.
the Lessee shall give notice thereof to the rating agencies specified in such paragraphs, such notice to be sufnciently in advance of such transaction to enable the rating agencies to respond thereto prior to consummation thereof.(v)INGURRENcE QF DEBT.Without the consent of the Owner Participant, the Lessee shall not, and shall not permit any of its subsidiaries (whether consolidated or unconsoli-dated)to, issue, assume or become liable in respect of (A)any Debt maturing more than one year after the date of such issuance, assumption or liability (including current maturities of Debt with an original maturity of more than one year)if, immediately thereafter, (i)the total amount of all Debt of the Lessee and its subsidiaries (whether consolidated or unconsoli-dated)maturing more than one year after the date of such issuance.assumption or becoming liable-(reduced by Cash Available, for Investment and excluding 8115,000,000 of such Debt until August 31, 1987)shall exceed 70%of Consolidated Capitalization, in each case as shown on a pro forma consolidated balance sheet on and as of the date of such issuance, assumption or becoming liable, or (ii)the Coverage Ratio of the Lessee would be less than 1.6 to 1, or (B)any Debt maturing one year or less after the date of such issuance, assumption or becoming liable (excluding current maturities of Debt with an original maturity'of more than one ycal)if, immediately thereafter, the total amount of all Debt of the Lessee and its s<<bsidiaries (whether consolidated or unconsolidated) maturing one year or less after the date of'<<ch issuance, assumption or becoming liable shall exceed 20%of Consolidated Capitalizatio>>.
i>>each case as shown on a pro forma consolidated balance sheet on and as of the ilate of's'<<ch issuance, assumption or becoming liable.For purposes of.the foregoing clause (A), there shall be excluded any Debt which has been legally defeased or for the payment of which funds have been segregated in escr''ow.(vi)CHANGE IN CHIEF ExEcUTIVE OFFIGE.The Lessee shall notify the Owner Triistee.the Owner Participant, the Loan Participant and the Indenture Trustee promptly after any ,change in the location of its chief executive ofBce and place oF business, principal place of ,business or place where the Lessee main/ains its business records.I (vii)NO PETITION AGREEMENT.
Prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture.
the Lessee shall not file a petition, or join in the filing of'a petition.seeking reorga>>izatio>>, arrangement, adjustment or composition of or in respect oF the Loan Participant'ii>>iler the Bankruptcy Code or any other applicable Federal or state law or the law of'he District of Columbia.(viii)ANPP PROJECT ACREExiENTS.
Except where the fail>>re to do so woidd>>ot li:ive a material and adverse effect on the Undivided Interest, the Real Property Interest.U>>it" or the rights, interests and benefits of the Owner Trustee or the Owner Participant under any Transaction Document, the Lessee at all times, unless the Owner Participant shall otherwise consent, shall (1)perform its obligations under, and comply w:ii the terms of, each AiVPP Project Agreement to be complied with by it, (2)exercise its rights under the AiVPP Participation Agreement to maintaig each ANPP Project Agreement in full force and effect, (3)keep unimpaired all of the Lessee's rights, powers and remedies under each ANPP Project Agreement and prevent any forfeiture or impairment thereof, (4)enforce the AiVPP Participation Agreement in accordance with its terms, (5)not take, fail to take or join in any action with respect to any AiVPP Project Agreement except as otherwise permitted by subclause (7), (6)not accept or approve any amendment or any other change to the ANPP Participation Agreement and (7)not accept or approve any amendment to any ANPP Pro'greement the effect of which would be to (A)reduce the Generation Entitlement Sh included in the Undivided Interest, (B)relieve the Lessee of any obligation under the ANPP Participation Agreement in respect of the Undivided Interest or the Real Property Interest on or after the Closing Date', (C)impose, directly or indirectly, on the Owner Trustee or the Owner Participant at any time any obligations, (D)discriminate against (x)the Owner Trustee or the Owner Participant in its capacity as lessor in a sale and leaseback transaction or (y)any present or future ANPP Participant because such ANPP Participant derived or will derive its status as"Participant" under the ANPP Participation Agreement from a lessor in a sale and leaseback transaction, or (E)deprive the Owner Trustee or the Owner Participant.
as the case may be, of the benefit of Sections 15.2.2, 15.10 and 32.1 of the ANPP Participation Agreement (or any comparable successor provisions).
The Lessee shall (X)provide copies of any proposed amendment to or modification of the ANPP Participation Agreement to the Owner Participant not less than 45 days prior to the execution thereof by the Lessee (except where the Lessee is unaware thereof 45 days prior to such execution, in.which case the Lessee shall provide notice thereof as promptly as possible after becoming so aware)and (Y)upon such execution furnish to the Owner Participant a copy of any such amendment or modification as executed.(ix)NQTEs AND BONDS.The Lessee will not, and will not permit any of its subsidiaries or any of its AIHliates over which it has control to, acquire any Notes or Bonds, except in strict compliance with the provisions of Section 1.04(b)of the Bond Supplemental Indenture, as in effect on the Closing Date.(x)CQQPERhYIQN.
The Lessee shall cooperate with the Owner Participant and the Owner Trustee in obtaining the valid and effective issue.or.as the case may be.transfc amendment of all Governmental Actions (including, without limitation, the License)ne'ary or, in the opinion of the Owner Participant, desirable for the ownership, operation<<nu possession of the Undivided Interest (including the related Generation Entitlement Share)or any portion of Unit 2 represented thereby, or the exercise by the Owner Trustee of the rights created by the Real Property Interest, by the Owner Trustee or any transferee.
lessee or assignee of the Owner Trustee for the period from and after the Lease Termination Date.The Lessee shall accept and cooperate in receiving the Special Transfer;(xi)DEcoMMIssIQNING.
The Lessee shall comply with and discharge all of its obligations under the ANPP Participation Agreement and Applicable Law with respect to Decomniission-ing, and will use its best efforts to ensure that Decommissioning is accomplished utilizing tlu: safest means available.
The Lessee shall (i)establish the Decommissioning Trust Fund and.if the Lessee elects, a second fund in order to meet the requirements of Section 468A of the Code (the Second Fund), (ii)grant'to the Owner Trustee a security interest in the Decommissioning Trust Fund and the Second F<<nd.if any.as security for the perforniancc by the Lessee of its obligations under this Section 10(b)(3)(xi).a<<d (iii)provide a<<y;<<l<liti<<<<:il funds required in respect of Decommissioning to the extent that the Deco<<<<<<issio<<i<<g Trust Fund and the Second Fund, if any, are inadequate for any reason.The Lessee agrees to pay.be solely responsible for, indemnify, and hold harmless each Indemnitee and any successor, assign or transferee (including by way of a lease)of any Indemnitee, from and against all Decommissic
'.ng Cost and all claims relating or allocable to, or incurred in connection with.Decommissioning notwithstanding (i)the occurrence of the Lease Termination Date.any Event of Default, Default, Event of Loss, Deemed Loss Event or any other event or occurrence, (ii)any provision of any Transaction Document.or other document.instrument or agreement, including the AiVPP Participation Agreement, (iii)any provision of the Lice or any other license or permit, or (iv)any Applicable Law, charter or by-law provi Governmental Action or other impediment (including, without limitation.
the bankruptcy insolvency of the Lessee), either now, or hereafter in efFect;it being understood that the obligations of the Lessee hereunder are and shall be absolute, unconditional and irrevocable and shall not be afFected by any circumstances of any character, including, without limitation, those of the type set:forth in Section 4 of the Facility Lease.Not later than July I, 1989, the Owner Participant and the Lessee shall cause a Person or Persons, selected by..the Lessee and reasonably acceptable to the Owner Participant (which may include any Person designated by the ANPP Participants to condiict a review of decommissioning costs related to PVNGS, provided such Person be reasonably acceptable to the Owner Participant), who shall be expert in the area of decommissioning of nuclear electric generating units, to establish a,best estimate of Decommissioning Cost and to establish the periodic payments to be deposited on the following October 1 or April 1, as the'ase may be, and every six months thereafter in the Decommissioning Trust Fund and the Second Fund, iF any, in order to make the aggregate amount in the Decommissioning Trust Fund and the Second Fund, if any, at October 1, 2013, equal to Decommissioning Cost.No-later.than one month before October 1 of each of the years 1994, 1999, 2004, 2019, 2011 and 2013, and not later than one month before October 1 of each odd-numbered year thereafter until Decommissioning'shall have been completed, the Owner Participant and the J.essee~shall cause such a Person or Persons to review and revise, if necessary, as of such October 1.such estimate and such amounts.The initial estimate and each such review shall take into consideration (i)the experience of the electric utility industry generally in the decommis-sioning of nuclear generating units, (ii)all Applicable Law and Governmental Action relating to the decommissioning of nuclear generating units, (iii)all technological or scientific developments in the decommissioning of nuclear generating units.(iv)earnings and pro.jected earnings during the Basic Lease Term on funds paid'into the Decommissioning Trust Fund and the Second Fund, if any, prior to such review, (v)the amount of periodic payments required to be made into the Decommissioning Trust Fund and the Second Fund.if any.during the Basic Lease Term subsequent to such October 1, (vi)the investments permitted under the Decommissioning Trust Agreement and (vii)any other facts or circumstances relating to the decommissioning of nuclear generating units which such Person or Persons shall deem relevant to such review;In conducting such revie~, such Person or Persons shall be permitted to employ, at the expense'of the Lessee, such additional consultants.
includi>>g, but not limited to;investment advisors and legal counsel, as it or they shall reasonably deem ,necessary for such review: In addition, if as a result of any Governmental Action dealing with decommissioning of nuclear generating units (including, but not limited to.the financing thereof or responsibility therefor), either the Owner Participant or the Lessee shall reasona-bly conclude that the Decommissioning Trust Fund and the Second Fund, if any, are inadequate or excessive for the purposes thereof, it may request a review of the Decor>>niis-sioning Trust Fund and the Second Fund, if any, pursuant to this Section 10(b)(3)(xi).The determination of such Person or Persons shall be conclusive and binding as betwee>>the parties hereto.In no event shall any periodic payment be less thari zero.The Lessee shall>>ot deposit any funds in respect of Decommissioning Cost in ariy fu>>d otlier thaii the Dcciii>>>>iis-sioning Trust Fund and the Second Fund, if any.All costs iiic>>rred p>>rs<<a>>t to this S<<ctioii 10(b)(3)(xi)shall be paid by the Lessee.The Lessee agrees to pay, and shall indemnify, defend and hold harmless each I>>der>>>>i-tee and any succ".ssor, assign or transferee (including by way of a lease)of any Indemnitee, on an After-Tax Basis, from and against any and all Taxes howsoever imposed with respect to the Decommissioning Trust Fund or the Second Fund, including, without limitation, the establishment, existence or funding of the Decommissioning Trust Fund or the Second Fund, if any, and the earnings on amounts paid into or retained by the Decommissioning Trust Fund or the Second Fund, if any (whether imposed on or with respect to such Indemnitee, successor, assign or transferee', the Decommissioning Trust Fund or the Second Fund.if any.the Decommissioning Trustee, the Lessee, or any Affiliate of any thereof).Any such indemnity payment shall be payable not later than 10 days after demand by the Indemnitee entitled thereto.As to any matter indemnified pursuant to the foregoing sentence involv'ederal income taxes, the contest provisions contained in Section 13(c)(9)shall ap mutatis mutandis, and as to other matters indemnified pursuant to the foregoing sentence, t contest provisions contained in Sec',tion 13(b)(4)shall apply, mutatis mutandis.In the event that (i)the Facility Lease shall have expired or been terminated (other than in connection with an Event of Loss, Deemed Loss Event or Event of Default), (ii)the Lessor shall (other than in connection with a termination pursuant to Section 14 of the Facility Lease)sell the Undivided'Interest and the Real Property Interest to any Person (including the Lessee in connection with the exercise by the Lessee of the purchase option provided by Section 13(b)of the Facility Lease)and (iii)the net sales proceeds (discounted back~semiannually to the Lease Termination Date at a rate per annum equal to the Prime Rate)received by the Lessor shall exceed 20%of Facility Cost, then the Lessor shall reimburse the"Lessee from any additional net proceeds of such sale in an amount equal to such net proceeds attributable to the decommissioning obligation of the Lessee under this Section 10(b)(3)(xi)with respect to the period from and after the date of such sale through the remaining useful life of Unit 2 (whereupon the reimbursement obligations of the Lessor under this paragraph shall terminate);
prouided, hoIoeuer, that any such reimbursement shall not reduce the amount of such net sales proceeds (discounted as aforesaid) retained by the Lessor to an amount equal to less than 20%of Facility Cost.The reimbursement obligations of the Lessor under the preceding paragraph are for the sole benefit of the Lessee, and no other Person shall be a third party beneficiary with respect~thereto.In the event that the Lessee and the Lessor shall not agree as to the amount of net sales proceeds attributable to the decommissioning obligation of the Lessee under this Section 10(b)(3)(xi), such amount shall be determined by the Appraisal Procedure.
The Owner Trustee and El Paso shall cause the Decommissioning Trust Agreement t executed as promptly as practicable after'the Closing Date.'The Decommissioning Trust Agreement shall be based upon the version thereof heretofore agreed to insofar as restric-tions on permissible investments are concerned.
The terms and conditions thereof shall provide that (a)the arrangements thereunder shall.to the extent consistent with this Section 10(b)(3)(xi), be structured to permit qualification under Section 468A of the Code and (b)to the maximum possible extent consistent with the Owner Trustee's being granted a security interest in the Decommissioning Trust Fund or the Second Fund of the Lessee.provide protection to the Owner Trustee and the Owner Participant against creditors of El Paso and against the bankruptcy or insolvency of El Paso.~(xii)COMMERGIhL OPERhTIoN OF UNIT 2.On or before September 30, 1987.Unit 2 will have achieved an electric output of not less than 95%of its nominal capacity of I.270 megawatts during a test period of at least 100 consecutive hours.(xiii)OTHER LEASES wtTH REsPEcr To PVNCS.The Lessee;agrees that it will dc.liver to the Owner Participant, promptly following execution and delivery thereof.all transaction documents (the New Lease Documents) pertaining to any true lease transaction tlmt the Lessee or any ASliate of the Lessee may enter into with respect to Unit 2.The parties hereto agree, upon the written request of the Owner Participant delivered within 60 days of receipt of such transaction documents, to enter'nto (within a reasonable
'.Ime is specified in such request)such amendments to the Facility Lease and the other Transaction Documents as are necessary or desirable to (a)include as Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life any or all (as the Owner Participant may select)comparable events, occurrences or circumstances under the New Lease Documents and (b)delete modify any or all (as the Owner Participant may select)Events of Loss;Deemed Loss Ev and provisions relating to Economic Useful Life in connection with the foregoing; it being intent and purpose of the foregoing to permit the Owner Participant to'ause.the Facility Lease and the other Transaction Documents to be amended, as it shall elect, to augment the specified Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life to include, mutatis mutandis, any or all comparable events, occurrences and circum-stances under the New Lease Documents; provided, hot@ever, that each such additional Event of Loss, Deemed-Loss Event and provision relating to Economic Useful Life shall include, mutatis mutandis, the same qualifications and incorporate, mutatis mutandis, the same definitions as shall be provided in the New Lease Documents and that in connection with the foregoing the Owner Participant shall be entitled to amalgamate any such additional Events of Loss, Deemed Loss Events and provisions relating to Economic Useful Life into the then present provisions of the Facility Lease and the other Transaction Documents so as to succinctly incorporate such additional events, occurrences and circumstances.
In connection with any proposed amendment under the foregoing provisions, neither the Lessor nor the Lessee shall be required to accept any change to the schedules of Casualty Values.Special Termination Values, Special Casualty Values and Termination Values attached to the Facility Lease.The Owner Participant agrees, without limiting its rights under Section 13(c), that it will not seek any amendment to the Facility Lease and the other Transaction Docume>>ts pursuant to this Section 10(b)(3)(xiii)unless the Owner Participant shall have determi>>ed.
based upon an opinion of its counsel and after consultation with the Lessee, that such amendment will not materially adversely affect its status as owner of the Undivided Interest for Federal income tax purposes.(xiv)Caavwrtv CHANGEs YO ANPP PARmcteAmox AcaazMEwT.
El Paso shall use its best efforts to grant a ground lease to the Lessor covering the PVNCS Site (which shall provide f'r rent of Sl per year until the expiration of the Lease Term and Fair!vfarket Rental Value thereafter), in which case the Lessor shall simultaneously sell back to the Lessee the realtycovered by the Deed and the Assignment of Beneficial Interest for a price equal to the Real Estate Investment.
The parties hereto will cooperate in efFecting the foregoing.
El Paso shall.within a reasonable time following the Closing Date, undertake to have Section 15.6.3.1 and Section 15.8 of the ANPP Participation Agreement amended to delete the requirement in such Section 15.6.3.1 and Section 15.8 that the rights and remedies of the parties to sale and leaseback transactions be subject and subordinate to the rights and remedies of the ANPP Participants.
El Paso's obligations under the preceding sentence shall be discharged if El Paso shall once introduce, for consideration by all the ANPP Participants, an amendment.
in form and substance reasonably satisfactory to the Owner Participant.
to the ANPP Participa'tion Agreement and vote affirmatively for such amendment'in connection with all deliberations concerning such amendment by the ANPP Participants and all committees of ANPP.If at any time, through the efForts of El Paso or otherwise, any of the restrictions on lessors co>>tained~in Sections 15.6.3, 15.8, 15.10 and 20.8 of the ANPP Participation Agreement are eliminated or reduced for or are made inapplicable to (through amendment, waiver or otherwise) any lessor acquiring an interest in all or any part of any Ce>>crating U>>it or Capit;tl Irnprovci>>e>>t (as such terms are defined in the ANPP Participation Agreeiiie>>t).
El Paso sh>>ll ca>>sv s>>ch restrictions to be comparably eliminated or red>>ced or made i>>;ipplicable to the Ow>>er Trustee.The parties hereto agree to enter into such amendments to this Participatio>>
Agreement and the other Transaction Documents and such other instruments and documents as shall be necessary or appropriate to efFect the foregoing.
If for any reason any of the restrictior.s on lessors contained in Section 15.6.3, 15.8 or 15.10 of the ANPP Participation Agreement are applicable on the Lease Termination Date or the Lessee shall not have granted to the Lessor a ground lease as contemplated above by the Lease Termination Date, and the effect of such restriction or restrictions is to reduce the amount received by the Lessor upon a disposition (by sale, lease or otherwise) from what would have been realized had such restriction or restrictions not been applicable or had such ground lease been in efFect.then the Lessee shall pay to the Lessor an amount equal to such reduction, payable within 10 days after determination of such amount.Such amount shall be determined promptly after the Lease Termination Date by agreement between the Ow Participant and the Lessee or, if they shall be unable to agree within 30 days after the Le Termination Date, by the Appraisal Procedure.(xv)AcQUISITfoN oF OTHER LEAsED INTEREsTs IN PVNGS.The Lessee shall not acquire.by purchase or lease, any interest in PVNGS from or through any ANPP Participant (including any interest at any time owned by any other ANPP Participant) from and afte'r the date which is five years prior to the date on which the Lessee is required to give its notice pursuant to Section 13(a)of the Facility Lease unless and until the Lessee shall have irrevocably given the notice pursuant to Section 13(a)of the Facility Lease of its election to exercise the purchase option permitted by Section 13(b)of the Facility Lease.(xvi)OTHER ACREEMENTs.
The Lessee shall not enter into or become bound by any agreement or arrangement which would proscribe its ability to assume the obligations and liabilities of the Owner Trustee in accordance with Section 3.9(b)of the Intlenture or to accept the Special Transfer.(xvii)LEITER oF CREDIT.The Lessee shall cause a commercial bank.trust company or United States branch or agency of a foreign bank satisfactory to the Owner Participa>>t (i>>its sole discretion) to issue in favor of the Owner Participant an irrevocable.
transferable sta>>tl-by letter or letters of credit (such letter or letters of credit and all letters of credit or other credit support instruments issued or executed from time to time being herein referred to as the Letter of Credit)which, from the date of delivery of the Letter of Credit until January 2.1992, shall (1)be in an amount equal to the excess of Special Termination Value over the principal amount of and accrued interest (from the Basic Rent Payment Date im>>Ie<liatcly preceding each date as oF which Special Terminatio>>
VahIe Is dcteri>>i>>c(l) 0>>the Notes Outstanding From time to time (except that if, as a result of the occurre>>ce of a>>evc>>t requiring an adjustment to rent pursuant to Section 3(d)or'3(e)of the Facility Lease Section 13, the amount available to be drawn under the Letter of Credit become>>es less tl such amount, the Lessee shall not be in default under this provision if, within':30 days of't i implementation of such adjustment pursuant to Section 3(f)of the Facility Lease, the Lessee replaces the Letter of Credit with a Letter of Credit complying with the terms and provisions of this Section 10(b)('3)(xvii))and (2)provide for reinstatement withi>>three Business Days from the date of any drawing thereunder in respect of.Supplenie>>tal Rent (other tha>>Casualty Value, Termination Value, Special Termination Value or Special Casualty Value)(except that the Lessee shall not be in default if such a reinstatement does not occur so long as the Lessee replaces the Letter of Credit within 30 days of the date of such a drawing with a Letter of Credit complying with the terms of this Section 10(b)(3)(xvii)).'he Letter of Credit shall in all other respects be in form and substance satisfactory to the Owner Participant, in its sole judgment.Any replacement Issuing Bank must be satisfactory to the Owner Participant, in its sole judgment.It is understood that the Owner Participant
<<>>d the Lessee may agree upon Letter of Credit amounts lower than those described<<bove.A>>y reimb>>rseme>>t agreement between the Lessee<<>>d the Iss>>i>>g Ba>>k relati>>g to a>>y Letter of Cretlit shall (i)require the Issuing B;mk to pay a>>y<Iraws o>>the Letter of Crctlit from general funds, (ii)not permit the Issuing Bank to exercise its right to set otf<<gai>>st a>>y amount owed as reimbursement to the Issuing Bank for draws on the Letter of Cretlit anti (iii)permit the Lessee to secure its obligations with the delivery of collateral to the Iss>>i>>g Bank.Any such reimbursement agreement shall in all other respects be in form and substance satisfactory to the Owner Participant, in its sole judgement.
The Lessee shall not amend any provision of any such reimbursement agreement with respect to any Letter oF Credit in a manner mate'rially adverse to the interests of the Owner Participant without the prior written consent of the Owner Participant.
If the obligations of the Lessee with respect to the Letter of Credit are secured significant extent by property of the Lessee, any fees payable to the Issuing Bank for origination and maintenance of the Letter of Credit shall be payable by the Lessee: proci<lec.
however, that in such event the Owner Participant shall pay to the Lessee during the term of the Letter of Credit an annual transaction fee (a Fee Obligation) in such amount as may be reasonably agreed by the Lessee and the Owner Participant but in no event to exceed an'mount equal to 2%of the"inaximum drawable amount as of the anniversary date of the issuance of the Letter of Credit (such transaction fee to be paid in quarterly installments).
In the event that the obligations of the Lessee with respect to the Letter of Credit are not secured to a significant extent by property of the Lessee, any fees payable to the Issuing Bank for the origination and maintenance of the Letter of Credit, up to a maximum of 2%annually of the maximum drawable amount thereunder (also a Fee Obligation) shall be payable by the Owner Participant.
Any amounts payable with respect to origination shall be amortized in equal amounts annually over the term of the Letter of Credit and shall be included in the annual computation of the 2%maximum responsibility of the Owner Participant for the Letter of Credit fees.If the annual aggregate cost of the maintenance of the Letter of Credit not secured to a significant extent by property of the Lessee exceeds 2%of the maximum drawable amount thereunder, the Lessee may, in its sole discretion, pay such excess;provided that if the Lessee does not pay such excess, the Owner Participant may cause the termination of the Letter of Credit, in which event the Lessee shall be deemed to be in breach of this Section 10(b)(3)(xvii).
The Lessee will deliver any certificates required to be delivered under the Letter of Credit as and when required.Within 15 days after any Issuing Bank shall have given not less than 30 days'otice of the termination of the Letter of Credit prior to its stated expiration date, the Lessee shall notify the Owner Participant of such fact and the Owner Participant shall have the opportunity to find a Person acceptable to it willing to issue a Letter of Credit for the account of the Lessee on substantially the same terms as the Letter of Credit then in efFect, including the amount of and responsibility for the annual fee payable under such replacement Letter of Credit.If the Owner Participant has not so found a Person within 25 days after any Issuing Bank shall have given not less than 30 days'otice of the termination of its Letter of Credit prior to its stated expiration date, or, when the Issuing Bank may terminate the Letter of Credit on less than 30 days'otice, at least five days prior to the termination of the Letter of Credit pursuant to such notice, the Lessee shall, unless an Event of Default shall have occurred and be continuing or an Event of Loss shall have occurred or Deemed Loss Event shall have been declared, have the right to purchase the Undivided Interest and the Real Property Interest at any time thereafter at least two business days before the expiration date'of the Letter of Credit for an amount equal to the excess of (i)the greater of (x)Fair Market Sales Value of the Undivid'ed Interest and the Real Property Interest and (y)the Special Termination Value over (ii)the unpaid principal amount of, and (if such Special Termination Value is equal to or greater than such Fair Market Sales Value)accrued interest since the last preceding Basic Rent Payment Date on, the Notes Outstanding on such purchase date after giving efFect to the payment, if any, of the principal installment due and payable and paid in respect of the Notes on such date.If the Lessee shall have made such payment and shall have assumed all 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 have made such payment but shall not have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture, the Owner Participant shall efFect the Special Transfer, in which case, without further act on the part of the Lessor or the Lessee, (i)the'bligation of the Lessee to pay further Basic Rent shall be reduced to an amount, payable on each Basic Rent Payment Date thereafter, 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.The Lessee's obligations under this Section 10(b)(3)(xvii) shall terminate on the fifth anniversary of the Closing Date, provided that, prior to such termination.
the Lessee shall.upon the request of, and at the sole expense of, the Owner Participant.
exercise'its reasonable efForts to secure a replacement Letter of Credit containing such terms as are mutually agreeable to the O~ner Participant and the Lessee.The foregoing provisions of this Section 10(b)(3)(xvii) are for the benefit only of t Owner Participant and the Lessee.Section 11.Conditions Precedent.(a)Oicner Participant and Loan Participant Conditions.
The obligation, of (x)the Loan Partici-pant to make the Loan on the Closing Date, and (y)the Owner Participant to make the Investment and the Real Estate Investment on the Closing Date, shall be subject to the fulfillment, on or prior to the Closing Date, of the following conditions precedent (each instrument, document, certificate, opinion, policy or writing referred to below to be in form and substance satisfactory to the Loan Participant and the Owner Participant):
(1)Notice of Closing;Transaction Documents.
Each shall have received executed copies, or sets of executed counterparts, of the Notice of Closing, each Transaction Document (other than the Letter of Credit and the Letter of Credit Agreement), each Financing Document and such other documents as are contemplated by this Participation Agreement.
(2)Authentication Request.The Owner Trustee shall have delivered to the Indenture Trustee a request, dated the Closing Date, authorizing the Indenture Trustee to authenticate and deliver to the Collateral Trust Trustee (pursuant to the Loan Participant's order herein con-tained)the Initial Series Notes upon the Loan Participant's payment of the proceeds of the Loan.(3)Original Counterpart of the Facility Lease.The Owner Trustee shall have delivered to the Indenture Trustee the counterpart of the Facility Lease marked"THIS COUNTERPART IS THE ORIGINAL COUNTERPART." (4)Due Authorization, Execution and Deliver.All of the documents described in clause (1)of this Section ll(a)shall have been duly authorized, executed and delivered by the respective parties thereto and shall be in full force and efFect on the Closing Date, and the Loan Participant and the Owner Participant shall have received evidence as to such authorization, execution and delivery.(5)Initial Series Note and Bond Transactions; Investment.
In the case of the Loan Part pant, (A)the Loan Participant shall have received the proceeds from the sale of the Initial Seri Bonds as a result of the consummation of the transactions contemplated by the Underwriting Agreement, (B)the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated anl delivered to the Loan Participant, the Initial Series iNotes evidencing the Loan made on the Closing Date, (C)the Collateral Trust Trustee shall have accepted the Bond Supplemental Indenture and shall have released the amount of the Loan from the lien of the Collateral Trust Indenture, and (D)the Owner Participant shall have made the Investment and the Real Estate Investment.
(6)Loan.In the case of the Owner Participant, the Loan Participant shall have made the Loan.(7)ANPP Administrative Committee.
The ANPP Administrative Committee shall have made the Bnding required by Section 15.6.2 of the ANPP Participation Agreement.
(8)No Violation.
The making by the Owner Participant of the Investment and the Real Estate Investment and by the Loan Participant of the Loan shall not violate any Applicable Law.(9)No Default.,No Default or Event of Default or, in the case of the Loan Participant, Indenture Default or Indenture Event of Default, shall have occurred and be continuing and no Event of Loss or Deemed Loss Event shall have occurred.(10)'Recording and Filing.The recordations and filings described in Schedule 3 shall have been duly made and all recording and fling fees with respect thereto shall have been paid.A certificate on Form U-7D with respect to the Facility Lease shall have been duly executed and delivered and shall be in due form for fling.(11)Representations and Warranties.
In the case of the Owner Participant, the representa-tions and warranties of the Loan Participant, the Owner Participant, FiNB and the Owner Trustee and the Indenture Trustee set forth in Sections 6(a), 7(a), 8(a)and 9(a), respectively, shall true and correct on and as of the Closing Date with the same efFect as though made on and as of the Closing Date, and the Loan Participant and the Owner Participant shall have received an 2~appropriate certiBcate, dated the Closing Date, to such efFect.(12)Representations and warranties of the Lessee.(A)The representations and warranties of the Lessee set forth in Section 10(a), in any other Transaction Document, in the Underwriting Agreement and in any certiBcate or other document to which the Lessee is a party executed or delivered in connection with the transactions contemplated hereby or thereby shall be true and correct on and as of the Closing Date with the same efFect as though made on and as of the Closing Date and (B)no Deemed Loss Event or Event of Loss shall have occurred and no Default or Event of Default shall have occurred and be continuing and the Loan Participant and the Owner Participant shall have received an OfBcers'ertiBcate of the Lessee, dated the Closing Date, to such efFect.The following statements shall be true, and such OfBcers'ertiBcate shall state that: (i)there has been no material adverse change in the properties, business, prospects or Bnancial condition of the Lessee since September 30, 1986, and no event has occurred since that date which would'materially adversely afFect the ability of the Lessee to perform its obligations under this Participation Agreement or any other Transaction Document or Financing Document and (ii)to such ofBcer's knowledge there has been no material adverse change or development since September 30, 1986 relating to Unit 2, to PVNGS or to nuclear power plants generally which afFects the operation of Unit 2 or the value of the Undivided Interest or the Bnancial condition of the Lessee.(13)Opinions oj'ounsel.
In the case of the Owner Participant, it shall have received (a)favorable opinions of Mudge Rose Guthrie Alexander R Ferdon, Shaw, Pittman, Potts h Trowbridge, Meyer, Hendricks, Victor, Osborn h Maledon, Rodey, Dickason, Sloan, Akin R Robb, P.A.and Baker h Botts, each dated the Closing Date and addressed to the Owner Participant, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents and Financing Documents as the Owner Participant may reasonably request, and (b)a favorable opinion of Cravath, Swaine R hfoore, as special counsel to the Owner Participant, with respect to such Federal tax and other tax matters'as the Owner Participant may reasonably request.In the case of the Loan Participant, it shall have received favorable opinions of Cravath, Swaine R Moore and Mudge Rose Guthrie Alexander R Ferdon, each dated the Closing Date and addressed to the Loan Participant addressing such matters relating to the transactions, contemplated hereby and by the other Transaction Documents and Financing Documents as the Loan Participant may reasonably request.The Loan Participant and the Owner Participant shall have received favorable opinions of Mudge Rose Guthrie Alexander R Ferdon, Kemp, Smith, Duncan R Hammond, Snell h Wilmer and Csaplar R Bok;each dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby'and by the other Transaction Documents and Financing Documents as either such Person may reasonably request.(14)Taxes.All Taxes, if any, payable in connection with the execution, delivery, recording and Bling of the Transaction Documents and Financing Documents and all the documents and instruments described in Schedule 3, or in connection with the issue and sale of the Initial Series Notes and the Initial Series Bonds and the making by the Owner Participant of the Investment and the Real Estate Investment, and all Taxes payable in connection with the consummation of the'ransactions contemplated hereby and by the other Transa'ction Documents and Financing Documents, shall have been duly paid in full.(15)Appraisals.
The Owner Participant shall have received a letter, dated the Closing Date and addressed to the Owner Participant, from Ebasco Business Consulting Company containing an appraisal of the Undivided Interest, which appraisal shall reQect such appraiser's reasonable conclusion that (w)the fair market value in the hands of the Owner Trustee of the Undivided Interest on the Closing Date, taking into account the efFect and existence of the Real Property Interest, the Assignment and Assumption and the ANPP Participation Agreement, is equal to the Purchase Price as set forth in the Notice of Closing, (x)the estimated remaining economic useful life of Unit 2 (including the Undivided Interest)is at least thirty-eight and three-quarters years, 29 (y)at'the expiration of the Brst four years of the Renewal Term the Undivided Interest will have an estimated residual value, taking into account the efFect and the existence of this Participation Agreement, the Real Property Interest, the Assignment and Assumption and the ANPP Participa-tion Agreement, in the hands of the Owner Trustee or a Person (unrelated to the Lessee)j could lease or purchase the Undivided Interest from the Owner Trustee for commercial use, eqi to at least 20%of the Purchase Price, determined without including in such value any increase or'ecrease for inflation or deflation during the period from the Closing Date thxough the expiration of the Brst four years of the Renewal Term, and (z)taking into account the efFect and the existence of the Real Property Interest, the Assignment and Assumption and the ANPP*Participa-tion Agreement, the use of the Undivided Interest at the Lease Termination Date by any User is feasible from an engineering and economic point of view and is commercially reasonable.
The Owner Participant shall have received an appraisal of the value of the Real Property Interest, which appraisal shall reflect the appraiser's reasonable conclusion that the fair market value in the hands of the Owner Trustee of the Real Property Interest on the Closing Date is equal to the Real Estate Investment as set forth in the Notice of Closing and shall cover such other matters as the Owner Participant shall have requested.
(16)Ogering and Sale of Interest.The Loan Participant, the Owner Trustee and the Owner Participant shall have received a letter or letters from Babcock R Brown Financial Corporation and Systems Marketing, Inc.with respect to the olFering and sale of the interests in the transactions contemplated by this Participation Agreement and each other participation agree-ment dated the date hereof relating to an undivided interest in Unit 2.(17)Governmental Action.The Lessee shall have obtained all Governmental Actions (in-cluding, without limitation, the License Amendment, the New Mexico Order, and the FERC Order, which orders shall be final and nonappealable) required or, in the opinion of the Owner Participant, advisable, for the consummation of all the transactions contemplated by this Partici;pation Agreement and the other Transaction Documents and the Financing Documents.
(18)No Change or Proposed Change in Tax Laws.No change shall have occurred or been proposed in the Code or any other tax statute.the regulations thereunder or any interpretat~.thereof or executive order in respect thereof that would adversely aifect the tax consequen~
anticipated by the Owner Participant with'respect to the transactions contemplated by the Transaction Documents, unless the eEect of such change or proposed change can be wholly accommodated through Section 3(d)of the Facility Lease.(19)Title platters;Certain Reports.The Owner Participant shall have received (i)an updated title report, dated the Closing Date, with respect to the Nuclear Plant Site (as defined in the ANPP Participation Agreement), which report does not disclose any exceptions materially-adverse to the possession or operation of Unit 2 or the performance by the Lessee of its obligations under this Participation Agreement and the other Transaction Documents, (ii)such title insurance policies with respect to the Nuclear Plant Site (as defined in the ANPP Participa-tion Agreement) and improvements thereon (including the Owner Trustee's interests therein)as it shall have reasonably requested, (iii)such insurance policies with'respect.
to PVNGS or the Lessee as the Owner Participant shall have requested, (iv)a survey of the Nuclear Plant Site, (v)such certificates and reports from the Lessee, independent insurance brokers and the insurance manager for PVNGS with respect to insurance relating to PVNGS, Unit 2 or the Undivided.Interest as the Owner Participant shall have requested, (vi)'such certificates and reports from its independent insurance consultant as the Owner Participant shall have requested, (vii)such certificates and reports from its independent engineering consultant as the Owner Participant shall have requested and (viii)a site arrangement plan of the Nuclear Plant Site.~(20)Special Certificate of the Lessee.The Owner Participant shall have r'eceived a certifi-cate of the Lessee, dated the Closing Date, to the eiFect that, (A)Unit 2 has been in all material respects completed in a good and workmanlike manner and in accordance with the plans and speciflcations relating thereto (as the same may have been modified from time to time to reflect Unit 2 as actually completed), Applicable Law (including, without limitation, the.regulations oF the NRC), the License and the ANPP Participation Agreement, (B)all Governmental Acti
.necessary for the commercial operation of Unit 2 (including the Undivided Interest)have been received, other than any such Governmental Action that is routine in nature for PVNGS or that cannot be obtained under Applicable Law, or is typically not applied for, prior to the time it is required, and that the Lessee expects to be obtained in due course, (C)the plans and specifications relating to Unit 2 are complete in all material respects (modified or to be modified as aforesaid) and consistent with prudent engineering practice, (D)the testing and startup procedures and the operation and maintenance programs for Unit 2 were consistent with such plans and specifications, Applicable Law and prudent engineering practice, (E)Unit 2 has been tested in accordance with all customary testing and startup procedures which would have been performed on or prior to the Closing Date, and such tests and procedures indicate that Unit 2 will have the capacity and functional ability to perform in commercial operation, on a continuing basis, the function for which it is designed in accordance with such plans and specifications and has a nominal capacity of 1,270 megawatts electric, (F)all material Governmental Actions relating to the construction, operation or maintenance of Unit 2 are listed in a schedule thereto, (G)there is no present event or condition which would materially adversely afFect the capability of Unit 2 to operate in accordance with such plans and specifications and (H)based upon the Le'ssee's present reasonable expectations, and subject to Applicable Law, the rights and interests made available to the ANPP Participants (including the Lessee)pursuant to the ANPP Participation Agreement (including the Real Property Interest), as such rights and interests are made available or are to be made available to the Owner Trustee, any successor or assign of the Owner Trustee or any"Transferee" of the Owner Trustee under Section 15.10 of the ANPP Participation Agreement, under and pursuant to this Participation Agreement, and the Assignment and Assumption, are adequate to permit, during the period following the Lease Termination Date or the taking of possession of the Undivided Interest and the Real Property Interest in the exercise of remedies under Section 16 of the Facility Lease, in accordance with the ANPP Project Agreements (i)the construction, location, occupation, connection, maintenance, replacement, renewal, repair or removal of Unit 2, (ii)the use, operation and possession of Unit 2, (iii)the construction, use, operation, possession, maintenance, replacement, renewal and repair of all alterations.
modifica-tions, additions, accessions, improvements, appurtenances, replacements and substitutions thereof and thereto,.(iv)adequate ingress to and egress from Unit 2 for any reasonable purpose in connection with the exercise of rights under the Assignment and Assumption and the ownership and possession of the Undivided Interest and the Real Property Interest and (v)the obtaining of nuclear fuel, of water and of transmission services to the ANPP Switchyard suScient to enable delivery of the Generation Entitlement Share related to the Undivided Interest in a commercially efBcient manner and on commercially reasonable terms.Nothing in the foregoing clause (H)shall be deemed to be or be construed as a warranty by the Lessee as to the performance by the Operating Agent of its obligations under the ANPP Participation Agreement.
Such certificate shall also be attested to by the Vice President-Power Supply of the Lessee, who shall state that (i)as a qualified engineer, he has made such investigation, inspection and review as he deems necessary to make the statements in such certificate and (ii)to the best of his knowledge, the statements of the Lessee in such certificate are true and correct.(21)Registration Statement.
The Loan Participant and the Owner Participant shall have received an OfBcers'ertificate of the Lessee, dated the Closing Date, to the e6'ect that on the date it became efFective and on the Closing Date, the Registration Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and the final prospectus did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading under the circumstances under which any such shall have been made.(22)Completion of Documentation.
All schedules to and blanks in the Transaction Docu-ments and Financing Documents shall have been completed to the satisfaction of the parties hereto.
(23)Unit 2 Letter.The Owner Participant shall have received a letter from El Paso representing such matters as the.Owner Participant may reasonably request.(24)Other hfatters.The L'oan Participant and the Owner Participant shall have receiv'uch other documents, certificates and opinions as the Loan Participant or the Owner Partioip or their respective counsel, shall reasonably retluest.(b)Lessee Conditions.
The obligation of the Lessee to sell and lease back the.Undiv'ided Interest and to grant the Real Property Interest on the Closing Date pursuant to Section 4 shall be subject to the fulfillment on or prior to the Closing Date of the following conditions precedent, in each case in form and substance satisfactory to the Lessee: (1)Paragraph (a)Documents, The Lessee shall have received copies'of the documents, certificates, opinions (other than the opinion referred to in clause (b)'f the first sentence of Section ll(a)(13)), appraisals, letters and forms described in paragraph (a)of this Section ll.All such opinions shall be addressed to the Lessee, except the opinions of (i)Shaw, Pittman, Potts and Trowbridge, (ii)Meyer, Hendricks, Victor, Osborn R Maledon, (iii)Rodey, Dickason, Sloan, Akin R Robb,~(iv)Baker h Botts;(v)ivludge Rose Guthrie Alexander R Ferdon to the Owner Participant and the Loan Participant and (vi)Cravath, Swaine R ivioore to which reference is made in clause (b)of the first sentence of Section ll(a)(13).(2)Payment of Purchase Price.The Owner Trustee shall have paid to the Lessee an amount, equal to the Purchase Price and the acquisition price of the Real Property Intt:rest.
(3)Special Opinion of the Lessee's Counsel.The Lessee shall have received a favorable opinion of Kemp, Smith, Duncan R Hammond, dated the Closing Date and addressed to the Lessee, with respect to such Federal tax and other matters as the Lessee may reasonably request., (4)Orders..The FERC Order, the NiiIPSC Order and the License Amendment shall be in form and substance satisfactory to the Lessee.'o)Registration Statement.
The Registration Statement shall have been declared eH'ective by the SEC and the Underwriters shall have purchased, or shall substantially simultaneous purchase, the Initial Series Bonds pursuant to the Underwriting Agreement.
(6)Compbtion of Documentation.
All schedules to and blanks in the Transaction Doc ments and Financing Documents shall have been completed to the satisfaction of the parties hereto.(c)Conditions to Releveraging.
The obligation of the Loan Participant to make, and the Owner Trustee to borrow the proceeds of, a Releveraging Loan on a Releveraging Date shall be subject to the fulfillment on or prior to such Releveraging Date of the following conditions precedent (each instrument, document, certificate, opinion or other writing to be in form and substance satisfactory to the Loan Participant and the O~ner Participant):
(1)Authentication Request, etc.The Owner Trustee shall have delivered to the Indenture Trustee a request, dated such Releveraging Date, authorizing the Indenture Trustee to authenti-cate and deliver a Releveraging Note to the Loan Participant upon its payment to the Indenture Trustee, for the account of the Owner Trustee, of the proceeds of such Releveraging Loan.(2)Releveraging Note and Bond Transactions.(A)The Loan Participant shall have received the proceeds from the sale of Releveraging Bonds in an amount sufBcient to make such Releveraging Loan, (B)the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated and delivered to the Loan Participant, a Releveraging Note or Notes evidencing such Releveraging Loan and (C)the Collateral Trust Trustee shall have accepted a supplement to the Collateral Trust Indenture subjecting such Releveraging iVote or Notes to the lien of the Collateral Trust Indenture and shall have released the amount of such Releveraging Loan from the lien o~the Collateral Trust Indenture.
(3)No Violation.
The return to the Owner Participant of a portion of the Investment and the making by the Loan Participant of the Releveraging Loan shall not violate any Applicable Law.e (4)No Default.No Default or Event of Default or (in the case of the Loan.Participant)
Indenture Default or Indenture Event of Default shall have occurred and be continuing, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared: (5)Representations and 1Varranties.
The representations and warranties of FNB and the Owner Trustee and the Lessee set forth in Sections 8(a)and 10(a), respectively, shall be true and corr'ect on and as of such Releveraging Date with the same effect as though made on and as of such Releveraging Date (with all references to the Closing Date in such representations and warranties being changed to a reference to such Releveraging Date), and the Loan Participant and the Owner Participant shall have received appropriate certificates, dated such Relevetaging Date, to such effect.(6)Opinions of Counsel, The Loan Participant and the Owner Participant shall have received favorable opinion of each of Cravath, Swaine R Moore, as special counsel for the Owner Participant, Csaplar R Bok, as counsel for the Owner Trustee, Snell R Wilmer, as special counsel for the Lessee, and Kemp, Smith, Duncan h Hammond, as counsel for the Lessee, each dated such Releveraging Date and addressing such matters relating to the transactions in connection with the Releveraging Loan as the Loan Participant or the Owner Participant may reasonably request.(d)Conditions to Refunding.
The obligation of the Owner Participant and the Loan Participant to participate in a refunding of the Notes, if any, as provided in Section 2(d), shall be subject to the fulfillment on or before the Refunding Date of the following conditions precedent (each instrument,'ocument, certificate, opinion or other writing to be in form and substance satisfactory to the Loan Participant and the Owner Participant): ,V (1)Authentication Request, etc.The Owner Trustee shall have delivered to the Indenture Trustee a request, dated the Refunding Date, authorizing the Indenture Trustee to authenticate and deliver the Refunding iVote or Notes to the Loan Participant against redelivery of the Initial g Series Notes (and each Releveraging iVote theretofore issued)to the Indenture Trustee for~cancellation.
(2)Refunding Note and Bond Tiansactions.(A)The Loan Participant shall have received'he proceeds from the sale of Refunding Bonds in an amount suiBcient to make the Refunding Loan, (B)the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated and delivered to the Loan Participant, the Refunding Note or iVotes evidencing the Refunding Loan made on the Refunding Date and (C)the Collateral Trust Trustee shall have accepted the Refunding Supplemental Indenture subjecting the Refunding Note or iVotes to the lien of the Collateral Trust Indenture and shall have released the Initial Series iVotes (and each Releveraging Note, theretofore issued)from the lien of the Collateral Trust Indenture.
(3)No Default.No Event of Default or (in the case of the Loan.Participant)
Indenture Event of Default shall have occurred and be continuing, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared.(4)Representations and 1Varranties.
The re'presentations and warranties of.FiVB and the Owner Trustee and the Lessee set forth in Sections 8(a)and 10(a), respectively, shall be true and correct on and as of the Refunding Date with the same efFect as though made on and as of the Refunding Date (with all references to the Closing Date in such representations and warranties being changed to a reference to the Refunding Date), and the Loan Participant and the Owner Participant shall have received appropriate certificates, dated the Refunding Date, to such effect.(5)Refunding Registration Statement.
The Loan Participant and the Owner Participant shall have received an OfBcers'ertificate of the Lessee, dated the Refunding Date, to the effect that'n the date it became effective and on the Refunding Date, the Refunding Registration Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and the final prospectus did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading under the circumstances under which any such shall have been made.(6)Opinions of Counsel.The Loan Participant and the Owner Participant shall received favorable opinions of each of Cravath, Swaine R Moore, as special counsel for the Owner Participant, Csaplar R Bok, as counsel for the.Owner Trustee, Snell R WUilmer.as special counsel for the Lessee, and Kemp, Smith, Duncan R Hammond, as counsel for the Lessee, each dated the Refunding Date and addressing such matters relating to the transactions in connection with the~Refunding Note or Notes as the Loan Participant or the Owner Participant may reasonably request.(e)Conditions to Reoptimi=ation.
The obligation of the Owner Participant and the Loan Partici-pant to participate in a reoptimization of the Notes, as provided in Section 2(e), shall be subject to the fulfillment on or before the date thereof of the following conditions precedent (each instrument, document, certificate, opinion or other writing to be in form and substance satisfactory to the Loan Participant and the Owner Participant):
(1)Note and Bond Transactions.
The conditions set forth in Section 3.12 of the Indenture and Section 1.04(c)of the Bond Supplemental'ndenture (and the Refunding Supplemental Indenture, if any)shall have been complied with.(2)No Default.No Event of Default or (in the case of the Loan Participant)
Indenture Event of Default shall have occurred and be continuing and no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared.(3)Representations and warranties, The representations and warranties of FNB and the Owner Trustee and the Lessee set forth in Sections S(a)and 10(a), respectively, shall be true and correct on and as of such date with the same effect as though made on and as of such date (with all references to the Closing Date in such representations and warranties being changed t reference to such date), and the Loan Participant and the Owner Participant shall have rece appropriate certificates, dated such date, to such eEect.'(4)Opinions of Counsel.The Loan Participant and the Owner Participant shall have received favorable opinions of each of Cravath, Swaine R Moore, as special counsel for the Owner Participant, and Kemp, Smith, Duncan h Hammond, as special counsel for the Lessee, each dated such date and addressing such matters relating to the transactions in connection with the reoptimization as the'Loan Participant or the Owner Participant may reasonably request.cution.and ceipt of an SECTION 12.Consent to Assignment of the Facility Lease;Consent to Indenture.(a)Consent to Assignment of Facility Lease.The Lessee hereby acknowledges, and consents in all respects to, the partial assignment of the Facility Lease by the Owner Trustee to the Indenture Trustee under and pursuant to the Indenture and agrees: (i)to make each payment of Basic Rent and Supplemental Rent due or to become due thereunder to the extent constituting Assigned Payments (excluding, in any event, all Excepted Payments)directly to the Indenture Trustee as provided in Section 11(b)of the Facility Lease, so long as any of the Notes shall be Outstanding and unpaid;and (ii)not to seek to recover any payment (other than a payment that both the Owner Trustee and the Lessee agree was made in mistake)made to the Indenture Trustee in accordance with the Indenture once said payment is made.(b)Consent to Indenture.
The L'essee hereby consents in all respects to the exe delivery of the Indenture, and to all of the terms thereof, and the Lessee acknowledges re executed counterpart of the Indenture; it being understood that such consent shall not be construed to quire the Lessee's consent to any future supplement to, or amendment, waiver or modification of the erms of, the Indenture or any Note.(c)Consent to Assignment by Loan Participant.
Each of the parties hereto acknowledges that the Loan Participant is assigning its right, title and interest in and to the Transaction Documents to the Collateral Trust Trustee as security for the Bonds to the extent set forth in the Collateral Trust Indenture, and each of the parties hereto consents to such assignment.
SECTION 13.Lessee's Indemnities, (a)Ceneral Indemnity.
The Lessee agrees, whether or not any of the transactions contemplated hereby shall be consummated and whether or not the Facility Lease, any other Transaction Document or any Financing Document shall have expired or have been terminated, to assume liability for, arid the Lessee does hereby agree to indemnify, protect, defend.save and keep harmless each Indemnitee.
on an After-Tax Basis, from and against, any and all Claims which may be imposed on, incurred by or asserted against any Indemtiitee (whether because of an act or omission by such Indemnitee or otherwise and whether or not such Indemnitee shall also be indemnified as to any such Claim by any other Person)in any way relating to or arising out of (i)Unit 2, the Undivided Interest, the Real Property Interest, PVNGS or the PVNGS Site, or any part of any thereof, any ANPP Project'greement, the issuance or payment of the Bonds or the Notes, this Participation Agreement or any other Transaction Document or any Financing Document (including, ivitliout limitation, the perform-ance or enforcement of any of the obligations and terms hereunder'r thereunder), (ii)a disposition
~of all or any part of the Undivided Interest, the Real Property Interest.Unit 2 or any other interest of-the Owner Trustee in connection with any termination of the Facility Lease.or (iii)the ilesign.construction, assembly, manufacture, financing, erection, purchase.acceptance, rejection.
ownership.
~~~~~~~~~quisition, delivery, redelivery, nondelivery, transportation, insuring, lease.sublease.preparation.
stallation, repair, rebuilding, improvement, modification, transfer of title.abandonment.
possession.
repossession, use, operation, maintenance, condition, sale, returnstorage or disposition of the Undivided Interest, Unit 2, the Real Property Interest, any Capital Improvement, the.PVNGS Site, any+, other facilities or property in or on the PVNGS Site or any other interest of the Owner Trustee in any','hereof or any accident, nuclear incident or extraordinary nuclear occurrence in connection with any thereof (including, ivithout limitation, (A)claims or penalties arising from any violation of'aw or liability in tort (strict or otherwise) or from the active or passive negligence of any Indemnitee.(B)loss of or damage to any property or the environment or death or injury to any Person, (C)latent and other defects, whether or not discoverable, (D)any claim for patent, trademark, service-mark or copyright infringement and (E)any claim of any Indemnitee incurred in the administration of this, Participation Agreement, any other Transaction Document or any Financing Document and not paid as Transaction Expenses or included in Facility Cost and, if not included in Transaction Expenses.the reasonable fees and disbursements of counsel and other professionals inc<<rred in connection there-with);provided, hoivever, that the Lessee shall not be required to indemnify;iny Inde>>i>>itee p<<rsii;iiit to this Section 13(a).(I)for any Claim in respect of Unit 2.tlie U>>divided i>>terest or tlie Rc:il Property Interest arising from acts or'events not attributable to Deco>>ii>>issioiiiiig or to;i>>y;ict or omission of the Lessee, whether as agent for such Indemnitee or otherwise.
>>or attribiit;ible to tlie period on or before the Lease Termination Date, which occur after satisfaction of the Lessee's redelivery obligations pursuant to Section 5 of the Facility Lease.except to the extent expressly provided in any Transaction Document, the ANPP Participation Agreement or any other agreement or undertaking of the Lessee, (2)for any Claim against such Indemnitee resuliin~solely fro'm acts which would constitute the willful misconduct or gross negligence of such Indemnitee (unless imputed to such Indemnitee'by i'eason of Unit 2, the Undivided Interest, the Real Property Interest.PVNGS.the i~~PVNGS Site or any other facilities at the PVNGS Site or any occurrence in connection with any reof or by reason of any act or omission of the Lessee, whether as agent for such Indemnitee or erwise), (3)for any Transaction Expense to be paid by the Owner Trustee pursuant to Sectioii i4(a).(4)for any Claim resulting solely from a transfer by the Owner Tr>>stee or the Owiier Participant of all or part of its interest in the Facility Lease, Unit 2, the Real Property Interest or the Undivided Interest other than'in connection with any early termination of the Facility Lease or exercise of remedies under Section 16 thereof or the transfer contemplated by Section 7(b)(4)o first transfer by the Owner Participant to an AIBliate of the Owner Participant or (5)in the case of t e Loan Participant, the Indenture Trustee and the Collateral Trust Trustee, for any Claim based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Registration Statement or the Refunding Registration Statement or any document or agreement in connection with the sale of the Bonds which is based upon information furnished to the Lessee or its agents by such Indemnitee expressly for use therein.To the extent that an Indemnitee in fact receives indemnification payments from the Lessee under the indemnification provisions of this Section 13(a), the Lessee shall be subrogated, to the extent of such indemnity paid, to such Indemnitee's rights with respect to the transaction or event requiring or giving rise to such indemnity, but only so long as such subrogation shall not materially adversely afFect the rights of such Indemnitee or any other Indemnitee here>>ntler.
Nothing herein or elsewhere contained shall be construed as constituting a guaranty by the Lessee of the principal of, premium, if any, or interest on the Notes or the Bonds'or of the residual value or useful life of the Undivided Interest.(b)General Tax Indemnity.
(1)Indemnity.
All payments by the Lessee or any Issuing Bank in connection with the transactions contemplated by the Transaction Documents shall be free of withholdings of any nature whatsoever (and at the time that the Lessee or any Issuing Bank is required to make any.payment upon which any withholding is required, the Lessee shall pay an additional amount such that the net amount actually received by the Person entitled to receive such payme>>t will.after such'withholding, equal the full amount of the payment then due)and shall be free of expense to each Indemnitee for collection or other charges.If, for any reason, the Lessee is required to m any payment to a taxing authority with respect to, or as a result of.any withholding tax impos any Indemnitee in respect of the transactions contemplated by the Transaction Documents, w withholding tax is not the responsibility of the Lessee under this Section 13(b)as determined pursuant to this Section 13(b)but without regard to the immediately preceding sentence of this Section 13(b)(1), then such Indemnitee shall pay to the Lessee an amount which equals the amount paid by the Lessee with respect to, or as a result of, such withholding tax.whether or>>ot'ny of the transactions contemplated hereby are consummated, except as provided in Section 13(b)(2)," the Lessee shall pay, and shall indemnify, defend and hold each Indemnitee harmless, on an After-Tax Basis, from and against, any and all Taxes howsoever imposed (whether imposed on or with respect to the Indemnitee, the Lessee, Unit 2, the Undivided Interest, the Real Property Interest, any Capital Improvement or the PVNGS Site or any part thereof or interest therein or otherwise) by any Federal, state or local government or subdivision thereof or taxing authority in the United States of America or by any foreign country or subdivision thereof or by any foreign or international taxing authority in connection with or relating to (A)the desig>>.construction, financing, purchase, acquisition, acceptance.
rejection.
delivery.>>o>>delivery.
tra>>s-~portation.
ownership, assembly, possession, repossession.
operation.
>>sc.co>>(litio>>.
i>>ai>>tc>>>>>>cc.
repair.improvement, sale', return.storage, abandonment, preparatio>>.
i>>stallatio>>.
replace>>ie>>t.
redelivery, manufacture, insuring, leasing, subleasing, modification.
tra>>sfer of title.reb>>ildi>>g, rental, importation, exportation or other application or disposition of, or the imposition of any Lien other than Owner Participant's Liens and Lessor's Liens (or incurrence of any liability to refund or pay over a-.:~amount as a result of any Lien other than Owner articipant's Liens and Lessor's Liens)on, Unit 2, the Undivided Interest, the Real Property Interest, any Capital Improvement or the PVNGS Site, or any part thereof or interest ther'ein, (B)the payment of Rent or the receipts or earnings arising from or received with respect to, and the indebtedness with respect to, Unit 2, the Undivided Interest, the Real Property'nterest or any Capital Improvem or any part of any thereof;interest therein or application or disposition thereof, (C)any am paid or payable pursuant to this Participation Agreement.
any other Transaction Document or Financing Document or the transactions contemplated hereby or thereby, (D)Unit 2, the Undivided Interest, the Real Property Interest, any Capital Improvement or the PVNGS Site, or.any part of any thereof or interest therein, or the applicability of the Facility Lease to the Undivided Interest, the Real Property Interest or any Capital Improvement, or any part of any L thereof or interest therein, (E)this Participation Agreement, any other Transaction Document or any Financing Document or (F)otherwise with respect to or in connection with the transactions contemplated by this Participation Agreement, any other Transaction Document or any Financing Document.(2)Exclusions Pom General Tax Indemnity.
Section 13(b)(1)'except for the Brst two sentences thereof)shall not apply to: (i)Taxes based on, or measured by, net income imposed by the United States Federal Government (including, without limitation, any minimum Taxes, capital gains Taxes.any Taxes on, or measured by, items of tax preference, surcharges, additions to tax, penalties.
fines or other charges in respect thereof);(ii)Taxes (other than sales, use or rental Taxes)imposed by any state or local government or subdivision thereof or other taxing authority in the United States or by a>>y foreign country or subdivision thereof or by any foreign or international taxing authority that are based on, or measured by, the net income, items of tax preference, net worth or capital of an Indemnitee, except, with respect to the Owner Trustee, the Trust, the Trust Estate, the Owner Participant and any Affiliate of any thereof, any such Taxes imposed by a jurisdiction as a result of a relation or asserted relation of such jurisdiction to the transactions conte>>i-plated by the Transaction Documents or the Financing Documents or as a result of the activities of the Lessee, any ANPP Participant or any Affiliate of any thereof in such jurisdiction; provided, however, that the amount of any Taxes for which the Lessee is'bligated to indemnify under the preceding exception s)iall be calc>>lated on a pro forrna basis as the amount by which: 'I (x)the incremental Taxes which the Indemnitee is obligated to pay in such jurisdiction, calculated as: (1)the actual amount of Taxes which the Indemnitee is'bligated to pay i>>such jurisdiction (except to the extent that any allocation or apportionment methotl ,used by such jurisdiction takes.into account the income or activities of business entities organized outside the United States of America), taking into account any actual net operating loss carryoversreduced by (2)the amount of Taxes which the Indemnitee would be obligated to pay i>>such jurisdiction (except to the extent that any allocation or apportionment method used by such jurisdiction takes into account the'ncome or activities of b>>si>>ess entities organized outside the United States of America).assuming that the tra>>sac-tions contemplated by the Transaction Doc>>roe>>ts a>>d the Fi>>a>>ci>>y, Doc>>>>iv>>ts had not occurred, taking into account any>>et operating loss carryovers th>>t wo<<ld have been available if such transactions had>>ot occurred.exceeds (y)any actual aggregate net reduction in Taxes in all other jurisdictions in which the Indemnitee is subject to tax (whether such reduction results from the operation of allocation or apportionment formulas, from credits or otherwise), such aggregate net reduction calculated as: (1)the aggregate amount of Taxes which the Indemnitee would be obligated to pay in all other jurisdictions in which such Indemnitee is subject to tax.assuming n~fl that the transactions contemplated by the Transaction Documents and the Fina ing Documents had not occurred, reduced by (2)the actual aggregate amount of Taxes which the Incleninitee is obligatecl to pay in all other jurisdictions in which such I>>cle>>initee is subject to t;ix: I>rouidc<f fi(rtI>er, however, that, with respect to any tax basecl on or rneasurecl by capital or net worth.the Lessee's indemnity obligation shall not exceed the incre>>iental portion of siicli Tax attributable to the transactions contemplated by the Transactio>>
Docuinents or tlie Financing Documents;(iii)Taxes attributable to the Uncliviclecl Interest or the Real Property Interest that are imposed with respect to any period after the later of (a)the Lease Ten>>i>>atio<<Date;>>i<1 (1>)satisfactio>>
of'lie Lessee's re<lelivery obligatioiis piirsiiaiit to Sectioii'>(a)ot'lie Facility Lease.unless siich Taxes relate to events occurring or niatters arising prior to or si>>i<<lt;ill<-
oiisly with such elate or redelivery: (iv)Taxes on or with respect to an Inclemnitee arisiiig from a>>y vol<<>>t;iry tra>>st'<.>(it being u>><lerstoo<l that the term"vol<<ntary transfer" cloes>>ot i>>cl<<<le a>>y tra>>st'(r pro<<i(1<<I for in the Tra>>sactio>>
Docu>>ients or the Financing Doc<<i>>e>>ts ii>><l<loes not iiiclii<l<<;i>>y transfer to the Lessee or any AfRltate thereof)by such Inclem>>itee of'iiy i>>ter<<st i>>tli<<Undivided Interest, the Real Property Interest.the Tnist Estate.the I>>clent<<re Est;ite.tile Notes or any other right or interest arisi>>g under tlie Tra>>s;ictio>>
Docii<<ic>>ts
<>r tli<<Financing Documents.
iinless aii Event of Def'aiilt has occiirre(1 a>>(l is co>>ti>>iiiiig.
<>r Tix<<s;irisiiig from;iii iiivol<<iit;irv triuist'cr by siicli l>><lci>>iiit<<e ot';iiiy sii<<li i>>t<<r<<st arisi>><!Iro>>i;i ba>>kri>ptcy or si>>iilar procee<li>>g i>>which siich l>>(lc>>iiiit<<<<
is tlie clcbtor i>>iless!ill('ll ba>>kruptcy or otlier procee<li>>g was cause(l by the Less<:e or;<<iy Affiliat tli<<r<<ot'<<xc.<<pt it'uch b;uikruptcy or other procee(li>>g w;is so caiisecl solely in co>><<<<etio>>
witli;i<<tiviti<<..
s<<ch l>>den>>iitce
<<>>rehitecl to tlie tr;uisactio>>s co>>tei>>pl;it(<1 l>y tlie Tr;i>>s;i<<tiu>>
D>><<<<i>><<or the Financing Docume>>ts);(v)Taxes based on or measured by any fees.commission or compensation receive<1'v the Owner Tri>stee.the Inclenture Trustee or the Collateral Tri>st Tr>>st<<<<t'or a<<ti>><.a>>tr>>st<<e.or for otlier scrvic<<s r<<>>(1<<r<<(l.
i>>co>>>><<<<tioii ivitl>a>>i<>t'li<tra>>sa<<ti<>>>>>
<<<>>u>>>>-pl;>teel by tlie Transactioii Docu>>ieiits or tlie Fiiiaiiciiig Doc;<<>>i<<>its: (vi)Taxes on or with respect to an Inclemnitee arisi>>g by reason of sucli In<i<<i>>>>it<<<<s failure to file proper and tir>>ely reports or retiirns (iinless the fili>>g of's<<cli reports or r<<t<<r>>s is the obligatio>>
of the Lessee un(ler the Traiisactioii Doc>>nients or the Fiiiaii<<iiig D<><<<<-<<ieiits)aii(l;uiy pe>>alties or a(l<litio>>s to tax iiiipos<<cl l>y re;isoii ot's>>c.li I>><l<<>>>>>it<<<<'>>
t'iiiliir<
to coniply with the laws imposing such T;ix or its iii;iterial failiir<<to coi>>ply ivitl>its obligations uncler Sectio>>13(b)(6), in each case unless such failiire resiilts t'roi>>;i>>y;i<<tin>>
ot'he Lessee or failure by the Lessee to co>>iply with;iiiy provisioii
<>f tlic Tra>>sa<<ti<>>>
Do<<<<i>i<.tits<>r tlie Fiimii<<ii>g Do<<iiiii<iits.i>>(l<<<li>><!tli<~t':iiliir<<
t<<t>r<>i i<1<>><<<ss;ir>i>>t'<>n>>ati<>i>: (vii)T;ix<<s oii or witli r<<sp<<<<t to;iii h><l<<>>>>>it<<<<<<>
isi>>g as<<r<<xi>it<>I;i>>>;it<ri;il I:iiliir<i>l suet>l>>clei>>>>itee to t'ulfill its obligatioiis witli respect to tl><<<oiit<<st ot'>>y'<<I;ii>>i ill accor<lance with Sectioii I:3(b)(4)of this Participatio>>
Agreeiiieiit or to provi(h.tli<<L<<ss<<<
with int'orni;itio>>(other tha>>tax returns)within tlie kiiowle(lge of siicli Iii<1<<iii>>it<<<<r<<;is<>i>;i-bly and timel>.equested by the Lessee, and not'otherwise
<<v iilable to tlie Lessee.to<<>><<bi<<the Lessee to complete and file or f'urnish any report.return or statenieiit i>>accor<la>><<c witli Sectio>>I'3(b)(5): (viii)Aiiy Taxes i>>>posed on tlie Lessor or tlie Owiier Particii>;>>it r<<siiltillg tr<>>>>.<>I which would>>ot have occurred but for, Lessor's Lie>>s or Owner Participaiit s Lie>>s;ui(t:~
Taxes ii>>pose<i oii the l>>cle>>t>>re Tnistee which woiil<l>>ot li;ive o<<<<<<rre<l l>iit for 1>><t<<>>t~Triist(.<<'s Li<<>is:
(ix)Any Tax on or with respect to any Indemnitee resulting from the gross negligence or.willful misconduct of such Indemnitee (it being understood that no Indemnitee is responsible for determining whether a Tax is payable if such Tax is the responsibility of the Lessee under this Section 13(b));and (x)Taxes imposed on or with respect to a transferee (er a subsequent transferee) of an original Indemnitee (other than a transferee or a subsequent transferee if such transferee or subsequent transferee is an AIBliate of the original Indemnitee) to the extent that the amount of such Taxes exceeds the amount of Taxes that would have been imposed on or with respect to such original Indemnitee but for the transfer to such transferee or, if imposed, would not have been subject to indemnification under this Section 13(b);provided, however, that the exception in this paragraph (x)shall not apply to any transferee where such transfer shall have occurred during the continuance of an Event of Default: provided, however, that the foregoing paragraphs (i)through (x)shall not apply to any Tax imposed on the Collateral Trust Trustee, the Loan Participant or the indenture estate under the Collateral Trust Indenture except that the foregoing paragraph (y)shall apply in the case of the Collateral Trust Trustee;(3)Calculation oj'eneral Tax Indemnity Payments.If any Indemnitee realizes a net permanent tax benefit by reason of the payment of any indemnity under Section 13(b)(I), such Indemnitee shall pay the Lessee, but not before the Lessee shall have made all payments theretofore due to such Indemnitee pursuant to this Section 13(b), an amount equal to the lesser of (x)the sum of such tax benefit plus any other net tax benefit realized by such Indemnitee as the result of any payment made by such Indemnitee pursuant to this sentence (such latter benefit being determined in a manner consistent with the definition of After-Tax Basis anti with the last sentence of Section 13'(b)(6))
and (y)the amount of such payment by the Lessee to such Indemnitee nnd any other payment by the Lessee to such Indemnitee therefore made pursuant to Section 13(b)(1)less the aggregate amount of all prior payments by such Indemnitee to the Lessee pursuant to this Section 13(b)(3)with respect to.amounts paid pursuant to Section 13(b)(1), it being intended that no Indemnitee should realize a net tax benefit pursuant to this Section 13(b)unless the Lessee shall first have been made whole for any payments by it to such Indemnitee pursuant to Section I'3(b)(I);provided, however.that (A)in computing any pen>>a-nent tax benefit, such Indemnitee shall be deemed first to have utilized all deductions anti crc<lits available to it otherwise than by reason of any payment by the Lessee pursuant to this Section 13(b)and (B)notwithstanding the provisions of this Section 13(b)(3), such Indemnitee shall not be obligated to make any payment to the Lessee pursuant to this Section 13(b)(3)if at the time such payment shall be due a Default or Event'of Default shall have occurred and be continuing.
(4)General Tax Indemnity-Contests.
If a written claim shall be made against any Indemnitee for any Tax for which the Lessee is obligated pursuant to this Section 13(b),'such Indemnitee shall notify the Lessee promptly of such claim, but the failur'e so to notify the Lessee shall not affect any obligation of the Lessee pursuant to this Section I'3(b)except ns provided in Section 13(b)(2)(vii).If the Lessee shall request in writing within.'30 tlnys<<fter receipt of such>>u<>tice.
such Indemnitee shall in good faith and at the E.essee's expense contest the inipositiou (inclu(line the amount)of such Taxes;provided, however, that such Indeninitee mny in its sole tliscretion select the forum for such contest and determine whether any such contest shall be by (A)resisting payment of such Taxes, (B)paying such Taxes under protest or (C)paying such Taxes ad seeking a refund thereoF, provided further, howe,ver, that (X)such Indemnitee shall not be obligated to contest any claim in which the amount in question is less than$250,000, (Y)at such Indemnitee's option, such contest shall be conducted by the Lessee in the name of such Indemnitee (subject to the preceding proviso)and (Z)in no event shall such Indemnitee be required or the Lessee permitted to contest the imposition of any Taxes for which the Lessee is obligated pursuant to this Section 13(b)unless (v)the Lessee shall have acknowledged its liability to such Indemnitee for an indemnity payment pursuant to this Section I.'3(b)as n result of such claim if and to the extent such Indemnitee or the Lessee, as the case may be, shall not prevail in the contest of such claim, (w)such Indemnitee shall have-received from the Lessee satisfactory indemnity for any liability, expense or loss arising out of or relating to such co including, but not limited to, (A)all reasonable legal, accountants'nd investigatory'ees a disbursements, (B)the amount of any interest, additions to tax or penalty that may be payable as a result of contesting such claim and (C)if such contest is to be initiated by the payment of, and the'laiming of a refund for, such Tax, sufhcient funds to make such payment on an After-Tax Basis and (ii)an opinion of independent tax counsel selected by the Lessee and approved by such Indemnitee (which approval shall not be unreasonably withheld)and furnished at the Lessee's sole expense to the efFect that a Reasonable Basis exists for contesting such claim or, in the event of an appeal, that there exists a substantial possibility that an appellate court or an administrative agency with appellate jurisdiction, as the case may be, will reverse or substantially modify the adverse determination, (x)the Lessee shall have agreed to pay such Indemnitee on demand all reasonable costs and expenses that such Indemnitee may incur in connection with contesting such claim (including, without limitation, all costs, expenses, losses, reasonable legal and accounting fees, disbursements, penalties, interest and additions to tax), (y)such Indemnitee and the Owner Participant shall have reasonably determined that the action to be taken will not result in any danger of sale, forfeiture or loss of, or the creation of any Lien (except if the Lessee shall have adequately bonded such Lien or otherwise made provision to protect the interests of such Indemnitee in a manner satisfactory to such Indemnitee and the Owner Participant) on.Unit 2.the Undivided Interest, the Real Property Interest, or any part of or interest in any of the foregoing, and (z)if such contest shall be conducted in a manner requiring the payment of the claim, the Lessee shall have paid the amount required.The Lessee'agrees to give such I>>de>>uiitee reasonable notice of any contest prior to the commencement thereof.If any Indem>>itee shall obtain a refund of all or any part of any Taxes paid by the Lessee (or if any such ref>>>>d wo>>ld be payable to such Indemnitee in the absence of an offsetting liability'or taxes payable to the tax'uthority in question by such Indemnitee in respect of which the Lessee is not respo>>pursuant to this Section 13(b)), such Indemnitee shall pay the Lessee, but not%efore the LFs shall have made all payments theretofore due to such Indemnitee pursuant to this Section 13(b), an amount equal to the lesser of (xx)the amount of such refund, including interest received (or receivable in accordance with the foregoing parenthetical clause)and attributable thereto.plus any permanent net tax benefit realized by such Indemnitee (determi>>ed i>>a man>>er consistent with the definition of After-Tax Basis and with the last sentence of Section 13(b)(6))as a result of any payment by such Indemnitee made pursuant to this sentence (after taking into account the tax consequences of the receipt of such refund and such interest)or (yy)such tax payment by the Lessee to such Indemnitee theretofore made pursuant to this Section 13(b)plus the amount of any interest actually received by such Indemnitee in connection with such refund to the extent not previously reflected in such tax payment by the Lessee, in either case net of any expenses of contest not already paid or incurred by the Lessee;provided, however, that (I)in computing any permanent'tax benefit, such Indemnitee shall be deemed first to have utilized all deductions a>>d credits"available to it otherwise than by reason of any payme>>t by the Lessee p>>rs<<>>>>t to this Section 13(b)and (II)notwithstanding the provisions of this Sectio>>i3(b)(4).s>>ch i>>dc>>>>iitc<<
shall not be obligated to make any payment to the Lessee purs>>a>>t to this Section 13(b)(4)ii>>t the time such payment shall be due a Default or an Event of Default shall have occurred a>>d be continuing.
An Indemnitee shall not be required to make any payment pursuant to this Sectio>>13(h)(4)before such time as the Lessee shall have made all payments and indemnities then due under the Transaction Documents to such Indemnitee.
Notwithstanding anything contained in this Section 13(b)(4)to the contrary, no Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been adversely decided pursuant to the contest provisions of this Section 13(b)(4)unless there shall have been'a change in the law (including, without limitation, amendments to statutes or regulations, admii , trative rulings and court decisions) after such claim shall have been so previously decided..such Indemnitee shall have received an opinion of independent tax counsel selected by the Les~
and approved by such Indemnitee (which approval'shall not be unreasonably withheld)and furnished at the Lessee's sole expense to the efFect that such change provides a Rea>sonable Basis for the position which such Indemnitee and the Lessee, as the case may be;had asserted in such previous contest or for an alternative position based upon such change that the Lessee now desires to assert.Nothing contained in this Section 13(b)shall require any Indemnitee to contest or permit the Lessee to contest a claim which such Indemnitee would otherwise be required to contest pursuant to this Section 13(b)if such Indemnitee shall waive payment by the Lessee of any amount that might otherwise be payable by the Lessee under this Section 13(b)by way of indemnity in respect of such claim.(5)General Tax Indemnity-Reports.If any report, return or statement is required to be filed with respect to any obligations of the Lessee under or arising out of this Section 13(b).the Lessee shall.timely file the same, except for any such report, return or statement which such Indemnitee has notified the Lessee that it intends to file.The Lessee shall either file such report.return or statement so as to show the ownership of the Undivided Interest or the Real Property Interest, as the case may be, in the Owner Trustee and send a copy of such report, return or statement to the Owner Trustee and such Indemnitee or, where not so permitted, notify the Owner Trustee and such Indemnitee of such requirement and prepare and deliver such report.return or statement to the Owner Trustee and such Indemnitee in a manner satisfactory to the Owner Trustee and such Indemnitee within a reasonable time prior to the time such report, return or statement is to be filed or, where such return, statement or report shall be required to refiect items in addition to any obligations of the Lessee under or arising out of this Section 13(b).timely provide the Owner Trustee and such Indemnitee with information sufficient to permit s>>ch report, return or statement properly to be made with respect to any obligations of the Lessee under or arising out of this Section 13(b)(and the Lessee shall hold each Intlen>nitee har>>>less from and against any liabilities, obligations, losses, damages, penalties, claims, actions.suits anti reasonable costs arising out of any insufficiency or inaccuracy in any such report.ret>>r>>.statement or information).
The Lessee shall not have any right to examine the tax returns of;>>>y Indemnitee.
The Lessee shall have the right to conduct all negotiations with the State of Arizona Department of Revenue with respect to the computation of the value of Unit 2, the Undivided Interest and the Common Facilities for purposes of computing Arizona property taxes.(6)General Tax Indemnity-Payment.
All Taxes shall be paid when due and payable a>>d.unless otherwise requested by the appropriate Indemnitee, the Lessee shall pay any Taxes for which'it is liable pursuant to this Section 13(b)directly to the appropriate taxing authority and shall pay each Indemnitee promptly on demand in immediately available funds any amo<<>>t due such Indemnitee pursuant to this Section 13(b)with respect to such Taxes.Any such dern>>>>d shall specify in reasonable detail the payment and the facts upon which the right to pay>>>e>>t is based.Each Indemnitee shall promptly forward to the Lessee any notice, bill or advice received by it concerning any Taxes.Within 30 days after the date of each payment by the Lessee of any Taxes, the Lessee shall furnish the.appropriate Indemnitee the original or a certified copy of a receipt For the Lessee's payment of such Taxes or such other evi<le>>ce of pay>>>e>>t ofs>>c h Taxes as is acceptable to such Indemnitee.
The Lessee shall also f>>r>>ish pro>>>ptly upo>>req<<cst s<<cl><I>>ta as any Indemnitee may require to enable such Inde>>>nitee to co>>>ply with the require>>>e>>ts ot'a>>y taxing jurisdiction.
Whenever any payment is to be made by the Lessee under thip Section 13(b)and it shall be necessary, in calculating the After-Tax Basis amount of such payment.to compute the amount of any liability for federal, state or local tax imposed on or.measured by the>>et income of any Indemnitee, such computation shall l based on the assumption that such taxes shall be payable at the highest marginal statutory rates in efFect for the relevant period.(7)Definition of Indemnitee.
For purposes of this Section 13(b).the term Indemnitee shall include the successors an)assigns of each respective Indemnitee, and for purposes of Federal income taxes, the aIBliated group of corporations and each member thereof (within the meaning of Section'1504 of the Code)of which such Indemnitee is a member.if such group shall file a co>>solidated United States Federal income tax return.and.for purposes of income or franchise (7)Dejinition of Indemnitee.
For purposes of this Section 13(b), the term Indemnitee shall include the successors and assigns of each respective Indemnitee, and for purposes of Federal income taxes, the aSliated group of corporations and each member thereof (within the mea'f Section lo04 of the Code)of which such Indemnitee is a member, if such group shall consolidated United States Federal income tax return, and, for purposes of income or franc taxes imposed by a particular state or local taxing jurisdiction, shall mean and.include any consolidated or combined group of which such Indemnitee is or shall be a member that is treated as such by such state or local taxing jurisdiction.
(8)Supporting ilfateriaI.
Each Indemnitee shall provide to the Lessee such supporting material (other than tax returns)as the Lessee shall reasonably request in connection with the matters set forth in this Section 13(b).The Lessee shall reimburse to any Indemnitee any expenses incurred in providing requested supporting material to the Lessee.(9)Cooperation.
The Owner Participant agrees (without committing itself to take any.action), upon the written request and at the expense of the Lessee, to discuss and to give reasonable consideration to suggestions of the Lessee regarding the minimization of any Taxes for which the Lessee is responsible under this Section 13(b).(c)Special Tax Indemnity.
(1)Tax Assumptions.
The Facility Lease has been entered into, and the Owner Participant's Net Economic Return has been computed, on the basis of the following assumed Federal income tax benefits: (i)The Facility Lease will be treated as a true lease under which the Owner Trustee will be the purchaser, owner and lessor of the Undivided Interest and the Real Property Interest and the Lessee will be treated as the lessee of the Undivided Interest and the Real Property Interest.(ii),The Owner Participant will be entitled to t'ake into account in computing.its Federal income tax liability each item of income, gain, deduction, loss and credit of the Trust.(iii)iVot less than 90.30391 percent of the property constituting the Undivided Int constitutes"section 38 property" as such term is used in Section 48(a)of the Code (as s Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986), that was placed in service not earlier than May 20, 1986 (such percentage of the property constituting the Undivided Interest being hereinafter referred to as the Clause (iii)Property);
and not less than 90.30391 percent of the Purchase Price is attributable to Clause (iii)Property.(iv)Not more than 9.69609 percent of the property constituting the Undivided Interest constitutes property that was placed in'service prior to May 20, 1986 (the Clause (io)Property);
and not more than 9.69609 percent of the Purchase Price is attributable to the Clause (iv)Property.(v)The Owner Participant will be allowed deductions under the accelerated cost recovery system with respect to the Undivided Interest pursuant to Sections 168(a)and 168(b)(1)of the Code (as such Sections are applicable.to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986);the Owner Participant will not make an election under Section 203(a)(1)(B) of the Tax Reform Act of 1986;the Owner Participant's taxable year in which the Closing Date occurs will be a 12-month taxable year;the Owner Participant's aggregate adjusted basis for purposes of computing such deductions will be equal to 100 percent of the Purchase Price;and the Owner Participant will be entitled (assuming that it does not make an afhrmative election to take slower depreciation deductions pursuant to Section 168(b)(3)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986), it being understood that any election imputed to, or deemed made by, the Owner Participant as a result of actions of another Person shall not be considered to be an affirmative election by the Owner Participant) to take Taxable Year~Ending u e30 1987 1988 1989.1990 1991 1992~~~~~~~~~~~~~~~1993.1994.1995.1996.1997.Percentage (to be applied against loo percent of the Purchase Price)7.33%14.00%12.00%10.00%10.00%10.00%9.00%9.00%9.00%9.00%0.67%(the deductions described in this Section 13(c)(1)(v)being hereinafter referred to as the ACHS Deductions).(vi)The indebtedness evidenced by the Notes will constitute a loan made to the Owner Trustee;all amounts paid on the Notes other than payments of principal will be deductible by the Owner Participant, when paid or accrued, pursuant to Section 163(a)of the Code in accordance with the accrual method of accounting (it being understood that such deductions will not be affected by any other provisions of the Code such as Section 163(e))(the deductions describe<i in this Section 13(c)(1)(vi)being hereinafter referred to as the Interest Deductioav).(vii)The Owner Participant will be allowed current deductions for amortization of an amount equal to the Transaction Expenses computed on a straight-line basis over the Basic Lease Term (the Amortization Deductions).(viii)The Owner Participant will have at all relevant times sufRcient Federal taxable income against which to apply the ACRS Deductions.
the Interest Deductions and the Amortization Deductions.(ix)The Notes will bear interest pursuant to their terms at the rates applicable from ti<ne to time;the principal amount of the Notes will constitute no more than 80 percent of the Purchase Price;and the Notes will be amortized by certain payments of principal pursuant to the ter>>is thereof.(x)Basic Rent will be paid on the Basic Rent Payment Dates.Basic Rent will be payable in advance in semi-annual installments during the Basic Lease Term commencing on July 2, 1987, and the Renewal Term as set forth in the Facility Lease.(xi)None of the Trust.the Owner Trustee a>>d the Ow>>er Participa>>t will at a>>y ti>>i<h<<required to include any amount in gross income for Fe<leral i>>coi>>e tax p>>rposes with r<<sp<<<<t t<>the transactions contemplated by the Transaction Documents or the Financing Doc>><>>e>>ts other than (A)payment's of Basic Rent in the amounts and no earlier, than at the times such payments are required to be made in accordance with the Facility Lease, (B)payments of Casualty Val>>e.Termination Value, Special Termination Value and Special Casualty Value"ad payments pursuant to the exercise of the Lessee's options to purchase the Und;vided Interest as described in the Facility Lease at the time such payments are made and (C)any payments required to be made on an After-Tax Basis pursuant to the Transaction Documents at the time such payments are made.(xii)The Owner Participant's marginal Federal rate of income tax is 46 percent for its taxable year ending June 30.1987, and 34 percent for each taxable year thereafter, without giving eff'ect to any credits against tax.
(xiii)The Owner Participant's cash investment in the Undivided Interest at the Closing Date will be an amount equal to the Investment Percentage of the Purchase Price.(xiv)The Closing Date will be December 18, 1986.(xv)The Owner Trustee and the Owner Participant will be entitled to treat each iten income, gain, deduction, loss and credit with respect to the transactions contemplated by the Transaction Documents and the Financing Documents as derived from or allocable to sources within the United States.(2)Tax Representations.
The Lessee represents and warrants to and covenants with the Owner Participant that: (i)On the Closing Date and throughout the Lease Term the Undivided Interest will constitute"recovery property" and"10-year property" within the meaning of Sections 168(c)(1)and 168(c)(2)(C)of the Code (as such Sections are applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)as in effect on the date hereof.(ii)Assuming that the Owner Participant will be treated as the owner of the Undivided Interest for Federal income tax purposes, (x)on the Closing Date and throughout the Lease Term not less than 90.30391 percent of the property constituting the Undivided Interest will constitute"section 38 property" in the hands of the Owner Participant within the meaning of Section 48(a)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)as in effect on the date hereof that was placed in service not earlier than May 20, 1986, and (y)on the Closing Date and throughout the Lease Term not less than 90.30391 percent of the Purchase Price will be attributable, in the hands of the Owner Participant, to such property.(iii)Unit 2 will be"placed in service" for the purposes of Section 168 of the Code (as s Section is applicable to property placed in service during 1986 as to which the Owner Partici has made no election under Section 203(a)(1)(B)of the Tax Reform'Act of 1986)no later t i the Closing Date and each item of property constituting the Undivided Interest will be so placed in service no later than the Closing Date.(iv)None of the property constituting the Undivided Interest and none of the Purchase Price shall be subject to the provisions of Section 168(f)(12)of the Code (as such Section is applicable to property.placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986).(v)To the best of its knowledge, the Lessee and each AfBliate thereof have provided to the Appraiser all factual information in their possession which is relevant to such Appraiser's conclusions and such information is accurate and complete on the Closing Date.Neither the Lessee nor any AfBliate thereof has any reason to believe that the Appraiser's conclusions are inaccurate.(vi)Assuming that the Owner Participant will be treated as the owner of the Undivided Interest for Federal income tax purposes, the Owner Participant will be entitied to the ACRS Deductions, the Interest Deductions and the Amortization Deductions.(vii)None of the Trust, the Owner Trustee and the Owner Participant will at any time be required to include any amount in gross income for Federal income tax purposes with respect to the transactions contemplated by the Transaction Documents or the Financing Documents other than the amounts described in clauses (A), (B)and (C)of Section 13(c)(1)(xi)at the respective times referred to therein.(viii)The Owner Trustee and the Owner Participant will be entitled to treat each item~<income, gain, deduction, loss and credit with respect to the transactions contemplated by Transaction Documents or the Financing Documents as derived from or allocable to sources within the United States.(ix)The provisions of Section 168(f)(10) of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)as in eH'ect on the Closing Date (including the amendment contained in Section 1809(a)of the Tax Reform Act)will not apply to the transactions'contemplated by the Transaction Documents or the Financing Documents in a nmnner that could cause a Loss and the Lessee will not take any action pursuant to Section 168(b)(3)or 168(f)(2)(C)of the Code (as such Sections are applicable to property placed i>>service during 1986'as to which the Owner Participant has made no election under Section 203(a)(1)(B)of the Tax Reform Act of 1986)that is inconsistent with the Owner Participa>>t's entitlement to the ACRS Deductions.(x)Neither Unit 2 (other than Common Facilities) nor any item of property constituti>>g the Clause (iii)Property was placed in service for Federal inconle tax purposes prior to XI>>y 20.l9Sii.(xi)At all times prior to the closing on the Closing Date the Undivided Interest was ownetl by the Lessee.(xii)The provisions of Section 168(e)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election u>>der Section 203(a)(1)(B) of the Tax Reform Act of 1986)will not apply to the tra>>sactio>>s contemplated by the Transaction Documents or the Financing Documents.(xiii)Throughout the Lease Term the Undivided Interest will>>ot co>>stit>>te-tax-<<x<<>>ipt
>>s<<property" within the meaning oF Section 168(j)of the Code (as such Sectio>>is applicable to property placed in service during 1986 as to which the Owner Participa>>t has>>m<le>>o clccti>>>>~~under Section 203(a)(1)(B) of the Tax Reform Act of 1986)as in etfect on the Closi>>g Date (including the amendment made by Section 1802 of the Tax Reform Act of l986)a>><l th<<provisions of Section 168(j)of the Code (as such Section is applicable to property placed i>>service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B) of the Tax Reform Act of 1986)as in eff'ect on the Closing Date (includi>>g the amendment made by Section 1802 oF the Tax Reform Act of l98(i)will>>ot apply t>>th<<transactions contemplated by the Transaction Docume>>ts or the Fi>>a>>ci>>g Doc>>>>ie>>ts.(xiv)No part of the Undivided Interest will be used predominantly outside the United States within the meaning of Section 168(f)(2)of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has>>wde no electio>>>>>>d<<r Section 203(a)(1)(B)of the Tax Reform Act of 1986).(xv)On the Closing Date, no improveme>>ts, modificatio>>s or atlditio>>s to the U>>divided Interest are required to render the Undivided Interest complete for its intended>>se by the Lessee.(xvi)On the Closing Date.>>o part oi'the cost oi'th<<U>>(livid<<d i>>t<<r<<st or th<<R<<al Pr>>p<<rt~I>>terest paid for or i>>curred by the Lessee or a>>y AfRliate ther<<oi'sl>>ill
>>ot hav<<b<<<<>>r<<i>>il>>>>s<<d by the Owner Trustee.(xvii)On the Closing Date the fair market value of the U>>divided I>>terest was 887.382.030.
the fair market value of the Clause (iii)Property was 878,909,387.92, the fair>>market value of th~Clause (iv)Property was$8,472,642.08 and the fair market value of the Real Property Interest was 845.021.22.(xviii)(A)It is reasonable to expect (x)that the U>>divided I>>terest will be useful to a>>tl useable by a Person other than the Lessee or any Person related to the Lessee at the e>>d of the Basic Lease Term and at the end of the Renewal Term and capable of continued leasing or transfer to such a Person at such times and (y)that it will be co>>>>>>ercially feasible for the Ow>>er Trustee or the Owner Participant to enter into such a lease or transfer at such times in transaction pursuant to which the Owner Participant would realize, with respect to the.Undivi Interest, the residual value set forth in the r'eport of the Appraiser apart from any amounts such a Person'ould be required to expend pursuant to the Assignment and Assumption or otherwise in connection with the acquisition, use or possession of the Undivided Interest and apart from any amounts that such a Person would be required to expend in connection with the acquisition, use or possession of the Real Property Interest and (B)the Undivided Interest does not constitute, and will not constitute during the Lease'',Term,"limited use property" within the meaning of Revenue Procedure 76-30;provided, however, that this representation is not a represenation that any residual value will in fact exist at the end of the Basic Lease Term and any Renewal Term.(xix)The provisions of Section 467 of the Code (as such Section is applicable to property placed in service during 1986 as to which the Owner Participant has made no election under Section 203(a)(1)(B) of the Tax Reform Act of 1986)will not apply to the transactio>>s contemplated by the Transaction Documents or the Financing Documents.(xx)Neither the Lessee nor any Affiliate thereof legally or beneficially or constructively owns or will own (within the meaning of Section 318 of the Code)any capital stock of the Loa>>Participant.
(3)Consistent Tax Returns, The Lessee agrees that neither it nor any of its Affiliates will at any time take any action, directly or indirectly, or file any returns or other documents inconsistent with the assumptions and representations set forth in Sections 13(c)(1)and*(2).and thit the Lessee a>>tl any such Affiliate will file such returns, maintain such records, take such actions a>>d ex'ec<<te s>>ch documents as r'easonably requested by the Owner Participant from time to time as may be appropriate to facilitate the realization of such assumptions by the Owner Participant.
The Lessee cove>>ants~
agrees to maintain, or cause to be maintained, such other records as may lm necessary in orde~verify the factual basis for the matters referred to in this Section 13(c).Except forthe Lessee's-tax returns, the Lessee shall make the records referred to in the preceding sentences available, or cause such records to be made available, for inspection by the Owner Participant or its authorized agents.'uring normal business hours at the Lessee's office it'303 North Oregbn Street.El Paso.Texas>9901.upon request by, and five days'riorwotice from, the Owner Particip;>>>t.
The Lessee shall: at its expense, upon request by the Owner Participant, provide to the'Owner Participant a copy of such records which shall be certified to be a true copy by an affidavit attached thereto and executed by an officer of the Lessee.Notwithstanding the preceding sentence, the Owner Participant or its a>>thorized agents shall have the right to make copies and extracts of any such records at the Owner Participant's sole expense.I (4)Indemnification
-Loss of Tax Benefits.The'Lessee shall indemnify the Owner Participa>>t on an After-Tax Basis for (i)any loss, disallowance.
<lelay in obtaining, or recapt>>re of the Federal i>>co>>ie tax I>>~>><fits described in Section 13(c)(1)resulti>>g in whole or in substa>>tial part froi>><<>>y o>>e or>>>>>re oi'he following events or things: (A)any representation or warranty of the Lessee in Section 13(c)(2)or elsewhere in this Participation Agreement, the other Transaction Documents or the Financing Doc>>>>~e>>ts shall prove inaccurate at any time or he Lessee shall breach any of its covenants in Section 13(c)(2)or any of its agreements, covenants, duties, undertakings or other obliga-tions under this Participation Agreement or the other Transaction Documents or.the Financing Documents, or (B)any act or failure to act by the Lessee or by any Affiliate, transferee, sublesse assignee of the Lessee or by any user of the Undivided Interest or the Real Property Inte~or by any person to whom the Lessee or any Affiliate thereof shall sell power or energy generated at PVNGS, or by any person having custody or possession of Unit 2 or the ndivided Interest or the Real Property Interest or by any ANPP Participant or by any anufacturer, vendor, supplier, contractor or subcontractor of Unit 2 or any part thereof or by any ASliate of any of the foregoing or by any subsequent transferee, sublessee or assignee or by any trustee, receiver, liquidator or debtor in possession of any of the foregoing, other than, in the case of the Lessee, the execution and delivery of one or more of the Transaction Documents or the Financing Documents and acts specifically required or expressly permitted to be performed by the Lessee under the Facility Lease or any Transaction Document or any Financing Document;provided, however, that (w)any act of the Lessee performed to satisfy a general covenant to comply.with Applicable Laws or Prudent Utility Practice or to cause the Undivided Interest to be operated and maintained or to carry out obligations under the ANPP Participation Agreement and related agreements, (x)any act that is permitted by implication or because it is not required or prohibited by such documents, (y)any act that implements a general requirement or right on the part of the Lessee in a manner that is>>ot specifically required or expressly permitted under such documents and (z)the making of a>>y Capital Improvement shall each be an act or failure to act for which the Lessee is responsible under this Section 13(c)(4)(i)(B), or (C)the sale or other disposition of Unit 2, the Undivided Interest.the Real Property" Interest, any item of property constituting the Undivided Interest or the Real Property Interest or any interest in the Trust or the Trust Estate upon the exercise.by the Ow>>er Participant or the Owner Trustee of its remedies under the Facility Lease upon the occurrence of an Event of Default thereunder, or(D)the bankruptcy, or other proceedings for the protection of debtors.of or involvi>>g the Lessee or any transferee, sublessee or assignee of the Lessee or any s>>bseq<<e>>t transferee, sublessee or assignee or any Affiliate of any of the foregoing (i>>each case other than the Lessor and the Owner Participant), or any foreclosure on any property of a>>y of the foregoing, or (E)any damage to or destruction, loss of use, loss of generating capacity, theft.nongovernmental taking or requisition or repair of or any additio>>.in>provement.
r>>o<lifica-tion,'alteration, replacement or substitution of or to Unit'2 or the U>>divided 1>>terest or the Real Property Interest or any part of any thereof, or (F)any governmental taking or requisition of title, use or otherwise of U>>it>.the Undivided Interest or the Real Property Interest or any part of any thereof if such taki>>g or requisition does not immediately constitute an Event of Loss under the Facility Lease.or (G)any payment by any manufacturer or any other vendor or supplier or contractor or subcontractor with respect to any part of Unit 2 or the Undivided Interest or the Real Property Interest, but in the event of any such payment>>>>>de to the Owner Participa>>t.
a>>y indem>>ity pursuant to this Section 13(c)(4)(i)(G)slrall take i>>to ace~>>>>>t a>>y<<c<>>>i>>>>i>>
benefit realized by the Ow>>er Participant fro>>>the receipt oi's>>ch pay>>>e>>t witl>~><<t<h>>>l>lc counting for any economic loss for which such pay>>>ent provitletl co>>>pe>>satio>>.
o'(H)any issuance, defeasance, refinancing, refunding, redemption.
purchase.rep>>rchase.
cancelation, r tirement, reoptimization, substitution, releveraging, modification or remarket-ing of the Notes, or the Bonds, or any other debt securities issued or assumed pursuant to the Transaction Documents or the Financing Documents or any terms or provisions of any thereof or otherwise in connection with the financing, refinancing or any Supple>>>e>>tal Financing of Unit 2, any Capital Improvement, the Undivided Interest or the Real Property Interest or any part of any thereof or interest therein.including, without limitation.
the purchase or deemed purchase by the Lessee or the Loan Participant of any such Notes.Bonds or securities, or (I)the presence of the Loan Participant, or any successor or assign thereof, in the transactions contemplated by the Transaction Documents and the Financing Document~(J)the existence or operation of the ANPP Participation Agreement, the ANPP Pro~Agreements or any amendment to any of the foregoing (including without limitation the rights and remedies of the ANPP Participants) or any obligations of the Lessee or restriction of rights of the Owner Trustee or the Owner Participant or provisions of any of the Transaction Documents or the Financing Documents (including without limitation the provisions of the Assignment and Assumption) resulting from any'of the foregoing, or (K)the existence, provisions, operation or implementation of the License or the License Amendment, or (L)the existence, provisions, operation or implementation of Title USA Companv of Arizona Trust No.530, or (M)the existence, operation or implementation of the provisions set forth in Sec-tion 10(b)(3)(xi)hereof, or (N).the existence, provisions, operation or implementation of Section 8(g), 15(iii)or 16(a)(vii)of the Facility Lease, or (0)the existence or asserted existence of a partnership or association between or among the Owner Participant or the Owner Trustee and any other Person or Persons.or (P)the existence, operation or implementation of the provisions of the Lease permitting the Lessee to elect the Renewal Term pursuant to Section 3(a)(iii)and Section 12 of the Facility Lease, and (ii)any inclusion in the Owner Participant's gross income.for Federal income tax purpo of any amount in respect of any replacement or substitutipn of.any alteration to or moclific;in, or any addition or improvement to, any item of property comprisiiig the U>>divided I>>feres any part thereof or any expenditure made, or property furnished by the Lessee in respect of such.item of property or pursuant to the Transaction Documents or Financing Documents (whether or not permitted or required under the Transaction Documents or the Financing Documents)(any'such loss, disallowance, delay in obtaining, recapture or.inclusion described in Sec-tion 13(c)(4)(i)or Section 13(c)(4)(ii)being referred to as a Loss)." (5)Indemnity Payment-After-Tax Basis.(i)In the event of a Loss.the Owner Participant.
unless pursuant to Section 13(c)(8)the Owner Participant is not entitled to payment with respect to such Loss, shall notify the Lessee of such Loss and the Lessee shall p'ay to the Owner Participant o>>a>>After-Tax Basis an amount (the Indemnity Payment)which shall be equal to the sum of the aggregate additional Federal income taxes payable by the Owner Participant as a result of such Loss and any interest, penalties or additions to tax payable as a result of such Loss (except to the extent such penalties result from the Owner Participant's failure to file ret>>r>>s that are tii>>ely<<>>d proper i>>sofar as they relate to matters unrelated to the transactions co>>te>>iplated by the Tra>>sactio>>
Doc>>>>ic>>ts>>r the Financing Documents).(ii)If the Owner Participant, as the result of a Loss occurring with respect to any year under circumstances that require the Lessee to indemnify the-Owner Participant with respect to such Loss pursuant to Section 13(c)()(i), shall be entitled to claim (taking into account the assumptions set forth in Section 13(c)(6))with respect to any subsequent year Federal income tax savings that would not have been realized but for such Loss, the Owner Participant shall promptly pay to the Lessee an amount equal to the sum of such Federal income tax savi>>gs plus the amount of any Federal, state or local income tax savings the Owner Participant shall re.(taking into account the assumptions set forth in Section 13(c)(6))as the result of any pay>made pursuant to this sentence;provided, however, that such sum shall not be payable (A)be such time as the Lessee shall have made all payments or indemnities then due pursuant to the Transaction Documents and the Financing Documents and (B)while any Default or Event of Default shall have occurred and be continuing; provided further.however.that such s<<m shall not exceed the excess of the amounts previously paid by the Lessee to the Owner Participa>>t pursuant to Section I'3(c)(5)(i)with respect to the Loss that gave rise to such tax savings over th'e a>I>o<<>>ts previously paid by the Owner Participant to the Lessee pursuant to this Section 13(c)(5)(ii)with respect to such Loss..(iii)If the amount that the Lessee would be required to pay purs<<ant to Section I'3(c)(5)(i)with respect to a Loss shall exceed SN0,000 and if (A)the Bonds (or, if the Bonds are>>ot tl>eii rated.the preferred stock of'he Lessee)shall be rated at least"investment gra<le" by Sta>><l;>rcl 8 Poor's Corporation a>>d Moody's Investors Service.Inc.(or.if>>either of s<<el>rati>>g or><;ihiz;>ti<>>>s shall rate the Bonds (or if applicable, the preferred stock of the Lessee);it the ti>>ie.by a>>y n;>tio>>ally recognizecl rati>>g organization in the Unites States of Americ;i).
or (B)tli<<L<<ss<<<<sli;ill liave provicled to tl>e Owner Participant a letter of're(lit or otlier sec<<rity witli rest)<<et to its obligations under this Section 13(c)(5)(iii), in each case adeq<<ate in the sole jii(lg>>ient of the Owner Participant.
then the Lessee may elect.notice of which election shall be given by tlie Lessee to the Owner Participant not later than 15<lays;ifter tl>e Ow>>cr P;irtieipa>>t shall li;iv<<requested a payment by the Lessee pursuant to this Section I'3(c).to pay to the Ow>><<r Participant.
in lieu of'the application of Sections I'3(c)(5)(i)and (ii).on i>>>After-T;>x Basis.oii each succeecling Basic Rent Payment Date during the Basic Lease Ten>>.a>>ai>>o<<iit wliich.wli<<>>ackled to the Basic Rent payable on such Basic Rent Payment Date.sh;ill preserve to the Oiv>>er P;>rticipa>>t tlie sa>>>e Net Eeoiioi>>ie Rctiini (;>f't<<r t;ikiiig i>ito;ice<)iiiit;i>>y p;ist.pr<<s<<iit<>>I'iitiir<<tax beiieiits re:isoii;ibly cxpeetccl by tl>e Ow>>c.r P;irtieipa>>t t<)l)<<;iv;iil:il)lc t<)it)tli it tl<<Owiii r Particip u>t wo<<ld have re;>lize(l if'it Im<l<<ot siiffere(l siich Loss.Tlie Lessee sli;>II iiot l)<<p<<ri>>itt<<<l to i>>ake the election set forth i>>this Sectio>>I'3(c)(5)(iii)if'he Le:>se T<<n>>i>i:>ti<)ii D:it<<<)r;iii Event of Loss shall liave occ<<rrecl.
a Deeiiiecl Loss Eve>it sli;ill li;iv<<b<<c.'ii cl<.<<I>r<g>>r'.i D<<fi<<ilt<>r Event of Default shall have occurred a>>'d be continui>>g.'f the Lease Ternii>>atio<<Date slmll oeeiir after the Lessee shall have commenced making payments pursuant to this Sectioii I'3(c)(5)(iii).on the Lease Terminatio>>
Date the Lessee shall pay to the Owner Particip;>iit o>i;i>i Aft<<r-T;ix B;isis in a li>>>>p sii>>>>;>>;>iiioi>>>t wl>ieh sh;>ll preserve to tli<<Oiv>><<r P;irtic.ip;i>it tli<<s;iiii<
Xc~t Economic Ret<<r>>(after takiiig iiito acco<<>>t previoiis p;iy>>ie>its piirsi<<i>>t to tliis.Si'<<-tion 13(c)(5)(iii)'with respect to such Loss)that the Owner Participant woiild have re;>lize<l if'it had not sufFered such Loss.(6)Determination of Pa@me)>ts.
Whenever it may be i>ecess>ry t'or p<<rpos<<s of'l>is S<<<<tic>>>f:3(<)to<leter<<>i>>e
(;>)whether;>Loss lms occ<<rrecl..(b) tlic a>>io<<>>t of'irx<<s r<<s<<lti>>g fn)i>>;<<iy L<>s>>s<<fferecl by the Ow>>er Participant or (c)the an>o<<>>t of'a>>y Fe(ler;>I ii>co>>>e ti>x savi>>gs r<<t'<rr<<<l t<)ii>Sectio>>I'3(c)(5), such determination shall be rn'ide o>>the iiss<<niptioiis tliat (;i)tl>c F<<cl<<r';il ii><<<>>>><<taxes of the Owner Participant are payable at the highest r>>;irgi>>:il st;>t<<tori';>x rat<<s iii<<fl'<ct f'<)r<<<)rpor;>te taxpayers for thc respective ve;>rs to wl>ieh;<<>i Loss>>r L<)ss<<s r<<hit<<fth<<I ij<vti><Ifatr I.(I))iii<<<)i>>piitiiia'.
its Feel<<r>l i>>eo>>>e tax li;>bility.
tli<<Oivi><<r P:>rti<<ii)a>>t
<<>><<I<l h;>i<c<<rr<>>>fi l<<lli iitiliz<.(I th<<t>x.b<<>><<fits tl>at;>rc tlic.si>bj<<et of'siiel>Loss;ig iiiist tax<<>>p;iy:il)l<<:it tl><<EII'<<>i)
<lt;><<<:<<><I (e)tlie Owiier Particip;i>>t caii c<<rre>>tlv fullv<<tilize:iiiv t:ix saviiigs r<<siilti>>g t'roi>>;i L<)ss;<<;iii>st Fe(leral i>>come taxes payable at the Effective Rate (it bei>>g<<>>clerstoocl.
iii coii>>eetioii
>vith;<<>y L>>ss witl>respert to the be>>eflts describecl in Sectio>i I:3(c)(I)(xv).th:>t'iiotliiiig sc.t I'orth iii tlils s<<lit<.'>>ec.
'shall require the Owner Participant to assume that it can utilize any foreign tax cre<lits tli;it it c;i>>iiot iii I'i>et iitilize).
For purposes of determining the ai>>ount of taxes pay;>ble by tlie Ow>>er P;irticip;iiit iipoii receipt of'a>>y payment req>iirecl to be nmde by the Lessee to the Ow>>erP:>rticip;>i>t p<<rs>>a>>t tc)tliis S<<etioii I:3(c)aiicl the;>nioii>>t of aiiy tax savings realizecl by the Owiier Particip;iiit';is.;i r<.siilt<)I';iiiy y>>>ei)t>>><<<le by the Owner Participant pursuant to Section 13(c)(5)it slialf be;>ssiiiiie<l that leral.state.local a>>cl foreign taxes are payable by the Ow>>er Participa>>t.at tlie highest>>>ar<~i>>:>I
.<tiitory rates i>>effect for the relevi><<t period.Tlie detern>i>>iitioi>
of'he;>iiioui>t pay:>bl>>to or by tli<Ow>>er Participant pi>rsuant to this Sectio>>I:3(c)shall be nia(le in the first insta>>ce by the Oiv>>er
~~Participant,';who shall furnish the Lessee with a notice setting forth.in reasonable detail the computations and methods used in computing such amount;and if requested by the Lessee, determination shall be verified in writing by a firm of nationally re'cognized independent p accountants selected by the Owner Participant and acceptable to'he Lessee.The costs of suc verification shall be borne by the Lessee unless an error (to the disadvantage of the Lessee)of 10 percent or more shall be discovered in which case such costs shall be shared equally.Any statements furnished to the Lessee pursuant to this Section 13(c)(6)shall (a)be signed by a Responsible Olficer of the Owner Participant and (b)state in reasonable detail the basis upon which such amount or adjustment has been determined.
The Lessee agrees that'it will not have the right to inspect the tax returns, books, records or any other documents of fhe Owner Participant or any ASliate thereof in order to verify the basis or the accuracy of the calculations so made or of the amounts set forth in any such statement and that the determinations made by the independent accountants in accordance with this Section 13(c)(6)shall be conclusive and binding.(7)Effective Date.An Indemnity Payment shall be payable not later than 10 days after deman<l by the Owner Participant, except as provided in Section 13(c)(8).(8)Excluded Events.The Owner Participant shall be responsible for, and shall not be entitled to any payment in respect of, any Loss occurring primarily (or, in the case of Section 13(c)(8)(ii).
solely)as a direct result of one or more of the following events: (i)a failure of the Owner Participant to claim in a proper or timely manner the ACRS Deductions, the Interest Deductions or the Amortization Deductions for the appropriate years (any disclosure or failure to make a disclosure pursuant to Section ii661 of the Co<le slmll>>ot cause a claim to be considered ir>>proper), unless (A)the cbiming of any such<led>>etio>>s wo<<l<l be inconsistent with any prior audit adjustment by the IRS with respect to which the Lessee required to indemnify the Owner Participant pursuant to this Section 13(c)(except to the e.such prior audit adjustment is being contested in accordance with the provisions of Se<13(c)(9)), (B)the Owner Participant shall have furnished the Lessee with an opinion of independent tax counsel, selected by the Owner Participant and reasonably satisfactory to the Lessee, to the efFect that as a result of a tax law change.Event of Loss.Deemed Loss Event.Termination Event or an act, omission or misrepresentation of the Lessee (or a>>y other Perso>>referred to in Section 13(c)(4)(i)(B))such claim would not be proper pursuant to the standards of ABA Formal Opinion 85452 or (C)such failure to claim any such deductions for the , appropriate year is caused by a failure of the Lessee to take any action or provide the Owner Participant with any information or document that the Lessee is-required to take or provi<le pursuant to the Transaction Documents or the Financing Documents: (ii)the failure of the Owner Participant to have sufficient Federal taxable income to benefit from the ACRS Deductions,, the Interest Deductions or the Amortization Deductioris: (iii)any voluntary sale by the Owner Participant or any i>>vol>>>>tary sale or other<lisp>>siti>>>>
resulti>>g from the bankruptcy of.the foreclosure against.or a>>y si>>filar procee<limni<,;i<.;<i>>st.
thc Owner Participant or the Owner Trustee, of the Un<livi<le<l 1>>terest.the Trust Estate.or a>>y beneficial interest therein, unless a Default or an Event of Default shall have occurre<l and be continuing;
~(iv)any Event of Loss or'Deemed Loss Event wl..reby the Lessee is required under the Facility Lease to pay, and shall have paid in full, Casualty Value or Special Casualty Value.as the case may be, for all the Undivided Interest, or any termination of the Facility Lease whereby the Lessee is required under the Facility Lease to pay, and shall have paid in full, Termination Value or Special Termination Value for all the Undivided Interest, except to the extent the pay.made with respect to such Event of Loss or termination did not properly reflect the time o occurrence of (or the time of the tax eifect resulting from)such Event of Loss or termi>>atio
.
~~(v)the failure of the Owner Trustee to be taxed as a conduit entity unless such failure arises as n result in whole or in substantial part from one or more of the events or things set forth in Section I'3(c)(4);"(vi)the inability of the Owner Participant to claim the ACRS Decluctio>>s.
the l>>terest Deductions or the Amortization Deductions due to the Owner Participant or nny AfRlinte of a>>y thereof or any preclecessor of any thereof being or becoming an entity subject to the provisions set forth in Section IGS(f)(11).168(j), 4%, 4G9.501, N3.851.856.$71.881.ISGI.I'3SI'or 1891 of'he Cocle as in effect on the elate hereof, in ench case unless such inability or becotnirtg subject results in whole or in substantial part from the trn>>sactions contemplntecl by the Tra>>s;>etio>>
Documents or the Finnncing Documents: (vii)failure of the transactio>>
to qualify as a-true lease-f'r Fe(leral i>>co>>)e tax purpos<<s.res<<lting in the Owner Participant not being treated ns the owner of the U>><livicled Interest f'r Fe(lernl i>>conte tax ptrrposes.
except if s<<ch fnil<<re sh;tll res<<lt irt wltol<<or irt s>rbst;<<>ti:tl p;trt I'r<>>>>one or more of the eve>>ts or things set forth in Sectio>>18(c)(4): (viii)the Owner Participant or the Owner Trustee being treated tts ettg;>geol in a partnership or associntion with a>>y other Person.if such pnrtnership or nssociation arises pri<<t;trily o<<t of'a>>y relntionship a>>tong tire Owper Participant or the Owner Trustee mr<I such otlrer Perso>>otlt<<r th;>r>a relationship arising as.a result in whole or in substantial part of the existence.
provisiorrs.
operation or implementation of the transaction contemplnte(l by the Tra>>sactior>
Docunte>>ts.
tlt<<Fi>>ancing Documents or the ANPP Project Agreements or as a result in whole or ir)s<<bsta>>ti;tl part f'rom nny one or>>tore of the events or things set forth in Section I:3(c)(4): (ix)tl)e taxable yc:tr of'l)e Ow>>er Participnrtt or th<<Owr)<<r Tr>rst<<<<<l<<ri>>r!)vhi<h th(~Closing D;tte occtrrs beit>g shorter tha>>;t t;tx;>hie ye;tr co>>t;ti>>i>>g I I r>>o>>tits<<>>l<<ss th(.'xist(>>(<<
of st>el)taxable ye;tr cor)t;ti>>itrg fewer th:t>>II r>>ortths sl)all r<<s>rlt fr()>>>':tr>y;>sp<<<<t
<)I'.-th<<trnrts;>etio>>s co>>te>>tpl;tte(l by tire Tr;t>>s;>etio>>
Doc<<rr>cr)ts or tlt<<Fi>>;>>><<ir>g D>><<<<>>>c>>t>>
>)r I~>rensort of the<late Unit 2 was pl:tee<I i>>service: ar>cl (x)the failure of the Owner Pnrticipant to fulfill'its material obligations to contest a proposed ndj<<str>>ent or aclverse determination as provicle(l i>>Section IS(c)(9)..(9)Contests.(i)If tire IRS proposes in writir>g;trt a(lj>rst>>t<<ttt i>>th<<F<<(l<<ral i>><<()r>><<t:tx Ii:>l)iliti of'tire Ow>>er P;trticip;trtt.
wltich adjustment if sustai>>e(l wo<<lcl rest>It ir>a Loss.the Ow>>er P:trti<<ip:>r>t shnll notify the Lessee promptly of such adjustment and of nil action taken or proposed to be taken by the IRS an<I the Owner Pnrticip;tnt shall for at least'30 clnys after givi>>g s<<ch>>oti<<e torbe;tr.if s<<<<h forbe>ra>>ce is permittecl by law.payment of wty tax (i>>cltrcli>>g ir)terest.
per>ziti<<s;t>><l:t<l<litio>>s t<)tax ther<<or))<<sserte<l to be.p;tyable;ts;t result of such propose<I;t<ljtrstr>><<>>t.
Th<<L<<ss<<<<ttr!l'<<<<s tht>t tl>(Owtter Participa>>t's failure to provi(le<<>>y notice referrecl to it)tire prece(litrg s<<t>tc;rtc;<<sit;tll r<<)t>>I l'(.(t the Lessee's obligations under this Sectio>>I'3(c)unless s<<clt fail<<re sh:tll pr<<clt><l(tilt.'<<ss<<<<
I>'<)I>>pursuing its rights under this Section I.'3(c)(9).(ii)If: the Lessee reqi>ests witl>it>'30<I:tys:tfter tl><<Ow>><<r P:trtir.ip;t>>t's r><)ti<<<<i)>>rs>r:>r>t t<)S<<<<t<<)>>I:1(<<)(9)(r) tl>'tt t)t<<prop()s<<<l:>clj>tst>>><<r>t l><<<<()r>t<<st<<(l.
th<<0<v>>(r P:>r'ti(>!);>>>t
~l>all<<<)>>t<<st tire prc)pos<<(l;<<lj>rstrttcrtt irt goo(l I'aitlt;>t tlt<<tri;tl<<<)<<rt l<<i<<I<<p(>>>><<<<<<i!)t ()I';>>><)pi>>i>>ll>>I irt(lcpe>>(let>t t;tx co<<r>sel of'rmtior)ally recogr)ize(l st;tt><li>>g s<<l<<<<te(l l)y tl>(.L(.ss<<(.;>r<<l r<<:>s()>>;>I)li sntisfactory to the Owner Participant to the eH'ect that there exists a b;tsis in Iaw n>><l I;><<t<<>><l(.r tire st;tr><lar<l ir>>posecl bv ABA Font>>>I Opi>>iort S~-:352 for st>eh co>>test;t>>cl;tt e;tel>;tpp<<ll;>t(l(i<<I upon receipt of an opinion o." independent tax counsel of nntio>>ally recog>>ize(l star)cli>>g sel<<<<t<<cl by the Lessee and reasonably satisfactory to the Owner Participn>>t to the eH'ect thnt there exists:>s<<bsta>>tial possibility that an appellate court will reverse or s<<bstantinlly>>)o(lify the lower co<<rt (lecisio<<:
proviclecl.
however.that (A)tlie Owner Participa>>t sh;tll be er)title(l to p>rrs<<<<or I'<)r<<o:>try aclmi>>istrative appeals.proceedings.
hearings ttrtd confere>>ces.
slrall be req<<ire(l to<<o>>test any propose(l;>dj<<stntent beyond the level of administrative proceecli>>gs only if'i<<)ely r<<q<<estecl by tire Lessee;>>>cl shall trot be required to pursue n>>y appettl to the Urtitecl St;ttes S<<pre>>>e Co<<rt.(B)the Ow>>er Participnnt sh:tll determine the court of competent jurisclictiott in which to co>>test the proposed adjustment either before or after payment of the tax asserted to be payable result thereof, and (C)the Owner Participant shall keep the Lessee informed as to the progr any litigation and, if requested by the Lessee, shall consult with the Lessee's counsel (provi that the conduct of all administrative proceedings and litigation shall nevertheless remain within the sole control and discretion of the Owner Participant and its tax counsel).The Owner Participant shall not be required to take any action pursuant to this Section 13(c)(9)(ii)unless (A)the amount of the Indemnity Payment (or equivalent amount payable under Sec-tion 13(c)(5)(iii))arising from all proposed adjustments with respect to a taxable year, plus all indemnities that would arise by reason of the fact that the subject matter of any such adjustments is of a continuing nature, shall be in excess of$250,000;(B)the Lessee shall have acknowledged its liability to the Owner Participant for an indemnity payment pursuant to this Section 13(c)(9)(ii)as a result of any proposed adjustment if and to the extent the Owner Participant shall not prevail in the contest of such proposed adjustment and the Lessee shall have agreed to indemnify the Owner Participant in a manner satisfactory to the Owner Participant for any liability or loss that the Owner Participant may incur as a result of contesting such proposed adjustment;(C)the Lessee shall have agreed to pay, and shall pay, the Owner Participant on demand all reasonable costs and expenses that the Owner Participant may incur in connection with contesting such proposed adjustment (including, without limitation, reasonable legal, accounting and investiga-tory fees, disbursements, penalties, interest and additions to tax);(D)no Event of Default shall have occurred and be continuing; and (E)the Owner Participant shall have determined that the action to be taken will not result in any danger of sale, forfeiture or loss of, or the creation of any Lien (except for Liens permitted under the Transaction Documents and except if the Lessee shall have adequately bonded such Lien or otherwise made provision to protect the interests of the , Owner Participant in a manner satisfactory to the Owner Participant) on the U>>divide<1 Interest.the Real Property Interest, Unit 2 or any part thereof or interest therein.The Owner Particip shall also not be required to contest any proposed.adjustment if the subject matter thereof be of a continuing nature and shall have previously been decide<i pursuant to the co>>provisions of this Section 13(c)(9), unless there shall have been a change in the law (i>>cludi>>g, without limitation, amendments to statutes or regulations, administrative rulings and court decisions) after such previous contest shall have been so decided, and the Owner Participant shall'ave'received an opinion of independent tax counsel selecte<l as provi<le<l in this Sec-tion 13(c)(9)(ii)and furnished at the Lessee's sole expense to the effect that the prior authorities are,no longer determinative of the issue and that under such new law there exists a basis in law and fact under the standard imposed by ABA Formal Opinion 85-35R to contest such proposed~adjustment.(iii)If the Owner Participant shall elect to contest a propose<l adjustment by payi>>g the t;ix claimed (including such other amounts payable as interest, penalties or additions to tax)and seeking a refund, and if the proposed adjustment would be a Loss with respect to which the Lessee could be required to indemnify the Owner Participant pursuant to this Section 13(c).then the Lessee shall advance to the Owner Participant on an interest-free basis a>><l with iio;i<I<lit'I<)liiil net after-tax cost to the Owner Participaiit the ag<<regate a>>io>>>>t of s<<cli tiixes.i>>tcrest.pc>>;iltics and additions to tax that the Owner Participa>>t shall have elected to pay.If the Ow>>er P:irticip;i>>t subsequently receives a refund, in whole or in part, of such taxes, interest, penalties or additions to tax (or if the Owner Participant would have received such a refund but for the fact that f>>n<ls advanced by the Lessee were applied in payment of a tax liability of the Owner Participaiit for which the Lessee is not responsible under this Section 13(c)), or if'.he Loss is not one for which the Lessee is required to make an Indemnity Payment (or payment pursuant to Sec-tion 13(c)(5)(iii)), the Owner Participant shall promptly pay to the Lessee the amount of such refunded or credited (or refundable or creditable) taxes.money advanced, interest.penaltie additions to tax plus the amount of any related interest received (or receivable) by the Oi Participant from the taxing authority; provided, however, that the Owner Participant may o the amount of such r'efunded taxes, interest, penalties or additions to tax against any amount due-G2-and owing by the Lessee to the Owner Participant pursuant to this Section 13(c);provided further, however, that the Owner Participant shall not be required to make'any payment to the Lessee pursuant to this Section 13(c)(9)(iii)to the extent such payment (minus any such interest attributable thereto not previously'aid by the Lessee)would exceed the amount previously paid by the Lessee to the Owner Participant with respect to the Loss giving rise to such refund.(iv)Notwithstanding anything to the contrary contained in this Section 13(c)(9), the Owner Participant may at any time decline to take any action or any further action with respect to a proposed adjustment that it would otherwise be required to take pursuant to this Section 13(c)(9)or may settle any contest without the consent of the Lessee;provided, however, that if the Lessee shall have properly requested such action or contest pursuant to Section 13(c)(9)(ii)and shall have duly complied with all the terms of this Section 13(c)(9), the Owner Participant shall notify the Lessee that the Owner Participant waives its right to any Indemnity Payment by the Lessee that would otherwise be payable by the Lessee pursuant to this Section 13(c)in'respect of such adjustment, including any indemnities arising solely from such adjustment in subsequent years or which would arise by reason of the fact that the subject matter of such adjustment is of a continuing nature.In such event, the Owner Participant shall, within 30 days of such notice.reimburse the Lessee for the amount of all taxes, interest, penalties and additions to tax previously
'advanced by the Lessee to the Owner Participant pursuant to Section 13(c)(9)(iii).(v)If the Lessee shall have appropriately requested the Owner Participant
'to contest any proposed adjustment as above provided and shall have duly complied with all the terms of this Section 13(c)(9), the fact of the Lessee's liability for indemnification to the extent required pursuant to this Section 13(c)shall become fixed upon a Final Determiriation of the liability of tlie Owner Participant for the tax and any interest, penalties and additions to tax asserte<l to be payable as a result of such proposed adjustment.
A"Final Determination" with respect to;i Loss shall mean (A)a decision, judgment, decree or other order by any court of cor>>pcterit jurisdiction, which decision, judgment, decree or other order has become final (i.e..wheii<<Il allowable appeals have been exhausted by either party to'the action to the extent required.by this Section 13(c)(9))or, in any case where judicial review shall at the time be unavailable by reason of the proposed adjustment involving a decrease in a net operating loss carryforward.
a decision.judgment, decree or other order of an administrative o%cial or agency of competent jiiris<liction.
which has become final (i~e., all administrative appeals have been exhausted by either party to tlie extent required by this Section 13(c)(9)), (B)a closing agreement entered into under Section 7121 of the Code or any other settlement agreement entered into in connection with an administrative or judicial proceeding, or (C)the expiration of the time for instituting a claii>>f'r refund, or if such a claim was filed, the expiration of the time for instituting suit with respect thereto.Notwithstanding anything in this Section 13(c)(9)to the contrary.the Owner Particip;iiit shall not be required to make any payments to the Lessee under this Section 13(c)(9)while tliere shall be an amount due and owing by the Lessee to the Owner Participant under any of the Transaction Documents or the Financing Documents.
or if and for so long as an Event of Defaiilt shall have occurre<land be continuing.
The amo>>nt payable to the Ow>>er P<<rticip;i>>t p>>rs>>;i>>t to this Sectioii 13(c)(9)shall be paid iipon receipt by the Lessee of<<writtc>><lei>><<ii<l tli<<rci'iir i'ro>>i the Owner Participant accompanied by a written statement<lescribi>>g iii<let;iil such Loss;>>i<l the computation of the amount so payable.(vi)The provisions of this Section 13(c)(9)shall apply mutatis mutandis with respect to claims for interesr, penalties and additions to tax referred to in Section 13(c)(iv)of the Facility Lease unless the Owner Participant shall have received an opinion from independent tax counsel selected by it to the.efFect that it is more likely than not that such interest.penalties or additions to tax are payable.(10)Adjustments, The assumed Federal income tax benefits set forth in Section 13(c)(1)shall be adjusted to reflect any adjustments provided for in Section 3(d)of the Facility Lease.In the event a>>y->>3-paymeqts shall be due to the Owner Participant under this Section 13(c), the schedules of Casu."'alues, Termination Values, Special Casualty Values and Special Termination Values shall be appr ately adjusted.If an event giving rise to the payment of an amount determined by reference t schedule of Casualty Values, Termination Values, Special Casualty Values or Special Termination Values shall occur and the date as of which the Owner Participant shall be affected shall be ea'rlier than the date taken into account in computing such schedule, such Values shall be appropriately increased based otherwise on the same assumptions previously used by the Owner Participant in calculating such schedule.(ll)Agliated Group.For purposes of this Section 13(c), the term-Owner Participant" shall include any member of an affiliated group of corporations of which the Owner Participant is, or may become, a member if consolidated or combined returns are or shall be filed for such affiliated group for Federal, state or local income tax purposes.(12)Payments.All payments to be made to the.Owner Participant or the Lessee pursuant to this Section 13(c)shall be made in immediately available funds to such bank and/or account in the continental United States for the account of the Owner Participant or the Lessee as from time to time the Owner Participant shall have directed the Lessee or the Lessee shall have directecl the Owner Participant, as the case may be, in writing.If the date on which any payment to be macle pursuant to this Section 13(c)shall not be a Business Day, such payment shall be made on the next succeecling Business Day.(13)Interest.Interest at the'Penalty Rate shall be payable on any amount not paid when due under this Section 13(c)until such amount shall be paid.SECTION 14.Trarisaction Expenses.(a)Transaction Expenses.Subject to the provisions of Section 14(c).with fu>>cls proviclecl by Owner Participant, the Owner Trustee hereby agrees that it will pay when clue the following costs a expenses (Transaction Expenses): (i)(x)the reasonable legal fees and disbursements of Mudge Rose Guthrie Alexander ice Ferdon (as counsel for the Loan.Participant), Cravath.Swaine R Moore.Csaplar 8 Bok.Shaw.Pittman, Potts R Trowbridge, Meyer, Hendricks, Victor.Osborn R Maleclon.Rocley.Dickason.Sloan, Akin ice Robb, Baker R Botts, Fitzgerald R Brown and Willkie Farr h Gallagher (as counsel.for the Indenture Trustee), for their services rendered in connection with the execution and delivery of this Participation Agreement and the other Transaction Documents ancl all fees.expenses and disbursements incurred by any of such law firms.the Owner Participant or the Loan Participant in connection with such transactions and (y)an amount not to exceecl 825.000 to be paid to Drexel Burnham Lambert, Incorporated for financial consulting services providecl to the Owner Participant;(ii)the initial (but not the ongoing)fees and expenses of the Owner Trustee, the Paying Agent ancl the Indenture Trustee: (iii)all stenographic.
printing, reprocluction.
ancl other reasonable out-of-pocket expenses (other than investment banking or brokerage fees)incurred in connection with the execution ancl delivery of this Participation Agreement and the other Transaction Documents and Financing Documents and all other agreements, documents or instruments prepared in connection there-with (including all computer analysis and travel related costs);(iv)the fees of the appraisers for services rendered as contemplated by Section 11(a)(15)and the fees of the consultants for services rendered as contemplated by Section 11(a)(l9):~(v)all costs of issue of the Initial Series Bonds, including, without limitation, the cost preparing the Financing Documents, filing fees relating to the Registration Statement ancl fe'es.expenses and disbursements of Willkie Farr R Gallagher.
as counsel t'or the Collateral Trust Trustee, Mudge Rose Guthrie Alexander.R Ferdon, as counsel for the Loan Participant, Willkie Farr R Gallagher, as counsel for the underwriters of the Bonds, the initial fees of the Collateral Trust Trustee and its out-of-pocket expenses through the Closing Date, rating agency fees and the fees and commissions of the underwriters of the Bonds;and (vi)the fees and out-of-pocket expenses of Babcock R Brown Financial Corporation and Systems Marketing, Inc.in connection with the placement of the beneficial interest in the Trust.Subject to the provisions of Section 14(c)below, funds for the payment of Transaction Expenses will be provided by the Owner Participant to the Owner Trustee and the Owner Trustee will promptly disburse such funds.(b)Post-Closing Expenses.The Lessee will'pay, as Supplemental Rent, (i)the ongoing fees, expenses, disbursements and costs (including legal and other professional fees and expenses)of or incurred by the Owner Trustee, the Indenture Trustee, the Paying Agent and the Collateral Trust Trustee, including in connection with the issue, sale and purchase of Notes and Bonds after the Closing Date, and (ii)all fees, expenses, disbursements and costs (including legal and other professional fees and expenses)incurred by the Loan Participant, the Owner Participant.
the Owner Trustee, the Indenture Trustee, the Paying Agent and the Collateral Trust Trustee in connection with (a)any Default, Event of Default, Indenture Default or Indenture Event of Default, (b)the entering into or giving or withholding of any amendment, modification, supplement, waiver or consent with respect to any Transaction Document or Financing Document, (c)any Event of Loss or Deemed Loss'Event, (d)any transfer of all or any part of the right, title and interest of the Indenture Trustee in.to and under the Transaction Documents, (e)any transfer of all or any par't of the Trust Estate, (f)any transfer contemplated by Section 7(b)(4)and (g)any relevcraging, rcftincli>>g or reoptiniization referred to in Section 2(c), 2(d)or 2(e).(c)Lessee's Obligation.
Notwithstanding Section 14(a), in the event the transactions contein-plated by this Participation Agreement shall not be consummated.
the Lessee shall pay or cause to be paid, and shall indemnify and hold harmless the Loan Participant, the Indenture Trustee, the Owner Trustee and the Owner Participant in respect of, all Transaction Expenses, unless such failure tq, consummate shall result solely from the Owner Participant's default in making its Investment.
SECTION IS.Owner Participant's Transfers.'a)
Transfers.
After the Closing Date, except as contemplated by the Facility Lease.the Owner Participant shall not assign, convey or otherwise transfer all or any part of (inclodin I, rcitlioot Iimitation, an undivided interest in)its right, title or interest in and to this Participation Agrecine>>t.
any of the other Transaction Documents or the Trust Estate (except its right ta receive Excepted Payments)to any Person (a Transferee) except on the following conditions: (i)the Transferee shall enter into an agreement or agreements whereby such Transferee confirms that (1)it shall be bound by the terms of this Participation Agreenierit
<<nd each other Transaction Document.to the extent of the interest transferred.
as ii'it lu<l been oric!in;ally nun<ed as the Owner Participant hereunder and thereunder and (2)ii'such Transi'cree is a public utility company, it shall have waived its right to claim Special Casualty Value upon the occurrence oi'a Deemed Loss Event of the type specified in clause (1)of the definition thereof'.(i.')the Transferee shall be a financial institution, a corporation or a partnership; anti (iii)such transfer shall not violate the Securities Act or any provision of, or create a relationship which would be in vi6lation of, any Applicable Law or agreement to which the transferring Owner Participant or the Transferee is a party or by which its property is bound.pon any such transfer, the transferring Owner Participant shall be released from its obligations under this Participation Agreement and the other Transaction Documents to the extent of the interest-oo transferred.
An agreement to transfer shall not in and of itself constitute a transfer for purposes o Section 15..(b)Procedure.
If the Owner Participant transfers all or any part of its interest hereunder pursuant to this Section 15, it shall give written notice thereof to the Lessee, the Owner Trustee, the Indenture Trustee and the Loan Participant, specifying the name and address for notices to the Transferee, such other information and e'vidence as shall be necessary to establish compliance with.this Section 15 and the extent of the interest transferred to such Transferee.
If, as a result of any such transfer, the original"Owner Participant" is not to continue to receive all payments to be made by the Indenture Trustee to the"Owner Participant" under the Indenture, the original"Owner Participant" shall from time to time, by notice to the Indenture Trustee, with copies to the Lessee, the Owner Trustee and the Collateral Trust Trustee, designate the manner in which any such payments to such"Owner Participant" are to be allocated, and the Indenture Trustee and the Lessee shall be entitled to rely on such notice for all purposes.This Section 1.5 shall not apply to the Special Transfer.This Section 15 is for the benefit of the Lessee, the Owner Trustee and the Owner Participant and may not be enforced by any other party hereto.SECTION 16.Brokerage and Finders'ees and Commissions.
Except to the extent of amounts payable by the Owner Participant pursuant to Section 14, the Lessee will indemnify and.hold harmless the Loan Participant, the Indenture Trustee, the Owner Trustee and the Owner Participant in respect of any commissions, fees, judgments or other expenses of any nature and kind which any of them may become liable to pay by reason of any claims by or on behalf of brokers, finders, agents, advisors or investment bankers in connection with the transactions contemplated by this Participation Agreement, any other Transaction Document or any Financing Document, or any litigation or similar proceeding arising from any such claim.other than those cl;'rising out of written undertakings of the party claiming indemnification under this Section 1G o ASliate or shareholder (or ASliate of such shareholder) of such Person with any such broke'r: fir agent, advisor or investment banker.SECTION 17.Survival of Representations and Warranties; Binding EfFect.(a)Survivnl.All indemnities, representations and warranties contained in this Participation Agreement, in any ather Transaction Document, in any Financing Document and in any agreenient, document or certificate delivered pursuant hereto or thereto or in connection herewith or therewith.
shall survive, and shall continue in efFect following, the execution and delivery of this Participation Agreement, the making of the'investments and the loan referred to herein.'ny'isposition of any interest in the Undivided Interest, Unit 2 or any other property referretl to in this Participation Agreement and the expiration or other termination of any of the Transaction Documents or Financing Documents and shall be and continue in efFect notwithstanding (i)any investigation made by the Owner Participant or the Loan Participant or (ii)the fact that any of the Indenture Trustee.the Owner Trustee, the Loan Participant or the Owner Participant may waive compliance with a>>y of the other terms.provisions or contlitions of any of the Transaction Docunients or Fina>>cine Do<<<<i>>cuts.
The obligations of the Lessee under Sections 10(b)(1)(vi).10(b)(1)(vii).i0(b)(2).10(b)(3)(vii).10(b)(3)(x), 10(b)(3)(xi), 10(b)(3)(xiv), 10(b)(3)(xv), 10(b)(3)(xvi).10(b)(3)(xvii).1:3.I4.IG and 19(f)shall survive the expiration or other termination of this Participation Agreement or any other Transaction Document or Financing Document.The modification by law of any statute of limitations or the waiver or e".,;ension of any statute of limitations by the Owner Trustee, the Indenture Trustee, the Lessee, the Owner Participant, the Loan Participant or any Indemnitee shall not alFect such survival.(b)Binding Egest.All agreements, representations and warranties in this Participation A ment, the other Transaction Documents and the Financing Documents and in any agreer document or certificate delivered concurrently with the execution of this Participation Agreemet from time to time thereafter, shall bind the party making the same and its successors and permitted-oG-
~~signs and shall inure to the benefit of each party for whom made and their respective successors and rmitted assigns, and, to the extent'provided in the next sentence, each Indemnitee and its successors and assigns.The obligations of the Lessee under Sections 10(b)(3)(xi)and 13 and under Section 20.of the Facility Lease are expressly made for the benefit of, and shall be enforceable by, any Indemnitee, separately or together, without declaring the.Facility Lease to be in default and notwithstanding any assignment by the Lessor of the 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 Participation
'Agreement, or in this Participation Agreement or any Transaction Document or any Financing Document.All payments required to be made pursuant to Sections 10(b)(3)(xi)and 13 shall be made directly to, or as otherwise requested by, the Indemnitee entitled thereto upon written demand by such Indemnitee.
Except to the extent permitted by Sections 10(b)(3)(ii)and (iii), the Lessee shall not assign any of its rights or obligations hereunder without the prior written consent of the Owner Participant and the Owner Trustee.Except as otherwise indicated, all references herein to any party to this Participation Agreement and the other Transaction Documents shall include the permitted successors and assigns of such party.SECTION 18.Notices.All communications, notices and consents provided for herein shall be in writing, including telex, telecopy or other wire transmission containing a request for assurance of rec'eipt in a manner typical with respect to communications of that type, or mailed by registered or certified mail, and shall be addressed (i)if to the Owner Participant, at Commercial Federal Tower, 2120 South 72nd Street.Omaha, Nebraska 68124, Attention:
JefF Bainbridge;(ii)if to the Loan Participant.
at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, Attention:
President: (iii)if to FVB or the 2~2 Owner Trustee, at 100 Federal Street, Boston, Massachusetts 02110.Attention:
Corporate Tr<<st ivision (TWX No.940581);(iv) if to the Indenture Trustee, at First City Financial Center.l30l annin Street, 21st Floor, Houston.Texas 77002, Attention:
Corporate Tr<<st Department:
and (v)if to the Lessee, at 303 North Oregon Street, El Paso, Texas.79901, Attention:
Secretary; or at such other address as any party hereto may from time to time designate by notice duly given in accordance with the provisions of this Section to the other parties hereto.All such communications.
notices and consents given in the manner provided above shall be effective on the date of receipt of s<<ch communication or notice.SECTION 19.Miscellaneous.(a)Execution.
This Participation Agreement may be executed in any n<<mber of counterparts and by the difFerent parties hereto on separate counterparts.
each of which.when so exec<<tell a<<d delivered, shall be an original, but all such counterparts shall together constit<<te b<<t one and the sandie instrument.
Although this Participation Agreement is dated as of the date first above written l'r convenience, the actual dates of execution hereof by the parties hereto are respectively the dates set forth under the signatures hereto.and this Participation Agreement shall be'effective on the latest of s<<ch dates.(b)Intention of tlute Ou:ner Trustee and the.Otcner Participant.
Each of the Owner Tr<<st~e a<<<l the Owner Participant intends to exercise its rights and carry out its obligations hereunder and<<<<der the other Transaction Documents solely with a view to furthering its own best interests and does not have.and does not expect to have, any form of joint profit motive with any other Person.The Owner Trustee and the Owner Participant shall not be required to share any Rent to which they are entitled under.:.e Facility Lease, or the residual value of the Undivided Interest or the Real Property Interest, with any~other Person.The Owner Trustee and the Owner Participant are not under the control of nor shall ey be deemed to be under the control of any other Person having any interest in Unit 2.and shall not the agent of or have a right or power to bind any such Person (other than the Owner Participant as egards the Owner Trustee)without its express written consent.The Owner Trustee (on behalf of the Ovvner Participant) and the Owner Participant (on its own behalf)have and at all times shall retain the right separately to take or dispose of the Undivided Interest and the Real Property Interest, sub'nly to the rights of the Lessee and the Loan Participant under the Transaction Documents.
Owner Trustee and the Owner Participant accordin'gly do not intend to create any form of partner or joint venture with any other Person by virtue of the transactions c'ontemplated hereby or by any of the Transaction Documents.
In the event that it is determined, contrary to the intent of the Owner Trustee and the Owner Participant, that, for purposes of the Code or any other ihcoine tax law, a form of partnership or joint venture exists between the Owner Trustee or the Owner Participant and any other Person, the Owner Trustee and the Owner Participant hereby elect to the extent permitted by law (i)not to have the partnership provisions of the Code or such other income tax law apply to any of the transactions contemplated hereby or by any of the Transaction Documents and (ii)to be treated solely as owning the Undivided Interest and the Real Property Interest.(c)Governing Lau>.This Participation Agreement 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 Yorlc.~(d)Amendments, Supplements, etc.Neither this Participation Agreement nor any of the terms hereof may be amended, supplemented, waived or modified orally, but only by an instrument in writing signed by the party against which enforcement of such change is sought.(e)Headings.The headings of the sections and paragraphs of this Participation Agreement have been inserted for'onvenience of reference only and shill in no way restrict or otherwise modify any of the terms or provisions hereof.(f)Bankruptcy of Owner Participant.
If (a)the Owner Participant or the Owner Trustee becomes a debtor subject to the reorganization provisions of the Bankruptcy Cocle, or any s<iccessor provision, (b)pursuant to such reorganization provisions the Owner Participant or the Ow>>er Tr<<s's required, by reason of the Owner Participant being held to have reco<irse liability<lirectl indirectly to the Holder of any Note or the Indenture Trustee, to a>akepay>>>e>>t o>>;icco>>>>t o ainount payable as principal or interest on such Note and (c)such Hol<fer or the Indenture Trustee actually receives any Excess Amount which refiects any payment by the Owner Participant on account of clause'(b)of this Section, then such Holder or the Indenture Trustee, as the case may be, shall promptly refund to the Owner Participant such Excess Amount.For purposes of tliis Section.-Excess Amount" means the amount by which such payment exceeds the amount which would have bee>>received on or prior to the date of such payment by such Holder or the Indenture Trustee if the Owner Participant or the Owner Trustee had not become subject to the recourse liability referred to in clause (b)of this Section.Nothing contained in this Section shall prevent such Hol<ler, or the Indenture Trustee from enforcing any personal recourse obligation (a>>d retaillilig the procee<ls thereof)of the Owner Participant expressly provided for under this Participation Agree>>ie>>t.(g)Entire Agreement.
This Participation Agreement and Exhibits, the other, Transactio>>
Docu-ments and the Financing Documents supersede all prior agreements, written or oral, between or among any of the parties hereto relating to the transactions contemplate<i hereby ai><l thercl>y>>ii<1 e;ich of the parties hereto represents
<<>>d warrants to the otliers th:it this Participati<><<A<:rcc>>ic>>t
>><i<i the other Transactio>>
Documents and the Finaiicing Docuiiieiits co>>stit<ite tlie e<itirc;<grc<.<>>c>>t among the parties relating to the transactions contemplated hereby a>><l thereby.(h)P>>bticity.
Each party hereto agrees that it will not issue or release for external p>>blicatio>>
any article or advertising or publicity matter relating to the transactions contemplated hereby or any similar transaction and mentioning or implying the identity of the Owner Participa>>t without the prior written consent of the Owner Participant; provided, however, that the Owner Participant agrees that such written consent shall not be required if such issue or release is required by Applicable Law.
IN WITNESS WHEREOF, tlie parties hereto have" each caused this Participatio>>
Agreei>>e>>t to b<uly executed by their respective ofRcers thereunto duly authorized as of the dates set forth below.COMMERCIAL FEDERAL INVESTMENT CORPORATION By: Date: ta t Vice Presiden EL PASO FUNDING CORPORATION By: Date:/,~Vice President/, J>/(-.=-.-EL PASO ELECTRIC COMPANY By: Vice President Date: J-/8-8"~~-THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee By: Date: Assi tant Vice FIRST CITY NATIONAL BANK OF HOUSTON, in its individual capacity and as Indenture Trustee By: Assistant.
Vice President
 
Schedule I EL PASO ELECTRIC COMPANY PALO VERDE ViUCLEAR GENERATING STATION UiVIT 2 NOTICE OF CLOSING Pursuant to Section,'5(a) of the Participation Agreement.
dated as of Deceniber l.198G (tli<<Participation Agreement), among Commercial Federal Investmerit Corporation.;is Owner Particip;iiit.
El Paso Funding Corporation.
as Loan Participant.
The First National Bank of Boston.as Ow>>er Tr>>stee.First City.National Ba>>k of Houston.as Indenture Tr>>stce.;>>i<i El Paso El<<ctric Coi>>p;i>>y (El Paso).El Paso liereby gives iiotice of;i Closing to occur at l0:00 a.>>i.o>>D<<<<<<i>>li<<r
.I<)'l(i.Tli<<Closing will be held at the ofRces of (i)Purchase Price is the anioiiilt specifie in Sche<liil<<2 as tile-P>>r<<li:ise pri<<<<.-(ii)Real Estate I>>vestr>>ent is the aniount set forth in Sche<liile 2 as tll<<-R<<;il Est;it<<Investment." (iii)Based upo>>information supplied to El Paso.Estini;it<<<i Tra>>s;ictioii Expcils<<s<<r<<:l'>>aggregate of 8.Instructions with respect to payment of siich Esti>>i;ite<l Trii>>sa<<ti<iil Expenses are attached hereto.~~(iv)Piiy>>le>>t of the Piirch:isc Price;i>><l th<<a<<q>>isitio>>
pri<<<<of th<'<<;il Pr>>p<<rts l>>t<i'<st sh;ill be>>iade<<s provi<le<l in the P;irticip itio>>Agrcei>>c>>t.
Capitalize<i.
ten>>s use<I liereiil;iii<l llot otherwise spc<<ifi<<ally
<l<<fiiii<<<l li<<r<<i>>sli;ill l>>ii<tli<<mea>>i>>gs set forth i>>Appe>>dix A to the Participatioii Aj,'reei>>e>>t.
IN WITNESS WHEREOF, El Paso has executed this Notice ol'Closiiig tliis l98G.<l;iy of D<<c<<iiill<<r.
EL PASO ELECTRIC COlvlPAiVY Vice Pr<<si<l<<lit e
Schedule 2 PRICING ASSUiif PTIONS Basic Rent, Casualty Value, Special Casualty Value, Termination Value and Special Termination Value, as to be set forth in the Facility Lease as it will be originally executed, will be computed on the basis of the following pricing assumptions:
Closing Date Loan Percentage
.Investment Percentage.......
~.......Lessor Note Rate Basic Lease Term (years)..........
Initial Series Note Amortization Schedule.........
Interim Rent Rent Structure First Basic Rent Payment........
~.....Owner Participant's Tax Rate..........
Transaction Expenses (funded by'he Owner Participant and expressed as a of Purchase Price)Purchase Price.Real Estate Investment:...............
December 18, 1986 79.9992859%
20.0007141%
Notes due 1992=8.20%: Notes due 1997=9.20%: and Notes due 2011=10.50%26.79 years See Schedule 2A attached hereto 0.0%Semi-annual payments in advance July 2, 1987 46%for the year ending June 30.1987 and 34%thereafter 2.5%$87,382,030
$45,02L22 0 I Schedule 2A DISPLAYED IN PERCENTAOF'i OF TOTAL ASSET COSTDate 7/2/1987 I/O/1988 7/2/1988 I/2/19S9 7/2/1989 I/2/1990 7/2/1990 I/')/1991 7/2/1991 I/O/1992 7/2/1992 I/2/1993 7/2/1993 I/2/1994 7/2/1994 I/2/1995 7/2/1995'I/2/1996 7/2/1996 I/O/1997 7/2/1997 II/199S 7/2/1998 I/2/1999 7/2/1999 I/2/2000 7/2/2000 I/2/2PQI ,7/2/200'I I/O/2002/''Q2 I/O/2003 7/2/2003 I/2/2004 7/2/2004 I/2/2005 I')/<005 1/2/2OOG 7/2/200G I/2/2()07 7/'I'00(I/2/2008 (/2/npos I/O/2009/')/')009 I/2/2010 7/2/')OIO I/2/2011 7/2/2011 I/2/')012 7/2/20I2 I/)/20 I,3 Tot;tls Dcht S<<rvice Principal 0.0000000 0.0000000 0.0264525 0.7908142 0.8232376 O.S5G9904 0.8921270 0.9287042 Internt 4.3413750 4.0280799 4.0280799 4.0269953 3.9945719 3.9608192 3.9256826 3.8891054 3.8510285 3.811'3905
'3.7701273 3.7271723 3.G7700'30
'3.6245')59 3.5696349 3.5122188 3.4521617 3.3893419 3.3236323'3.)549002
'3.18:300(i4 3.I078054 3.o5n2oo7 2.9S52072 2.9249537 4.3413750 4.0280799 4.0545324.4.8178096 4.8178096 4.8178096 4.8178096 4.8178096 4.8178096 4.8178096 4.8178096 4.8178096 4.8178096 4.817809G 4.8178096 4.8178096 4.8178096 4.8178096 4:8178096 4.817snor 4.8 I 7809(i 4.2048GGG 4.2883529 4.132892'3 4.2495622 4.0830727 4.2082920 4.0298244 4.1641'385 3.9728555 0.96G7810 1.0064191 1.0476823 1.0906372 1.14080G5 I.lo3283r) 1.2481747 1.3055907 1.3656479 1.4284677 1.4941772 1.5629094 1.(i'34sn:32 1.0970(i I 2 1.2381432 I.147C)851 I.3246085 1.2276609 1.4173'324 l.'3132748 1.5 I 65358 2.8554118 2.7909596 2.7165496 2.G476027 2.5G79846 1.4048709 4.1168999 1.622671O 1.5O2SG 3 1.73G2224 I.GO77111 1.8577080 1.7198809 1.987GS24 1.8398884 2.49422SS 2.4090386').3'301'381 2.2389864 2.1545816 2.0570519 1.96675SI 1.8624048 1.7G58107 l.(i54 I')(i!)l.54(i7247 l.:3749928 1.1942449 1.004007S'3.9119059 4.066'3604 3.S466975 4.0122S96 3.77G9328 3.954440G'3.7022932 3.89n5494:3.7004837 4.ii I (S)09(i 4.SI7SO9G').12C)73>87 2.0 l(i:32(i')
:3.')7 I 0848:3.4428 I (is:3.G235646
:3.S I:38018 4.SI78096 4.S17SOOG 4&#xc3;I (8096 0.8037832 0.59'30468 0.3712467 4.01402G4 4.2247628 4.4465628 2.62480:37 0.0000000 0.0000000 0.0000000 O.nnnonnn 4.8178096 4.S178096 2.7626058 0.137S022 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 Q.oononno O.onnoooo'I.94f)5420 131.94G54' sn.oonnonn Balance 80.0000000 80.0000000 79.9735475 79.18273'32 78.3594956 77.502505'3 76.610'3783 75.6816741 74.7148931 73.7084740 72.GG0791 I 71.5701545 70.4293480 69.2'3(in(i4:3 G7.987S89G GG.GS22OSO r)5.31GC)510 6'3.8881S:3'3 62.'3940061 r)O.SSIOOC)S 59.I 9(i29'36 58.0992:324 5(i.s(i I os 9'5).71:34(WI) 54.:3887956 53.161134G 51.74'38022 5 0.4'3052)"(5 48.9 I 3991(i 47.509 I 207 45.S864497 44;3835824 42.r)4-,.>r)Oi) 4 I.n:39(i48'!)
:>9.I 8 I 94()S:37.4620(inn
:35.474:3776
'3:3.6344892
:>I.5)0775)05)
"!).-((i I I":)(i 2(i.I!)I):3'3')')
7.(75)')2)I I o.I 2:39()74 15).:310 I')56 11.2961292 7.071'3GG5 2.62480'37 0.0000000 0.0000000 0.0000000 0.0000000 O.onoonon.Rale 8.20000 8.20000 8.20000 8.20000 8.20000 S.20000 8.20000 s.')norm S.)onnn s.)0000 9.20000 9.2onnn 9.2nnnn o..)noon 9.20000 9.20000 9'000 9.20000 9.2nnnn!).)I)l)nn I I)..)nnl)n I n.;)nnl)n 10..)nnn()
I 0.5nooo 10.50000 10.50000 10.5nnng ln.;)nni)l)
In.500()n 10.00000 10.50000 10.5nnn0 I 0.;)nnnl)I n.')nn()()
In.;)norm 10.500()0 in.>noon ln..)nl)nl)
I i)..)()I)t)I)
It)..)I)III)I)
I 0.5)nl)I)I).I o.')I)nnn I n.')nl)l)0 10.50onn 10.50000 10.50000 10.5noon 10.50000 10.50000 10.50000 I 0.5nnl)n 0
Schedule 3 RECORDATIONS AND FILINGS Part I.Recordations in Respect of the Sale of, and the Owner Trustee's Title to, the Undivided Interest and the Real Property Interest.A.County Recorder, Maricopa County, Arizona: (i)Deed;(ii)Bill of Sale;(iii)Assignment and Assumption;(iv)Facility Lease;(v)Indenture;(vi)Mortgage Releases;and (vii)Financing Statement Change Forms UCC-2.B.Secretary of State, Arizona: (i)Financing Statement Change Forms UCC-2.Part II.UCC-I Financing Statements,~i i~~~A.County Recorder, Maricopa County, Arizona: (i)A financing statement on form UCC-I naming El Paso.as lessee.tlic Owiier Tr<<stcc.;is lessor, and the Indenture Trustee, as assignee of the Owner Trustee.it>respect of'he F:icility Lease;(ii)A financing statement on form UCC-I naming the Owner Tr<<stee.as debtor.anti the Indenture Trustee, as secured party, in respect of the Lease Indenture Estate: a>>d (iii)A financing statement on form UCC-l naming the Loan Participant.
as<lebtor.and the Collateral Trust Trustee, as secured party, in respect of the Pledged Property (as.defined in the Collateral Trust Indenture).
B.Secretary of'tate, Arizona: (i)Two financing statements on form UCC-l, each nami>>g El Paso.as lessee.the Owiier Trustee, as lessor, and the Indenture Trustee, as assignee of the Owner Trustee, in respect of tlie rents under the Facility Lease: (ii)A fin;iiiciiig state>>ieiit on fon>>UCC-i ii;ii>>iiig tlic Ow>>cr Tr<<stcc.>>>>(l<<l>t<<r.;i>>il tlii Iiitle>>ture Tr>>stee.as secured party.in respect ot'lie Lease l>>dc>>t<<r<<Est>>tc (iii)A financing statement on form UCC-I naming the Loan Participa>>t.
as tlebtor.>>>><I tile Collateral Trust Trustee, as secured party, in respect of'he Pledged Property (as tlefinc<l iii tlie Collateral Trust Indenture);
and C.Secretary of State, Texas: (i)A financing statement on form UCC-I naming El Paso, as lessee, the Owner Trustee.as~~lessor.in respect of the Facility Lease;(ii)A financing statement on form UCC-I naming the Indenture Trustee.as assignee of'he Owner Trustee.in respect of the Facility Lease: and (iii)A financing statement on form UCC-I naming the Owner Trustee.;is debtor.and Indenture Trustee, as secured party, in respect of the Lease Indenture Estate.D, Massachusetts/state and local: A financing statement on form UCC-I naming the Owner Trustee.as debtor.an<1 the Indenture Trustee.as secured party, in respect to the Lease Indenture Estate.Part III.Utility Filings Texas Secretary of State Filing of the Facility Leases as protective filings'and the Wiortgage Releases, Exhibit A to Participation Agreement BILL OF SALE AND ASSIGNMENT (late(l as ()f f'roi>>to EL PASO ELECTRIC COMPANY
 
BILL OF SALE AND ASSIGNMENT, dated as of from f a corporation (the Owner Participant), to EL SO ELECTRIC COMPANY, a Texas corporation (El Paso).WITNESSETH:
WHEREAS, pursuant to Section 7(b)(4)of the Participation Agreement dated as of December 1.1986 among[a predecessor of]the Owner Participant, El Paso Funding Corporation.
as Loan Participant, The First National Bank of Boston, in its individual capacity and as Owner Trustee.First City National Bank of Houston, in its individual capacity and as Indenture Trustee and El Paso.as Lessee (the Participation Agreement), the Owner Participant desires to sell and El Paso.desires to b>>y the Assigned Property (as hereinafter de8ned);NOW, THEREFORE, in consideration of the premises and of other good and valuable considera-tion.receipt and sufRciency of which are hereby acknowledged.
the parties hereto agree as follows: ARTICLE I DEFINITIONS SeCTIoN 1.01.Fo'r purposes hereof, capitalized terms used herein shall have the i>>ea>>i>>gs assigned to such terms in the Participation Agreement.
ARTICLE II AssICNIIENT OF TnusT ESTAB ,SECTIQN 2.01.Assignment.
Owner Participant does hereby grant.bargai>>.convey.sell.assig>>.transfer and set over to El Paso, on an as is, where is basis, free and clear of Owner Participant's Liens but otherwise without recourse, representation or warranty, express or implied.of'ny nature whatsoever, all Owner Participant's right, title and interest in.to and>>>>der the Trust Estate except Owner Participant's right to receive Excepted Payments (the Assigned Property)[.subject to Ow>>er Participant's security interest in, and general lien upon, all the right, title and intere'st of'l Paso.as successor Owner Participant, in, to and under the Assigned Property'.
The disclaimer of representa-tions and warranties set forth in the second sen'tence of Section 6(b)of the Facility Lease is hereby incorporated herein as fully as if set forth at this place.[Notwithsta>>di>>g the foregoi>>g tra>>sfcr a>>d assignment of the Assigned Property to El Paso, the obligation of El Paso to n>>ike the pay>>ic>>ts provided in Section[insert applicable section: 9(c), 9(d).13(c)or 16]of the Facility Lease[Scctio>>10(b)(3)(xvii)of the Participation Agreement)(together with interest thereon in accorda>>ce with Section 3(b)of the Facility Lease)(or to make other payments in a like amo<<nt)shall not be<lee>>ied to be canceled or discharged b>>t shall conti>>>>e>>ntil all s>>ch a>>io>>>>ts are so receive<I hy Oiv>>cr Participant p>>rs>>a>>t to the provisions of Section 7(b)(4)of the Particiiratio>>
AIIr<<e>>lc>>t.'[
[The Owner Participant hereby acknowletlges receipt of 8=-represc>>ti>>g pay>>ic>>t i>>t<<ll>>f':ill ai>>ou>>ts due to the Owner Participant under Sectio>>[insert applicable sectio>>: b(c).9(d).I3(c)or 16[of the Facility Lease[or Section 10(b)(3)(xvii)of the Participation Agreement."]
'To be inserted if on the date of the transfer the Owner Participant has not received under Section'.2 of the Indenture the payments provided for in Section 9(c), 9(d).13(c)or 16 of the Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement as the case nmy be.~~o be inserted if on the date of the.transfer the Owner Participant has received the paynie>>ts provided f'r in Section 9(c), 9(d), 13(c)or 16 of the Facility Lease or Section 10(b)(3)(xvii)of.the Participation Agreement as the case may be.A-2 ARTICLE III EFFFC,TIVKiNESs OF TBAiVSFEu SFn'toiv 3.01.Effectiveness of Transfer.The transfer of the Assigned Property shall become efFective without further action upon the execution and delivery by the Owner Participant to El P<<so of this Bill of Sale and Assignment and the furnishing of a counterpart of this Bill of S<<le<<>>d Assignment to the Owner Trustee.ARTICLE IV Mist':ELLiNK()
t's St:.~.n()i 4.01.Successors and Assigns.This Bill of Sale and Assig>>i>>ent shall be bntdi>>g upo>>the Owner Particip;mt anti its successors and shall in>>re to the be>>eAt of El Paso<<>>(1 its s>>cccss>>rs
<<>>d<<Ssig>>S.St:.<."nr>>
4.02.Covernin<<Lau;.
This Bill of Sale and Assign<>>e>>t shall be govcr>>etl by<<>>tl co>>strued<<>>d enforce(1 i>><<ccord<<>>ce with'the I<<w oi'he State ol'ew York.IN WITNESS WHEREOF,.the undersigned has caused this Bill of S<<le anti Assig>>me>>t to b>><l>>ly execute<1 as of the day and year written above.By:-t Exhibit B to~Participation Agreement AFFIDAVIT OF TRUSTEE THE FIRST NATIONAL BANK OF BOSTON, as Owner Trustee under that certain Trust Agreement dated as of December 1, 1986 with COMMERCIAL FEDERAL INVESTMENT CORPORATION The undersigned, being a duly authorized representative of The First National Bank of Boston.a national banking association, as Trustee under the above-captioned Trust Agreement (the Trust Agreement), does hereby affirm and acknowledge that The First National Bank of Boston, as Trustee.holds legal title to certain real (and other)property on behalf of a certain beneficiary, such property and beneficiary being more particularly described in that certain Deed recorded December, 1986.as instrument No.86-, records of Maricopa County, Arizona;being further described in that certain Deed and Bill of Sale recorded December, 1986, as instrument No.86-, records of Maricopa County, Arizona;being further described in that certain Assignment.
Assumption and Further Agreement recorded December, 1986, as instrument No.86-, records of Maricopa County, Arizona;and being further described in that certain Deed and Assignment of Beneficial Interest dated as of December 1, 1986, a'nd that certain related Aniended Affidavit of Trustee cuted by Title USA Company of Arizona as Trustee of its Trust No.830 and recortle<l December 6, as instrument No.86-, records of Maricopa County.Arizonan the property descriptions anti eneficiary disclosures contained in or incorporated into each of said instruments being incorporated herein by this reference as if fully set forth herein.A certain change in ownership of the beneficial interest in the Trust Agreement has occ<<rre<l since the recordation of the above-described instruments.
As now reflected in the records of The First National Bank of Boston, the sole beneficiary of the Trust Agreement is: El Paso Electric Company 303 North Oregon Street El Paso, Texas 79901 A copy of the Trust Agreement is available for inspection at the offices of The First Natio<<al Bank of Boston, 100 Federal Street, Boston, Massachusetts 02110.DATED THIS day of THE FIRST NATIONAL BANK OF BOSTON.not in its individ<<;il capacity.b<<t solely as Owner Trustee under the Trust Agreement dated as of December 1, 1986, with By:
44 Appendix ADEFINITION OF TEBXIS 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 becon>e 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 A'ppendix 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 such amendment.
Additional Bonds shall mean Bonds in addition to the Initial Series Bonds.Additional Equity Investment shall have the meaning set forth in Section 8 (f)of the Facility Lease.Additional Notes shall have the meaning set forth in the recitals to the Indenture, which Additional Notes shall be issued, if at all, pursuant to Section 3.5 of the Indenture.
Afhliate, with respect to any Person, shall mean any other Person directly or indirectly controlling ontrolled by, or under direct or indirect common control with, such Person.For purposes of this nition, the term'"control" (including the correlative meanings of the terms"controlled by" and"under common control u:ith"), as u'sed 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 or accrued 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 current credits or current deductions arising therefrom and computed at the highest marginal statutory tax rates)resulting from the receipt (actual or constructive) or accrual 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 or accrued.Agency'eriod shall have the me'aning set forth in Section 7.01 of the Assignment and Assumption Aggregate Liability shall have the meaning assigned in the Price-Anderson Act, as in effect as of the Closing Date;provided that if the Price-Anderson Act shall be amended to expand the meaning of the term"aggregate liability," the term"Aggregate Liability" shall be similarly expanded.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.L2 of the ANPP Participation Agreement (or any comparable successor provision).
ANPP Participants shall have the meaning assigned to the word"Participant" under the ANPP icipation Agreement.
A-1 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 SCPPA and LADWP.ANPP Project Agreements shall mean the ANPP Participation Agreement and the other Project Agreements (as such term is defined in the ANPP Participation Agreement).
AivPP Sicitchyard shall mean the ANPP High Voltage Switchyard located at the PVNGS Site, the ownership, construction, operation and maintenance of which are governed by the ANPP High Voltage Switchyard Participation Agreement executed as of August 20, 1981 (APS Contract No.2252-419,00), the parties to which are APS, PNM, Salt River, El Paso, LADWP and Southern California.
=Applicable Laio shall mean all applicable laws, statutes, treaties, rules, codes, ordinances, regula-tions, permits, certificates, orders, interpretations, licenses and permits of any Governmental Authority 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).
Applicable Unit 2 Percentage shall mean 1.998026%with respect to property in Unit 2 not constituting Common Facilities and 0.666007%with respect to Common Facilities.
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, amount or determina-tion then the subject of an appraisal.
If either the Lessor or the Lessee, as the case may be, shall determine that a value, period, amourit or determination to be determined under the Facility Lease or any other Transaction Document cannot be timely established 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 notic If within 20 days after appointment of the two appraisers, as described above, the two appraisers unable to agree upon the value, period, amount or determination 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 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'lectric 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 more disparate from the middle determination by more than twice the amount 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 contem-plated by any provision of any Transaction Document shall be divided equally between the Lessor and the Lessee (except pursuant to Section 13(c), 14 (a)or 16 of the Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement, which shall be paid solely by the Lessee).APS shall mean Arizona Public Service Company, an Arizona corporation.
Ari=ona Public Utility Act shall mean Chapter 2, Title 40, Arizona Revised Statutes.Assigned Payments shall have the meaning set forth in Section 2.1 (1)of the Indenture.
Assignment and Assumption shall mean the Assignment, Assumption and Further Agreement, date as of December 1, 1986, between El Paso and the Owner Trustee.A-2 Assignment of Beneficial Interest shall mean the Deed and Assignment of Bene6cial Interest under itle USA Company of Arizona Trust No.530, dated as of the Closing Date, from El Paso to the Owner istee.Assumption Agreement shall mean the Assumption Agreement of El Paso 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.Authorized Ojficer shall mean, with respect to the Indenture Trustee, any ofBcer of the Indenture Trustee or any other Person who shall be duly authorized by appropriate corporate action on the part of the Indenture Trustee to authenticate a Note and shall mean, with respect to the Owner Trustee, any ofBcer of the Owner Trustee who shall be duly authorized by appropriate corporate action to execute any Transaction Document.Bankruptcy Code shall mean the Bankruptcy Reform Act of 1978, as amended, and any law with respect to bankruptcy, insolvency or reorganization successor thereto.Basic Lease Term shall mean the initial term of the Facility Lease, which shall begin on the Closing Date and end on October 1, 2013, unless earlier terminated as provided in the Facility Lease.Basic Bent shall have the meaning set forth in Section 3 (a)of the Facility Lease.Basic Bent Payment Dates shall mean and include July 2, 1987, a'nd each January 2 and July 2 of each year thereafter, ending July 2, 2013, and, if the Lessee shall elect the Renewal Term, each October 1 and April 1 of each year during such Renewal Term, commencing October 1, 2013 and ending six months before the last day of the Renewal Term.Bill of Sale shall mean the Deed and Bill of Sale, dated as of the Closing Date, between El Paso and Owner Trustee.Bonds shall mean all bonds, notes and other evidences of indebtedness from time to time issued and outstanding under the Collateral Trust Indenture, including, unthout limitation, the Initial Series Bonds, the Releveraging Bonds, the Refunding Bonds and any other Additional Bonds.Bond Supplemental Indenture shall mean the Series 1986A Bond Supplemental Indenture dated as of December 1, 1986, among El Paso, the Loan'Participant and the Collateral Trust Trustee, supplementing the Collateral Trust Indenture and providing, among other things, for the issuance of the Initial Series Bonds.Business Day shall mean any day other than a Saturday or Sunday or other day on which ba'nks in El Paso or Houston, Texas, 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 replacement of any such property with other property, irrespective of whether (i)such replacement property constitutes an enlargement or betterment of the property which it replaces, (ii)the cost of such addition, betterment, enlargement or replacement is or may be capitalized, or not 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 reQected in the plans and speci6cations for Unit 2, as built, and (b)any alteration, modiBcation, addition or improvement to Unit 2, other than original, substitute or replacement parts incorporated into Unit 2.Cash Available for Investment shall mean (i)until December 31, 1987, the excess of cash and porary cash investments not segregated for other purposes (including redemption of Debt)over construction requirements needed for the ensuing 12-month period and (ii)thereafter, zero.A-3 Casualty Value, as of any date of determinatio'n thereof, shall mean (i)during the Basic Lease Term, the percentage of Facility Cost.set forth opposite the date in Schedule 1 to the Facility Leas immediately succeeding such date of determination (or, if such date is specified in Schedule 1 to t Facility Lease, such date)and (ii)during the Renewal Term, the amount determined by amortizin ratably the Fair Market Sales Value of the Undivided Interest as of the day following the last day of the Basic Lease Term in monthly steps over the period from such date to the License Expiration Date.Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstand-ing, 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, under any circumstances and in any event, in an amount at least sufBcient 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.Change in Tax Law shall have the meaning set forth in Section 3 (d)of the Facility Lease.Chief Financial Ofhcer shall mean the person designated by the Board of Directors of El Paso as the chief financial oifice of El Paso.Claims shall mean liabilities, obligations, losses, damages, Taxes (other than Taxes on income), penalties, claims (including, without limitation, claims involving liability in tort, strict or otherwise), actions, suits, judgments, costs, interest, expens'es 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.Closing shall mean the proceedings which occur on the Closing Date, as contemplated.
by the Participation Agreement.
Closing Date shall mean December 18;1986.Code shall mean the Internal Revenue Code of 1986, as amended, or any successor law.Collateral Tact Indenture shall mean the Collateral Trust Indenture, dated as of August 1, 1986, among El Paso, the Loan Participant and the Collateral Trust Trustee.Collateral Trust Indenture Supplement shall mean a supplement to the Collateral Trust Indenture.
Collateral.Trust Testee shall mean First City National Bank of Houston, not in its individual capacity, but solely as Collateral Trust Trustee under the Collateral Trust Indenture, and each successor trustee thereunder.
Common Facilities shall mean all PVNGS common facilities, as set forth in Section B of Exhibit B to the Bill of Sale, other than excluded common facilities as set forth in Section B of Exhibit B to the Bill of Sale.Consolidated Capitalization shall mean the total of capital and surplus plus the principal amount of indebtedness for borrowed money which matures more than one year after the date as of which Consolidated Capitalization.
is being determined, all as shown on a consolidated balance sheet of the Lessee.Coverage Ratio shall mean the ratio of (x)consolidated net earnings before income taxes (excluding 100%(50%until July 1, 1989)of the allowance for funds used during construction (net of deferred taxes))increased by the pro forma earnings on Cash Available for Investment (calculated at the prevailing 90-day treasury bill rate)for the twelve-month period ending on a date no later'than 135 days prior to the date as of which Coverage Ratio is being determined to (y)total interest and lease payments that will be payable by the Lessee and its subsidiaries (whether consolidated or unconsoli-dated)during the twelve-month period following the date as of which Coverage Ratio is being determined, excluding (i)lease payments to the Rio Grande Resources Trust, (ii)lease paymen under any short-term operating lease of computers, office equipment or the like, (iii)interest on D A-4 which has been legally defeased or for the payment of which funds have been segregated in escrow d (iv)interest on Debt maturing one year or less from the date of incurrence thereof.Cure Option shall have the meaning set forth in Section 16(e)of the Facility Lease.Debt shall mean (a)secured or unsecured indebtedness for borrowed money or for the deferred purchase price of property or evidenced by notes, bonds or other instruments, (b)obligations as lessee under capital leases, (c)the present value of obligations as lessee under other leases the remaining terin of which (including options to renew)is more than one year, in each case discounted to present value as of the respective dates on which such obligations are due at the rate per annum borne by the debt placed in conjunction with such lease or, if no such debt was placed, at the Lessee's marginal cost of debt at the time such lease was entered into, (d)obligations secured by any Lien existing on any property owned or held by a Person, whether or not such Person has assumed or become liable for the obligations secured thereby, and (e)obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of)indebtedness or obligations of others of the kinds referred to in clauses (a),,(b), (c)and (d)above.For purposes of the foregoing, there shall be excluded, except as used in Section 15 of the Facility Lease, obligations under any operating lease of computers, ofBce equipment or the like, the original term of which (including options to renew)is less than Gve years, and obligations under any lease from the Rio Grande Resources Trust.Decommissioning shall mean the decommissioning and retirem'ent from service of Unit 2, and the related possession, maintenance and disposal of material, radioactive or otherwise, used in or produced by or relating to Unit 2, including, without limitation, (i)'placenient and maintenance in a state of protective storage, (ii)in-place entombment and maintenanc'e,".(iii).
di'smantlement, (iv)removal, decontamination and disposition of equipment and Bxtures, (v)razirig, (vi)removal and disposition of debris related to Unit 2 from the PVNGS Site, (vii)restoration of the PVNGS Site related to Unit 2 for unrestricted use, (viii)any other actions relating to decommissioning and retirement from service iired by the NRC and (ix)all activities undertaken incident to the implementation thereof.Decommissioning Cost shall mean the Applicable Unit 2 Percentage of costs, liabilities and expenses relating or allocable to, or incurred in connection with, Decommissioning, including compliance with the Lessee's obligations under Section 10(b)(3)(xi)of the Participation Agreement."Decommissioning Trust Agreement shall mean the Decommissioning Trust Agreement to be entered into among the Owner Trustee, El Paso and the Decommissioning Trustee.Decommissioning Trustee shall mean First City.iVational Bank of El Paso, a national banking association, as trustee under the Decommissioning Trust Agreement, and each successor trustee under sich Agreement.
I Decommissioning Trust Furid shall mean the trust fund established and maintained under and pursuant to the Decommissioning Trust Agreement.
Deed shall mean the Deed, dated as of the Closing Date, from El Paso to the Owner Trustee.Deemed Loss Event shall mean any of the following events (unless and until waived in writing by the Owner Participant):
(1)~~Utility Regulation.
If at any time from and including the Closing Date and before the Lease Termination Date, the Lessor or the Owner Participant, by reason of the acquisition or ownership of the Undivided Interest or the Real Property Interest or any part thereof by the Lessor (or any beneBcial interest therein by the Owner Participant) or the lease of the Undivided'Interest to the Lessee or any of the other transactions contemplated by the Transaction Documents, 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, a public utility or a holding company under any Applicable Law or as a consequence of any Governmental Action, and the efFect thereof on the Lessor or the Owner Participant would be, in A-5 the sole judgment of the Owner Participant, acting on the advice of counsel, adverse, except that if the Lessee, at its sole cost and expense, is contesting diligently and in good faith any Governmen-tal Action which would otherwise constitute a Deemed Loss Event under this clause (1), su Deemed Loss Event shall be deemed not to have occurred so long as in the sole judgment of t.Owner Participant (i)such contest does not involve any danger of the foreclosure, sale, forfeiture or loss of, or the creation of any Lien on, the Undivided Interest, the Real Property Interest or any part thereof or any interest therein, (ii)such contest does not adversely acct the Undivided Interest or the Real Property Interest or any part thereof or any other property, assets or rights'of the Lessor or the Owner Participant or the Lien of the Indenture thereon, (iii)the Lessee shall have furnished the Owner Participant with an opinion of independent counsel satisfactory to the Owner Participant to the eEect that (a)there exists a reasonable basis for contesting such determination and (b)in the case of any action arising from or related to the Lessor or the Owner Participant under the Holding Company Act, it is more likely than not that the Lessee will successfully contest such determination without the need for any appeal, (iv)such determination shall be eH'ectively stayed or withdrawn during such contest (and shall not in the sole judgment of the Owner Participant be subject to retroactive application at the conclusion of such contest)in a-manner satisfactory to the Owner Participant, and the Owner Participant shall have determined in its sole judgment that such contest and the Lessor's continued ownership of the Undivided Interest and the Real Property Interest during the pendency of such contest will not adversely aiFect its business or the business of any of its AIBliates, and (v)the Lessee shall have indemnified the Lessor and the Owner Participant in a manner satisfactory to the Owner Participant for any liability or loss which either may incur;it being understood, however, that the term Owner Participant as used in this clause'"(j.)
does not include any Transferee who at the time of transfer is an entity which is subject to regulation as an electric utility, public utility or a holding company under Applicable Law.or Governmental Action.(2)Change in Applicable Laco.Any change in, or new interpretation by a Governmen Authority having jurisdiction relating to, Applicable Law, including, without limitation, the Pri Anderson Act, the Atomic Energy Act, the Nuclear Waste Act or the regulations of the NRC, i each case as in efFect on the Closing Date, or any other significant development, as a result of which, in the opinion of independent counsel to the Owner Participant (i)the Aggregate Liability for a single Nuclear Incident of all Persons Indemnified is increased;(ii)the Aggregate Liability for a single Nuclear Incident of all Persons Indemnified exceeds the amount of Financial Protection required with respect to a single Nuclear Facility under Applicable Law and available at the time of such Nuclear Incident;(iii)(a)the amount of Primary Financial Protection required with respect to a single Nuclear Facility under Applicable Law is increased, whether or not the total amount of Financial Protection required with respect to a single Nuclear Facility is increased, (b)the amount of Financial Protection required with respect to a single Nuclear Facility under Applicable Law is increased (including, but not limited to, an increase in the amount of retrospective premiums payable under the.Retrospective Rating Plan), or (c)the amount of retrospective premiums payable under the Retrospective Rating Plan in any one year with respect to two or more Nuclear Incidents is increased;(iv)the provisions of the penultimate sentence of Section 170b.of the Atomic'Energy Act, 10 C.F.R.Section 140.22 or 10 C.F.R.Section 140.92 shall be modified or changed in any material respect;(v)the Lessor or the Owner Participant may become liable or responsible in any capacity (including, without limitation, through assessments imposed by a Governmental Authority) for payments owed in respect of the Nuclear Waste Fund (as such term is used in Section 302 of the Nuclear Waste Act)or in respect of the handling or disposal of nuclear waste, decontamination, storage, transportation or safekeep-ing of radioactive or hazardous materials or any other obligation in the nature of the foregoing;(vi)the Lessor, the Owner Participant or the Lessee may be prohibited from asserting any right, protection or defense available under Applicable Law as of the Closing Date with respect to civil or criminal actions brought in connection with a Nuclear Incident (including, without limitatio through an expansion of the waiver of defenses provision under subsection 170n.of the Ato A-6 Energy Act);(vii)there shall be expressly created a new cause of action whereby any Person who pays or will pay retrospective premiums under the Retrospective Rating Plan or other assessments required under Applicable Law may recover the amount of such payments from the facility in which a Nuclear Incident occurs or from any Person associated with such facility;(viii)there shall be a third tier or additional level of potential or real liability (including assessments imposed by a Governmental Authority) with respect to a Nuclear Facility;(ix)there shall be any type of claim, liability or expense (other than the costs of investigating and settling claims and defending suits for damage)excluded from the limitation of liability established by the Price-Anderson Act (through modiBcation of the deBnitions of"aggregate liability,""persons indemniBed,""nuclear incident" or otherwise) or excluded (or the funding or payment thereof deferred)under insurance or other Financial Protection required under Applicable Law as in effect on the Closing Date, except to the extent and in the amount expressly excluded or deferred pursuant to Applicable Law as in effect on the Closing Date;or (x)the Lessor or the Owner Participant may be exposed, during the Lease Term or after the Lease Termination Date to any other increased real or potential liability (including, witliout limitation, through assessments imposed by a Governmental Authority) with respect to a Nuclear Incident or otherwise relating to the operation of PVNGS or the transactions contemplated by the Participation Agreement; prouided, hou;euer, that no such change, interpreta-tion or'signiBcant development shall constitute a Deemed Loss Event if and for so long as such change, interpretation or signiBcant development meets all the conditions constituting a Safe Harbor Change.For purposes of this clause (2), 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 eliminate or negate any exposure of the Lessor or the Owner Participant to real or potential increased liability.-
~~i p'.~'(3)Insurance.
The Lessee shall not be in compliance with Section 10 of the Facility Lease.(4)License.Any expiration, revocation, suspension, amendment or interpretation by any~~Governmental Authority of the License or any other change in Applicable Law or Governmental Action, as a result of which, prior to the Lease Termination Date, either the Lessor or the Owner Participant is or might (i)be required to be or become a licensee under the Atomic Energy Act with respect to Unit 2 or (ii)be subject to the obligations or liabilities imposed as of the Closing Date (or thereafter) on licensees under the Atomic Energy Act with respect to Unit 2 or (iii)be otherwise subject to signiBcant regulation.
(5),lfultiple Incidents.
The occurrence (i)of two or more incidents (including incidents occurring outside the United States of America), in each case at any Nuclear Facility or Facilities using a Combustion Engineering pressurized water reactor nuclear steam supply system, or another nuclear steam supply system of comparable design or comparable components, the failure of which Conibustion Enginee'ring pressurized water reactor nuclear steam supply system or other nuclear steam supply system of comparable design or comparable components results in (x)a discharge or dispersal of radioactive material off-site when, as a result of an event comprised of one or more related happenings, radioactive material is released from its intended place of conBnement, in amounts off-site, or causing radiation levels off-site, which result in off-site surface radiation levels measured over a contiguous or non-contiguous area of 100 square meters of (A)alpha particles from transuranic isotopes in excess of.35 microcuries per square meter, (B)alpha particles from all other isotopes in excess of 3.5 microcuries per square meter or (C)either beta or gamma particles in excess of 4 millirads per hour as measured at a height of one centimeter (measured through not more than 7 milligrams per square centimeter of total absorber), prouided,.however, that (I)if the level of radiation constituting an Extraordinary Nuclear Occurrence is reduced by the NRC from those set forth herein, then the levels set forth herein shall be reduced equivalently or (II)if alternative criteria for determining an Extraordinary Nuclear Occurrence are adopted by the NRC, then the criteria set forth herein shall be modified to be consistent with the criteria established by the iNRC, or (y)(A)the radiation level in the containment vessel as nieasured by the average of two high range radiation monitors in the top half of such containment A-7
'essel (or if only one such monitor is'operating at such time, such monitor)averaged over one hour equals or exceeds 1,000 rad per hour;or (B)any measure of radioactivity in the primary coolant system shall exceed by 1,000 times the limiting conditions for operation specified in t technical specifications for Unit 2 (as in efFect on the Closing Date);or (z)damage to ofF-sit property, including, without limitation, costs for decontamination, in amounts in excess of$15,000,000;(ii)within a five-year period of three or more incidents, of the type and severity described in subclause (i)(x), (y)or (z)above, at any Nuclear Facility or Facilities (including incidents occurring outside the United States of America).(6)Illegality; Exercise of Rights and Remedies.Any change in Applicable Law or any Governmental Action the efFect of which is or might be (i)to make any of the transactions contemplated by the Transaction Documents unauthorized, illegal or otherwise contrary to Applicable Law, (ii)to impede the exercise by the Lessor or the Owner Participant of any right or remedy under any Transaction Document relating to the assertion of claims for Bent or monetary damages, (iii)to cause the Lessor or the Owner Participant to be or become liable in any capacity in respect of Decommissioning, including, ivithout limitation, all or any portion of the Termination Obligation (as defined in the ANPP Participation Agreement), or (iv)to constitute an assertion to the efFect'that (a)the exercise by the Lessor or the Owner Participant of any right (irrespective of the event giving rise to such right)under any Transaction Document would constitute impermis-sible control over Unit 2 or the licensees of Unit 2, other than an assertion consistent with the second sentence of Section 184 of the Atomic Energy Act and the NBC's regulations thereunder," including, ivithout limitation, 10 C.F.B.Section 50.81, as now in e6'ect or (b)the acquisition or transfer of the Undivided Interest was in violation of, or otherwise contrary to, Applicable Law.(7)Radiation Level.Except as a result of controlled movement of spent fuel into or within.the spent fuel storage facility for Unit 1 or 3, the radiation level in the fuel building above either such storage facility, as measured by'a valid radiation measuring'instrument located in such building above either such storage facility, shall be more than 1,000 times the average of the previous five readings of such measuring instruments over a period of not less than 24 hours.Default shall mean an everit or condition which, with the giving of notice or lapse 5f time, or both, would constitute an Event of Default.Directive shall mean an instrument in writing executed in accordance with the terms and'rovisions of the Indenture by the Holders, or their duly authorized agents or attorneys-in-fact, , representing a Majority in Interest of Holders of Notes, directing the Indenture Trustee to take or refrain from taking the action specified in such instrument.
Early Payment Obligation shall mean the obligation of the Lessee to pay to the Lessor the amount specified in clause (A)of the first sentence of Section 9(c)or clause (A)of the third sentence of Section 9(d)of the Facility Lease.Economic Useful Life shall mean that period commencing on the date as of which the determina-tion 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 it can reasonably be anticipated that Unit 2 will no longer be useful to, and usable by, the ANPP Participants as a facility for the generation of electric power or Unit 2 is no longer an economic and commercially practical and feasible 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, whichever is expected to occur earlier.For the purpose of determining Economic Useful Life, all relevant factors shall be taken into account (as such factors obtain on the date of determination and as such factors are reasonably anticipated to obtain in the future), including all relevant contractual and other arrangements, Governmental Actions, physical and other aspects of Unit 2, market conditions and technological developments.
El Paso shall mean El Paso Electric Company, a Texas corporation.
El Paso Net)Vorth shall mean the consolidated common stockholders equity'of El Paso and any successor, as shown in its audited financial statement as of December 31 of the most recent year.A-8 Equity Portion of Rent shall mean (i)in the case of any payment of Basic Rent, the amount of Basic Rent payable under the Facility Lease reduced by the principal and interest then due and able on the Notes, (ii)in the case of any payment of Casualty Value, Special Casualty Value, ination Value or Special Termination Value, the amount thereof reduced by the principal amount and accrued and unpaid interest (since the Basic Rent Payment Date immediately preceding the date of payment)on the Outstanding Notes or (iii)in the case of any payment of Supplemental Rent not described in (ii)above, the amount thereof payable to the Owner Participant.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.Estimated Transaction Expenses shall have the meaning set forth in Section 5(a)of the Participa-tion Agreement.
Event of Default shall have the meaning set forth in Section 15 of the Facility Lease.Event of Loss shall mean any of the following events: (a)a Final Shutdown, (b)a Requisition of Title or (c)a Requisition of Use for a period which exceeds Bve years or ends on or after the last day of the Lease Term (including any elected Renewal Term).Excepted Payments shall mean (i)all payments of Supplemental Rent, other than payments by the Lessee (x)of Casualty Value paid pursuant to Section 16 of the Facility Lease or Termination Value or (y)of indemnity payments to which either the Loan Participant or any Indemnitee other than the Owner Trustee or the Owner Participant (or the respective successors, assigns, agents, ofBicers, directors or employees of the Owner Trustee or the Owner Participant) is entitled, (ii)any amounts payable under any Transaction Document to reimburse the Lessor or the Owner Participant (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 or by the see in the case of the Special Transfer, (iv)so long as no Indenture Event of Default shall have orred and be continuing, all payments of Basic Rent, Casualty Value, Termination Value, Specfal mination Value or Special Casualty Value 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 prin'cipal 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, (vii)any amount payable pursuant to the Letter of Credit or any reimbursement agreement or similar agreement relating to the Letter of Credit and (viii)any payments in respect'of interest to the extent attributable to payments'eferred to in clauses (i)through (vii)above.Excess A'mount shall have the meaning set forth in Section 19(f)of the Participation Agreement.
Existing Mortgages shall mean the Indenture of Mortgage dated as of October 1, 1946, between El Paso and State Street Trust Company (now State Street Bank and Trust Company), as Trustee, and the'ndenture of Mortgage dated as of June 1, 1981, between El Paso and First City National Bank of El Paso, as Trustee.Extension Letter shall mean the Extension Letter dated December 18, 1986 and addressed to the Collateral Trust Trustee by the parties to the.Participation Agreement.
Extraordinary Nuclear Occurrence shall h'ave the meaning assigned in Section 11 of the Atomic Energy Act and the related NRC regulations (10 C.F.R.$$140.84 and 140.85)as in efFect as of the Closing Date.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 thy Facility Lease, dated as of December 1, 1986, between El Paso, as ee, and the Owner Trustee, as Lessor.A-9 Fair Market Rental Value or Fair Market Sales Value of any property or service shall mean the value, which shall not in any event be less than zero, of such property or service for lease or sale determined on the basis of an arm'-length transaction for cash between an informed and willing less or purchaser (under no compulsion to lease or purchase)and an informed and willing lessor or sel (under no compulsion.to lease or sell), and shall take into account (except when used in Section 16(a of the Facility Lease)the existence of the Decommissioning Trust Fund, the Second Fund, if any, and the Lessee's obligations under Section 10(b)(3)(xi)of the Participation Agreement and shall take into account the Lessor's rights and obligations under the Assignment and Assumption and the Assignment of Bene6cial Interest and rights under the Deed and the Bill of Sale (or the ground lease referred to in Section 10(b)(3)(xiv)of the Participation Agreement, as appropriate), but shall be without regard to any rights of the Lessee (including any renewal options)under the Facility Lease.Except pursuant to Section 16(a)of the Facility Lease or 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 and the other Transaction Documents and the ANPP Participation Agreement, and (ii)the Lessee or El Paso, 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 advance.FCNB shall mean First City National Bank of Houston, a national banking association.
Federal Power Act shall mean the Federal Power Act, as amended.Federal Securities shall have the meaning set forth in Section 2.3(c)of the Indenture.
FEHC shall mean the Federal Energy.Regulatory Commission of the United States of America or any successor agency.FEHC Order shall mean the Order issued by the FERC on July 16, 1986 (Docket No.EC86-18-00
's supplemented by the letter dated November 14, 1986 from the Chief Accountant of the FERC Docket No.ES87-8-000).
Final Shutdown shall mean the earliest 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;(2)(x)the suspension of the License or that portion of the License which permits operation of Unit 2, which suspension remains in efFect for three consecutive calendar months;(y)any order of or direction (or series of orders or directions) by'the NRC or any other Governmental Authority that Unit 2 suspend operations for reasons of radiological health and safety for a Period exceeding 24 months;or (z)any cessation of operation of Unit 2 for a period of 24 months if the resumption of operations requires the..concurrence of the NRC or any other Governmental Authority; (3)the permanent or temporary cessation of operation of Unit 1, 2 or 3 as a result of a Nuclear Incident at Unit 1, 2 or 3 (or if such Unit 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
'onsecutive calendar months, or (B)such Nuclear Incident causes the radiation level in the containment vessel of such Unit, as measured by the average of two high range radiation monitors in such containment vessel of such Unit (or if only one such monitor is operating at such time, such monitor)over one hour to equal or exceed 200 rad per hour;provided, however, that this subsection (B)shall'not apply in respect of a Nuclear Incident arising solely from a fuel handlin accident; (4)(i)the occurrence of a Nuclear Incident at Unit 1, 2 or 3 causing (A)substantial injury or death to any person on or off the PVNGS Site or (B)a discharge or dispersal of"source,""special~~~~~~~nuclear material" or"byproduct material".(as deGned in the Atomic Energy Act)from its intended place of con6nement in amounts ofF the PVNGS Site or causing radiation levels ofF the PVNGS Site such that, in the case of (B)above, (x)the'NRC declares the occurrence of an Extraordinary Nuclear Occurrence or declares any other event connoting an equivalent level of accident or (y)the surface contamination dose rate measured off the PVNGS Site by a r'adiation 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, 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'uch change by the NRC, or (ii)the occurrence at PVNGS of a discharge or dispersal of radioactive material when, as a result of an event comprised of one or more related happenings, radioactive material is released from its intended place of con6nement in amounts oE'-site resulting in an aggregate cost of decontamination estimated to be in excess of$10,000,000; (5)the declaration by the Operating Agent of a site area emergency set forth in the PVNGS Emergency Plan for any reason other than a drill or false alarm;(6)except as a result of controlled movement of spent fuel into or within the spent fuel storage facility for Unit 2, the radiation level in the fuel building above such storage facility, as measured by a radiation measuring instrument located in such building above such storage facility, shall be more than 1,000 times the average of the previous Bve readings of such measuring instrument over a period of not less than 24 hours;(7)destruction of Unit 2, or damage to any portion of Unit 2 and, unless the Lessee~-theretofore shall have exercised its purchase option under Section 13(b)of the Facility Lease, the failure of the Lessee, or of the Lessee and one or more other ANPP Participants, (A)to agree within eighteen calendar months of such damage or destruction (or prior to such earlier date as of which one or more other ANPP Participants shall agree to restore or reconstruct any damaged portion of Unit 2 in accordance with Section 16.2 of the ANPP Participation Agreement) to restore or.reconstruct Unit 2 to completion prior to the day sixty calendar months after the date of such agreement and (B)thereafter to complete the restoration and reconstruction of Unit 2*within a period of sixty calendar months after the date of.such agreement, but in no event later~than the end of the Lease Term, provided that no Final Shutdown shall be deemed to have occurred pursuant to this clause (7)if and so long as Unit 2 is in operation at a rated core power level of a least 1900 megawatts thermal;or (8)the operation of Unit 2 at a net rated capacity below 630 megawatts electric, or the non-operation of Unit 2, by reason of the fact that its net rated'capacity is below 630 megawatts electric, or any combination thereof, for any reason other than as a result of damage to Unit 2.For purposes of this de8nition, a Final Shutdown in consequence of the occurrence of an event described in clause (4)shall be deemed to have occurred immediately upon the occurrence of any of the following: (i)the water level within the primary coolant vessel shall decline to a level which is three feet above the nuclear core, (ii)the water level within the spent fuel storage facility shall decline to a level which is three feet above the top of any fuel which has been in the reactor core within the prior 12 months, (iii)the pressure within the primary coolant system shall decrease by in excess of 1000 pounds per square inch in a period of less than 5 minutes or (iv)the departure frorq nucleate boiling ratio shall be less than 0.9;and a Final Shutdown in consequence of the occurrence of an event described in clause (6)shall be deemed to have occurred immediately if the water level is three feet above any fuel which has been in the reactor core within the prior 12 months.Financing Documents shall mean the Collateral Trust Indenture, the Bond Supplemental Inden-, the Extension Letter and the Underwriting Agreement.
A-ll Financial Protection shall have the meaning assigned in the Price-Anderson Act, as in efFect as of the Closing Date;provided that if the Price-Anderson Act shall be amended to expand the meaning of the term"financial.
protection," the term"Financial Protection" shall be similarly expand'ed.
FNB shall mean The First National Bank of Boston, in its individual capacity, and its successors an assigns.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.Generating Unit shall mean Unit 1, 2 or 3 or any of the other Generating Units (as such term is defined in the ANPP Participation Agreement) constituting PVNGS.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 El Paso as the ANPP Participant with respect to its 15.8%interest in Unit 2, (ii)when used in reference to the Undivided Interest, shall mean the Generation Entitlement Share attributable to a 1.998026%undivided interest in Unit 2, and (iii)when used in Section 19 of the Facility Lease, shall refer to all Generating Units at 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.Gouermnental Authority shall mean any Federal, state, county, municipal, foreign, internation regional or other governmental authority, agency, board, body;instrumentality or court.Holders shall mean the holders of the Notes or the Bonds, as the context may require.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, First City National Bank of Houston, the Indenture Trustee, the Paying Agent, the Banks, 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 ASliate of any of the foregoing and the respective successors, assigns, agents, officers, directors or employees of the foregoing, excluding, however, any ANPP Participant other than the Owner Trustee or the Owner Participant.
Indenture shall mean the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 1, 1986, between the Owner Trustee and First City National Bank of Houston.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 Tnastee shall mean First City.National Bank of Houston, a national banking association, not in its individual capacity, but solely as Indenture Trustee under the Indenture and each successor trustee and co-trustee thereunder.
Indenture Tnsstee'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 individ A-12 1 capacity, unrelated to the transactions contemplated by the Transaction Documents or the Financing Documents.
Indenture Trustee's Once shall mean the office of the Indenture Trustee located at First City ncial Center, 1301 Fannin Street, 2lst Floor, Houston, Texas 77002, or such other oRce as may be sig'nated by the Indenture Trustee to the Owner Trustee and each Holder of a Note Outstanding under the Indenture.
Inflation Index shall mean such annual percentage adjustment in the aggregate amount payable with respect to all Nuclear Facilities under the Retrospective Rating Plan based upon a percentage change in the consumer price index or such other measure as may be provided from time to time in the Price-Anderson Act, as amended from time to time.Initial Series Bonds shall mean the Lease Obligation Bonds, Series 1986A of the Loan Participant, issued, authenticated and delivered under the Collateral Trust Indenture, as heretofore supplemented and amended and as supplemented by the Bond Supplemental Indenture.
Initial Series Notes shall mean the nonrecourse promissory note, substantially in the form of Exhibits A-l, A-2 and A-3 to the Indenture, te 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(a)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 Participa-tion Agreement.
IRS shall mean the Internal Revenue Service of the United States Department of the Treasury or any successor agency.Issuing Bank means the commercial bank, trust company or United States branch or agency of a gn bank, which issues the Letter of Credit (or any replacement Letter of Credit).LADYVP 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 Dnte shall mean the last day of the Lease Term (whether occurring by reason of a termination or expiration of the Lease Term).Lessee shall mean El Paso Electric Company, a Texas corporation, and its successors and assigns, as Lessee under the Facility Lease and as party to the other Transaction 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 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 Tn~tee's Liens shall mean Liens against the Trust Estate or the Lease Indenture Estate (other than Permitted Liens, except"Lessor's Liens" and"Owner Participant's Liens" rred to in clause (vi)of the definition thereof)for which the Lessee is not responsible and which result from acts of, or any failure to act by, or as a result of claims against, FNB or the Lessor, unrelated to the ownership of the Undivided Interest or the Real Property Interest, the administration of the Trust Estate or the transactions.
contemplated by the Transaction Documents or the Financin Documents.
Letter of Credit shall have the meaning set forth in Section 10(b)(3)(xvii)of the Participation Agreement.
License shall mean NRC Facility Operating License No.NPF-51, issued April 24, 1986 (supersed-ing iNRC 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.License Amendment shall mean the Amendment, dated on or about December 10, 1986 amending the License and approving the transactions contemplated by the Participation Agreement and the Facility Lease.License Expiration Date shall mean December 9, 2025, or such later or earlier date as 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 El Paso Funding Corporation, a Delaware corporation.
Loan Percentage shall mean the percentage identified as such in Schedule 2 to the Participation Agreement.
If Majority in Interest of Holders of Notes shall mean Holders of a majority in principal amount of all I Notes Outstanding under the Indenture at the time of any such deter'mination.
illaterial Project Agreements shall mean (i)Arizona Nuclear Power Project (ANPP)Participation Agreement among APS, Salt River Project Agricultural Improv'ement and Power District, Public Service Compahy of New Mexico, El, Paso Electric Company, Southern California Edison Company, Southern California Public Power Authority, and Los Angles Department of Water and Power, dated August 23, 1973, as amended, (ii)Nuclear Fuel Contract between ANPP and Combustion Engineering, Inc.(CE), dated as of August 20, 1973,".(iii)Nuclear Steam Supply Contract between APS and CE, dated as of August 20, 1973, (iv)Turbine Generator Contract between APS and General Electric Company, dated as of March 21, 1974, as amended, (v)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, (vi)Contract between APS and Westinghouse Electric Corporation for fuel fabrication services for reload of batches of nuclear fuel, dated August 7, 1974, as amended, (vii)Agreement for the Sale and Purchase of Waste Water Efiluent between the City of Tolleson, APS, and Salt River, dated June 12, 1981, as amended, (viii)Agreement for Construction of ANPP between Bechtel Power Corporation (Bechtel)and APS dated January 15, 1973, (ix)Agreement for Engineering and Procurement Services between APS and Bechtel, dated January 15, 1973, (x)Option and Purchase of Efiluent among the Cities of Phoenix, Glendale, Mesa, Tempe, and Scottsdale, the Town of Youngtown, APS, and Salt River, dated April.23, 1973', (xi)Agreement for Conversion Services between Allied Chemical Corporation and APS, dated November 17, 1975, as amended, (xii)Uranium Concentrate Sales Agreement between Energy Fuels Exploration Company and APS, dated as of December 1, 1983, (xiii)Uranium Concentrate Sales Agreement between Energy Fuels Exploration Company and APS, dated A-14 as of October 23, 1981, as amended, (xiv)Agreement for Sale of Uranium Concentrates between Pathfinder Mines Corporation and APS, dated December 1, 1983, and (xv)Contract for Disposal of'nt Nuclear Fuel and/or High Level Radioactive Waste between USA and APS, dated July 21, 1984.Maximum Aggregate Loss shall be computed and applied in respect of Unit 2, including all interests erein, and with respect to each calendar year shall mean the sum of retrospective premiums, if any, payable during such year under the Retrospective Rating Plan with respect to any Nuclear Incident which shall have occurred prior to the date of such calculation.
Maximum Option Period shall mean the period, in no event ending after the earlier to occur of the License Expiration Date and October'1, 2026, (i)at the end of which the residual value of the Undivided Interest (without regard to infiation or defiation from the Closing Date and taking into account the existence and eQ'ect of the Assignment and Assumption, the ANPP Project Agreements and the License)shall be at least equal to 20%of Facility Cost, (ii)which, when added to the Basic Lease Term, does not exceed 80%of the economic useful life of the Undivided Interest from the Closing Date and (iii)at the end of which, taking into account the existence and efFect of the Assignment and Assumption, the ANPP Project Agreements and the License, the use of the Undivided Interest by any User (in a transaction pursuant to which the Owner Participant could realize the amount referred to in clause (i)above)is feasible from an engineering and economic point of view and is commercially reasonable.
Unless the period, as computed in accordance with the preceding sentence, shall end on an April 1 or October 1 of any year, the final date of the Maximum Option Period shall be the final April 1 or October 1 in the period, as so computed.Mortgage Releases shall mean the releases of liens dated December 15, 1986, under and with.respect to the Existing Mortgages.
Net Economic Return shall mean (i)the after-tax book yield, (ii)the total after-tax book earnings over the Lease Term, (iii)ninety percent of the after-tax book earnings for each of the first eight years of the Lease Term and (iv)the total after-tax book earnings over the first eight years of the Lease m, in each case originally expected by the Owner Participant with respect to the Undivided rest, utilizing the assumptions, including without limitation the Pricing Assumptions and Tax ssumptions, originally used by the Owner Participant in the initial computation of Basic Rent,'Casualty Value, Special Casualty Value, Special Termination Value and Termination Value, it being understood that when there is an adjustment to preserve Net Economic Return each of the elements described in the foregoing clauses (i)through (iv)must be preserved at a level at least as great as that originally anticipated.
Net Worth shall mean the total of common stock, nonredeemable preferred stock and capital surplus and retained earnings, as shown on a consolidated balance sheet of the Lessee or pro forma consolidated balance sheet of the Surviving Lessee, as the case may be, prepared on the basis of generally accepted accounting principles consistently applied.New Mexico Order shall mean the order issued by the NMPSC on July 16, 1986, in Case No.2032, as amended by the Amended Order issued on November 14, 1986 in Case No.2032.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.Non-Burdensome Regulation shall mean (i)regulation to which the Owner Participant or the Owner Trustee is otherwise subject by reason of its lease financing or'ther 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 or the Real perty 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 Capi 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 Notes and each Releveraging Note, any Refunding Notes and any other Additional Notes.Notice'of Closing shall have the meaning set forth in Section 5(a)of the Participation Agreement.
NRC shall mean the Nuclear Regulatory Commission of the United States of America or any successor agency.Nuclear Aggregate Liability shall mean the amount of Aggregate Liability for a single Nuclear Incident of all Persons Indemgified, as determined in accordance with the Price-Anderson Act, as amended from time to time.Nuclear Facility shall mean a facility designed for producing substantial amounts of electricity and having a rated capacity of 100,000 electrical kilowatts or more.Nuclear Incident shall have the meaning assigned in the Price-Anderson Act, as in effect as of the Closing Date;provided that if the Price-Anderson Act shall be amended to expand the definition of"nuclear incident," the term"Nuclear Incident" shall be similarly expanded.Nuclear Waste Act shall mean the Nuclear.Waste Policy Act of 1982, as amended, or any i comparable successor law.~l II I Overs'ertijicate shall mean a certificate signed by the President or any Vice President and by the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Person wi respect to which such term is used.Operating Agent shall have the meaning assigned thereto in the ANPP Participation Agreement.
Outstanding, when used with respect to the Notes, shall mean, as of the date of determination, all such Notes theretofore issued, authenticated and deliv'ered 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 sufBcient 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 exten)that an amount suIBcient to make full payment of such obligations when due has been deposited with the pledgee of such Notes for the purpose of holding such amount in trust for the payment of such obligations in accordance with the indenture or agreement under which such obligations are secured and (d)Notes in exchange for, or in lieu of, which other Notes have been issued, auth'enticated and delivered pursuant to the Indenture; provided, however, that any Note owned by the Lessee or any Affiliate thereof shall be disregarded and deemed not to be Outstanding for the purpose of any Directive.
Overdue Interest Bate 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.Owner Participant shall mean Commercial Federal Investment Corporation, and its successors and.assigns 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, except"Lessor's Liens" and"Owner Participant's Liens" referred to in clause (vi)of the definition thereof)for which the Lessee is not responsible and which result fr 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.
Ou:ner Trustee shall mean The First National Bank of Boston, a national banking association, not in individual capacity, but solely as Owner Trustee under the Trust Agreement, and each successor as rustee, separate trustee and co-trustee thereunder.
Participation Agreement shall mean the Participation Agreement, dated as of December 1, 19S6, among the Owner Trustee, the Indenture Trustee, the Loan Participant, the Owner Participant and El Paso.Paying Agent shall mean Mellon Trust Company, and any successor Paying Agent under the Indenture.
Paying Agent's Once shall mean the address in New York, N.Y.of any Paying Agent under the Indenture, or the address in New York, N.Y., of any successor Paying Agent under the Indenture.
Penalty Rate shall mean 2%per annum in excess of the Prime Rate.Period shall mean the length of time for which an action or event is stated or otherwise known at its inception to be in existence (determined by the terms of such action or event or the surrounding circumstances), or is expected at its inception to be in existence as determined by an independent nuclear engineering consultant or firm having expertise in the area of nuclear electric generating plants designated by Lessor and Lessee within 10 days after either shall request such designation (which Lessor or Lessee may do at any time after such action or event occurs)or, if Lessor and Lessee are unable to agree on such consultant or firm within such 10-day period, designated by the American Arbitration Association, or any organization successor thereto, within 7 days after either Lessor or Lessee sh'all request'such organization so to do (which Lessor or Lessee may do at any time after the expiration of such 10-day period).Such consultant or firm shall render its determination within 14 days fter its designation, which determination shall be final, binding and conclusive on Lessor and Lessee.fees and expenses of such consultant or firm shall be shared equally by Lessor and Lessee.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 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 Mortgages on the leasehold estate under the Facility Lease;(iv)Liens for taxes on the Undivided Interest or the PVNGS Site 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'ale, forfeiture or loss of the Undivided Interest, any part thereof or interest therein, (y)interfere with the use, possession or disposition of%he Undivided Interest, or any part thereof or interest therein, or (z)impair payment of Rent;(v)inchoate materialmen's, mechanics', workmen', repairmen's, employees', carriers', ware-housemen's, or other like Liens arising in the ordinary course of business for PVNGS, and not delinquent;(vi)Lessor's Liens, Owner Participant's Liens and Indenture Trustee's Liens;(vii)choate Liens that have been bonded for the full amount in dispute or as to which other security arrangements satisfactory to the Lessor shall have been made and which are being contested diligently by the appropriate party in good faith and by appropriate proceedings so long as such proceedings shall not violate clause (x), (y)or (z)of clause (iv)above;(viii)choate Liens of any of the types described in clause (v)above that have been bonded for the full amount in dispute or as to which other.security arrangements satisfactory to the Lessor 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 good accounting practice and (B)there shall have been secured a stay of execution pending such appeal or proceeding for review, so long as such appeal or proceeding 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; 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)under the ANPP Participation Agreement or any other ANPP Project Agreement and (xii)Liens on the undivided ownership interests in Unit 2 owned by the ANPP Participants and oth Persons (other than the Lessee).Person shall mean any individual, partnership, corporation, trust, unincorporated association or joint venture, government or any department or agency thereof, or any other entity.Persons Indemn(fied shall have the meaning assigned in the Price-Anderson Act, as in effect as of the Closing Date;prdvlded that if the Price-Anderson Act shall be amended to expand the meaning of the term"persons indemni6ed," the term"Persons Indemni6ed" shall be similarly expanded.PNM shall mean Public Service Company of New Mexico, a New Mexico corporation.
Price-Anderson Act shall mean the Price-Anderson Act, Pub.L.No.85-256, 71 Stat.576 (1957), as amended to the Closing Date (except as expressly otherwise provided).
Price-Anderson Change shall mean any change in, or new interpretation by a Governmental Authority relating to, Applicable Law, including, without limitation, the Price-Anderson Act or the Atomic Energy Act, the Nuclear Waste Act or the regulations of the NRC, in each case as in efFect on the Closing Date.Pricing Assumptions shall mean the pricing assumptions set forth in Schedule 2 to the Participation Agreement.
Primarr~Financial Protection shall mean Financial Protection required to be maintained by each Nuclear Facility under Applicable Law, except for such amounts.required to be maintained under a Retrospective Rating Plan.Prime Rate shall mean the rate of interest publicly announced from time to time by Chemical Bank, a New York banking corporation, at its principal ofBce in New York City as its prime or ba lending rate.Any change in the Prime Rate shall be efFective on the date~such change in the Pri Rate is announced.
Project Manager shall have the meaning assigned thereto in the ANPP Participation Agreement.
Prudent Utility Practice shall mean, at a particular time, those practices, methods and acts as are in accordance with standards of prudence applicable to the electric utility industry which would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition.
Purchase Documents shall mean the Bill of Sale, the Deed, the Assignment of Bene6cial 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 de6ned in the ANPP Participation Agreement.
PVNGS Site shall mean the interest in Title USA Trust No.530 and the real property described in Exhibit A to the Bill of Sale.R eal Estate Investment shall have the meaning set forth in Section 3(a)of the Participation Agreement.
Heal Property Interest shall mean the interest of the Lessor in the PVNGS Site created by the Assignment of Bene6cial Interest and the Deed or, if applicable, created by the ground lease referred to in Section 10(b)(3)(xiv)of the Participation Agreement.
A-18 Reasonable Basis for a position'shall.exist if tax counsel may properly advise reporting such position on a tax return in accordance with Formal Opinion 85-352 issued by the Standing Committee Ethics and Professional Responsibility of the American Bar Association.
Refunding Bonds shall mean the Loan Participant's lease obligation bonds to be issued, authenti-ted and delivered under the Collateral Trust Indenture, as supplemented by the Refunding Supplemental Indenture, as referred to in Section 2(d)of the Participation 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 Notes shall mean the nonrecourse promissory notes, if any, to be issued by the Owner Trustee and authenticated by the Indenture Trustee on the Refunding Date to refund the Initial Series Notes and each-Releveraging Note theretofore issued.Refunding Registration Statement shall mean the registration statement on Form S-3, including all exhibits and all documents incorporated in the Refunding Registration Statement by reference, to be Gled with the SEC under the Securities Act in connection with the ofFer, issue and sale of the Refunding Bonds.Refunding Supplemental Indenture shall mean the Refunding Bond Supplemental Indenture, among El Paso, the Loan Participant and the Collateral Trust Trustee, supplementing the Collateral Trust Indenture and providing, among other things, for the issuance of the Refunding Bonds.Registration Statement shall mean the registration statement on Form S-3, including all exhibits and all documents incorporated in the Registration Statement by reference, Gled with the SEC (Registra-tion No.33-10317)under the Securities Act in connection with the ofFer, issue and sale of the Initial Series Bonds.Releveraging Amormt shall mean (i)the initial principal amount of each series of Releveraging onds, or (ii)the initial principal amount of the Refunding Bonds to the extent such amount is in ss of the Initial Series Bonds being refunded, but only in an amount equal to the amount that the ted Refunding Note exceeds the aggregate amount of the Initial Series Notes and any Releveraging Notes theretofore issued.Releveraging Bonds shall mean a series of securities issued, authenticated and delivered under the Collateral Trust Indenture, part of the proceeds of which is used to refund to the Owner Participant a portion of its Investment.
Releveraging Date shall mean the date of issuance of Releveraging Bonds.Releveraging Loan shall have the meaning set forth in Section 2(c)of the Participation Agreement.
Releveraging Note shall mean a non-recourse promissory note or notes, substantially in the form of the Initial Series Notes or, if the Refunding Date shall have occurred, the Refunding Note.or Notes, to be issued by the Owner Trustee and authenticated by the Indenture Trustee on the Relm~e'raging Date ,to refund to the Owner Participant a portion of the Investment.
Renewal Term shall have the meaning set forth in Section 12 of the Facility Lease.Rent Increase shall have the meaning set forth in Section 3(g)of the Facility Lease.Rent shall mean Basic Rent and Supplemental Rent.Requisition of Title shall mean any circumstance or event in consequence of which Unit 2 or the Undivided Interest (or all or any portion of the Real Property Interest the loss of which would signiGcantly interfere with'tFie use of Unit 2 or the Undivided Interest)shall be condemned or seized or title thereto shall be r'equisitioned 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, so long as h appeals are undertaken in good faith and are being diligently pursued.
Requisition of Use shall mean any circumstance or event (other than a Requisition of Title)in consequence of which the use of Unit 2 or the Undivided Interest (or all or any portion of the Heal Property Interest the loss'of which would significantly interfere with the use of Unit 2 or th Undivided Interest)shall be requisitioned or taken by any Governmental Authority under power eminent domain or otherwise.
Responsible Ofhcer 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 oificer who in the normal perform-ance of his operational responsibility would have knowledge of such matter and the requirements with'espect thereto.Retained Assets shall mean (i)the Lessee's interest in PVNGS other than the Undivided Interest and the Real Property Interest, (ii)Severable Capital Improvements title to an 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 and the Real Property Interest)to which the Lessee becomes entitled in consequence of Section 16.2 or 23.5 of the ANPP Participation Agreement (except as otherwise provided in Section 5(a)or 19 of the Facility Lease).Retrospecttue Rating Plan shall mean the industry retrospective rating plan established pursuant to the Price-Anderson Act, or any successor or similar plan established under Applicable Law.Safe Harbor Change shall mean the first Substantial Amendment enacted after'the Closing Date, if, upon the efFective date of such Substantial Amendment and at'll times thereafter (as shall be determined from time to time), as a result of such Substantial Amendment, in the opinion of independent counsel to the Owner Partici'pant, (i)Nuclear Aggregate Liability shall not exceed either (a)the amount of Financial Protectidn required to be maintained by each Nuclear Facility with respect to a single Nuclear Incident orI(b)(x)on the date of enactment$7 billion, regardless of the number of Nuclear Facilities then in service, and (y)at all times thereafter
$7 billion as adjusted for*the number of Nuclear Facilities then in service multiplied by the Inflation Index, if any;(~commencing as of December 31 of any year in which Nuclear Aggregate Liability is equal to~exceeds 87 billion, El Paso Net Worth shall be equal to or greater than.075 times Nuclear Aggregate Liability; prouided, however, that if El Pasb Net Worth shall be less than.075 times Nuclear Aggregate Liability, then the Substantial Amendment shall no longer-constitute a Safe Harbor Change only if, in.the year following the year'for which the computation was made, El Paso Net Worth shall'not equal or exceed.075 times Nuclear Aggregate Liability computed for such following year;,(iii) the amount of~Primary Financial Protection available from commercial insnrance nnderwrtter's on terms~snbstantially equivalent (in the reasonable opinion of the owner Participant) to the terms in efFect on the Closing~Date under Applicable Law and required to be maintained by licensees with respect]o any single Nuclear Facility shall be at least equal to the amount required under Applicable Law (which amount;shall not exceed$500 million);i(iv)Maximum Aggregate Loss per year shall not exceed (x)825 million or (y)commencing as of December 31 of any year in wbiclj Nuclear Aggregate Liability is equal to or greater than$7 billion,$25 million multiplied by the Inflation Index, if any;(v)the provisions of the penultimate sentence of Section 170b, of the Atomic Energy Act, 10 C.F.R.$140.22, and 10 C.F;R.$140.92 (as such regulation and form of indemnity agreement relate to the guarantee of the NRC of: defaults by licensees under the Retrospective Rating Plan)as in e6'ect on the Closing Date, shall not have been amended or modified in any material respect;(vi).the NRC shall be required to fulfill payment obligations when due from a licensee liable for damage arising out of or related.to a Nuclear Incident in the event that the payment obligations of such licensee m any calendar year exceed the amount payable by such licensee in respect of such Nuclear Facility in such year under the'etrospective Rating Plan;prouided, howsoever, that the NRC shall be entitled to reimbursement
.through the Retrospective Rating Plan as such payments are made over time;(vii)neither the Lessee nor any other Persons Indemnified will be required to waive the defense of the statute of limitations (existing under any Applicable Law)with respect to a Nuclear Incident (except an Extraordinary Nuclear Occurrence);
with respect to'an Extraordinary Nuclear Occurrence such defense shall I A-20 waived only as to suits instituted within 30 years after the date the Extraordinary Nuclear Occurrence which is the subject of the suit takes place or within a prescribed number of years from the date on hich the claimant first knew, or reasonably could have known, of his injury or damage and the cause reof;(viii)neither the Lessor nor the Owner Participant shall be exposed to any increased real or ential liability (including assessments imposed by a Governmental Authority) with respect to activities authorized by the Nuclear Waste Act;(ix)none of the results contemplated in subclauses (vii)and (ix)of clause (2)in the definition of Deemed Loss Event shall have occurred: and (x)(a)neither the Lessor nor the Owner Participant shall, in the opinion of independent counsel to the Owner Participant delivered within six inonths of such Substantial Amendment, be exposed to any other material increase in its real or potential liability with respect to a Nuclear Incident, either before, on or after the Lease Termination Date, except for liability arising with respect to a Nuclear Incident which takes place after the Lessor or the Owner Participant, as the case may be, becomes a licensee of the NRC, and (b)neither the Lessor, the Owner Participant nor the Lessee shall be prohibited from asserting any other right, protection or defense available under Applicable Law as in efFect on the Closing Date other than those rights, protections and defenses which are waived pursuant to this definition of Safe Harbor Change;provided, however, that an expansion of the waiver of defenses provision of subsection 170n.(l)of the Atomic Energy Act so that such waivers are applicable with respect to an Extraordinary Nuclear Occurrence arising out of or resulting from or occurring in the course of (a)transportation of source material, byproduct material, or, special nuclear material to or from any facility licensed under Section 53, 63 or 81 of the Atomic Energy Act, (b)activities undertaken by the Secretary, including, but not limited to, activities related to the storage or disposal of'igh-level radioactive waste or (c)the construction, possession or operation of any facility licensed under Section 53, 63 or 81 of the Atomic Energy Act, shall not be deemed to expose the Lessor, the Owner Participant or the Lessee to any increased real or potential liability.
"-'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 sh, less all costs and expenses whatsoever incurred by the Lessor and the Owner Participant in nection therewith.
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.Second Fund shall have the meaning set forth in Section 10(b)(3)(xi) of the Participation Agreement.
'ecretary shall m'ean the'Secretary of Energy.~0 Section 6(c)Application shall mean the Loan Participant's Application for an Order under Section 6(c)of the Investment Company Act of 1940 Exempting El Paso Funding Corporation from A'll Provisions of such Act, as Bled with the SEC on April 11, 1986, and as amended by Amendment No.1 thereto dated July 11, 1986.Securities Act shall mean the Securities Act of 1933, as'amended Securities Exchange Act shall mean the Securities Exchange Act of 1934, as amended.Severable, when used with respect to any Capital Improvement, shall mean any Capital Improve-ment which can be readily removed from Unit 2 without materially damaging Unit 2 or materially diminishing or impairing the value, utility or condition of Unit 2.Southern California shall mean Southern California Edison Company, a California corporation.
Special Casualty Value, as of any date of determination thereof, shall mean (i)during the Basic Lease Term, the percentage of Facility Cost set forth opposite the Bate in Schedule 2 to the Facility Lease immediately succeeding such date of determination (or, if such date of determination i specified in Schedule 2 to the Facility Lease, such date), and (ii)during the Renewal Term, t amount determined by amortizing ratably the Fair Market Sales Value of the Undivided Interest as the day following the last day of the Basic Lease Term in monthly steps over the period from such date to the License Expiration Date.Anything contained in the Participation Agreement or 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, under any circumstances and in any event, in an amount at least suificient to pay in full, as of any date of payment, the aggregate unpaid priricipal amount of all Notes Outstanding at the close of business on such date, together with accrued and unpaid interest on such Notes.Special Termination Value, as of any date, shall mean the percentage of Facility Cost set forth opposite such date in Schedule 4 to the Facility Lease.Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstanding, Special Termination Value shall be, when added to all other amounts which the Lessee is required to pay under Section 13(c)of the Facility Lease, under any circumstances and in any event, in an amount at least suRcient to pay in full, as of any date specified on Schedule 4 to the Facility Lease, the aggregate unpaid principal amount of all Notes Outstanding at the close of business on such date, together with accrued and unpaid interest'n such Notes.Special Transfer shall have the meaning set forth in Section 7(b)(4)of the Participation Agreement.
Substantial Amendment shall mean any amendmeht to the Price-Anderson Act or the Atomic Energy Act which would constitute a Deemed Loss Event under clause (2)of the definition of Deemed Loss Event.Supplemental Financing shall mean a financing of the Supplemental Financing Amount of Capi'Improvements made pursuant to Section 8(f)of the Facility Lease.Supplnnental Financing Amount shall mean the Applicable Unit 2 Percentage of the cost of a Capital Improvement which equals (i)the amount of the increase, if any, in the Owner Participant's
'asis in the Undivided Interest for purposes of section 1012 or 1016 of the Code as a result of such Capital Impr'ovement less (ii)the amount of the related Additional Equity Investment of.the Lessor, if any.Supplemental Rent shall have the meaning set forth in Section 3(b)of the Facility Lease.', Surviving Lessee shall have the meaning set forth in Section 10(b)(3)(ii)of the Partic pation , Agreement.
t Taxes 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, excise, gross income, gross receipts, sales, use, property, personal and real, tangible and intangible, and stamp taxes), levies, imposts, duties, charges, assessments, or withholdings of any nature whatsoever, general or specific, ordinary or extraordinary, together with any and all penalties, fines, additions to tax and interest thereon.Tax Assumptions shall mean the assumptions set forth in Section 13(c)of the Participation Agreement with respect to the Federal income tax consequences of the transactions contemplated by the Participation Agreement.
Tax Reform Act of 1986 shall mean Pub.L.No.99-514, the Tax Reform Act of 1986.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 Participa-tion Agreement (or any comparable successor provision)
~Termination Value, as of any Basic Rent Payment Date, shall mean the percentage of Facility Cost set forth opposite such date in Schedule 3 to the Facility Lease.Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstanding, Termination Value shall be, when added to all other amou'nts 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 sufBcient 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.Texas Public Utility Regulatory Act shall mean the Texas Public Utility Regulatory Act of 1975, as amended, or any comparable successor law.Transaction Documents shall mean the Participation Agreement, the Facility Lease, the Trust Agreement, the Indenture, the Extension Letter, the Decommissioning Trust Agreement, the Mort-gage Releases, the Assignment and Assumption,'the Purchase Documents, the Letter of Credit, any reimbursement or similar agreement relating to the Letter of Credit 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, the Real Property Interest, and 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 sentations and warranties in a manner comparable to that set forth in the second sentence of on 6(b)of the Facility Lease), together with the due assumption by the transferee of, and the due re ease of the Lessor from, all of the Lessor's obligations under the Assignment and Assumption and the Deed (or the ground lease referred to in Section 10(b)(3)(xiv)of the Participation Agreement, as the case may be)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.
Tnsst shall mean the trust created by the Trust Agreement.
Tnsst.Agreement shall mean the Trust Agreement, dated as of December 1, 1986, between Commercial Federal Investment Corporation and FNB.Trust Estate shall have the meaning set forth in Section 2.03 of the Trust Agreement.
Trust Indenture Act shall mean the Trust Indenture Act of 1939, as amended.Trustee's Expenses shall mean any and all liabilities, obligations, costs, compensation, fees, expenses and disbursements (including, without limitation, legal fees and expenses)of any kind and nature.whatsoever (other than such amounts as are included in Transaction Expenses)which may be imposed on, incurred by or asserted against the Indenture Trustee or any of its agents, servants or representa-tives, 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 the 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 icipation Agreement.
A-23 UCC or Uniform Commercial Code shall mean the Uniform Commercial Code as in effect in any applicable jurisdiction.
Underwriting Agreement shall mean the agreement executed by the Loan Participant, El P Smith Barney, Harris Upham R Co.Incorporated and PaineWebber Incorporated (acting either underwriters or representatives of the underwriters named therein)relating to the purchase, sale and delivery of the Initial Series Bonds.Undivided Interest shall mean a 1.998026%undivided interest in Unit 2 (other than the Retained Assets described in clauses (ii)and (iii)of the definition of such term and other than the portion of Unit 2 described as excluded from the transfer pursuant to the Bill of Sale in Section A of Exhibit B thereto), including, except where expressly stated to the contrary, the related Generation Entitlement Share attributable to a 1.998026%undivided interest in Unit 2.Undivided Interest Indenture Supplement shall mean the supplement to the Indenture, substantially in the form of Exhibit C thereto.Uniform System of Accounts shall mean the Uniform System of Accounts prescribed for Fublic Utilities and Licensees subject to the provisioris of the Federal Power Act (Class A and Class B), 18 C.F.R.101, as in eEect on the date of execution of the Participation Agreement, as amended or modified from time to time after such date.Unit 1 shall mean the 1,270 megawatt unit, commonly known as Unit 1, and one-third of the Common Facilities at the Palo Verde Nuclear Generating Station.'I Unit 2 shall mean the 1,270 megawatt unit, commonly known as Unit 2, and one-third of the Common Facilities at the Palo Verde Nuclear Generating Station, all as more fully described in Exhibit B to the Bill of gale, together with all Capital Improvements thereto.Unit 3 shall mean the 1,270 megawatt unit, commonly known as Unit 3, and one-third of the Common Facilities at the, Palo Verde Nuclear Generating Station.Unit 2 Retained Assets shall mean (i)all resident fuel assemblies, equipment and personal prope constituting part of the Generating Unit (as defined in the ANPP Participation Agreement) designate as Palo Verde Nuclear Generating Station (other than common facilities) owned by the Lessee but excluded from Unit 2 as set forth in Section A of Exhibit B to the Bill of Sale and (ii)a one-third interest in all equipment and personal and real property constituting PVNGS common facilities under the ANPP Participation Agre'ement owned by the Lessee but excluded from the Common Facilities as set forth in Section B of Exhibit B to the Bill of Sale.User shall mean a Person unrelated to El Paso (within the meaning of section 318 of the Code)!possessing the Undivided Interest after the Lease Termination Date.A-24 TRUST AGREEMENT dated as of December 1, 1986 between COMMERCIAL FEDERAL INVESTMENT CORPORATION, as Owner Participant and THE FIRST NATIONAL BANK OF BOSTON, as Owner Trustee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities 0
TABLE OF CONTENTS Si:.<."i'<<>i 1.01.Definitions ARTICLE I DEFINITIONS Si<<"ii<>i 2.0l.Six~"I'l<)N 2.02.St:.<el<>N 2.03.ARTICLE II At.Ttt<>i<<Tv To ExE(:t"rE ANI)PE<tv<>itii Villi(>t s Do<:t'ill:.N'is; R,aT<vt<:.GATI(>i
.'>Nl>C(>NI>It<xi;KTI(>N:
DE(:I.,<tt
'>I'<<>N (>v Tni irr BT Ttii:.OwNI:.I<Tilt sTI'.I'.Authority to Exec>>te;>>>(I Perforni Vario>>s Docu>>>e>>ts
.Ratificatio a>>(l Co>>f>r>>>ation Declaration of Trust by the Owner Trustee.Si:.<I<<>i.'3.01.Si:.<."I'I<
>x 3.02.ARTICLE III PA Ts I I',NTS Payments from Trust Estate Only Method of Paynient Distrib>itioi>s
~ARTICLE IV Dlirl'l<llit"I'<<>NsSt:.<IT<<>N 5.01.St:.<ITI(>N 5.02.SE<ITi<>N 5.03.SE<."I'I<>N 5.04.SE<ITi<>N 5.05.SE(ITt(>N S.06.ARTICLE V DUTIFs oF TIIE OwivEA Tnt sTI'.I<Notice of Certain Events Action upon Instructions Indemnification
.No Duties Except as'Specified in Trust Agreement or Iiistructions
..No Action Except Under Specified Documents or Instructions
.....Absence of Duties Sv<"I'I<>x G.OI St:.<"I'<<>x (i.t)2 Sl:.i'I'<<>x (i.it.3 Si:.<."I'I<>>
6.04.St:.<ITt<>N 6.05.SE(IT<ON 6.06.ARTICLE VI Tiit:.O>vNI'.ll TII<'ia'I:.I:.
Acceptance of Trust a>>d Duties Fur>>ishi>>g of'ocu>>>e>>ts No Representatio>>s or W;>rr;>>>ties as to the U>>(livi<l<<(l 1>>tcrcst.thc R<<;>I Property Interest.Unit 2 or Docume>>ts......
No Segregation of Moneys: No Interest Reliance: Advice of Counsel Not Acting in Individual Capacity.St<<."I'<<>x 7.0I.:.(."I'<<>N 7.02.ARTICLE VII INI>l'.~lbll'I<:
x'I'I<>x (>I'ilt:.Owii:.I<T>><>ri'I'.I:.
>>T Tiii:.Owii:.I<P>I<'I'I<ti~>i'I'he Owner Participant to l>>demnify the Ow>>er Trustee Compensation and Expenses.
TABLE OF CONTENTS (Continued)
ARTICLE VIII TERMINATION OF TRUST AGREEMENT SEGTIQN 8.01.Termination of Trust Agreement SEcrroN 8.02.Termination at Option of the Owner Participant.
ARTICLE IX SUccEssoR OwNER TRUsTEEs, Co-OwNER TRUsTEEs AND SEPARATE OwNER TRUsTEEs SECTION 9.01.Resignation of the Owner Trustee: Appointment of Successor..............
SEOTrov 9.02.Co-Trustees and Separate Trustees ARTICLE X SUPPLEMENTs AND AMENDSIEivTs SEcrroN 10.01.Supplements and Amendments SEcrroN 10.02.Limitation on Amendments.
6 6 I SEcrroN 11.01-SEcTroN 11.02 SEcrroN 11.03.SEcrroN 11.04.SEcrroN 11.05.SEcrroN 11.06.SEcrroN 11.07.SEcrroN 11.08.SEcnoN 11.09.SEcTION 11.10.SEcrroN 11.11.SEcrroN 11.12.SEGTIQN 11~13., SEcrroN 11.14.SCHEDULE I ARTICLE XI MISCELLANEOUS No Legal Title to Trust Estate in the Owner Participant Sale of Undivided Interest and/or Real Property Interest by the Owner Trustee is Binding Limitations on Rights of Others Notices Severability Limitation on the Owner Participant's Liability.
Separate Counterparts
.Successors and Assigns.Transfer of Interests Headings Governing Law.Administration of Trust Performance by the Owner Participant
.ConAict with Transaction Documents Section 15.6.1 Lessor's CertiAcate 8 8 8 9 9 9 9 9 9 ll TRUST AGREEXIENT TRUST AGREEMENT.
dated as of December l.1986.between CO~1~1ERCIAL FEDERAL NVEST~IENT CORPORATION (the"Owner Participant")and THE FIRST>VATIONAL BANK OF BOSTO>V.a national banking association (the"Owner Trustee").WITN ESSETH: WUHEREAS.the Owner Participant desires to acquire the.U>><livided Interest;m<1 the Re:il Property l>>terest thro<<gh the Trust created hereby: and~IVHEREAS.Tlie First iV itioiial B;>iik of Bosto>>is willi>>g to;ict'iis Owiier T><<stee;<<>d to;i<<<<<<pt tl<<Tr<<st<<rc;ite(l hereby: NO~V.THEREFORE.
it><<oiisi<leratioii of'tlic n>iitii;il;igreei>><<>its li(reiii<<>>>>t;iiii<<<l;i>>(l otl><<r u<)<)d>>lid v>>l>>>>ble col>sider>>tloll.
receipt of wl>l<<E>Is llerebv i>ck>>owledged.
tli<.'i>rtl<<s E><<reto i>gr<<<<i>~follows: ARTICLE I D>:.>>>ir>>()~s S>:<.")'>>>i 1.01.Definitions.
All capitalized terms<<sed hereii>a>><l iiot otherwise<lefine<l lier<<i>>sli;ill liave the i>>e;i>>i>>gs set forth in Appeii<lix A to the Participatioii Agr<<ci>>eiit d;>t<<<l;>s ol'ece>>iber 1.198G.a>>ioiig the parties hereto ai>d otliers.Refere>>ces ii>tl>is Agreenie>>t to;irti<<l<<s.
sectioi>s.
p;ir;igraplis;i>><l chi<<s<<s;ire to articl<<s.sectio>>s.par;>graplis;iii<l
<<I:<<is<<s of tliis A'r<<<<i>><<iit
<<i>l<<ss otherwise i>>dic;ite(l.
ARTICLE II A(->>'>i)>>>>''Y T<i EX>'i(!>>"'>'.
XXI)P>'.I>l'()lix>
Vh>>>()<'!i DO<'.>'X>>'.!<
>'s: RA'I'l>>><,''>()vI Abl)C()X>:ll>h>
0'>>>4: D>:.<:>.x>u>'><)i
<)>>T)>(')r>'v Tiii'u'i>:.>>
Tn<s>>'t><St:.n'>()i 2.0L Authority to Execute anrl Perform Vario>>s Doc>n)>ent<.
The Owner Particip:<<it hereby authorizes and directs the Owner Trustee (1)to execute a>>d deliver each Tr;ins;i<<tioii Docu>>>ent to which the Owner Trustee is to be a party a>>d to execute and issue;iii<l reqii<<st tl><<Indenture Trustee to authenticate and deliver the Initial Series>Vote (each such" Traiis;ictioii f)oc<<>iie>>t.
i>>eluding the Initial Series Note.to be in the form approve<I by the Owiier Particip;i>>t).(ii)to execute and deliver all other agreements, instrun>ents*and certificates conte>>iplate<l by tlie documents referred to in clause (1), (iii)to take whatever action shall be required to be take>>by tlie Owner Tr<<stee by the terms of.an<i exercise its rights and perform its<luties<<ii<ler.eacli oi'li<<<lo<<<<i>>c>>ts.;igree>>ie>>ts.
iiistr<<>>ieiits aii<l certificates ref'erred to iii cl;<<ises fi);u>d (ii):>l)ov<<;>>>
s<<t lortli iii sii<<li do<<<<i>>e>>ts.
<<gree>>>e>>ts.
i>>str<<>>>e>>ts and certific:ites;iii(l (iv)s<<l)j<<<<t to tli<<t<<riiis>>1 tliis Agre<<i>>e>>t.
to take s<<cl>otlier;ictio>>
iii co>>>>ectio>>
with the foregoi>>g;>s tlie O>v>><<r P:irti<<it>><<it i>>;>i 1'roi>i tiiiie to tii>>e direct.Six">'>>>i 2.0').Rntificatio)>
nn<f Confirmatio.
By certific:ite d;>ted Decei>>ber).1<)')(i (tl><<-Sectio>>15.6.1 Certificate-).
the Owner Trustee confirnied the i>>itters required to be co>>firiii<<<l oii the part of a lessor in a sale and leaseback transaction under Section 15.6.1 of the-'.NPP Particip itio>>Agreement.
a copy of which certificate is attached hereto as Schedule L The Owner Participa>>t.
by its execiitio>>
an(l delivery of'his Agreement.
ratifies anti confirnis the execiitio>>;i>><l delivery by tl>(Ow>>er T><<stee oi'l>e Sectioii 15.G.1 Certificate.
S>:,<i'ii>x 2.0'3.Decl(>>ation of Trust by tI>e Ou;>>er Tnrstee.The Owner Triistee l>erel)y (I<<<<l:ines
't it will hold all estate.right.title and interest of the Owner Trustee i>>a>>d to tlie U>>divi<l<<<l rest.the Real Property Ii>terest.
the Transaction Doc<<ments;i>>d any other property coiitril)<<t<<<l by the Owner Participant.
including without lin>itation all amounts of Rent, insurance proceeds on<I requisition, indemnity or other payments of'ny kind, but specifically excluding any Except.Pavments (collectively, the"Trust Estate"), upon the trusts set forth herein and for the use, benefit of the Owner Participant.
ARTICLE III PAYxlENTS St:.(:n<>i 3.01.Payments from Trust Estate O>>Ig.All payments to be made by the Owner Trustee under this Agreement shall be made only from the income and proceeds from the Trust Estate a>>(l only to the extent that the Owner Trustee shall have received income or proceeds fro>o the Tr<<st Estate to>>>eke such pay>>>ents it>accordance with the terms hereof.except as specifically provi(le<I i>>Sectio>>6.0I.The Owner Participant agrees that it will look solely to the income<<n<l procee(ls fro>>>th<Trust Estate to the exte>>t available for pay>>>e>>t as herein provi(le(l u>>(I that.c'xc(pt as spe'(.ifi<<alii provi(le(l herei>>.the Owner Trustee shall not be liable to the Owner Participa>>t for a>>y;u>>o<<>>ts payable under this Agreement and shall not be subject to any liability under this Agreeme>>t.
S<:.<;;>'>(>x 3.02.Plethora of Payment.All an>ouots payable to the Ow>>er Participa>>t purs<u>>>t tn this Agreement shall be paid or caused to be paid by the Owner Trustee to the Owner Participa>>t'.
or its nominee, by crediting the amount to be distributed to the Owner Participant to an accou>>t maintained by the Owner Participant with the Owner Trustee in immediately available Fun(ls or hy transferring such amount in immediately available funds to a banking institutioi>
with bank wire transfer facilities For the account oF the Owner Participant.
as i>>structe(l Fro>>>ti>>>e to ti>>>e by thc Ow>>er Participant.
ARTICLE IV Di~"('>on>>'>'I(>ms SF(:Tl<>N 4.01.Distributions.
Subject to the terms and requirements of the Transaction Doc<<-ments.all payments and amounts received by or on behalf of the Owner Trustee shall be distribute<I forthwith upon receipt in the following order of priority: first.so much of such pay>>>cot or n>oou>>t as shall be required to pay or reimburse the Owner Trustee for any fees or expenses (inclu(li>>g reasonable attorney's fees and expenses)not otherwise paid or reimbursed to the Owner Trustee as to which the Owher Trustee is entitled to be paid or reimbursed hereunder shall be retained by the Owner Trustee;and, second, the balance, if any, of such payment or amount re>>>ai>>i>>g thereafter shall be distributed to the Owner Participant.
ARTICLE V DUD>>: i<>I: Till:, Owhl:,n Tn(".il'tn S>a'>'n>i 5.0I.Notice of Ce>tain Ereots.I>>the eve(>t the Ow>>er Tn>stee shall have k>>nivl<<<lc<<>i'>>y Default.Event ol'efault.
Indenture Default.Indenture Evc>>t oi'efu>lt.
Eve>>t>>I'<>s>><>r Deemed Loss Event.the Owner Trustee shall give'prompt written notice thereof to the Oiv>>cr Participant.
the Lessee.the Loan Participant and the Indenture Trustee unless such Defa(>lt.Eve>>t ol'efault.
Indenture Default.Indenture Event of Default, Eve>>t ol'oss or Dee>>>e(l Loss Evc>>t>>o'anger exists before the giving of such notice.Subject to the provisions of Section 5.03.the Ow>>er Trustee shall take or refrain from taking such action, not inconsistent with the provisions of the Transaction Documents.
with respect thereto as the Owner Participant shall direct by written i>>structio>>
to the Owner Trustee.If the Owner Trustee shall have given the Owner Participant (vritte>>>>otice oF a>>y eveot and shall not have received written instr>>etio>>s as above provi(le(l withi>>:30<Iui s'fter mailing notice of such event to the Owner Participant.
the Owner Trustee>>>ay.subject to provisions of the Transaction Documents, take or refrain From taking such action.but shall be u>
>>o duty to.and shall have no liability for its failure or refusal to, take or refrain fro>>)takiiig any action with respect thereto as the Owner Trustee shall deem advisable and in the best interests of the Owner~~~articipant.
For all purposes of this Agreement, in the absence of actual knowledge of an ofRcer in the orporate trust division of the Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of any Default.Event of Default.Indenture Default, Indenture Event of Default.Event of Loss or Deemed Loss Event unless the Owner Trustee receives written notice thereof given by or o>>behalf of the Owner Participant, the Lessee, the Loan Participant.
the Indenture Trustee or;i>>y Holder of a Note.S>:.<;>'<<)x 5.02.Action upon Instructions.
Subject to the terms of Sections 5.01 and 5.0'3.upon tlie written instructions of'the Owner Participant, the Owner Trustee will take or refrai>>froni takii)g s<<cl)<<etio>>or actions.not inconsistent with the provisions of the Transaction Doc<<>>ie>>ts.
as>>iay be specified ii>such i>>str<<etio)is.
S>;c'>'<<)x 5.0'3.Inde)u)>ification.
Tl)e Owner Triistee shall>>ot be reqiiire<l to t;ike or refr;iii)1'ro>>i t:iki>>g a>>y<<etio>><<>>der this Agreei>>ent or a>>y other Tra>>sactio>>
Doc<<>>ie>>t (otlier tli;i>>tlic;icti<>>)>>
specified in the first sentence of Section 5.01)unless the Owner Trustee shall i)ave been in<lei>>>>ifie<l by the Lessee or.if the Owner Trustee reasonably believes such indeninity to be i>>a<leqimte.
by tlie Owiier Particip;int.
in>>ia>>ner a>>d for>>)reasonably satisfactory to the Owi>er Tr<<stce.;>>!;>i>>st;<<)y liability.
fee, cost or expense (including reasonable attorneys'ees a>>d expenses)which>>)ay be , incurred or charged in connection therewith, other than such as may result from" the willf<<l niiscond<<ct or gross negligence of the Owner Trustee: and.if the Owner Participant shall have directed the Owner Trustee to take or refrain from taking any action under any Tra>>sactio>>
Doc<<i>>ent.
the Owner Participant agrees to furnish such in<le>>>nity, by;i written<<>><lerti>ki>>>.
<)f'n<lemnification and, in a<klition.
to pay the reasonable comper)sation of the Owiier Tr<<stee for tll<.,services performed or to be performe<l by it pursuant to such<lirectio>>.
Tl>e Ow>>er Tr<<stee sli;ill i)<)t be required to take any action<<>>der;iny Tra>>saction Doc>iment if tl)e Owner Triistee sli;>II rc;iso>>;il)ly leternii>>e.
or sh;ill have beer>advised by co<<>>sel.that such aetio>>is likely to resiilt iii persoii;il li;iliility wl)ich the Owiier Trustee has not been and will not be adeqiiately iii<leni>>ifie<l or is coiitr;iry to tll<rms hereof or of any document contemplated hereby to which the Owner Trustee is a party or is otherwise contrary to law.P IA S>;<.->'><)x 5.04.No Duties Except as Specified in Trust Agreement or lnstructio)>s.
The Ow>>er Trustee shall not have any duty or obligation to manage, control.use.make any payment in respect nf.register.record.insure, inspect, sell, dispose of or otherwise deal with the Undivided Interest.the Real Property Interest or any other part of the Trust Estate.or to otherwise take or refry>>fro>>>t>ki>>>.'ny action under or in connection with any document contemplated hereby to which the Owner Tr<<stee is , a party.except as expressly provided by the terms of this Agreement or in written instructions fro>>>the Owner Participant received pursuant to Section 5.01 or 5.02;and no implied duties or obligatio>>s slmll be rend into this Agreement against the Owner Trustee.The Owner Trustee nevertheless agrees tli;it it will.in its individ<<al capacity and at its own cost and expense.promptly take;ill<<ctioii;>s>>i:iy be>>ecessary to discharge any Les'sor's Liens arising by, through or<<'nder it o>>;>i)y p;irt of tl>c Tr<<st Estate.S>u-)'<<>i 5.05.<Vo Action Except Under Specified Documents or Instr>>etio)>s.
The'w>>cr Tr<<stcc agrees th;it it will not manage.control.use.sell.dispose of or otherwise<leal with tli<.U>><livi<lc<l Iiiterest.
the Real Property Interest or any other part of the Trust Estate except (i);is req<<ire<l by tlie terms of the Transaction Documents, (ii)in accordance with the powers gra>>ted to.or the authority conferred upon, the Owner Trustee pursuant to this Agreement or (iii;.n accordance with the express terms hereof or with written instructions from the Owner Participant pursuant to Section 5.01 or 5.02.S>'<".)'u)x 5.06.Absence of Duties.Except in accordance with written i>>str<<ctions f<<riiislic<l p<<rs<<;i>>t to Sectio>>s 5.01;<<id 5.02.a))d without limitation of the ge>>erality oi'Sectio>>
5.0<.tlie 0<vile)Trustee shall not have ai>y duty to (i)file.record or deposit any Tra>>saction Doc<<>>iei)t or;i>>y otlier ument.or to maintain any such filing, recording or deposit or to refile.rerecord or redeposit;iiiy
:3 such docuntent.(ii)obtain insurance on the Undivided Interest or the Real Property Ititerest or elfec or niaintain any such insurance, other than to receive and forward to the Owner Participant ai>>otices.policies.certificates or binders furnished to the Owner Trustee p<<rsuant to the Facility Lease.(iii)rnaintai>>Unit 2.the Undivided Interest or the Real Property Interest.(iv)pay or discharge a>>y T;tx or any Lien owing with respect to or assessed or levied against any part of the Trust Estate.except;is provided i>>the last sentence of Section 5.04.other than to receive a>>cl forward notice of such Tax~or Lien to the Owner Participant.(v)confirm, verify.investigate or inquire into the failure to receive<<>>y reports or fina>>ci;tl statenie>>ts of the Lessee.(vi)inspect Unit 2 at a>>y ti>>ie or ascertai>>or i>>q<<ire as to the perforntwtce or observance of any of the covenants of the Lessee or any other Person<<>><ler a>>y Tra>>saction Doc<<ment~ith respect to the Undivided Interest.the Real Property I>>terest or Unit>or (vii)>>iaimge.
co>>trol.<<se.sell.dispose of'or otherwise deal witli tlte U>><livide<l l>>terest.tlt<Rc:tl Property Ititercst or Uiiit 2 or;tity p;trt thereof or;tiiy otlier part of tlie Tnist Est;ite.except as pr<>i i<1<<il i>>Scctioii'v.05.ARTICLE VI execiite,<<id
<leltver su<.h doc.<<i>>ettts o>>ts beh, St:.<."t't<>x 6.04.No Segregation of iMonegs<No interest.Except as otherwise provided hereiit o;iiiy ot'lie Tr;t>>s:ictioii Doc<<iiie>>ts.
iiio>>eys received by tlte Oiv>>er Tnistee liere<<>><ler ii<<<<<l>t<>t i.Till:.Ou'xt:.tt T<<t i't't t'.Si:.i"t'tt>i G.OI.Aeeeytanee of Trust anrl Duties.The Owner Trustee accepts the trusts hereby create<1 a>>d agrees to perform the same.but only upon the terms of'his Agreemeiit.
Tlte Ow>>er Tr<<stee also;igrees to<lisb<<rse;tll nioneys actually receivecl by it constit<<ti>>g part of'lie Tnist Est;tt<.iipo>>tlte terms of this Agree>>tent.
The Owner Trustee shall not be answerable or;tccoti>>t:ible ii>><l<<r;<<iy circ<<iiista>>ces.
except f'r (i)its ow>>willful>>iisco>>cl<<ct or gross iiegligc>>ce: (ii)tltc i>>;ice<<r;icy i>f'iiy of'ts representatio>>s or warr;<<ities cotitaiiie<l in Section G.03 or ttttcler Sectioii'i(;i)oi'lic P;irtic.ip:ttio>>
Agree>>ieiit give>i expr<.sslv iit its iiiclivi<liial cap;ic:ity.(iii)its 1'itil>>rc to peri'<>r>>i i>liliu:i-tin>>s expressly iiit<lert;tketi by it in tlte I;tst se>>te>>ce of Section.~.04 of'liis Agree>>ic.>>t or iii S<<<<tii>>'>(b)of'he Particip;ttioii Agreeiiieiit or (iv)Taxes b;tse<l oit or>>ie'asiirc<l by;iiiy f'ecs.co>i>i>>issi<>>i>>
compensation received by it for acting as trustee in connection with any of the tritiisactio contemplated by the Transaction Documents.
Si:.<t't<>i 6.02.Ftt>7>isltin<<of Doe<i>>tents.
The Owner Trustee will furnish to the Owner P;irtici-pant, promptly upon receipt thereof, duplicates or'copies of all reports.notices.requests.<lei>>;>>i<Is.
opinions.certificates.
financial statements and any other writittgs f'urnishe<l to the Owner Tnistee hereunder or<<nder the Transaction Documents.
unless by the express ter>>is of<<ny Tr;t>>s;tctioti Document a copy of the same is required to be furnished by so>>ie other Perso>>directly to the Oiv>>c r Participant.
or the Owner Trustee shall have determined that the same has alrea<ly bee>>f'<<rnishe<l to the Owner Participant.
St'.<mt<>w 6.03.No Reyresentations or Warranties as to tlte UncliUi<le<l Interest.the Real Pr<>t>e>%t Interest, Unit 2 or Doe<<raents.
The Owner Trustee makes (i)NO REPRESENTATION OR lVAR-RANTY AS TO THE TITLE.VALUE.CONDITION.
DESIGN.OPERATION.
~IERCHANTABILITY OR FITiVESS FOB USE OF THE UNDIVIDED INTEREST.THE HEAL PROPERTY liVTEBEST.
t:X IT'>OR AiVY,OTHER REPRESENTATION OR KVABRAiVTY.
EXPRESS OR IMPLIED.>VIT+I BESPE(:T TO THE UiVDIVIDED INTEREST.THE REAL PROPERTY INTEREST OR UNIT>WHATSOEVER.
except that the Owner Trustee hereby represents.
warrants ancl cove>>aiits to tlie Ow>>er P;irticip;<<it that it will comply with the last sentence of Section 5.04.and (ii)>>o representatio>>
or w;irr;i>>ty;is t<>th'e validity or enforceability of any Transar'ion Document or as to the correctn'ess of;iiiy st;ite>>ic>>t made by any Person other than the Owner Trustee, contained in any thereof.and except tltat tlie Owner Trustee represents.
warrants and covenants to the Owner Participant th;tt this Agreenie>>t li;is bee>>.a>><l each of's<<ch other'doc<<me>>ts which contemplates exec<<tio>>tliereof'by the Oiv>>er Tnist<<e lms l>ee>>or will be.exec<<teil;<<id delivered by its officers wlto;ire.or will be.<fitly atttl>orii<<<l tt>il f'.
-segregated in any manner, except to the extent required by law, and may be deposited under such~~eneral conditions as may be prescribed by law, and the Owner Trustee shall not be liable for any terest thereon, except as may be agreed to by the Owner Trustee.SEcrtoN 6.05.'eliance; Advice of Counsel.The Owner Trustee shall not incur any liability to any Person In acting upon any signature, instrument, notice, resolution, request, consent, order, certificate.
report, opinion, bond or other document or paper believed by it to be genuine and believed by it in good faith to be signed by the proper party or parties.The Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect.As to any fact or matter the manner of ascertainment of which is not specifically prescribed herein.the Owner Trustee may for all purposes hereof rely on an Officers'ertificate of the relevant party as to such fact or matter.and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.I>>the adn>inistration of the trusts hereunder, the Owner Trustee may execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents or attorneys anti nmy consult with counsel, accountants and other skilled Persons to be selected and employed by it.and the Owner Trustee shall not be'liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion within the scope of such Person's competence of any such counsel, accountants or other skilled Persons and not contrary to this Agreement.
SEcrtoN 6.06.Not Acting in Individual Capacity.Except as provided in this Article VI.in accepting the trusts hereby created the Owner'rustee acts solely as trustee hereunder and not in its-individual capacity;and all Persons having any claim against the Owner Trustee by reason of the'transactions contemplated by the Transaction Documents shall look only to the Trust Estate (or a part"thereof.as the case may be)for payment or satisfaction thereof, except as specifically provided in this Article VI and except to the extent the Owner Trustee shall otherwise agree in any Transaction ocument to which it is a party.ARTICLE VII INDE!4NIFlchYION OF THE OwNER TRUsTEE BY THE OwNER PARTIGIPhNT SEcrroN 7.01.The Owner Participant to Indemnify the Owner Tnatee.The Owner Participant agrees to assume liability for, and to indemnify and hold harmless the Owner Trustee and FNB.In, its individual capacity, against and from, any and'all Claims which may be imposed on.Incurred by or asserted at any time against<he Owner Trustee (and not indemnified by the Lessee within a reasonable time after demand therefor)in any way relating to or arising out of the Trust Estate.any of the properties included therein, the-administration of the Trust Estate or any action or inaction of the Owner Trustee hereunder or, under the Transaction Documents, except only that the Owner Partici-pant, shall not be required to indemnify the Owner Trustee for Claims arising or resulting from any of the matters described in the last sentences of Sections 5.04 and 6.01.The indemnities contained in this Section 7.01 shall survive the termination of this Agreement.
SEcnow 7.02.Compensation and Expenses.'he Owner Trustee shall receive as compensation for its services hereunder such ordinary fees as are fair, reasonable and customary for the performance of such'services and as may heretofore and from time to time hereafter be agreed upon between the Owner Participant and the Owner Trustee.The Owner Trustee shall be entitled to be reimbursed for its reasonable expenses hereunder and to be compensa'ted;easonably for any extraordinary services rendered hereunder.
ARTICLE VIII TERs>>NATION OF TRUST A<:>>EEs>ENY SE(">'>()N 8.01.Ter>ninntion of Trust Agreement.
This Agreement and the trusts createcl here shall terminate and the Trust Estate shall, subject to the Participation Agreement.
the In(lenture
<<>><l Article IV of this Agreement.
be distributed to the Owner Participant.
and this Agreement shall be of'o further force or effect, upon the earlier of (i)the sale or other, final disposition by the Ow>>er Trustee of all property constituting part of the Trust Estate and the final distribution by the Owner Trustee of all moneys or other property or proceeds constituting part of the Trust Estate i>>accor<la>>ce with the tern>s of Article IV and (ii)21 years less one day after the cleath of the last survivor of>ill of the clescenclants living on the elate of this Agreement of'Joseph P.Kennecly.father of Presicle>>t Jol>>i F.Ke>>>>e(ly.b<<t if a>>y s<<ch rights.privileges or options shall be or beco>>ie vali(l<<>>cler Applical)lc L;>u 1'or;i perio<l s<<l)seq<<ent to the 2lst aiiniversary of'he (leath of's<<cli I;ist s<<rvivor (or.uitl<<)iit li>>>itiiig tlie gc>>erality of the f'oregoi>>g.
if legislatio>>
shall becoi>>e elfective pn)vi(li>>g f()r tlie i:>liclity i>>pen>>itti>>g the effective grii>>t of such rights.privileges a>>d opt'io>>s for;i perio(l iii gross exec<<(liiig tl><<period for which such rights.privileges and options are hereinabove stated to exte>>d and be valicl).the>>s>ich rights.privileges or options shall not terminate as aforesai(l biit sli;>ll ext(>><l to;i>>(l co>>ti>>>><<in effect.but only if such nontermi>>ation and extension shall then be v'>lid<<>>der Applicable Lasv.ii>itil such time as the same shall, under Applicable Law, cease to be valid.SE(a>()N 8.02.Ter>ninntion nt Option of the Ou,'ner Pnrtieipnnt.
Notwithstanding Section 8.0l.tl>is Agreement and the trusts created hereby shall terminate a>>d the Trust Estate sh>ill be distrib<<te<l to'he Owner Participant.
aiid this Agree>>ient shall be of'no further force aii(l effect.<<poi>tlie clectioi>()f the Owner Participant by notice to the Owner Trustee.if such notice shall be iicco>>ip;<<iiecl by tlie writte>>;>greement of the Owner Participant ass>in>i>>g all tlie oblig;itioiis of'l>e Ow>>er Tr<<stec<<>i(l<<r or conte>>ipl:ite<l by the Transaction Doc<<nie>>ts;iii(l;ill other oblig;itioiis of'l>e O~v>>c>'>'<<st<<l.
i>>c<<rrecl by it as trustee here<<iider:
pro>:i(le(f.
hou.e>:er.
that no sucli el<<etio>>sli;ill b<<cll'(.<<tive
<<>>til the lien of the Incle>>ture o>>the Lease li>de>>ture Estate has bee>>rele;>se(l.(ii)f'>ill pay>>ieiit ()f'rincipal of and premium, if any, and interest on the Notes has been made and (iii)any lien on t Trust Estate heretofore created pursuant to Section 7(b)(4)of the Participation Agreenie>>t h;is'termiiiated.
Such written agreement shall be reasonably satisfactory i>>form a>>d substance to tl>e Owner Trustee and shall release the Owner Trustee from all further obligations of'the Owner Trustee hereunder and under the agreements and other instruments mentioned in the prece<li>>g se>>te>><<e.ARTICLE IX'>>(:(:>:ss()>>
OwN>'.>i Tll>.'!iTE>"i, CO-oivN><>>
T>>('>r>>'<>:s
*NO SEPA>>ATE OwNE>>Tl>UsTEF'i Sl'.<r>'>>>N 9.01.Resignation of the Ou;ner Tr>>stee: Appoint>>>e>>t oj Snrcesso>'.(a)Tlic Oiv>><<>'rustee may resign at any time without cause by giving;it least'30<lays'rior writte>>>>oticc t()tli<<Ow>>er P;irticip;iiit.
the l>><le>>t<<re Tr<<stee;i>>cl tlie Lessee.s<<cli r<<sigii;itio>>
t>>l>c<<II'<<<tii>
~>>>>tl><;iccept;ii>ce of';ippoi>>t>>>e>>t by a successor owner trustee uii(ler Secti(>>i ().Ol (I)).I>>;i(l(litii>ii.
tli<<Ow>>er P;irticip;int may at any time remove the Ow>>er Trustee with, or witlio<<t,ca<<se by;i>>i>>stn<<>><<>>t i>>writing delivered to the Owner Trustee.such removal to be effective<<po>>the;icceptiiiic<<(>f'ppointnie>>t by a successor owner trustee under Section 9.01(b).Iii case of the resig>>atio>>
or rci>>ov>>l of'the Owner Trustee, the Owner Participant may appoint a successor owner trustee by aii iiistr<<i>>eiit signed by the Owner Participant.
If a successor owner trustee shall not have been appointed withi>>30 days after the giving of written notice of such resignation or the clelivery of the writteii i>>str<<>>>e>>t with respect to such removal.the Owner Trustee or the Owner Particip;mt
>>my apply to;iiiy coiirt of'o>>ipete>>t jurisdictio>>
to appoi>it a successor ow>>er trustee to;ict<<>>til s<<ch ti>>>e.it;<<>y.:is:i successor shall have been appointed and shall have accepted its;ippoi>>tme>>t as above provi<le<l..
successor owner trustee so appointed by such court shall immediately and without f'urther ac superseded by any successor owner trustee appointed as above providecl within one year from the date~~of the appointment by such court.(b)Any s<<ccessor owner trustee.however appointed.
shall execute and deliver to the predecessor Owner Trustee a>>instrument accepting such appointment.
and thereupon such successor owner trustee.without further act, shall become vested with all the estates.properties.
rights.powers.cl<<ties<<>>d trusts of'he predecessor Owner Trustee in the trusts hereunder with like effect as if origi>><<lly named an Owner Trustee herein: but nevertheless, upon the written request of'such successor owner trustee.s<<ch predecessor Owner Trustee shall execute and deliver a>>instr<<nie>>t tra>>sferri>>g to s<<ch successor owner trustee.upon the trusts herein expressed, all the estates.properties.
rights.powers.duties anti tr<<sts of s<<ch predecessor Owner Trustee.and such pre<lecessor Ow>>er Trustee shall<l>>ly assign.transfer.<Ieliver ancl pay over to such successor owner trustee all c>>o>>eys or other property the>>hei(l by s<<ch pre<lecessor Owner Tr<<stee<<po>>the tncsts herei>>expresse<l.(c)Anv shccessor ow>>er tr<<stee.Icowever<<ppoi>>ted.
sh<<ll be a Ir<<>>k or tr<<st<<<>>>>p<<>>i i>>cori>>>-r<<tc.cl<<>>cl (loi>>g b<<si>>ess withi>>the U>>ite(I States of A>>cleric<<<<>>(l li<<vhig<<cc>>>>bi>>ccl c<<pit<<l<<>>cl s<<rpl<<s of't least 850,000.000.
if there be such an institution willi>>g.<<ble<<>><l leg<<IJy q<<alificcl to perform the clcities of Owner Trustee hereuncler
<<pon reasonable or c<<sto>>mry ter>>is.(d)Any corporation into which the Owner Trustee may-be merged or co>>verted or with wliiclc it may be consolidated, or any corporation resulting from any merger.conversion or consolidatio>>
to which the Owner Trustee shall be a party.or any corporation to which substantially all the corpor;ite tr'<<st business of'he Owner Trustee may be transferred, sh<<ll, s<<bject to the ter>>is of'Sectio>>
9.()l (c).b'e the Owner Trustee<<>><ler this Agreeme>>t without f<<rther act..Sc<c."nc>v.
9.02.Co-Tr>>stees an(f Separate Tr>>steee.Whenever the Owner Tr<<stee'r thc Ow>>cr'P<<rticip<<>>t shall (lee>>i it<<ecess<<ry or pr<<(le>>t i>>orcler either to co>>for>>i to<<>>y I<<iv of<<<<y j<<ris<li<ti<>>i i>>which all or a>>y part of'the Tr<<st Estate shall be sit<<<<teel or to~>><<ke<<>>y cl<<ii>>or bri>>g<<>>y s<<it a ith spect to the Trust Est<<te.the Notes or a>>y Tra>>s<<etio>>
Doc<<>>ie>>t.
or the Ow>>cr Tncstcc.>>r the w>>er Participant shall be advised by counsel satisfactory to it that it is so>>ecess<<ry or pncclc<<t.th<<wner Trustee and the Owner Participant shall execute and deliver an agreement s<<pple>>ic>>t<<l hereto and all other instruments and agreements, and shall take all other action necessary or proper to constitute one or more Persons (and the Owner Trustee anny appoi>>t o>>e or>>core of its officers)cithc.r.as co-trustee or co-trustees jointly with the Owner Trustee of all or any part of'he Trust Est<<te.or<<s separate trustee or separate trustees of all or any part of the Trust Estate.<<n<l to vest in such Perso>>s.in such capacity.such title to the Trust Estate or any part thereof ancl such rights or cluties<<s>>i<<y be necessary or desirable, all for such period and under such terms<<ncl co>>ditions as<<re s<<tisf<<ctory to the Owner Trustee and the Owner Participant.
In case any co-tr<<stee or sep<<rate trustee sh<<ll<lie.become incapable of acting, resign or be removed, the title to the Tr<<st Est<<te a>><l all rights a>>(l (hities of such co-trustee or separate trustee shall, so far as permitted by law.vest i>>and be exercise<I by the Owner Tr<<stee.witho<<t the appointment of a successor to such co-tr<<stee or sep<<r<<te tr<<stee.ARTICLE X Sc:I>>'l.l'.x>>:.x'I'>>
Axl)Ax>>'..'<<,I><<<<:N'I's Sc:.<"n<ix l0.0l.Swpplenients and Ainemlinents.
At the writte>>req<<est of'the Ow>>er P<<rticip<<>>t.
this Agreei>>e>>t shall be ac>>e>>ded by a written instr<<>>ie>>t signecl by the Ow>>er Tr<<stee<<>>(I the Ow<<el Participant, but if in the opinion of the Owner'.rustee any instrume>>t required to be so exec<<te<l adversely affects any right, duty or liability of, or immunity.or indemnity in favor of.it un<ler this Agree>>ie>>t or any of the<loc<<ments contemplated hereby to which it is<<p<<rty.or wo<<lcl c<<<<s<or result in a>>y conflict with or breach of<<ny terms.co>>ditio>>s or provisions of'.or<lef<<<<lt<<>>(lcr.its clmrter (loc<<>>>e<<ts or by-I<<ws or<<>>y docume>>t co>>tee>>pl<<te<l hereby to which it is<<p<<rty.the Oii>>cr Trustee>>i<<y in its sole cliscretio>>
decline-to execute such i>>str<<nie>>t.
<<>>less it shall li<<ie bcc<<vicled an indemnity satisfactory to the Owner Trustee by the Owner Particip<<nt.
St:.<a'<oi 10.02.Limitation on Amen<lw)ents.
Notwithstanding Section 10.01.the Owner Trustee shall not execute any amendment which might result in the trusts created hereunder being termina (i)without the consent of the Indenture Trustee, prior to the release of the lien of the Indenture the Lease Indenture Estate or prior to the payment in full of the principal of and premium.if any.a interest on the Notes or (ii)without the consent of the holder thereoF.prior to the terminntion of<<ny lien created purs<<nnt to Section 7(b)(4)of the Participation.
Agreement.
ARTICLE XI i%its(:EI.LAX<'.<><'><
SI'.I I'w>h I I.OI.Xo Legal Title to Trwst Estate in the Oicner P<w tirit>nwt.
The O<v>>er P<<rticip;i)it sli;ill iiot l)<<ve l<g<<l title to<<>>y part ol'tlie Triist Estate.No tr<<>>sf<r.1>y op<<ritio>>oi'li)v or oth<rais<<.<>F;i>>y rigl)t.title or iiiterest oi'he Owner Particip<<iit in;iii(l to tlie Tr<<st Est;itc or liere<<>>(lel xi))ill opcrite to ten>>i>>;)te tliis Agreenie>>t or the trusts here<<ii(ler or e>>title;<<iy siicc(ssor or tri<<)sI'c)<<c t<><<n accounting or to the transfer to it of legal title to any part of the Trust Est'ite.S<:,<.Ti(>x 11.0'>.Sale of Un<li<'i<le<i lntei'est an<llor Real P>ot>rrttt intr>cst btt tlw Owwww 1'rust'rw is Binding.Any sale or other conveyance of the Undivided Interest.or'Real Property Interest or<<iiy part thereof or any assignment of rights under the Assignment and Assumption by the Owner Tr<<stee made pursuant to the terms of this Agreement or any other Transaction Dociinient sh;ill bi>>(l the Owner Participant and shall be efFective to transfer and convey all right.title and interest ol'lie Owner Trustee and the Owner Participant in and to the Un<livide(l Interest.tlie Re;il Property I>>tcl>cst or aiiy part thereof.or such rights under the Assignment a>>d Ass<<>>)ptioii.
as the c;ise i>><<y l>e.N<>purchaser or other grantee shall be required to inq<<ire<<s to the i<<lthorizi)tio>>.
>>eccssity.
expc(licii<<y or regiil;irity of siich s;ile or coiiveya>>ce or<<s to the;ipplic;itioii of:iiiy s;il>>or otlier pri)cce(l>>
<<itli respect thereto by the Owner Tr<<stee.S):<a'<<>Y 11.03.Limitations on Rights of Others.Nothing in this Agreen)e>>t.
whether express implied, shall be construed to give to any Person other than the Owner Trustee nn<l the Ow>>er Participant any legal'or equitnble right, remedy or claim under or in respect of this Agreenie>>t.;>>iy cove>>a>>ts, conditioi)s or provisions contained herein or the Trust Estnte.<<II of wl)ich nre;>>i<1 slmll I><<construed to be for the sole and exclusive benefit of the Owner Trustee nnd the Owner Particip;iiit.
S):.<v<<>i'11.04.
Notices.Unless otherwise expressly specified or perniitted by the ternis hereof.all notices hereunder shall be given as provided in the Participation Agreement.
S):<)'<<>i 11.05.Se);erability.
Any provision of this Agreement wliicli is proliibited or iiiierif'ore<.-
able in nny jurisdiction shall, as to such jurisdiction, be Inelfective to the extent oF such prohibition or unenforcenbility without invalidating the remnining provisions hereof.a>>(l;i>>y s<<ch prohibitioii or<<>>e>>force;ibility In<<>>y j<<ris<liction shall not invalidnte or re>>der<<iie>>I'orce;ible s<<ch provisio>>i>>;>>)y other jiirisdictio>>.
Si:,i'i'iiix I l.06.Liwiitatiow on the Oicwer Particit>a>)t s Liability.
Tlie Owiicr P:irticip;iiit sli;ill<<i>t h<<ve;ii)y li;ibility I'or the perl'ormnnce of this Agreement except;is expressly set I'ortli lierci>>.S<:.<-rw>x I 1.07.Separate Cow>>tert>arts.
This Agreement may be execiite(l by the p;irties lierct<>i>>separate co<<nterpartc.
each of which when so executed and delivered shall be a>>origi>><<l.b<<t;ill s<<cli counterparts shall together constitute but one and the same instrument.
S<:.(r)'<<>i 11.08.Swccessors anrl Assigns.All covenants and ngreements co>>tni>>ed hereiii sh;ill l>e bi>><liiig<<poii.;in<I inure to the benefit of.the Owner Trustee a)id'its successors a)id<<ssigns<<>><I tlie O)viier Particip<<iit;<<)d its successors
<<iid assigns.<<II<<s l)ereii)provided.Any re(piest.>>otice.(Iirccti<>>i.
coiise>>t.w;)iver or other instrument or action by the Owner Participa>>t shall bi>>d the successors
.;issigns of the Owner Pnrticipant.
Sv<x<<)x 11.09.Transfer of Interests.
Subject to the provisions of Section lo oF the Participatio>>
Agreement, the Owner Participant may assign, convey or otherwise transfer all or any part of its right, itle and interest in and to this Agreement and the Trust Estate.In case of any such assignment.
conveyance or transfer of less than all of the interest of the Owner Participant.(i)the transferor a>>d transferee or tra>>sferees shall be severally obligated with respect to the indemnification obligatio>>s impose'd>>nder Section 7.01 in accordance with the interest held by each of them and (ii)appropriate an>endn>ents shall be made to this Agreement to provide for the situation in which there is more th;u>one Owner Participant as may be agreed to by the transferor and transferee or transferees a>>d co>>se>>ted to by the Owner Trustee.No such assignn>ent.
conveyance or tra>>sfer shall violate:>>>y provision of Applicable I~w or create a relationship which would be i>>violation thereof;The O>v>>er Tr>>stee shall not be on notice of or otherwise be bound by any such assignment.
conveyance or tra>>sfer u>>til it shall have received an executed counterpart of the i>>str<<ment oF such,;>ssig>>>>>c>>t.
co>>veya>>ce or tr;u>sfer.
S<:<'>'<<>i I I.l<).Ika<li)>"e.
The hea(li>>gs of the vario>>s Articles:>>>(I Sectio>>s l>cr(i>>;>n I'<>r co>>ve>>ie>>ce of refere>>ce o>>ly;>>>(I sh;>ll>>ot (lefi>>e or lin>it;\>>y of the ter>>>s or provisio>>s I>ere>>i.S<(<a'<<>x Il.ll.Corernin<'aw;.This Agreement shall in all respects be gover>>ed by.;u>(l co>>stn>ed i>>accorda>>ce with.the laws of the St;>te of New York.i>>clu<li>>g;>II
>>>;>ttcrs of co>>st>>>cti<>>>.
validity and performance, except to the extent that, pursuant to the laws of the State of Arizona.tl>e~laws of such State are mandatorily applicable hereto.S<:.<r><<>i 11.12.Ahninietration of Trust.The principal place ofa<lmi>>istratio>>
of the Trust sh;>II be i>>Boston.Massachusetts.
S>:<.">'><)x II.I'3.Performance b<J tl<e Ou'ner Partic<))ant.
Atty oblig>tio>>
oi'l>e Ow>>cr Tr>>stcc'ere>>>>der or u>>der;>ny Tra>>suction Doc>>>>>e>>t or other (loc<<>>>c>>t co>>tc>>>plate(l hcrci>>>>>>>y l)c'erfor>>>ed by the Owner Particip;u>t a>>d a>>y s<<ch perfon>>;u>ce slmll>>ot l>c c>>>>stn>c<l;>s;>
rcv<><<;>ti<>>>''he tn>sts cre;>ted hereby.S>.<.-n(>>11.14.Conflict<oitl>Transaction Doe<<)nents.
If this Agree<>>e>>t (or;u>y i>>structio>>s given by the Owner Participant pursuant hereto)shall require that any action be taken with respect to a>>v n>>>tter and any other Transaction Document (or any instr>>etio>>s duly given in accor(la>>ce ivith the ter>>>s thereof)shall require that a diff'erent action be taken with respect to such<>>atter.;>>><I s>><<h actions shall be mutually exclusive, the provisions of such other Transaction Doc>>me>>t.in respect thereof.shall control.
)
IN WITNESS KVHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized, as of the day and year first above written.COMMERCIAL FEDERAL INVESTMENT CORPORATION By:~~t Vice Preside THE FIRST NATIONAL BANK OF BOSTON By: Assistant Vice President e
IN WITNESS WHEREOF.the partie's hereto have caused this Agreement to be duly executed by their respective ofRcers thereunto duly authorized, as of the day and year 6rst above written.COMMERCIAL FEDERAL INVESTMENT CORPORATION By: Assistant Vice President THE FIRST NATIONAL BANK OF BOSTON By:~Assista t Vice Pre t I~"r~,
SECTION 15.6.1 LESSOR'S CERTIFICATE EL PASO UNIT 2/1986.6 Schedule I The undersigned, being a duly elected, qualified and acting Assistant Vice President of THE FIRST NATIONAL BANK OF BOSTON, a national banking association
("FNB"), hereby certifies, for and on behalf of FNB, as follows: 1.Reference is made to (i)the Arizona Nuclear Power Project Participation Agreement.
dated as of August 23, 1973, as amended (the"ANPP Participation Agreement"), and (ii)the sale and leaseback transaction proposed to be entered into by El Paso Electric Company ("El Paso")on or before December 31, 1986, with respect to Palo Verde Nuclear Generating Station ("PVNGS")Unit 2 and El Paso's interest therein and in certain PVNGS common facilities relating thereto (the"Proposed El Paso Sale and Leaseback Transaction"): 2.In connection with the Proposed El Paso Sale and Leaseback Transaction, FNB will enter into a Trust Agreement (the"Trust Agreement")with Commercial Federal Investment Corpora-tion, constituting FNB the trustee (in such capacity,"Owner Trustee")of a grantor trust (the"Grantor Trust");thereafter, the Grantor Trust will acquire from El Paso an undivided ownership interest of up to approximately
%in certain assets constituting part of PVNGS Unit 2, up to approximately
%in certain PVNGS common facilities and up to approximately
%in the PVNGS site and lease back such interests to El Paso pursuant to a Facility Lease having a primary term of at least 25 years;and 3.Upon the execution and delivery of the Trust Agreement and upon consummation of the Proposed El Paso Sale and Leaseback Transaction, FNB.solely in its capacity as Owner Trustee~~~and not otherwise, confirms that, except as provided in Sections 15.2.2..15.6.4.and 15.IO of the ANPP Participation Agreement, El Paso shall be and remain the sole"Participant" for all purposes of the ANPP Participation Agreement and the sole representative (with power to bind the Grantor Trust and any mortgagee, trustee and secured party of the Grantor Trust of the type'escribed in Section 15.1.2 of the ANPP Participation Agreement) in all dealings with the other ANPP Participants in relation to the property, rights.titles and interest of El Paso transferred to the Grantor Trust pursuant to the Proposed El Paso Sale and Leaseback Transaction.
WITNESS the signature of the undersigned this day of December, 1986, for and on behalf of'NB.Martin P.Henry Assistant Vice President 11 0
CERTAIN RIGHTS OF THE LESSOR UNDER THIS FACILITY LEASE HAVE BEEiN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, FIRST CITY NATIONAL ANK OF HOUSTON, AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE, ibfOBTGAGE.
CURITY AGREEiv1ENT AND ASSIGNMENT OF RENTS DATED AS OF DECEivfBER 1, 1986.IS FACILITY LEASE HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.
SEE SECTION 22(e)OF THIS FACILITY LEASE FOR INFORMATION CONCERNING THE RIGHTS OF HOLD-ERS OF VARIOUS COUNTERPARTS HEREOF.THIS COUiNTERPART IS NOT THE ORIGINAL COUNTERPART.
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY.but only if, contrary to the intention of'he parties, it;should be so construe<1.
This instrusnent is file(i as a utility security interest as a precautionary matter.Sarihtg<Xeuse Dated as of December l, 1986'etween THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Ourner Trustee under a Trust Agreement, dated as of December 1, 198G, with COMMERCIAL FEDERAL INVESTMENT CORPORATION Lessor and EL PASO ELECTRIC COMPANY Lessee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities THIS INSTRUMENT CONTAINS AFTER ACQUIRED PROPERTY PROVISIONS
 
k TABLE OF COiNTEi ITS QTI ON SECTION SECTION SECTION SECTION SECTION 2 a b c d 3 b c d e f g h 5 a b 6 b c Dellnitions Lease of Undivided Interest and Real Property Interest;Term;Personal Property.Lease of Undivided Interest and Real Property Interest.Term.~~~~~~~~~~~~4~Personal Property.Description
.Rent;Adjustments to Rent Basic Rent Supplemental Bent.Form of Payment Adjustments to Rent for Change in Tax Law Adjustments to Rent for Changes in Pricing Assumptions Computation of Adjustments
.Rent Increase SufRciency of Basic Rent and Supplemental Rent.Net Lease Return of the Undivided Interest;Disposition Services Return of the Undivided Interest.Disposition Services II Warranty of the Lessor.Quiet Enjoy'ment Disclaimer of Other Warranties Enforcement of Certain Warranties Page I I I 1 3 3 3 3 5 6 G G 6 7 SECTION SECTION'.7 8 ,'b c (d e Title to Capital Improvements
.f Funding of the Cost of Capital Improvements g-Useful Life Liens Operation and iviaintenance; Capital Improvements Operation and Maintenance Inspection
.Capital Improvements
.Reports.7 7 8 8 g g IO SEC."I'I 0iv g a b c d e f g h I j k Event of Loss: Deemed Loss Event: Special Transfer for Flil<<rc to WI;ii<<tain or Replace Letter of Credit.Damage or Loss Repair Payment of Casualty Value Payment of Special Casualty Value.Requisition of Use.....Termination of Lease Term.Application of Payments on an Event of Loss.Application of Payments Not Relating to an Event of Loss Dispositions at Time of Default or Event of Default Assumption of Notes;Creation of Lien on Undivided Interest...............
Special Transfer for Failure to Maintain or Replace Letter of Credit.........
II ll II II IQ I c)12 13 l3 13 13 (0 o~~~'~~~~~~~~I~I~I I~I I I~~~'~~~~~~.0~~~~~I I'~I'~I~~~~'~
TABLE OF CONTENTS-(Continued)
Pi'i'I>I X S<:iii:.i>i'i.i:.
S(<<<<:.i><i.i:.S<<<<<:.i)i.i.i:.S<:<<i:.i>i i.i:.S(:iii:.i) ui.i: S(<<<<:.i>i i.i'.A Definitions I Schedule of Casualty Values'), Schedule of Special Casualty Values 3 Schedule of Termination Values 4 Schedule of Special Termination Values 5 Description of Real Property Interest G Description of Undivided Interest 1
FACILITY LEASE.FAcILITY LEAsE, dated as of December 1, 1986 between THE FIRsT NATIoNAL BANK oF BosToN, not'ts individual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of ember 1, 1986, with Commercial Federal Investment Corporation, as Lessor, and EI.PAso ELEcTRIc CQMPANY, a Texas corporation, as Lessee.WITN ES S ETH: WHEREAs, the Lessor owns the Undivided Interest and the Real Property Interest, the Lessee desires to lease the Undivided Interest and the Real Property Interest from the Lessor, and the Lessor is willing to lease the Undivided Interest and the Real Property Interest to the Lessee all on the terms and conditions set forth herein;Now, THEREFoRE, in consideration of the premises and of other good and valuable consideration.
receipt and sufnciency of which are hereby acknowledged, the parties hereto agree as follows: SEGTION 1.Definitions.
For purposes hereof, capitalized terms used herein, and not defined herein, shall have the meanings assigned to such terms in Appendix A, as amended from time to time in conjunction with the amendment of this Facility Lease.References in this Facility Lease to sections, paragraphs and clauses are to sections, paragraphs and clauses in this Facility Lease unless otherwise indicated.
SECI'ION 2.Lease of Undivided Interest and Real Property Interest;Term;Personal Property.(a)Lease of Undivided Interest and Real Property Interest.Upon the terms and subject to the conditions of this Facility Lease, the Lessor hereby leases to the Lessee, an<I the Lessee hereby leases from the Lessor, the Und/vided Interest and.the Real Property Interest.(b)Tenn!The term of this Facility Lease shall begin on December 18, 1986 and shall end'on the day of the Lease Term.(c)Personal Property.It is the express intention of the Lessor and the Lessee that title to the Undivide'd Interest and every portion thereof is severed, and shall be and remain severed, from title to , the real estate constituting the PVNGS Site.The Lessor and the Lessee intend that the Undivi<le<l Interest shall constitute personal property to the maximum extent permitted by Applicable Law.(d)Description.
The'eal Property Interest is described on Schedule 5 hereto.The Undivided Interest is described on Schedule 6 hereto.SECTION 3.Rent;Adjustments to Rent.(a)Basic Rent: The Lessee shall pay to the Lessor, as basic rent (herein referred to as Basic Rent)for the Undivided Interest, the following amounts: (i)on July'2, 1987 and on each Basic Rent Payment Date thereafter to an<1 inclu<ling January 2, 2013, an amount equal to 4.7851475%
of Facility Cost: (ii)on July 2, 2013, hn amount equal to 2.3925737%
of Facility Cost;(iii)if the Lessee shall elect the Renewal Term, on October 1, 201'3, and on each B;basic Re>>t Payment Date thereafter during the Renewal Term, an amount equal to one-half of the average of the last two p'ayments of Basic Rent payable under clause (i)of this Section 3(a).(b)Supplementac Rent.The Lessee shall pay the following amounts (herein referred to as SuppleInental Rent): (i)when.due or, where no due date is specified, on demand, any amount (other than Basic Rent, Casualty Value, Termination Value, Special Termination Value and Special Casualty Value)which the Lessee assumes the obligation to pay or agrees to pay to the Lessor, the Owner Pnrticipant,-
the Indenture Trustee, the Collateral Trust Trustee or any Indemnitee under this Facility Lease, any other Transaction Document or the Collateral Trust Indenture and any amou>'hich the Lessor is obligated to pay under Sections 6.9, 7.6 or 8.7 of the Indenture;(ii)when due any amount payable hereunder as Casualty Value, Termination Value, Special Termination Value orhpecial Casualty Value, and an amount equal to nny premium or prepay-ment penalty with respect to the Notes;(iii)on demnnd and in any event on the Bnsic Rent Payment Date next succeeding the date such amounts shall be due and payable hereunder, to the extent permitted by Applicnble Law.interest (computed on the same basis as interest on the Notes is computed)at a rate per an>>u>>>equal to (A)the Overdue Interest Rate, on that portion of the pnyment of Basic Rent or Supplemental:Rent distributable pursuant to clause'J<rst" of Section 5.1 or cia<>se"seeo>><l" of Section 5.3 of the Indenture (determined prior to the computation of interest on over<I>>c pnyments referred to in such clauses), and (B)the Penalty Rate, on the bnlnnce of nny s>>ch pny>>>e>>t of Basic Re>>t or S>>pplen>e>>tal Rent (i>>el>><it>>g, to the extent permitted by Applic;>1>lc Law, interest payable pursuant to this clause (iii)not paid when due (without regard to n>>y period of grace))for nny period for which the same shall be overdue.The Lessor shnll have all rights, powers nnd remedies provided for in this Facility Lease.at law.i>>equity or otherwise, in the case of non-payment of Basic Rent or Supplemental Rent.Drawings>>>><ler the Letter of Cre<lit, if any, shall be deemed to be in satisfaction of the Lessee's obligation to pay the Equity Portio'n of Rent hereunder to the extent of such drawing.(c)For>>>of Pay>>>ent.S<>bject to Section 11(b), each pnyment of Rc>'>t>>n<lcr this Facility L<<ns<<shall be>>>ade in immediately available funds no later than 12:00 noon, local th>>e nt the place oi'eceipt.
on the date each such payment shall be d>>e an(1 paynble herc>>>><ler nnd shall be pni<l either (A)in the case of pnyments other tha>>Excepted Payments.to the Lessor at its n<klrcss<lctcr>>>i>><<<l accordance with Section 17, or at such other a<klress as the Lessor may direct by notice in writi>>g the Lessee, or (B)in the case of Excepted Payments, to such Person'as shall be entitled to receive suc payment at such address as such Person may direct by notice in writing to the Lessee.If the dnte on which nny pnyment of Rent is due hereunder shnll not be a Business Dny.the pnyment otherwise<l<<c tl>ereon shall be due and payable on the preceding Business Day, with the snme force and effect ns ii'aid on the nominal date provided in this Facility Lease.'(d)Adjust>>>ents to Rent for Change in Tax Law.Basic Rent and the schedules of Casualty Values.Special Casualty Values, Special Termination Values and Termination Values nttache<l hereto shall bc'djusted (upward or downward}to preserve Net Economic Return if there is n>>y chn>>ge i>>th<I>>ter>>al Revenue Code of 1954, as amended, ns in effect immediately prior to the e>>nct>>>e>>t of th<<T>>x Reform Act.of 1986 or successor legislation enacted by the Ninety-ninth or O>>e Hu>><lrc<lth Congresses (ineln<ling proposed, temporary or Anal regulntions resulting therefron>)
oil>e>tl>a>>n ch;>>>ge in respect of nn-nlternntive mi>>imu>>>tax-or a>>"a<kl-on mi>>i>>>u>>>tnx-hnvi>>g the sn>>><<<<lf<<<t ns n>>-;liter>>ntive>>>i>>i>>>>>n>
tnx-(herci>>refcrre<l to as n Cl>a>><<r in Tax La<<<: t>>'<>ei<l<
rl.lion'erei; that.t<>preve>>t<lo<<ble co>>>>ti>>g.to the exte>>t the clmnge i>>corporate tnx rnt<<s co>>tni>><<<l i>>S<<<<ti>>>>ii0I<>I'he Tnx Refor>>>Act of 1986 has been tnke>>into account i>><leter>>>i>>i>>g Basic R<<>>t n>><l th<<vnl>><<>>referred to in Section 3(b)(ii), such change will not be considered a Chn>>ge i>>Tnx Law).A>>y adjustment under this Section 3(d)shall be made no more frequently than annually.The provisions of this Section 3(d)to the contrary notwithstanding, if any Change i>>Tn.: Lnw is.or becomes, applicable to the transaction contemplated by this Facility Lease in consequence of the transfer of the Owner Participant's beneAcial interest in the Trust (ul>etl>er or not permitted by Section 15 of the Participntion Agreement) or if such Chnnge in Tu<Law wo>>kl>>ot have I>ec>>applicable to such transaction had no such transfer occurred, then>>o upward or<low>>hvar<I adjustment shall be, or be required to be, made pursuant to this Section 3(d), t>rouiderl, l>owe<<er.tl this pnragraph shall not apply to a transfer to an AfRliate of the Owner Participm>t.
(e)Adjustments to Rent for Changes in Pricing Assumptions.
Basic Rent and the schedules of Casualty Values, Special Casualty Values, Termination Values and Special Termination Values attached eto shall be adjusted (upward or downward)to preserve Net Economic Return if there is any nge in the Pricing Assumptions, other than the Pricing Assumptions relating to taxes, including,~thout limitation, in respect of (1)the issuance of a Releveraging Note or a Refunding Note or (2)the payment of Transaction Expenses.(f)Computation of Adjustments.
As soon as practicable after the occurrence of an event requiring an adjustment to Basic Rent, and the schedules of Casualty Values, Special Termination Values, Special Casualty Values and Termination Values attached hereto, pursuant to Section 3(d)or (e)or Section 13 of the Participation Agreement, 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)by the Owner Participant's nationally recognized independe>>t public accountants, in which case such accountants shall either (i)confirm to the Lessee in writing that such revised amounts were computed on a basis consistent with the original calculations.
or (ii)compute and'provide to the Lessee, the Lessor, the Owner Participant, the Loan Participant anti'he Indenture Trustee revised amounts and percentages which are on such a basis.The,revisetl amounts and percentages, as so confirmed or computed if applicable, shall be conclusive and binding upon the Lessee, the Lessor and the Owner Participant.
The cost of any such verification shall be.borne by the Lessee, unless such accountants shall require an upward or downward adjustment to the revised amounts and percentages originally provided by the Owner Participant which is greater than 10%of the amount of the adjustment to Basic Rent so provided, in which case such cost shall be sharetl equally by the Owner Participant and the Lessee.Each adjustment pursuant to Section 3(d)or (e)or tion 13 of the Participation Agreement may, but need not, be evidenced by the execution and very of a supplement to this Facility Lease in form and substance satisfactory to the Lessee anti the ner Participan't, 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 and any related modifications of the Transaction Documents shall satisfy the provisions oF applicable accounting requirements and of Revenue Procedure 75-21, Revenue Procedure 75-28 anti any other applicable statute, regulation, revenue procedure, revenue ruling or technical information release relating to the subject matter of Revenue Procedure 75-21 or Revenue Procedure 75-28, but, in the case of any'pward adjustment, such upward adjustment shall be no less than the adjustment otherwise required pursuant to this Section 3.(g)Rent Increase.If the Letter, of Credit is not delivered to the Owner Participant on or prior to the 75th day following the Closing Date or if the Lessee fails to comply with any of the ter>>>s of Section 10(b)(3)(xvii) of the Participation Agreement, each payment of Basic Rent payable o>>or before January 2, 1992 shall be increased (the Rent Increase)to 106.015%oF the percentage of Facility Cost specifietl in Section 3(a)(i);prouided, hou;ecer, that the Rent Increase shall not apply to any Basic Rent Payment Date occurring more than four months after the Lessee<lelivers to the Ow>>cr Participant a Letter of Credit complying with Section 10(b)(3)(xvii)of the Participation Agree>>icnt ii'he Lessee is otherwise in compliance with the terms of Section 10(b)(3)(xvii)of the Participation Agreement on such Basic Rent Payment Date.(h)Sugciency of Basic Rent and Supplemental Rent.Notwithstanding any other provision of this Facility Lease or any other Transaction 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 then due nnd payable on all Notes and (ii)each pnyment of Casualty Value, Special Casualty Value, Special Termination Value and Termination Value shall in no event be less (whei ndded to all other amounts required to be pnid by the Lessee under this Facility Lease in respect o any Event of Loss or Deemed Loss Event or termination of this Facility Lease)than an amount suff)cient.
as of'he<late of payn)ent, to pay in full the principal of, nnd premium, if any, nnd interest on nil Notes Ootstnn<li))g on nnd as of such date of payment (taking into account nny assumptioii of the Notes by the Lessee).S):<rri<>x 4.Net Le<)se.This Fncility Lease (as originally executed and as'modified, supplemented and amen<le<1 froin tiioe to time)is a net lease ancl the Lessee hereby ncknowledges and agrees that the Lessee's obligation to pay nil Rent hereunder, ancl the.rights of the Lessor in ancl to such Rent.shall be absolute.u>>co>>clitio>>al n<icl irrevocable ancl shnll not be affected by any circu>>)stances of n>>y character.
i>>dwclio<<,<c'ithowt li)witatton, (i)any set-off, abatement.
counterclaim.
suspension.
reco)ipo)e>>t.
'rc<l<ictio>>,<lefeose or otlier right or claim which the Lessee>>)ay lmve agni>>st thc Lessor.thc Ow>><<r Pnrticipaot, the Ioclenture Trustee, the Collateral Trust Trustee, tlie Lo;ui Paiticipa>>t.
the Operatiiig Agent.any ANPP Pnrticipant, nny vendor or mnnofacturer of any equipn)eot or;issets inclo(led io tl)c U>><livi<led Interest.Unit 2, any Cnpitnl Improvement, the Real Property Interest.tlie PVNGS Site.PVNGS, or any part of any thereof;or any other Person for any reason wE)atsoever.(ii)any defect io or fnilure of the title, merchantability, condition, design, compliance with specificntioiis.
oper;ition or fitness for use of all or nny part of the Undivided Interest, Unit 2.any Capital Improvement.
tlie Real Property Interest, the PVNGS Site or PVNGS, (iii)any destruction of.<lamnge to, or ren)ovill.
abancloomeot.
shot(lown.
salvage.scrapping, requisition.
taking, loss.thef't or clestructio>>
of';ill or n>>y part of tl)e U>><livicle<l Interest.Unit 2.noy.Cnpital Ii>>provei>>e>>t.
tl)c R<;:il Property Interest.tlic PVNGS Site or PVNGS, or;oiy interference, interruption or cessntioii io the use or possession tlicreof'r of the Unclivicle'<l Interest by the Lessee or by any other Person (i))clw<li>><<,<citI)owt liw)itati<)w.
tlic Oi)eritiog Age))t or;)oy otlier ANPP Pnrticipo)t) for;)))y reaso)i wlmtsoevcr or of'wliatc.vcr (lair:iti<>(iv)noy restrictioo.
prevention or ciirtnilment of'or interfere>>ce with a>>y ose of all or any p;irt of'tl Undivided Interest, Unit 2, any Capitnl Improvement, the Real Property Interest, the PVNGS Site or PVNGS.(v)nny insolvency, bankruptcy, reorganization or similnr proceecling by or agninst the Lessee.the Lessor.the Owner Participaiit, the In<lenture Trustee.the Collaternl Trust Trustee.tlie Lo;i>>Participnnt, the Operating Agent, any other ANPP Participant or any other Person, (vi)the iovali<lity.
illegality or unenforceability of this Facility Lease, any other Transaction Document.nny Financing Document.the ANPP Participation Agreement or any other'ristrument referrecl to herei>>or tE)ereio or nny other infirmity herein or therein or any lack of right, power or nothority of the Lessor.tlie Lessee.the Owner Participant.
the Indenture Trustee.the Collateral, Trust Trustee.tlie Lo;i>>Pnrticipaot or miy other Perso>>to enter into this Fncility Lense.nny other Transactio>>
Doc>>>>)c>>t or AllY Fii)aociog Doc>>>>)eot, or aoy doctrine of force w)njewre, iiopossibility.
frustration.
1'iiilorc of'onsi<leratio>>.
or noy similar leg;il or equitable.
cloctrioe that the Lessee's obligatioi) to pay Reiit is exciise<l because tlie L'essee hns oot received or will not receive tEie benefit f'r wliicli tli<.Less<<<<liar<',iiiic(l.'it twin<<tlw i))tri)t of'lie Lessee to;issiiii)c
<<II risks t'roiii;ill c.-i)is<.'s wli;its>>ever tli;it tli<~Lessee (lo<.'s 1)ot I'CC<.'lvc sllcli benefit.(vii)tl)c brc;icli or f iiliirc of'>>y w;irr:i>>ty
<)r rcprcsc>>t;iti<>>i
>>m<lc iii this Ficility Lease or aoy otl)er Traosactio>>
Doc<i)iie)it or;i))y Fiiia>>ciiig Dociii>>ciit by tlic Lessor.the Owner Participnot.
tE)e Indenture Trustee.tE)e Collater;il Trust T)'ustce.tli<.L<>>iii Participnot or miy other Person, (viii)any nmendment or other cE)niige of;or any;issig))iiie))
t of'ri<:fits uncler.this Facility Lease, ai)y other Transactio)i Docui>>ent, any Finaiiciiig Docuiiieiit or;iiiy ANPP Project Agreement, or any waiver, action or inaction under or in respect of'hi-&#x17d;acifity Le;ise.aiiy other Transaction Document.any Financing Document or any ANPP Project Agree>>ieiit.
or<<>>y exercise or non-exercise of any right or remedy under this Fncility Lense.any other Trans;ictioii Docon)ent.
n)iy Fioanciiig Docun)ent or any ANPP Project Agreement.
i>>el>>clio<<.
<c'itI)owt Iiw)itwtio>>.
tlie exercise of a>>y foreclosure or other remedy under the lodeiiture.
the Collateral Trust l)i<leiitiire or this Facility Lense.or the sale of Unit 2, any Capital Improvement.
the Real Property Interest.t~U>>divided Interest.the PVNGS Site or PVNGS, or aoy part thereof or a>>v interest thereii).or (ix)a~
other circumstance or happening whatsoever.
whether or not similar to any of the foregoing.
Tlie ssee acknowledges that, by conveying the leasehold estate created by this Facility Lease to the see and by putting the Lessee in possession of the Undivided Interest and the Real Property crest, 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).The Lessee hereby waives.to the extent permittecl by Applicable Law, any and all rights which it may now have or which at any time hereafter'ay 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 hereuocler.
i>>eludinp, u:ithout limitation, the provisions of Arizona Revised Statutes Section 33-343.If for any reason whatsoever this Facility Lease shall be terminated in whole or in part by operation of lasv 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 Suppleroe>>tal Rent at the time such paymeot woulcl have become clue ancl payable io accorclance with the tcn>>s hereof ha(l this Facility Lease not been terminated in whole or in p)rt.Each paymeot of Rent iiiade by tlic Lessee liereuoder slmll be final ancl the Lessee shall not seek or liave aoy right to recover all or aiiy part of such payment froni the Lessor'or any.other Person for any reaso>>whatsoever.
All cove>>;iiits.
agreeoients and undertakings of the Lessee herein shall be performed at its cost.expense and risk unless expressly otherwise statecl.Nothing in this Section 4 or elsewhere slmll be coostruccl as a g<<aranty by the Lessee of any residual value in the Undivided Interest or the Real Property Interest or as a guaranty of the Notes or the Bonds.Any provision of Section 7(b)(2)or 8(c)of the Participation Agreement to the contrary notwithstancling, if the Lessee shall fail to make any payment of Rent to;>>iy Person when and as due (taking into account applicable grace periods), such Person shall have tlic right at all times.to the exclusion of the ANPP Participants, to demand.collect.s<<e for.e>>force obligations relating to ancl otherwise obtain all amounts d<<e in respect of s<<cli Rent.: Si:.<."i'i<)x 5.Return of the Undioided Interest;Disposition Seruiees.(a)Return of the U>>dii)ided I>>terest.On the Lease Termioatioo D;ite.tlic Lessee will s<<rr<<ii<1<<r essioo of the Undivided Ii)terest aod the Real Property Interest to the Lessor or its (lcsig>>cc.
At e time oF such return, (i)'the Lessee shall pay or have paid all aniounts clue and pay;ible, 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 afte'r the Lease Tern>)to the Un(livi(le<1 Interest or the Real Property Interest in respect of any period or periocls eocling o>>or prior to tlic Lease Termination Date (including, uN'thout limitation, all amounts payable with respect to any ancl all Capital Improvements to which the Owner Participant has consented pursuant to the second se>>teiicc of Section 8(c), whether or not implementation thereof has been cooipleted oo or prior to the Lc;ise Termination Date), and (ii)the Unclivided Interest and the Real Property Iot'crest shall be f'ree;>>i<1 clear oF all Liens (other than Permitted Liens described in cia<<ses (i).(vi).(ix).(x);iiid (xi)oi'li<<definition of such term and other than Permitted Liens described io clauses (iv).(v).(vii);iii(l (viii)of the defioition of such term if and to the extent such Perniittecl Liens are i>>siirecl by a title i>>s<<r;i>>co co>>ipaoy or bondecl or other arrangeoients, io eacli case reasonably s;itisfactory to the Lessor.Ii;iv<<l)cc~>>i>>acle with respect thereto)aod io the coo(litioii;<<i<I st;itc oi'cp;iir rc(i<<irc(l by S<<cti<iii l).Tli<<Lessor sli:ill oot;ib;iiidoii the Uodivi(lcd Iiitcrcst.
Iii tlic cv<<iit tli;it i>>i or i)rior to tli<<l.<<<s<<Tcrniiimtioii D;ite tliere slmll lmve occ<<rrecl:i (lci'a<<lt by aiiy AiVPP P:irticip;i>>t
(>>lhn thn>>El I'asi>)iiiiclcr tlie AiVPP Particip;itioii Agreeiiieiit aod such defoilt sh;ill oot l&ve bec.ii ciirc(l by tlic (lcf>>iilti>>g ANPP Participant, theo (i)the Lessee agrees to indemnify and hold the Lessor (iiiid e;icli siicc<.ssor.
assign aod transferee thereof)harmless against any and all obligatioiis under the AiVPP P;irticip;itio>>
A;~reemeot with respect to contributions or payments required to be macle thereby as a result of s<<ch default and (ii)the Lessor (and each successor, assign and transferee thereof)agrees to reimb<<rse the Lessee for all amounts paid by the Lessee pursuant to the foregoing'clause (i)to the extent.biit o>>ly to the extent.that the Lessor (or such successor.
assign or transferee) slmll have;ictuiilly receive<1>>et proceeds from the sale of power aod energy of the defaulting AiVPP Particip;i>>t
<<s a result oi'lic i nent made by the Lessee pursuant to the foregoing clause (i), and.to the extent the Lessor (or successor, assign or transferee) shall hive received such proceecls.
the amo<<>>t to be rei>>ibiirsed 5
to the Lessee pursuant to this chouse (it)shntt include interest at the Prime Rate from the<Late of auy payment by the Lessee pursuant to the foregoing clause (i)through the date of reimbursement of suc)amount pursuant to this clause (ii).(b)Disposition Seruices.The Lessee ngrees that if it does not exercise its option'to renew or purchnse as provided in Sections 12 and 13, respectively, then during the last thirty-six months of tlie Lease Term, the Lessee will fully cooperate with the Lessor in connection with the Lessor's efforts to lease or dispose of the Undivided Interest and the Real Property Interest, including using the Lessee's reasonnble efforts to lense or dispose of the Undivided Interest and the Real Property Interest.The Lessor agrees to reimburse the Lessee for rensonnble out-of-pocket costs a>>d expenses of the Lessee incurred at the request of the Lessor or the Owner Participant in connection with such cooperation and such efforts.Six,"rn)s 6.narra>>ty of tIie Lessor.(a)quiet Eajogine>>t.
The Lessor w;irrants thnt until the Lc;ise Termin;itio>>
Date.if tlie Lessee is i>>conipliance with each and every material term and provision of'his Facility Lense and encli otlier Transnctio>>
Docunient to be coinplied with by the Lessee, the Lessee's use and possession of'U>>it 2.iiicludi>>g the Uiidivided Interest, slmll not be interrupte(l by the Lessor or miy Person clai>>iiiig by.througli or under the Lessor, and their respective successors and assigns.(b)DiscIai>>ier of Other Warranties.
The warranty set forth in Section 6(a)is in lieu of all otlier warranties of.the Lessor or the Owner Participant, whether written, oral or iniplied.with respect to this Fncility Lense.Unit 2, nny Capital Improvement, the Renl Property I>>terest.PViVCS or the PVNGS Site.As nnio>>g the Owner Participant.
the Loan Pnrticipa>>t.
the I>>de>>ture Triistcc.tlic Coll:itcr;il Trust Trustee.the Lessor and the Lessee, executio>>by the Lessee of'his Facility Lease sli;ill bc co>>cliisive proof of the co>>ipli;i>>ce of'nit 2 (includi>>g niiy C;ipital Improve>>iciit).
the Uii(livi(le<i 1>>terest n>>d the Re;il Property Interest witli;ill req>>irci>>e>>ts of tliis Fiicility Lc;ise.;i>><l tli(Less<*ack>>owledges and;igrees that (i)NEITHER THE LESSOR NOR THE OWNER PARTICIPANT IS MANUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND AiVD (ii)THE LESSOR LEASES AND THE LESSEE TAKES THE UNDIVIDED INTEREST AND THE REAL PROPERTY INTEREST.AND SHALL TAKE EACH CAPITAL IMPROVEMENT, AND ANY PART THEREOF.AS IS At'h<D iVHERE IS, and neither the Lessor nor the Owner Pnrticipant shnll be deemed to have ma(le.n>>(l THE LESSOR AND THE OWNER PARTICIPANT EACH HEREBY DISCLAIMS.
ANY OTHER REPRE-SENTATION OB WARRAiVTY, EITHER EXPRESS OR IiplPLIED, AS TO ANY MATTER WHATSO-EVEB.INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF UNIT 2.ANY CAPITAL IMPROVEMENT.
THE UNDIVIDED INTEREST.THE REAL PROPERTY INTEREST.THE PVNCS SITE OR PVNGS.OR ANY PART THEREOF.THE iIERCIIANTABILITY TIII;IIEOI'II I'III: FIT&#xc3;ESS THEREOF FOR AN)'ARTICULAR PURPOSE.TITLE TO UNIT 2.ANY CAPITAL I tpf PBOVE-MENT.THE UNDIVIDED INTEREST, THE REAL PROPERTY INTEREST.THE PViVGS SITE OR PVNCS.OR ANY PART THEREOF.THE QUALITY OF THE~fATERIAL OR WOBKilANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS.
FBEEDO.'FROM PATENT Oft, TRADEMARK IiVFBINGEthIENT OB THE ABSENCE OF ANY LATENT OB OTIIEB DEFf':(:T(i.
WHETHER OR iVOT DISCOVERABLE.
NOR SHALL THE LESSOR OR Tl'IE OWNElt PABTIGI-PAiVT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDIiVG LIABILITY IN TORT.STRICT OR OTHERWISE), it beings n<rree(I thnt nil such risks.as:iiiio>>g tlie Owiit.'l.Participa>>t, the Loa>>Participant, the Collateral Trust Trustee, tlie Iiide>>ture Trustee.tlie Lessor a>><l the Lessee, are to be borne by the Lessee.The provisions of this Sect:.".i 6(b)have bee>>>>egoti;itc<l.
and.except to the extent otherwise expressly provided in Section 6(a), the foregoing provisions are i>>ten(led to be n co>>iplete exclusion and negation of any representatio>>s or wnrra>>ties by tlie Lessor.tlie Owner Particip;>>it.
the Loan Pnrticipaiit.
the Colhiteral Trust Trustee or tlie Iiide>>t>>re Tr<<stee.express or i>>iplied.with respect to Uiiit 2 (inciu<liii<<n>>y C;ipit;il Iiiiprovei>>e>>t).
the U>>(livi(le(l Interest.the Real Property Interest.PViVGS or the PVNGS Site that may nrise pursuant to a>>y lnw>>o or here;ifter in effect.or otherwise.
(c)Enforcement of Certain aVnrrnnties.
The Lessor authorizes the Lessee (directly or through ents, including the Operating Agent), at the Lessee's expense, to assert for the Lessor's account, ing the Lease Term, all of Lessor's rights (if any)under any applicable warranty and any other<<ims (under this Facility Lease or any Purchase Document)that the Lessee or the Lessor may have agni>>st any vendor or manufacturer with respect to Unit 2 (inclaaclingany Capital Improvement) or the U>><liviclecl Interest.and the Lessor agrees to cooperate, at the Lessee's expense, with the Lessee and the Operating Agent in asserting such rights.Any amount receivable (without regarcl to any right of setoff or other similar right of any Person against the Lessee)by the Lessee as payanent uncler any such warranty or other claim against any venclor or manufacturer (or.if such warranty or claim relates to the U>>divided Interest ancl the Retained Assets, the portion of such received amount appropriately allocable to the Undivided Interest)shall be applied in accorclance with Sections 9(g).(h)and (i).Sa:x;a'aa>v.
7.Liens The Lessee will not directly or indirectly create, incur, assume or permit to exist aiiy Lien except Pcriiiittccl Liens o>>or with respect to the Un<livicled I>>terest.tlic Real Property I>>terest.the Lessor s title thereto or any interest of the Lessor or Lessee therein (and the Lessee will proniptlv,<<t its owii expense.take such action as a>>ay be necessary<Inly to clischarge any Lien except Permittc<1 Lie>>s).Sa:.<ra'a<>N 8.Ot>erntio>>
nncl Alnintenn>>ee; Capital l>>at>rooe>>ae>>ts.(a)Ot>erntion nncl Mnintennnce:
The Lessee agrees that it will or will cause the Operati>>g Age>>t to (A)maintain Unit 2 in such condition that Unit 2 will have the capacity ancl functional ability to perform, on a continuing basis, ordinary wear and tear excepted, in normal corn>>iercial operation.
tlic fii>>'ctions for which it was<lesignecl, (B)operate, service.>>>aintain an<1 repair Ui>it 2 a>>cl rcpl;ic<<:ill
>>ecess;iry or a>seful parts a>>cl compoiieiits thereof so that the co>><lition iiiid oper;iti>>g eII>cic>>cy will 1>c nmi>>taineclancl preserved, ordinary wear and tear.excepted, in all>>>aterial respects in accord;ance witli)Praaclea>t Utility Practice for'tc>>>s of sii>iil;ir size<<nd>utiire.(2)s>>cli oper;itiiig st;a>><l;>>><Is;is sli;ill e<I>aired to take<<<lv<<ntage of a>>cl e>>f'orce<<II<<v<<ihable w<<rra>>ties
<<i><l (:3)the tc>a>>s:a>><l coii<litio>>>>
.II insurance policies nuintained in elf'ect at<<iay ti>>ie with respect thereto.(C)iisc.possess.oper;itc and'niaintain Unit 2 in compliance with all material applicable Governmental Actions (inclu<li>>g the License)affecting PVNGS or Unit 2 or the use, possession.
operation a>>cl mai>>ten;ince thereof;a>a<l (D)'therwise act in accordance with the standards set forth in the ANPP P;>rticipatio>>
Agree>>ic>>t.
The Lessee will comply with all its obligations under Applicable I iw aifecting Unit 2, the U>><livicle<l Interest, PVNGS, the Real Property Interest and the PVNGS Site, ancl the use.operatio>>;>>i<l maintenance thereof.The Lessee agrees to (i)exercise its rights under the ANPP Particip;itin>>
Agreement so that there will always be an Operating Agent uncler the'ANPP Participatio>>
Agre<I>>c>>t a>>d (ii)niaintain in fa>ll force ancl eifect a lice>>se from the NRC<<<leqaiate to possess the U>><livi<l<<<l l>>terest ancl the Real Property Interest uncler the circurnsta>>ces coiite>>ipl<<ted by thc ANPP P;irticip;a-tion Agreei>>ent.
The Lessee will keep ancl maintain proper books ancl records (i)relatiaig t<i;ill Operating Funds (ais clefi>>ecl i>>the ANPP Participation Agreei>>e>>t) provicle<l by it to tlic Op<.r:iti>>
~Age>>t>>aider tlic AiNPP Participation Agrceme>>t<<aicl (ii)relati>>g to thc:applic;atio>i ol'sii<<h Op<r:ati>a'a>>i<Is to tlie opcritioii
<<iicl>ii;iiiite>u>ice ot'Uiiit>;a>>cl thc<<c<iiiisitioia.
coiistrii<.tie>>>;a>a<1 iaast;all;atia>aa a>l';apit;al Iiaiprovcaiieiats.
iai c;ach s>>ch caise aapoaa rec<.'ipt of tli<.rc<iaaisitc i>>fo>>aa;itic>>a I'ro>>>tli<<Op<r;ati>a'gc>>t.<<II i>a<<ccorcl;i>ace witla the Ui>if'or>>>
Systei>>of Accoai>>ts.
Tlic.Lessor slull>iot l>c<>bli<<<.I iaa:a>aa way to i>>aiaitain.
<<Iter, rep;>ir, rebuilcl or replace Unit 2.aaa>y C ipit'il Iaaapaovca>>e>it.
tlac Rc;al Prop<<rty I>>terest or the Undivided Interest, or any part thereof, or.excet>t as provicle<l i>i Sectio>i S(f).to p:iy tlic cost of alteration, rebuilcling, replacement, repair or maintenance of U>>it 2.any Capit;il Inaprov<.iai<.ait.
the Uaidivided Interest or tE>e Real Property Interest, or any part thereof, a>>d the Lessee expressly waives the right to perform any such action at the expense of the Lessor pursua>>t to any law;it<<>>y tinie i>>effect.(b)Inspection.
The Lessor, the Owner Participa>>t.
the Indei>ture Trustee;ii>d the Colhiter;il Ta a>st i stee shall have the right to inspect PVNGS (saabjeet, in each event, to the ANPP Participation e>>>ent.Applic;able L>w m>d applicable co>>fide>tiality u>>dertaki>>gs a>>cl procedures est;iblisl>e<l by the Operating Agent)at their expense.The Lessor and the Owner Participant shall have the right to inspect, at their expense, the books and records of the Lessee relating to PViilGS, and make copies<<>>and extracts therefrom (subject as aforesaid) and may, at their expense, discuss the Lessee's aK~ir~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 Trust Trustee shall have any cluty whatsoever to make any inspection or inquiry referrecl to in this Sectio>>8(b)ancl shall not incur any liability or obligation by reason of not making any such inspectioii Ol.inquiry.(c)Capital Iniprouenients.
To the extent that Applicable Law or Pruclent Utility Practice requires tliat a Capital Iniprovement be ma(le to Unit 2, the Lessee shall cause such Capital Improvenient to be made in accordance with the ANPP Participation Agreement; prouicle<l, lioieeuer.
that nothing in this senteiice sh;ill be cleemed to increase the Lessee's obligations under tlie AiVPP Participatioii Agree-ment.If and to the extent required by the ANPP Participation Agreement.
the Lessee shall.at its sole expeiise.proinptly participate in the making of any Capital I>>iprovement to Unit 2.without tli<<written conse>>t of'the Lessor, the Lessee will not permit any Capital Iniprovenic>>t to be nmdc during the last three years of the Lease Term unless (i)such Capital Improvement is reasonably expected to be coinpleted prior to tlie end of the Lease Term, as dcterniined liy;ui indcperident engi>>ccr reasoiiably acceptable to the Lessee and the Lessor, (ii)arra>>ge>>ients for the pay>>ie>>t tlicrcof'atisfactory to the Owner Participant have been macle and (iii)the Lessee is coi>>inittecl to pay tlic cost thereof (whether or not completed prior to the end of the Lease Term)in a inanner satisfactory to tlic Owner Participant.
Of the net proceeds of (i)any sale or other disposition of property removed froi>>Unit 2 receivable (without regard to any right of setoff or other siinilar right of any Person agai>>st tlic Lessee)by.or creditecl to the account of.tlie Lessee in accorclance witli the AiVPP Particip;iti(>>i Agreenient and (ii)any iiisurance proceecls receivable (without regard to;uiy riglit of setoff or otli<<r siniihir right of any Person against the Lessee)for the account of the Lessor or the Lessee i>>respect of'lie loss or destruction of.or dani;ige or casimlty to.:uiy siicli property.tlic Applic;il>l>>
U>>it Perce>>tage of such aniount shall be applied;is providecl in Section 9(g), (li)or (i).;is tlic c;ise>>i;iy 1 A>>Applicable Unit 2 Percentage of property:it any time reniovecl froni Unit 2 sliall rci>>aiii tlic property of the Lessor, no matter where located, until such time as a Capital Improvement constitutiiig a replacenient of such property sliall have been installed in Unit 2 or siicli removed property lms liecii clisposed ofby the Operating Agent iii accordance with the ANPP Particip;itioii Agreeineiit.
Siniiiltaii<.-
ously with such disposition by the Operating Agent, title to an unclivided interest equal to the Applicable Unit 2 Percentage in the removed property shall vest in the Person designated by tlic, Operating Agent, free ancl clear of any and all claims or rights of the Lessor.Unless paragraph (3)of'ection 8(e)shall be applicable, upon the incorporation of a Capital Iniprovenient i>>Unit 2.witlio>>t f'urther act.(i)title to an uiidivided interest equal to the Applicable Unit 2 Pcrcciit;igc i>>siicli C;ipit;il Iniprovement shall vest in the Lessor and (ii)such undivicled interest iii sucli C;ipital Iniprovci>>c>>t shall become subject to this Facility Lease and be deemed to be part of tlie Undivided Interest for;ill purposes hereof'o the sanie extent that the Lessor ha(l a like>>iicliviclc(l iiitcrcst in tlic pnip<<rty origin;illy incorporated or iiistalled iii Uiiit 2.Tlic Lessee warraiits;ind;igrccs tli;it tli<<L<<ssnr's iiit<n st i>>;ill C 11)ltiil Iliiprovelllcllts sliall l)e f'rcc<<ii(l clear ot';ill Li<.'iis.<xn pt Pcriiiitt<<<l Li<'ii>>d<<s(ril>><I iii cliiilses (ll).(111)illld (xii)of tlie dcfiiiiitioii tliercot.(d)Reports.To the extent perniissible.
the Lessee slmll prep;irc aii(1 file iii tiiiicly faslii>>>>.or.where tlie Lessor shall be required to file, the Lessee sh;ill prepare aiid deliver to the Lessor witliiii;i reasonable tinie prior to the date for filing, any reports with respect to Unit 2, tlie Uiidivided I>>tcrcst or the conclition or operation thereof that shall be reqiiired to be filecl with aiiy Governiiiciital 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 st'itiiig tlie total cost of'll Capital Iniprovements
<<nd describing separately and in reaso>>able detail e;i<<li Capital Iniprovenient (or related group of Capital Improvenients) niade (hiriiig the period 1'roi>>tlie date hereof to December 31, 198G, in the case of the first such report.or during the period froin a the encl of the periocl coverecl by the last previous report to the Deceniber 31 prior to sucli report.
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, the Lessee vill report in writing to the Lessor with respect to (i)the most recent annual capital expenditure idget submitted by the Operating Agent to the Lessee in accordance with the ANPP Participation
.greement and (ii)the current 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 an undivided interest equal to the Applicable Unit 2 Percentage in each Capital Improvement to Unit 2 shall vest as follows: (1)in the case of each Nonseverable Capital Improvement, whether or not the Lessor shall have financed or provided financing (in whole or in part)for such undivided interest in such Capital Improvement by an Additional Equity Investment or a Supplemental Financing, or both, effective on the date such Capital Improvement shall have been incorporated or installed in U>>it 2, 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)'n Applicable Unit 2 Percentage of the cost of such Capital Improvement, the Lessor shall, without further act, acq>>ire title to such undivided interest in such Capital Improvement; and i i e (3)in the case of each Severable Capital Improvement, if the Lessor shall not have fi>>anced (by either an Additional Equity Investment or a Supplemental Financing, or both)the Applicable Unit 2 Percentage of the cost of such Capital Improvement, the Lessee shall retain title to such undivided interest equal to the Applicable Unit 2 Percentage in such Capital Improvei>>e>>t.
Immediately upon title to such an undivided interest equal to the Applicable Unit 2 Perce>>tage in ny Capital Improvement vesting in the Lessor pursuant to paragraph (1)or paragraph (2)of this ction 8(e), such undivided interest in such Capital Improvement shall.without further act.beco>>ie ject to this Facility Lease and be deemed part of the Undivided Interest and Unit 2 for all purposes hereof.(f)Funding of tlia.Cost of Capital linprovements.
Before placing in service any Capital Improve-."'ment to Unit 2 the cost of which exceeds$50,000,000 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, or arranging the financing of, an Applicable Unit 2 Percentage 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 I>>vestme>>t) and the issuance of Additional Notes, all on terms acceptable to the Lessee and the Owner Participa>>t.
If the Owner Participant does not finance, or arrange the financing of, an Applicable Unit 2 Percentage 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 (otlier tlia>>any Perso>>;iffiliated with the Lessee withi>>the>>iea>>i>>g of Section 318 of the Cocle)A<klitio>>al Notes (suc)i issuaiice of Notes liei>>g hereinafter referred to as a Supplemental Financing) and to use the proceeds tliereof to pay siicli percentage of the cost of such Capital Improvement, subject, liou:ever, to the satisfactio>>
oi'lie following conditions: (i)there shall be no more than one Supplemental Financing in any calendar year: (ii)the sum of the Supplemental Financing Amounts, if any, in any calendar year shall equal I, or exceed 122.645734%
of$10,000,000;(iii)the Lessee may include in any request for a Supplemental Financing only C;ipital Improvements not previously financed in any Supplemental Financing and which have been 9 installed or afHxed no earlier than three calendar years before the beginning of the calendar year in which such Supplemental Financing occurs;(iv)the total amount of all Supplemental Financings during the Basic Lease Term shall n exceed 12.645734%
of 8200,000,000;(v)unless waived by the Owner Participant, the Bonds shall, at the time of such Supplemen-tal Financing, be rated at least"investment grade," as determined by Standard R Poor's Corporation or Moody's Investors Service, Inc.or, if neither of such rating organizations shall rate the Bonds at the time, by any nationally recognized rating organization in the United States of America;(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 flna>>ced, 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 Participa>>t.
such Supple>>ic>>tal Financing shall not result in any adverse tax effect upon the Owner Participant, and the Owner Participant and the Lessee shall have agreed upon the amount and manner of payment of any indemnity payable by the Lessee as a consequence of such Supplemental Financing: (viii)in the opinion of the Owner Participant, such Supplemental Financing shall not result in any material adverse effect on the Owner Participant's flnancial or accounting position;(ix)the Additional Notes shall have.a flnal maturity date no later than July 2, 2013;(x)the Lessee s)mll have made such representations and warranties a>>d covenants regardi>>g the tax characteristics of the Lessor's undivided interest in each Capital Improvement fi>>'nnccd in a Supplemental Financing as the Owner Participant shall have reasonably requested and Scctio>>13(c)of the Participation Agreement shall have bee>>appropriately>>iodifled: (xi)appropriate adjustments to Basic Rent and the schedules of Casualty Values, Spec Casualty Values, Termination Values and Special Termination Values shall have been agreed to by the Owner Participant to support the amortization of the Additional Notes issued in respect of such Supplemental Financing and to preserve Net Economic Return;(xii)the Lessee shall have paid 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;(xiii)no Default or Event of Defa<ilt shall have occurred and be co>>ti>>>>i>>g and>>o Evc>>t nf Loss shall have occurred or Deemed Loss Event shall have been declared;a>>d (xiv)the Lessee shall have entered into such agreements and shall have provided s>>ch tax indemnities, representations, warranties, covenants, opinions, certificates a>>d other doc>>me>>ts as the Owner Participa>>t shall reasonably request.(g)Usefiil Life.If the Lessee shall not theretofore have exercised its purchase optio>><<>>dcr Section 13(b), then, (i)if the Lessee shall not theretofore have exercised its renewal optio>>p>>rsua>>t to Section 12, on April 1, 2012, the'Lessee shall initiate the Appraisal Procedure to determi>>e the remaining Economic Useful Life of Unit 2 as of April 1, 2013, and (ii)if the Lessee shall have exercised its renewal option pursuant to Section 12, on the'~sic Rent Payment Date occurring one year prior to the end of the Renewal Term, 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 Re>>ewal Term.The Lessee and the Lessor agree to use their best eH'orts to ensure that either such determination of remaining Economic Useful Life is made no later than six months prior to the end n the Lease Term.10 SzcrroN 9.E<<ent of Loss;Deemed Loss E<<ent;Special Transfer for Failure to hlaintain or Replace Letter of Credit.(a)Damage or Loss.In the event that Section 16.2 of the ANPP Participation Agreement (as in~ct on the date hereof)shall become applicable, or an Event of Loss or Requisition of Use shall occur, or Unit 2 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 any portion thereof;provided, hou,'ever, 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.(c)Payment of Casualty Value.(A)If the Letter of Credit is in effect.on the date following the occurrence of an Event of Loss on which the Owner Participant delivers to the Lessee written notice specifying such Event of Loss (it being understood that the Owner'articipant is obligated under Section 7(b)(5)of the Participation Agreement to attempt to draw on the Letter of Credit to tlie extent provided therein), or (B)if the Letter of Credit is not in effect, on the Basic Rent Payment Date next following the occurrence of an Event of Loss (the last day of the Lease Term being deemed a Basic Rent Payment Date for this purpose), the Lessee shall pay to the Lessor an amount equal to the excess of (x)Casualty Value, determined as of the date such payment is due, oner (y)the unpaid principal amount of, and accrued interest since the last preceding Basic Rent Payment Date on, the Notes outstanding on such date, after giving effect to the payment, if any, of the principal installnient due and payable and paid in respect of the Notes on such date.If the Lessee shall have made sucli payment and shall have assumed all obligations and liabilities of the Owner Trustee under the lenture and the Notes pursuant to Section 3.9(b)of the In(lelltille, thc Lessor sh;ill, so long;is no ult or Event of Default shall have occurred and be continuing (and at any time after the urrence of an Event of Loss the Lessor may): (i)if Section 16.2 of the ANPP Participation Agreement (as in effect on the dite hereof)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 A)NPP'Participation Agreement, Transfer the Undivided Interest and the Real Property Interest to sitch 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 an Applicable Unit 2 Percentage of the"salvage value" purchase price receivable (without regard to any right of setofF, or other similar right of any Person against the Lessee)by the Lessee: or (ii)in all other cases, Transfer the Undivided Interest and the Real Property Interest to the Lessee.If the Lessee shall Eiave niade siich payinent biit sEiall not Emve assuiiic(l;ill oblig;itioiis;iii(l li;)E)ilitics
'()i the Owiier Trustee ui)der tE)e Indenture a)id the Notes pursuant to Scctio))3.9(E>)oi'h(.'n(lc))tun.'.
the Owner Participant shall efFect the Special Transfer, in u:I)icl)case,)citl)out fio tl)er act o))lhe part oJ'he Lessor or the Lessee, (i)the obligation of the Lessee to pay further Basic Rent shall be reduced to an amount, payable on each Basic Rent Payment Date thereafter, equal to the aggregate amount of.principal, premium, if any, and accrued interest then payable on all Notes then Outstanding, and (ii)this Facility Lease shall become a security agreement for all purposes of Applicable Law.(d)Payment of Special Casualty Value.If events giving rise to a Deemed Loss Event (without regard to any declaration thereof)shall occur, the party hereto having knowledge tE)ereof sE)all promptly notify the other party of the occurrence thereof.A Deemed Loss Event shall not occur ss and until the Owner Participant delivers to the Lessee a written notice identifying the 11 applicable event and declaring that such event constitutes a Deemed Loss Event hereunder, which the Owner Pnrticipant shall do, to the extent practicable,'ithin 90 days after it shall hnve actu."'nowledge of the relevant event.(A)If the Letter of Credit is in effect, on the date such notice delivered (it being understood that the Owner Participant is obligated under Section"r(b)(5)of th Participation Agreement to attempt to draw on the Letter of Credit to the extent provided therein), or (B)if the Letter of Credit is not in effect, on the next date specified in Schedule 2 hereto following the dnte such notice is delivered (or if such notice shall be given less than 10 days prior to the>>ext such date, on the second succeeding date specified in Schedule)hereto following such notice).the Lessee shall pny to the Lessor an amount equal to the excess of (x)Specinl Casualty Value, determined as of the dnte such payment is due, over (y)the unpaid principal amount of, and accrued interest since the last preceding Basic Rent Pnyment Date on, the Notes outstanding on such dnte.after givi>>g elfect to the pnyment.if any, of the principal instnllment due and payable nnd paid in respect of the iNotes oaI such date.If the Lessee shnll have made such payment nnd shnll hnve assumed nll obligntio>>s>>I<1 liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of tlie I>>dent<<re.
the Lessor shall.so lo>>g as no Default or Eve>>t of Defaiilt shall h:ive occ<<rre(l;iii<1 l)c co>>tl>><<lilg
('lnd<it n>>y tlnlc'lftcl'hc occurrcncc of n Dcclllcd Loss Evcli't tile Lcssoi>>lilv).Tl"ulsfcl'he Undivided Interest nnd the Real Property Interest to the Lessee.If the Lessee shall have>>lade siich p;iynie>>t b<<t shnll not have;iss<<nied nil obligntions nnd linbilities of tile Osvner Tr<<stce ii>><lcr t)ic Indenture n>>d the Notes pursuant to Section'3.9(b)of the Indenture.
the Ow>>er Piirticipa>>t sli;ill elfect the Special Transfer, in Ichich case, untlioi<tfnrther act on the t)a)t of the Lessor or the Lessee.(i)the obligntion of the Lessee to pny further Bnsic Rent shall be reduced to nn nmo<<>>t, payable on e;icli Basic Rent Payinent Date therenfter, equal to the aggregate aniount of principnl.
premium.if nny.a>>d accrued i>>terest tlien payable on all Notes Oiitstan<ling, and (ii)this Fncility Lense sllnll bccoiiie;i secnrity agreement for all p<<rposes of Applicable Law.(e)He<tnisition of Use.In the ense of a Requisition of Use not co>>stit<<ti>>g;<<i Event of Loss.tliis Facility Lc'lse slinll co>>ti>>iie.;i>><l eacli mi<l every obligation of tlie Lessee licrci>>i<lcr;i>><l
<<>><Icr<<;i<Tra>>snctio>>
Doc<<nieiit sliall re>>ini>>, ili fiill f'orce;<<id eil'cct.So lo>>g;is>>o Dcf'i<<ilt or Evc>>t oi'<<fal shall liave occurred a>>d be co>>ti>>ui>>g, the Lessee shnll be entitle<1 to<<ll s<<>>is receive<1 by re;iso>><)any such Requisition of Use for the period ending on the Lease Termination Date.nnd the Lessor shall be entitled to nll sums received by reason of any such Requisition of Use for the period after the Lease Termi>>ation Dnte.(f)Termination of Lease Term.Upon (but only upon)a Transfer by the Lessor p<<rsimnt to Section 9(c)or 9(d)of this Facility Lense or Section 10(b)(3)(xvii)of the Pnrticipntion Agreenie>>t to the Lessee n>>d pnyment by the Lessee of the amounts specified therein: the Lease Term shnll e>><l;<<i<1 the Lessee's obligation to pay Basic Rent after such Transfer shall cense: t)roci<le<l, lio<ceen'.
th;it tlie Lessee sh;ill contiii<<e to be required to ninke all payme>>ts of S<<pplci>>e>>tal R<.'lit as,a>>d wllcll (Iilc.Ill all otlier cases.the Lease Term shall contiiiue nnd this Facility Leiisc sli;ill rei>>;iiii i>>fiill l'orcc<ill<I eifect.(g)At)t)lication of Patt>>le)its (nl an Euent of Losss.Any pnynieiits receivable (withnlit r('g<<<r<l t<)a>>x riglit oi's<.toif or otlicr siiiiilar riglit of;iiiy P<.rsoii;ig;li>>st th<.'cssc(');It:<<ly tiiiic l)y tlic Less<)r<)r tli<~Lessee.(Other than iiislirance place<1 by tlie Owiicr Trustee or tli(Osviicr P;irticip;ilit i)ilisli:lilt t>>Scctioil 10(b))froiii aiiy Cover>>i>>eiitnl Authority.
iiisiirer or otlicr P<.rsoii (c.xc<.pt tlic Lessee):Is:I result of the occurrence of ail Event of Loss shall be applied as follows: (i)all such pnyments shall be promptly paid to the Lessor for applicatioii pursuant to tlie following provisions of this Sectioii 9(g), excel)t that the Lessee may retain any a>>i<<<iits tli;it would at the time be paynble to the Lessee as reimbursement under the provisions of clause (ii)below;(ii)so nluch of such payme>>ts ns shall not exceed tile;ii>>o<<>>t reqiiired to be p;ii(l by tlic Lessee pursuant to Section 9(c)(ignoring, for this purpose, clause (y)of the first se>>te>>thereof)shnll be applied in reduction of the Lessee's obligation to pay such ainou>>t if>>ot;ilre;i 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 (including any"salvage value" referred to in clause (i)of Section 9(c))shall, in the case of payments from insurance carried by or on behalf of the L'essee, be paid to the Lessee or, in the case of any other payment, be divided between the Lessor and the Lessee as their interests may appear.(h)Application of Payments Not Relating to an Event of Loss.Payments receivable (without regard to any right of setofFor similar right of any Person against the Lessee)at any time by the Lessor or the Lessee (other than insurance placed by the Owner Trustee or the Owner Participant pursuant to Section 10(b))from any Governmental Authority, insurer or other Person with respect to any event giving rise to an amount referred to in the second sentence of Section 6(c)or the fourth sentence of Section 8(c), destruction, damage, loss, condemnation, confiscation, theft or seizure of or requisition of title to Unit 2 or the Undivided Interest or the Real Property Interest or any requisition of use of Unit 2 or the Undivided Interest or the Real Property Interest or any part of any thereof.i>>each case not constituting an Event of Loss, shall be applied first to reimburse the Lessee for all amou>>ts expended by it pursuant to Section 9(b)and second the balance, if any, of such payments shall, in the case of payments from insurance carried by or on behalf of the Lessee, be paid to the Lessee or.in the case of any other payments, be divided between the Lessor and the Lessee as their interests niay appear.(i)Dispositions at Time of Default or Event of Default.Notwithstanding the foregoing provisions of this Section 9, if a Default or an Event of Default shall have occurred and be continuing, any amount t)mt would otherwise be payable to or for the account of, or that woukl otherwise be retained by.the Lessee pursuant to Section 10 or this Section 9 shall be paid to the Lessor as security for the obligatio>>s of the Lessee under this Facility Lease and, at such time thereafter as the Lessee shall have cured a>>y such Default or Event of Default, such amount shall be paid promptly to the Lessee u>>less this Facility use shall have theretofore been declared to be in default, in which event s>>ch;mio<<>>t shall be osed of in accordance witli the provisions hereof and of the Indenture.
., (j)Assumption of Notes;Creation of Lien on Undivided Interest.In connection with an Event of Loss, a Deemed Loss Event, the exercise of the Cure Option or the exercise of the Lessee's purchase option pursuant to Section 13(c)of this Facility Lease or Section 10(b)(3)(xvii)of the Participation Agreement, (i)the Lessee agrees to use its best efForts to comply with the conditions set forth i>>Section 3.9(b)of the Indenture and, failing such compliance, agrees to accept the Special Transfer, 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 Owner Participa>>t eiFects the Special Transfer, the Lessor will execute and deliver the Undivided l>>terest I>>dr>>ture Supplement.(k)Special Transfer for Failure to Itlaintain or Replace Letter of Credit.If the Lessee slrall hav<<>>Iade<<II payments req>>ircd pursuant to its option to purchase u>>(lcr Section 10(b)(3)(xvii)oi'h<<Participatio>>
Agree>>Ient but shall>>ot have assumed all obligatio>>s a>>(l liabilities of thc Oiv>><<r Tr>>st<<(lulder the I>>denture and the Notes pursuant to Sectlo>>3.9(b)of the I>>(le>>t>>rc.
thc Ow>>er Parti<<II)a>>I shall efFect the Special Transfer, in Ivhich case, Ivithout further act on tlIe part of tIIe Lessor oi th<.Le~wee.(i)the obligation of the Lessee to pay further Basic Rent shall be reduced to an amount, payable o>>each Basic Rent Payment Date thereafter, equal to the aggregate amount of principal, prerniu>>I, if a>>y, 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 10.Insurance.(a)Re(tuired Insurance.
The Lessee will cause the Operating Agent to carry and maintain at least following insurance coverage with respect to the Undivided Interest and the Real Property 13 Interest, in each case with insurers of recognized responsibility, in such form as shall be satisfactory to the Owner Participant.(I)Non-Nuclear Insurance.(i),The Lessee shall maintain"all risk" property insurance covering physical loss with respect to Unit 2 in such amounts and with such other terms as are required by or nre in nccordnnce with Prudent Utility Practice, but in no event shall such amounts be less than the estimated maximum probable loss in respect of such property.Any insurance carried in accordance with this Section 10(a)(1)(i)shall be endorsed to provide that: 'A)losses shall be ndjusted nnd paid as provided in Section 10(n)(4):.(B)(i)the Lessor and the Owner Pnrticipnnt (the A<klitiona/
Insureds)are in-clu<le<l as n(klitionnl insureds, as their interests mny appear, a>>d (ii)any obligatio>>
imposed upon the insured (including, without limitntion, the liability to pny premiu>>is) shall be the sole obligation of the Lessee and not tliat of nny A<klitio>>al Insure<I: (C)the respective interests of the Additional Insureds shall not be i>>vali(lated by any breach of any warranties by the ANPP Participnrits contnine(l iii s>>ch policies: (D)the ins>>rer thereunder wnives all rights of subrogation ngainst the A<klitioiial Insureds with respect to their respective interests in Unit 2;(E)such insurance shall be primary without right of co>>tribiition of n>>y other insurance carried by or on behalf of any Additionnl Ins>>red with respect to its i>>tcrest i>>Unit 2;an<i (F)if siicli insuriince is caiicelle<l f'r aiiy reasoii wlmtsoevcr i>>cludi>>g>>o>>-pay>>ic'iit of pre>>ii>>>>i or any substn>>tinl clm>>ge is>>inde in the coverage wliicli;ilfccts thr i>>t<<r<<>>t of the A<klitional I>>s>>reds.(1)sucli c;mcellation or cli;iiige shall>>ot l>c cff(<<tive;is to tli~Additio>>nl I>>sureds f'r.'30 dnys after receipt by Tlie First N;itioii;il Ba>>k of Bostoll.il.Owner Trustee and agent, of written notice from such insurer of such ca>>cellatio>>
or-change, and (2)the Lessee will use its best efForts to cause such insurer to deliver a certificate with respect to such cnncellatio>>
or ch;mge to the Ow>>er Participant
>>ii<1 tlic Indenture Trustee.'ii)The Lessee shall maintain bodily injury and property damage liability ins>>rance (including product liability, completed operations and personnl injury insurance) coveri>>g claii>>s arising out of the ownership, operation, maintenance.
con<litio>>
or use of Unit 2 or tlie PVNGS Site.The nmount nnd other terms of such i>>suraiice slmll be iii accordaiice ivith tli<<higher of Pru<lerit Utility Practice and the ANPP Particip'ition Agree>>ieiit.
b<<t siich li>>iit>>shall in no event be less than$25,000,000 per occurrence coinbi>>c<l bodily i>>jury;i>><l property dnniage.Such insurance r>>ay i>>el>><le deductible a>>iounts>>ot to excee(l 82.000.i)i)i).
Any iiisura>>cc carried i>><<ccor<1;uice with this Sectio>>10(a)(i)(ii) slmll li<<<<ii(kir>><<il:i>>
provi(k.'(1 iii pirigriplis (B).(C).(D).(E)aii(l (F)of Scctioii 10(;i)(l)gi).<.ivv pl llui(tl<<ter>>i-A(l(lilional 1>>suie(ls-wlierever it;ippe;irs sli;ill iiiclii<k.
tlic L<<>>s(ir.tli<<O(vii<<r Parti<<i-t)(lilt (ill(l (ill Ill<leillllitees.
(2)Nuclear Insurance.(i)The Lessee shall maintain nuclear property insurance in nm unts and witli sucli other terms as are required by or are in accordance with the highest of (a)Applicnble Law.(b)the ANPP Pnrticipation Agreement and (c)Prudent Utility Practice: proui<le(l.
ho((eeet.that such insurnnce shall at all times be mnintained in amounts<<t least equal to the>>i>>sir>><<ni
>>uclear property insurance available on commercinlly re;iso>>nble terms.Tlie coverage afforded by such nuclear property insurance in respect of nny loss nt PVNGS nn<l avnilable f~any loss at Unit 2, either (A)shall at all times be at lenst equal to 8750 million re<<nr<lle>>s
~14 any suspension, termination, amendment, supplement or reduction of such insurance for any reason (inc1(iding by reason of a Nuclear Incident)or (B)so long as (1)Unit 2 is in, or is in a procedure which will result in, a state of cold shutdown in accordance with Prudent Utility Practice and (2)the first mortgage bonds of the Lessee shall have an investment grade rating (k)by two nationally accepted rating agencies if such first mortgage bonds are rated by two nationally accepted rating agencies or (y)by one nationally accepted ra'ti>>g age>>cy if such first mortgage bonds are only rated by one nationally accepted rating agency.will be reinstated to be equal to at least$750 million within 180 days of any suspension, termination.
amendment, supplement or reduction of such insurhnce for any reason (including by reason of a Nuclear Incident).
Such insurance may include deductible amounts>>ot to exceed 82,000,000.
Any insurance carried in accordance with this Section 10(a)(2)(i) shall be endorsed by the insurer as provided in paragraphs (A), (B), (D).(E)and (F)of'ection 10(a)(I)(i).(ii)The Lessee shall maintain the maximum nuclear liability insurance in anloii>>ts and such other terms;ls required by or in accordance with the highest of (a)Applicable LIIiv.(b)the ANPP Participation Agreement, (c)Prudent Utility Practice and (d)the maxinlui>>n>>clear liability i>>sara))ce available o>>coninlercially reasonable tcrnls.biit in n>>p ri:<<nt i>>such amounts and coiltai>>i>>g such other ter>>is as to cover the-aggregate liability-f'r a siilglc"nuclear incident" of all"persons indemnified" (as such terms are used in the Ato>>lic Eiicrgy Act)and in connection with the ownership, maintenance, condition or use of'U>>it)a>>d the PVNGS Site.The Lessee shall also maintain supplier's and transporter's insurance in a>>ioi>>its consistent with Prudent Utility Practice.The Lessee shall maintain niiclear liability i>>sura>>ce pursuant to this Section 10(a)(2)(ii).whether or>>ot the Le;ise Termination Date s)i;ill li;ivc occiirrcd.
until.>>otificd by the Owiicr Particip;lilt tliat iieithcr tile Lessor iior tile Ow>><<r Participant i)as aiiy further real or pote>>ti;il liability in coliiiectioii with the ow>>crsllip.
operatio>>.
i>>aiiiteiia>>ce.
coiiditioii or iis(.of'nit 2 or tlie PVNGS Sit<<: provi(lc(l tli;it<<I'tcr Decoi>>i>>issio>>i>>g lms bee)i co>>ipl(.tc(l the Lessee sli;ill iiot be rc(I>>irc(l to>>i;iilit;ii>>
iiiiclc;ir liability i>>surailce for>>lore than.'30 ye:irs.Any insuraiici.
carrie(l in accord>>>>ce witt>tllis Section 10(a)(2)(ii)shall be endorsed as provided in paragraphs (B), (D), (E)and (F)of'ection 10(a)(I)(i).(iii)The Lessee shall, or shall cause the Operating Ageilt to.iise its best efforts at;ill times to obtain the endorsement referred to in paragraph (C)of Sectio>>10(a)(I)(i) o>>;III insurance referred to in this Section 10(a)(2), and shall cause such endorsenie>>t to b<<obtained if and to the extent it is available to any other owner or operator of a n>>cl<<:ir generating u>>lt.('3)An>>wal Ret)ort)(>>I(l Ccrti%cntes.
Tile Lessee shall, or>or before XI;Ircii I of'c;i<<li y<<;ir.coi>>nle>>cing March I.1987.fiirnish to the Lessor;iiid the Owner Particip:iilt (A);I report sigil<<(l by tlie broker or brokers f'r the PVNGS insiira>>ce (or if'i)sur;Iilcc is pl;i<<c(l (lir<<<<tly l)y tll<<Op(.r;iti>>g Agciit.a rcport sig>>c(l bv tlic Oi)cr;iti>>g Agcllt ivhi<<ll ivill i>><<II<<l<<;i
<<<<pi<Ii'l<<~<<(i tificatc of Illsllr;>>lcc si$>>I.'(I by tile c:u'I'Icl'.
wilich c<<rtifi<<:it<<sh;III ill(li<<:it<<
tli:it:ill
(~i<<II)l's<<>><<'I l.reqiiirc(l'by tliis S<<etio)i IO:ire;ipplic:ible)(i)(Icscribi>>g iii (lct;iil tli<<iiisiir;I>><<<<
th<<il>>I:Iiiit;ii>>I
<I bv the ANPP Particip;iiits witli respect to PVIVGS.(ii)st;itiiig tli;it iio pr<<iliili>>is ar<<tll<<>>delinquent, and (iii)stating that insurance niaintained is in accordaiice witli (I)tile AIVPP Participation Agreement and (2)this Section 10;(B)a report signed by the broker or brokers I'or the Lessee's insurance (or if insurance is placed directly by the Lessee,;i report signed by th,.Lessee which will include a copy of the certificate of'nsurance signed by the carrier.whicli certificate shall indicate that all endorsements required by this Section 10 are;ipplic;iblc) sliowi>>g the separate i>>suraiice.
if any.theo inaintained by the Lessee with respect to its interest i>>PVNGS and stati>>g that>>o prenliums under such i>>suraiice are delinqueiit: (C)a certificate sigiie(l by tlie Lessee stating that the insurance maintained by the ANPP Participants an(l by the Lessee.ide>>tifiied on the reports to be delivered pursuant to clauses (A)a>>d (B).is i>>;iccordance ivith I5 Prudent Utility Practice within the nuclear industry, the ANPP Participation Agreement and this Section 10;and (D)upon the request of the Lessor or the Owner Participant, copies (to th~extent permitted by the issuers of such policies)of policies so maintait>ed.
Any report by a insurance broker with respect to clause (A)(iii)(1)of this paragraph 3 may be made in reliance upon a schedule provided by the Lessee (a copy of which shall be attached)identifying the i>>surance (by coverage, limits, insureds and other pertinent details)required to be maintai>>ed 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 s)mll be attached)identifying the insurance required to be maintained under this Section 10.(4)Proeee(ls.
All insurance proceeds paid in respect of or pursuant to paragraphs (1)and (2)above shall (i)be applied as provided in Section 9(g), (h)or (i).as the case may be, a>>d (ii)be a(Ejustc(E with the insurance companies or otherwise collected.
including the filing of;ippropriate proceedings, by the Operating Agent in accordance with the ANPP Participation Agreei>>e>>t,.swbject, Irou:ever, to any priority allocations of such proceeds to decontamination an(l debris rei>>oval set forth in the insurance policies or required under Applicable Law.If the Operati>><Agent, as trustee, shall become the loss payee under any policy of insurance constituting"Pr oj eet b>swr a>roe," as such term is defined i>>the ANPP Participatio>>
Agreen>c>>t.
tlie>>tlic Lessor;>>i(l tlic Owner Participmit shall be made beneficiaries of the trust arr;ingen>er>t u>>der wliicli tlic Operati>>g Agent acts as trustee.(b)Perrrritted I>>swrar>ce.
Nothing in this Section 10 sliall proEiibit the Lessee fro>>i placiiig at its expense insura>>ce on or with respect to tEie cost of purchasing replacement power.naming the Lessee as iris>>re(1 a>>(l/or loss payee.rrnless such insurance wo>ild conflict with or otlicrwise li>>iit tlic<<v>iihibility of ir>s>>ra>>cc to be prov>(lc(l or i>>a>>it>ui>cd i>>accord>>>ice witli Scctioii 10(a).Notliir>g iii this Sectioii 10 shall prohibit the Lessor or the Owner Participant froi>i placiiig;it its cxpciisc oth(.r iiisiir;ii>cc oii or witli respect to Ur>it').tlic U>>(lividc(l Iiitcrcst or tlic Re;il Prop(.'rty Iiitcrcst ()r tli oped>tiol>
of Uiiit 2.ria>>iiiig tire Lessor or tlic Owiicr Participaiit;is iris>>re(l;>ii(l/or loss p;iycc.w>>lr such i>>surance would coiiflict witli or otherwise liinit the ins>ira>>ce to be provided or iiiaiiit;iiiic(l i>accordance with Section 10(a).Sr((."r'r<)x 11.Rilit<to Assi<<r>or Swblease.(a)Assign>>rent or Srrblease by the Lessee.Without the prior writte>>co>>se>>t of the Lessor.tlie Lessee shall not encumber (except for Permitted Liens), or assign.sublease or transfer (except as permitted by Section 10(b)(3)(ii)of the Participation Agreement).
its leasehold interest un<ler tliis Facility Lease in the Undivided Iriterest or the Real Property Interest.except that the Lessee>>iay assigr>its leaschokl interest under this Facility Lease in the U>>divi(le(l Interest ai>(l tlie Rc;il P>()pcrty Iiiterest to a wholly owiied subsidi;iry of the Lessee or of the Lessee's p:irciit if s<<cli swl)si<li;iry's obligatio>>s
>>rider this Facility Le;ise and the other Tra>>sactioii Docun>eiits mid Fiimiicirig Doc>>>>>c>>ts shall be guara>>teed by EI Paso pursua>>t to" a valid ii>>d enforceable guara>>tee co>>t;iiiii>>g appropri:itc cove>>aiits of El P;iso;iri(l otE>ersvisc satisfactory it)fon>>aii(l siibstmice to the Osvr>cr P;irticip;>iit i>>its;>hsoliit<(liscrctio>i.
Tlic Lessee sli:ill iiot.witlioiit tli(.'rior ivrittc>>coiisciit<)1'l>c L<ss>>r;>r><l tE>(Owiicr P:irticip;i>it.
p:>rt with tlic posscssiori of.or s>>IE'cr or;>liow to p;>ss oi>t>)l'ts p>iss<<ssi>>i>.
thc U>i(livided Iiitercst or tire Re;il Property Iiiterest or;iriy iiiterest tlicrci>i.
exn pl to tlic cxtci>t>'cq>li>'<'(1 pursuaiit to tlie A>VPP Participation Agree>>ieiit (as in elfect oii tlic d;itc liereof')or;is cxprc>>sl)permitted by the provisions of this Facility Lease (inclrr(Iir>g, uithowt limitation, the first seiitciicc ol'his Section 11(a))or any other Transaction Document.(b)Assign>>>ent by Lessor as Secwrity for Lessor's Obligatior>s.
To secure the indebte(l>>css evidericed by t)ie Notes.the Lessor will assign to the Inderiture Trustee (x)its right.title a>>(l iiitcrcst to receive certain pay>>>cuts of Bent (r>ot inclw(ling, in any event.Excepted Paynie>>ts) to tlic extciit provided it)the 1>>(Eer>ture
'uid (y)if and when required by Sectiori 9(j), its riglit.title:iri(l i>it(.rest i>>the Undivided Interest and the Real Property Interest.TEie Lessee Eiereby (a)coiisents to su~;issigiii>>crit;>>i(l to the terms of the Indenture, (b)agrees to pay directly to the Iride>>turc Tnrstee~
such ofBce in New York, N.Y.of Mellon Trust Company or of such other bank or trust company in New rk, N.Y., all as the Indenture Trustee shall specify in writing to the'Lessee (so long as the lien of the lenture has not been satisfied and discharged and the Lessor is obligated thereunder), all amounts Rent (other than Excepted Payments)due or to become due to the Lessor t)rat shall be required to be pai<l to the Indenture Trustee pursuant to the Indenture, (c)agrees that the right of the Indenture Tr<<stee to any such payments shall be absolute and unconditional and shall not be affected by any circumstances whatsoever, inelu<ling,)oitl)out limitation, those circumstances set forth in Section 4.a>><l (d)agrees that, to the extent provided in the Indenture and until the Indenture is discharged i>>accordance with its terms, the Indenture Trustee shall have all the rights of the Lessor here<<nder with respect to Assigned Payments as if the Indenture Trustee had originally been named herein as the Lessor.Sl'.(.)'u>x 12.Li>>>ite<l Lease Bcneu:al S<<bject to the notice requirements set forth in Section 13(a).at the end of the Basic Le;)se Ter)>>.proui<lc<l that>>o Default or Event of Default shall have occurred a>>d be co>>tin<<i>>g,>>o Eve>>t ot'oss shall have occurred and no Deemed Loss Event shall have been declared.all Notes shall have bec>>p;)id i)t full and the Lessee shall be co>>c<<rre>>tly re'>>cwing the tcn>>of all other lc;)scs of i>>t<<r<<sts i>>U>>it 2 then leased by it as lessee (other than leases that are>>ot.leases for federal tax p<<rposcs).
thc Lessee shall have the right to renew the term of this Facility Lease for a period (the"Renewal Tern)-)cor>>r>>e>>cing October I, 2013, and ending, at the option of the Lessee (which option shall be exercise<l at the time of, and set forth in, the notice pursuant to Section I'3(a)), o>>either October I, 2017 or the fi>>al clay of the Maximum Option Period, during which Basic Rent shall be payable as provided i>>Section'3(a)(iii)and Section'.,S):.<,")'u
>s I'3.Notices for IIeneu'al or Purel)asc; Purcl)asc Optio>>s.(a))Votlces;I>>order to exercise the renewal option per>>)ittc<l by Sc<<tio>>12 or th<<p<<r<<h;)s<<
io>>per>>)itted by Sectio)i 13(b), the Lessee shall give to the Lessor writtc>>>>oti<:e of s<<ch cl<<<<ti)>>>not later than three years nor earlier than five years prior to the expiration of the Basic Lease Tern>or.in'the case of such purchase option, the Basic Lease Term or, if elected.the Renewal Tenn.A>>y s<<ch electio>>shall be irrevocable as to the Lessee, b<<t shall not be binding o>>the Lessor if, o>>the<lat<<oi'uch notice, a Default or an Event of Default shall have occurred and be co>>tin<<ing or<<>>Eve>>t of Loss slmll have occurred or Deemed Loss Event shall have been declared.Pro)>>ptly after receipt by the Lessor of any such notice.(i)in case the renewal option has been elected.the Maxi>><<>>>>Optio>>Period shnll be determined by the Appraisal Procedure or (ii)in case either the re>>ewal optio>>or th<<p<<rchase option has been elected.the Lessee and the Owner Participa>>t sh;)ll agree<<po>>th<<I';)ir Ivlarket S:)les Value of the Undivided Interest and the Re:)I Property Interest.or if withi>>three>>)o>>ths after the date of the Lessee's notice, the Lessee a>>d the Owner Particip;)>>t shall be<<>>;)ble so to;)gr<<<<.s<<ch F;)ir Market Sales Val<<e shall be determined by the Apprais;)l Proc<<<l<<rc.(b)Li>nile<i Par<<i)ase Option at Expiralio>>
of Ilu'ease'I'e>>u.(i)S<<bj<<<<t t<>th<<>>)>ti<<<)<q>>ir<->>)<<>>ts s<.t lorth it)Sectio<<1:3(;)).
>>>>less;<<)Evc>>t oi'D<<i:<<)lt shall hav<<<><<<<<<rr<<<l;<<><I l><<<<<>>)ti>>>>i>>
~)>r;<<)Eve>>t ot'oss sh:)II have occ<<rred or;)Dce>>)c<l Loss Evc>>t sh;)ll h;)v<<I)<<<<>><l<<<<l;)r<<<l.
il':)ll X)>t<s slmll Imve bee>>p;)i<l i>>full a>>d the Lessee shall be co>>c<<rre>>tly p<<rch;)si>>g
<<II i>>t<<rests i>>U>>it 2 tl)<<>>leased by it as lessee (other than leases that are not lenses for federal tax p<<rposes);
thc Less<<<<sh;)II have the right to purchase the Undivided Interest and the Real Property I>>terest o>>the d;)te oi'he expiratio>>
of the Basic Lease Term or the Renewal Term (if elected)for a p<<rchase prie,'q<<;)I to thc Fair Market Sales Value thereof.(ii)If the Lessee slmll have elected to p<<rch;)se the U>><livi<led I>>terest;)>>d the Real Property I>>terest purs<<m)t to Section 13(b)(i), payment by the Lessee of the p<<rchase price ther<<1'or sh;)II be made in immediately available funds, whereupon the Lessor shall Transfer the Undivided I>>terest a>>d the Re;)l Property Interest to the Lessee.17 (c)Purchase Option for Change in Tax Latu.(i)If the Owner Participant shall notify the Lessee pursuant to Section 3(f)that, as the result of the adjustments to Basic Rent required pursuant to Section 3(d), the aggregate Basic Rent payable pursuant to Sections 3(a)(i)and (ii)(without rega.to any adjustment required by Section 3(e))is greater than 110 percent of the amount of aggrega Basic Rent that would be payable absent such adjustments, then, upon written irrevocable notice given by the Lessee to the Owner Participant (the Exercise Notice)not later than 60 days after such Owner Participant's notice pursuant to Section 3(f), Gut in no event after September 30, 1989, the Lessee may purchase the Undivided Interest and the Real Property Interest.Such purchase shall occur on the next succeeding date specified in Schedule 4 hereto occurring not earlier than 90 days after the date of the Exercise Notice, for an amount equal to the sum of (A)the greater of the Fair Market Sales Value of the Undivided Interest and the Real Property Interest (determined as of the date on which such purchase by the Lessee occurs by agreement of the Owner Participant and the Lessee, or, if they shall fail to agree within 15 days after the giving of the Exercise Notice, by the Appraisal Procedure) and the Special Termination Value (as adjusted pursuant to Section 3(d)and/or 3(e))specified for such date in Schedule 4 hereto~min<<s the unpaid principal amount of.and (if such Special Termination Value is equal to or greater than such Fair Market Sales Value)accrued interest since the inst preceding Basic Rent Payment Date on, the Notes Outstanding on such date, and (B)Basic Rent (after adjustment pursuant to Section 3(d))accrued and unpaid with respect to the period prior to the date of such purchase (the Exercise Price).(ii)If the Lessee shall have elected to purchase the Undivided Interest and the Real Property Interest pursuant to this Section 13(c), the Lessee shall pay the Exercise Price in immediately available funds.If the Lessee'shall fail to pay the full amount of the Exercise Price on the date specified in this Section 13(c), the Lessee shall no longer have any purchase right purs>>ant to this Section 13(c)and this Facility Lease shall ren>ain i>>effect.taking into acco>>>>t the adjustments provided for under Section 3(d).(iii)If the Lessee shall have elected to purchase the Un<livided Interest an<I the R Property Interest pursuant to this Section 13(c), shall have made the payme>>t require<I by t Section 13(c)and shall have assumed all obligations and liabilities of the Owner Trustee u>>der th 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, no Event of Loss shall have occurred and no Deemed Loss Event shall have been declared, Transfer the Undivided I>>terest and the Real Property Interest to the Lessee.If the Lessee shall have made such payment but shall not have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture, the Owner Participant shall effect the Special Transfer, in which case, without further act on the part of the Lessor or the Lessee.(A)the obligation of the Lessee to pay further Basic Rent shall be reduced to an amount, payable o>>each Basic Rent Payment Date thereafter, equal to the aggregate amount of principal.
premium.if a>>y.and accrued interest then payable on all Notes Outstanding.
and (B)this Facility Lease shall become a security agreement for all purposes of Applicable Law.(iv)The amo>>>>t of Basic Re>>t has been calc>>late<i on the ass>>>>iptio>>
t)rat th<<esti>>r>>t<<<l t>>x payme>>ts to be nude by the Owner Participant o>>the esti>>iate<l tax pay>>ie>>t<l>>tcs>>it<<r tl>>~Closing Date will reflect the benefit of the occurrence of the U>>divi<le<l 1>>terest b<<i>>g pla<<<<<l i>>service by the Lessor in December 1986.If the Lessee shall exercise the purchase optio>>>>>><l<<r this Section 13(c), then, upon demand by the Owner Participant.
the Lessee shall pay to the Owner Participant, in addition to the Exercise Price, an amount which, on an AfterTax Basis.shall be equal to the interest, penalties and additions to tax, if any, payable by the Owner Participa>>t or any ASliate thereof resulting from any underpayment of estimated taxes, if any, that was caused by assuming that the Undivided Interest would be placed in service by the Lessor in December 1986.and that such purchase would not occur.The computation of the amount of such i>>ter'est.
penalties and additions to tax shall be subject to the verification procedure set forth i Section 3(f).18 (v)The Lessee shall have no right to purchase under this Section 13(c)if the Lessor or the Owner Participant has provided notice to the Lessee on or prior to 15 days aftet the date of the Exercise Notice that it has waived the increase of the amount of aggregate Basic Rent payable pursuant to Sections 3(a)(i)and (ii)as a result of an adjustment required pursua'nt to Section 3(d)to the extent such adjustment would require the aggregate Basic Rent payable to exceed 110%of the amount that would have been payable nbsent such adjustment.
Sl:.(rrl()~
14.Termination for Obsotescence.(a)Ternlination Notice.Unless n Default or an Event of Default shaH have occurred i>>i<i b('.co>>ti>>ui>>g or an Event of Loss shaH hnve occurred or a Deemed Loss Event shnH have been<leclnrc<l.
the Lessee shaH have the option (prooided that the Lessee'shaH have delivered to the Lessor a>>Officers'ertificate to the effect that the Lessee's Board of Directors has adopted and there is in effect n rcsolutio>>
determining tlmt Unit 2 is surplus to the Lessee or econoinicnHy obsolete.wliicli<letermi>>ntion shaH be concurred in by an independent engineer selected jointly by tlie Lessee nii(l thc Owner Participnnt (or selected by the Appraisnl Procedure if the Lessee nild the Owiicr Participn>>t shall be unable-to agree upon such an engineer within 30 dnys following tlie delivery ot'uch Officers'ertificate) nnd provided that the Lessee shaH be simultaneously disposing of aH otlicr i>>tcrcsts i>>U>>it 2 leased by it pursuant to le;ises (other tha>>finance leases for ncco>>>>ti>>g p<<rposcs)).o>>at least one year's nnd.not more than 2 years'rior written notice (n Terniination Notice)to thc Lessor.the Owner Pnrticipant,and the Indenture Trustee (which notice shaH be irrevocable).
to ter>>iinate this Facility Lease on any Basic Rent Pnyment Date (the Ter>>linatio>>
Date);ifter Jali>>;ir)2.1997, nnd prior to January 2, 2011.If the Lessee shnH give the Lessor a Terminntio>>
Notice, the Lessee shnH, as agent f'r the Lessor, use its best efforts to obtnin cash bi<Is for the p>>rchnse of the Un(livi<lc<l'iltcrest;>>i<i the Rc;ll Property Iiitcrest.-Thc Lessor sh;lH;llso lmvc thc right to obt;li>>s>>ch c;isli l)i(ls.either directly or througli agc>>ts otlier thnn the Lessee.The Lessee sh;iH certify to tlic Lessor xvithi>>te>>dnys after the Lessee's receipt of'each bid (and.in any event.prior to thc Tern)i>>atio>>
Date)thc unt;>>id ter>>is thereof';i>>d the>>n>>ie (in<I Mklress of'hc Pcrso>>(wliich sh>>H>>ot bc tlic Lessee iir AIRliate of the Lessee, or nny nge>>t of either tliercof)s>>b>>iitti>>g slich bid.(b)Bight of Lessor to Betain Undivided Interest upon Terinination.
The Lessor>>iny elect to retni>>.rnther than sell, the Undivided Interest nnd the Re;il Property Interest by givi>>g>>otice to thc Lessee hiid'the Indenture Trustee prior to the Terminntion Date.It sh;iH be a coilditioii precedeiit to thc Lessor's right to retain the Undivided Interest and the Real Property Interest tliat on or prior to thc Terminntion Date the Lessor shall have paid (or made provision for payment)to the Indeiiture Tru'stee the unpaid principnl amount of aH Notes Outstnn<ling on such<late;i>>d aH preniiui>>.
iF;i>>y.a>>d interest accrued and unpaid on the date oF payment.'f'he Lessor elects to rctaiii tlie Uii<livi(lc(l l>>tcrest and the Rc;il Property l>>terest pursunnt to this Sectio>>l4(b).the Lessee sli>>H p;iy to th<<Lessor on the Termination Dnte the Bnsic Rent and nny other Rent clue or nccrucd.as tlic case>>i;iy bc.to and including the Termination Dnte.together with a>>amount eq>>nl to tile excess.ifani/.of th(.'ern)i>>:ltion Value as of'he Tcrnlinntion Date OI'er the liighest bo>>;I fii(lc oil'cr receive(l plirsii;liit to Scctioii 14(a).(c)L'ca)it>>a>>Ihe T('riiii>>atioil Date.If thc Lessor h;is ilot clcctc(l to I'ctilili tli(.Uii(livi(l<<(l fill<r(it:l>>(l thc Rc;ll Property l>>tcrcst;ls provided i>>Scctioli ld(b).oii thc Tcri>>i>>;itin>>
D;lt<<tlic Lcssiir sli:ill.(b>>t o>>lv upo>>I'ccclpt of thc sale prlcc;>>ld;lH;ldditlo>>,'ll p;lv>>li.'llts sp(.'(.'Ifi(.'(I III th(.'cxt sc>>tello(')
Transfer the Undivided l>>terest nnd the Real Property Interest for cash to the bidder (wliicli sli;iH>>ot be the Lessee or an Affiliate of the Lessee, or any agent of either thereof)that slmH have sub>>iit ted thc highest bid on or before the Termination Date.The total sale price realizi;I nt such snle sli:iH bc retained by the Lessor (siibject, ho(eever, to the terms of the Indenture and the requirement that there sh;IH have been paid;or provisioii f'r pnyment made, to the Indenture Trustee the unp;iid pri>>cipal n>>io<<lit of aH Notes Outstnli<li>>g on the Termination Date n>>d;iH prenliui>>.
if';uiy.n>><l iliterest accrued;l>>d unpaid oil the date of pnymeilt)a>>d.in;idditio>>.
on thc Ternii>>ntio>>
Date thc Lessee I pay to the Lessor the excess, if any, of the Termination Value ns of the Termination Date orei.the ale price of the U>>divided Interest a>>d the Real Property Interest an(1 shnH pay to tlie Perso>>or 19 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 for any period after the Termination Date shall cease and the Basic Lease Term shall end on t Termination Date, but the obligations of the Lessee to pay Supplemental Rent when and as due sh 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 and the Lessee shall not thereafter be entitled to deliver another Termination Notice.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.(d)Early Terinination.
If the Lessee shall fail to exercise its renewal option or purchase optio>>within the time provided by Sectio>>,13(a), the Lessor shall have the option, on any Basic Rent Payment Date thereafter, on at least 60<lays prior written notice (a>>EnrIg Terminntio>>
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 Tenninatio>>
Date).Any Early Termination Notice may be revoke<i by the Lessor at any time on or prior to the Early Termination Date if any purchaser from or lessee of the Lessor shall fail to fulfill its obligation to purchase or lease on the Early Termination Date.On or prior to the Early Termination Date, the Lessor shall pay (or make provision for payment)to the Indenture Trustee the unpaid principal amount of all Notes outstanding on such date and all premiuni.if any, and interest accrued and unpaid on the date of payment.On the Early Termination Date.the Lessee shall pay to the Lessor any Basic Rent due or accrued, as the case may be, to a>>d i>>cludi>>g the Early Termination Date, and shall pay to the Person or Persons entitled thereto all Supplemental Rc whereupon the obligation of the Lessee to pay any Basic Rent for any period after the Ea Termination Date shall cease and the Lease Term shall end, but the obligations of the Lessee to pay Supplemental Rent when and as due shall continue in full force and effect and shall not be impaired by reason of any such termination.
SEGTIQN 15.Events of Default.The term Event of Default, wherever used herein, shall mean any of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary.
or come about or be effected by operation of law, or be pursuant to or in compliance with any Applicable Law or Governmental Action): (i)the Lessee shall fail to make, or cause to be made, (x)payment of Casualty Value, Special Casualty Value or Termination Value when due or payment due pursuant to exercise of the Cure Option when due (unless such amount shall have been wholly satisfied by a drawi>>g<<>>dcr the-Letter of Credit), (y)any payment of Basic Bent withiii 5 Biisi>>css Days after tlic s;i>>ic sli;ill become<lue or (z)any payment of S>>pplc>>iental Rent (other thn>>C;isii;ilty V;il<<c.Sp<<ci:il Casualty Value, Termi>>ation Value, Special Ter>>ii>>atio>>
V;ilue or pay>>ic>>t diic p<<rsii;i>>t t>>exercise of the Cure Option)within 20 days after the same shall become clue or dei>>a>>decl.;is tlic case may be (unless such amount shall have been wholly satisfied by a drawing uiider the Letter of Credit'and the maximum drawing amount under the Letter of Credit shall have been rei>>stated within three Business Days of such drawing);provided, ho<eever, that in respect of Early Paynient Obligations, an Event of Default shall not be deemed to occur until the Lessee shall have failed to make, or cause to be made, payment thereof (i)in the case of an Early Payment Obligation in respect of Section 9(c), on the Basic Rent Payment date next following the occurrence of mi Event of Loss (the last day of the Lease Term being deemed a Basic Rent Payment Date for thi purpose)or (ii)in the case of an Early Payment Obligation in respect of Section 9(d).the n o0 date specified in Schedule 2 hereto following the date that written notice of a Deemed Loss Event has been delivered (or if such notice shall be given less than 10 days prior to such next date, on the second succeeding date specified in Schedule 2 hereto following such notice);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), 10(b)(3)(v), or 10(b)(3)(xi)(but, with respect to the Lessee's obligation to make payments into the Decommissioning Trust Fund and the Second Fund, if any, only after 30 days following the date such payment is due)of the Participation Agreement or Section 7 or 11 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 less than (x)five and one-half years as of April 1, 2013 or (y)three and one-half years as of the date six months prior to the end of the Renewal Term;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 fail>>re shall continue for a period of 15 days after there shall have been given to the Lessee by the Lessor or the Owner Participant a notice specifying such failure and requiriog it to be remedied and stating that such notice is a"Notice of Defau1t" hereunder; or (v)the Lessee shall fail to perform or observe any covenant, condition or agreement (other than those referred to in clauses (i)through (iv)above)to be performed or observed by it under this Facility Lease (other than Section 10)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 an<1 ,~stating that such notice is a"Notice of Defn<<lt" hereunder:
or (vi)any representation or warranty made by the Lessee in this Facility Lease, any other Tra>>saction Document (oillcl iI<All Section 13(c)of the Particlp'ltlo>>
Agree>>le>>t) or a>>y agreement, document or certificate delivered by the Lessee in connection herewith or therewith shall prove to have been incorrect in any material'respect when any such representation or warranty was made or given and shall remain material and materially incorrect at the time in question;or (vii)the Lessee shall commence a'oluntary case or other proceeding seeking liquidatio>>.
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 possessio>>
by any such official i>>an involuntary case or other proceeding commenced against it, or shall make a general assig>>>>ie>>t for the benefit of creditors, or shall take any corporate action to authorize any of the foregoing:
or an involuntary case or other proceeding shall be commenced against the Lessee seeking'iquidation, reorganization or other relief with" respect to it or its<lebts u>>der any bankr>>ptcy.
insolvency or other si<>>ilar law now or hereafter in eifect or seeki>>g the appoi>>t>>>e>>t of a tr>>stc<.receiver, liquidator, custodian or other similar official of it or a>>y substa>>tial part of its prop<sty.a>>d such involuntary case or other proceeding shall remain>>>><lisi>>isse<l or u>>stave<I for a peri>><I of GO consecutive days;or (viii)final judgment for the payment of money in excess of$3,000,000 shall be rendered against the Lessee and the Lessee shall not have discharged the same or provided for its discharge in accordance with its terms or bonded the same or procured a stay of execution thereof within 60 days from the entry thereof;or (ix)(1)a default by the Lessee under the ANPP Participation Agreement in consequence of which the Lessee's right to receive its Generation Entitlement Share is suspended by the other ANPP Participants or (2)the giving by any ANPP Participant of a notice under Section 23.2 (or 21 any comparable successor provision) of the ANPP Participation Agreement respecting a default thereunder by the Lessee and the lapse of 15 Business Days from the giving of such notice without the Lessee having cured such default;provided, hot@ever, that for purposes of this clause (2)if t Lessee shall have disputed the existence or nature of a default and such dispute shall have beco the subject of an arbitration under Section 24 (or any comparable successor provision) of the ANPP Participation Agreement, such 15 Business Day period shall commence on the date of the final determination of the board of arbitrators under such provision; or{x){1)the Lessee shall fail to pay when due (whether by schedule maturity, required prepayment, acceleration, demand or otherwise) any Debt of the Lessee the principal amount (or equivalent) of which is greater than$10,000,000 and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt: or (2)any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and such Debt shall become due as a result thereof;or (xi)the Lessee shall, at any time'(A)fail to maintain or replace a Letter of Crerlit the>>i>>effect, in accordance with all of the terms and conditions of Section 10(b)(3)(xvii) of the Participation Agreement (unless the Lessee has exercised its purchase option.and paitl all amounts due in connection therewith, under Section 10(b)(3)(xvii)of the Participatio>>
Agree-ment), or otherwise be in breach of such Section 10(b)(3)(xvii), un1ess such failure or breach is the direct result of the failure of the Owner Participant to fulfill any Fee Obligation (as defined in such Section 10(b)(3)(xvii))or (B)fail to provide a replacement Letter of Credit complying with all the terms and conditions of Section 10(b)(3)(xvii)of the Participation
'Agreement (1)within 25 days after the receipt by the Owner Participant of notice that an existing Letter of Credit will be terminated prior to its stated termination date under circumstances in which at least 30 days'otice of such termination is required or (2)concurrently with the receipt by the Lessor of'>>otice that an existing Letter of Credit will be terminated prior to its stated termi>>atio>>
tlatc>>>>tier circumstances in which less than 30 days'otice of such terminatio>>
is req>>ired.SE~ION 16.Remedies.(a)Remedies.Upon the occurrence of any Event of Default and so long as the same shall be continuing, the Lessor may, to the extent permitted by Applicable Law, exercise one or more of the following remedies as the Lessor in its sole discretion shall elect: (i)the Lessor may declare this Facility Lease to be in default by written notice to such elfect~given to the Lessee, or may, by notice to the Lessee, rescind or terminate this Facility Lease: (ii)the Lessor may (x)demand'that the Lessee, and thereupon the Lessee shall, return possession of the Undivided Interest and the Real Property Interest promptly to the Lessor in the manner and condition required by, and otherwise in accordance with the provisions of.this Facility Lease as if the Undivided Interest and the Real Property Interest were bei>>g ret>>r>>etl at the e>>d of the Lease Term.anti the Lessor shall not be liable for the rei>>ib>>rsc>>ic>>t of thc Lessee 1'or any costs a>>d expenses incurred by the Lessee in connection therewith or (y)e>>tcr>>p>>>>thL PVNCS Site and take iminediate possession of (to the exclusion of the Lessee)the U>><livided Interest and the Real Property Interest, by summary proceedings or otherwise.;>11 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, as the Lessor may determine, free and clear of any rights of the Lessee a>>d 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 e~22 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 proportion-ately reduced, as the case may be (except to tl>e extent that Basic Rent is to be included in coniputations under clause (v)or (vi)below'if the Lessor shall elect to exercise its rights there<<n tier);(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 a>>y rights of the Lessee and witho<<t any duty to account to the Lessee with respect to such aetio>>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<leprivc<l of use of the Undivided Interest and the Real Property Interest pursuant to this clause (iv)shall be red<<ced by an amount equal to the net proceeds, if any, received by the Lessor from leasi>>g tl>c Undivided Interest and the Real Property Interest to any Person other thin the Lessee for'thc sanie periods or any portion thereof: (v)except i>>the case of a>>Event of Defa<<lt specified in cia<<se (iii)of Sectio>>IG.the Lessor>>>ay.whether or>>ot tlie Lessor shall have exercise<1 or shall thereafter at a>>y tii>>c exercise its riglits<<>>dcr clause (i), (ii), (iii)or (iv)above, dema>>d.by writte>>notice to tlic Lessee specifying a payment date which shall be a Basic Rent Payment Date not earlier tlia>>IO days<<1'tcr 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 liq<<idated
<laniages for loss of a bargain and not as a penalty (in lieu of the Basic Rent d<<e after the Basic Rent Paynieiit Date specified in s<<ch notice).any<<npai<l Rent<lue through the B;>sic Rc>>t P;iyi>>ent Date specific<1 iii s<<ch>>otice pl>>s whicliever of tl>e Iollowi>>g anio<<>>ts the Lessor.i>>its sole<liscrctio>>.
sli;ill specify ii>s<<cli notice.together with ii>tercst oii s<<ch ai>>o<<nt at tlie liigl>cr of thc.Ovcrd<<e Iiitcrcst lt:itc an<I the Penalty R;ite froni the Basic Rent Pay>>>eiit Date specific<1 iii s>>cl>>notice to tlic<I;itc oi'ct<<al payment: P (A)an amount equal to tl>e excess, if any, of Casualty Value, computed as of the Basic Rent Payment Date specified in such notice, over the Fair Market Rental Value of the Undivided I>>terest and tlie Real Property I>>terest (<letermined on the basis of tl>e thcii actii;il condition of Unit 2)until the encl of the remaining useful, life of Uiiit 2.after<liscoii>>ti>>g s<<cli Fair Market Rental Value semiannually to present value as oF the Basic Rent Payinerit D;itc specified in such notice at a rate oF 12%per annum: or (B)an amount equal to tl>c excess, if nng, of such Casualty Value over the F;>ir M;>rkct Sales Value of the Undivided I>>terest a>>d the Real Property I>>terest (deter>>iiiie<l o>>tlic I>axis of the then act<<al condition of Unit 2)as oF the Basic Rent Pay>>>e>>t Date specific<-i>>
siicli notice: or(C)'<<i;>>>io<<iit cqii;il to the<'xcesv.if nny, of (1)thc prese>>t valiic;is oi'lic B:isic ltc>>t P:iyi>>ci>t Date spccifiic<l ii>siicli>>oticc of:ill i>>st;illi>>ci>ts>>i'asic Rc>>t i>>itil tl>c c>>d>>I'h<B;>sic Lc:is<.'cn>>
or tlic Rcilcw:il Tc>'>>>>.;s tl>c c:isc>>>>iy bc.<lisc<>>i>i to<i sci>>i i>>i>>>>: ll~:>t i>>'lit(.ot'10%per;>>>i>i>i>>.
o>:e>(2)tlic prese>it v;iliie;>s of siicl>B;>sic Rc>>t P;iy>>i<.>>t D;itc<>1'tli<<1;iir Market Rental Value of the U>>divided Interest>>ii<1 the Re:il Property I>>terest (<let<.ri>>i>><<<l on the basis of the then actual condition of Unit 2)until the encl of the B;isic Le;isc Tcn>>or the Renewal Term, as the case may be, discounted semiann'<<ally at a rate of 10%per an>>ill>>;or (D)an amount equal to the highest of (X)s<<ch C;isu;ilty V;il<<c.(Y)s<<cli<liscoi>>ite<l Fair Market Rental Value a>>d (Z)s<<ch F;>ir Market Sales Val<<e;i>>d.
i>>tliis evciit.iipo>i 1'<<ll payme>>t by the Lessee of all su>>>s clue hereu>>der, the Lessor sh;ill.at its optioii.eitlicr Transfer the Undivided Interest and the Real Property Interest to the Lessee or proniptly sell the Undivided Interest and the Real Property Interest and pay over to the Lessee tlic>>et proceeds thereof up to the amount set forth in (X), (Y)or (Z)above actually paid by the Lessee to the Lessor;(vi)if the Lessor shall have sold all the Undivided Interest and the Real Property Interes pursuant to clause (iii)above, the Lessor, in lieu of exercising its rights under clause (v)above.may, if it shall so'elect, but not in the case of an Event of Default specified in clause (iii)of Section I.>, demand that the Lessee pay to the Lessor and the Lessee shall pay to the Lessor on the date of such sale, as liquidated damages for loss of a bargain and not as a penalty (in lieu of Basic Rent<lue for periods commencing after the next Basic Rent Payment Date following the<late of such sale).any unpaid Basic Rent clue through such Basic Rent Payment Date.plus the aniount of any difference between the Sale Proceeds and Casualty Value, computed as of such, Basic Rent Payment Date, together with interest at the higher of the Overdue Interest Rate and the Penalty Rate on the amount of such Rent and such deficiency from the date of such sale until the<late of'ctual payment;(vii)iii the case of an Eve>>t of Default specified in clause (iii)of Section 15.the Lessor i>>;iy demand.by written notice to the Lessee specifying a payment date which shall be tlie last B;isic Rent Payineiit Date of the Lease Terni.tE)at tEie Lessee pay to the Lessor.;i)i<I tlie Lessee sli;ill pai'o the Lessor, on such Basic Rent Payment Date, as liqiiidate<l damages for loss of a bargain<<n<l not as a penalty, any unpaid Rent due through such Basic Rent Payment Date t>lus an amount equal to the Fair Market Sales Value (without including in such value the availability of tlie Decommissioning Trust Fund and the Second Fund, if any, or the benefit to the Lessor of tlie Lessee's obligations under Section 10(b)('3)(xi)of the Participation A<reen)ent)of the U>><livi<lc<l l>>terest a)id the Real Property l>>terest (detcrniined on the 1>asis of tlic tlicii actii;il con(litio>>
(>i'>>it 2)<Eeten>>ine(E as of such B;isic Rent Piiynient Date.togetlicr with iiitcrcst o>>siicli iiin<><<>>t;it the higher of tlie Overdue Interest Rate and the Penalty Rate froi>>the B;isic Re>>t Payi>>c>>t Date specified in such notice to the d;ite of actiial pay>>)cnt.;>>)d iipon receipt of'iicli p;iyiiiciit t Lessor shall Trmisfer to the Lessee tlie Uiidivided Interest a)id the Re;il Property I)itercst.(b)No ReIease.No rescission or termination of this Facility Lease.in whole or in part.or repossessio>>
of the Undivided Interest;md the Real Property liiterest or exercise of;i>>y re>>ic(ly i>>i<lcr Sectio>>1G(a)shall, except as specifically provided therein, relieve the Lessee of any of its li;il>ilitics and obligations hereunder.
In addition, the Lessee sE)all be liable.except as otherwise provided;il>ovc.
for any and all unpaid Rent due hereunder before, after or during tlie exercise of any of the forcgoiiig reniedies.
including all reasonable legal fees and other costs and expenses iiiciirred by the Lessor.tl)<.Owner Participant an<1 the Indenture Trustee 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 tlie Undividc<l Interest;i>><E the Real Property Interest or any part thereof pursuant to this Section 16.the Ow>>er Participa>>t.'tl)c Lessor or the Indenture Trustee may bid for an<1 purch;ise such property.(c)Rr>nr<lirs Ct<>>>><latier.
No reiiic(lv<<ii(lcr Sectioii 16(;i)is ii)t<.'ii(lc(l t>>bc cxcl<<sivc.
biit<<<(li sli:ill bc ci>>iiiil;itive;iii<l ii);i(l(litio>>
to;ii)y otlier rci>>c<ly provi<lc<l
<<>>(1<r Sccti<>>i 16(;i)'i>r i>thi rais<~;iv;iihiblc to tlic Lessor:it law or i>>eq))ity.)No express or i>>iplic<l w;iivcr by tlic Lessor<>1';i>>y V<I:,<<)lt i>>Eve>>t of Defi<<Et liereunder sliall in any way be.or be co>>strne<E to be.a waiver oi';i>>y 1'<<t<<r<<or subsequent Default or Event of Default.The failure or delay of the Lessor in exercisi>>g a>>y ri lit granted it hereunder upon the occurrence of any of the contingencies set forth hereiii sli;ill>>ot constitute a waiver of any such right upon the continuation or recurrence of any siich contiiigellcics or'similar contingencies and any single or partial exercise of any particular right by the Lessor shall iiot exllililst the same or constitute a waiver of any other rigE)t provided herein.To the exterit per>>)itte(E l>y Applicable Law.the Lessee hereby waives any rights now or hereafter conferred by statiite or otlierwise whicli niay require the Lessor to sell, lease or otherwise use tlie Uiidivi<le<l li)terest or tlic.Real Property Interest in mitigation of the Lessor's damages as set forth in Section 1G(a)or whicEi n)~otherwise limit or modify any of the Lessor's rights and remedies provided in this Section 16.
(d)Exercise of Other Rights or Remedies.In addition to all other rights and remedies provided in this Section 16, the Lessor may exercise any other right or remedy that may be available to it under plicable Law or proceed by appropriate court action to enforce the terms hereof or to recover mages for the breach hereof.(e)Special Cure Right of Lessee.If a Notice of Default is given under clause (iv)of Section 15, the~Lessee may, on or prior to the occurrence of an Event of Default resulting therefrom, give written notice to the Lessor stating that the Lessee has elected to exercise the option (the Cure Option)provided in this Section 16(e), which election shall be irrevocable as to the Lessee.Promptly after the giving of such notice, the Lessee and the Owner Participant shall agree upon the Fair Market Sales Value of the Undivided Interest and the Real Property Interest or, if they shall be unable so to agree within one month after the date of the Lessee's notice, such value shall be determined by the Appraisal Procedure.
On the Basic Rent Payment Date next following the date that such Fair Market Sales Value shall have been determined, the Lessee shall pay to tbe Lessor 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, and (if such Casualty Value is greater than or equal to such Fair Market Sales Value)accrued interest since the last preceding Basic Rent Payme>>t Date on, the Notes Outstanding on such date after giving effect to the payment, if any, of the principal installment due and payable and paid in respect of the Notes on such date.If the Lessee shall have made such payment and shall have assumed all obligations and liabilities of the Owner Trustee u>>der 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 have made such payment but shall not have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b)of the Indenture, the Owner Participant shall effect the Special Transfer, in which case, without fiirther act on 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.payable on each Basic Rent Payment Date thereafter, 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 beco>>re a urity 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, addressed as provided in the Participation Agreement.
All such communications arrd notices given in such manner shall be effective on the date of receipt of such communication or notice.SEGTIoN 18.Successors and Assigns.This Facility Lease, including all agreements, covenants, indemnities, representations and warran-ties, shall be binding upon and inure to the benefit of the Lessor and its successors and perrrritted'ssigns, 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 perfori>>or comply with any of its other agreeme>>ts contained hereirr.or shall fail to>>r;rkc;rrry pay>>reirt to l)e r>>ade by it under a>>y ANPP Project Agreement, or shall fail to perform or coi>>ply witlr a>>y of its otlrcr agreements contained in any ANPP Project Agreer>>ent either the Lessor or the Ow>>er P;rrticip>>irt may, but shall not be obligated to (i)to the extent not prohibited by Applicable Law, terrder such payment, or (ii)to the extent not prohibited by Applicable Law and, in the case of the ANPP Project Agreements, to the extent not expressly prohibited thereby, effect such performance or compli, nce, and the amount of such payment and the amount of all costs and expenses (including, without limitation, attorneys'nd other professionals'ees 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 higher of the Overdue Interest Rate and 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 Less<ac under the ANPP Participation Agreement, then (so long as an Event of Default h occurred and is continuing) the Lessor, together with each other Person contributing to such cu shall be entitled (to the full extent enforceable in accordance with Applicable Law and the ANP Participation Agreement) to receive the Generation Entitlement Share of the Lessee under the ANPP Participation Agreement (not limitecl to Unit 2), with each contributor to receive a percentage of sucli Generation Entitlement Share equal to the percentage of the cure contributecl thereby.Sa:<+ac)x 20.Aclclitional Covenants The Lessee agrees to comply with and to pay, as Supplemental Rent, all amounts payable by it u>>cler the provisions of Section 13 of the Participation Agreement, which provisions are incorporated herein by this reference as fully as if set forth in full at this place.The Lessee agrees to comply with its cove>>ants and agreements set forth in Sections 10(b), 14 and 1G of the Participatio>>
Agree>>>e>>t
<<>><I Articles III.IV.V, VI ancl VII of the Assignment ancl Assumption.
which covenants an(I agree>>>ents are i>>corporatecl herci>>by this ref'ere>>ce as fully as if set forth i>>full at tl>is place.Sa'.<.i'a<)Y 21.Lease of Real Propert)g Interest.Pursuant to the Deed a>>el the Assignment of Bea>eficial I>>terest.the Lessee lms solcl to tlic Lessor the Real Property I>>terest.The Lessor hereby grants to the Lessee a leasehokl i>>terest'in tE>c Rc;il Property Interest, such leasehold to be coterminous with the lease of the Unclividecl I>>tcrest hereunder and to be at a rent per annum equal to 12%of the Real Estate Investn>ent payable by tlic Lessee to the Lessor in arrears in equal semiannual installments on each Basic Rent Payme>>t D;ite during the Lease Term.Sa:.<.a'a<)x 22.A>>ac)a<luaents a)a<l alli scella))co)as (a)Auaencluaents in a Vriti)a<<.The tera>>s of this F icility Lease>>my>>ot bc waive(E.altcrc<E.>>io<lifi<<a>>)e>>(le(l.
supplen>e)itecl or ter>>)i>>>>teel iii a>>y iiiai>>>er whatso'ever exeet)l by writtc>)i>>st)>a)a>ca)t sigii by the Lessor and the Lessee.(b)Surviv<)I.
(1)All indemnities, representations ancl warranties contained in this Facility Le;isc a>>d the other Trcu>saction Documents a>>cl the Fina>>ci>>g Doc>>>>iea>ts aiid i>>;>iiy agree)>>e>>t.
docii>>ici>t or certificate deliverecl pursuant hereto or thereto or in coii>>ectio>>
E>erewitE>
or therewith slmll'urvive, ancl continue in effect following, the execution-ancl delivery of this Facility Lease;i>><l tlic expiration or other termination of this Facility Lease.(2)The obligations of the Lessee to pay Supplemental Rent an<1 the obligatio>>s of tlie Lcssc'<under Sections 5.10(a)(2)(ii), IG.19 aiid 20 shall survive the expiration or ter>>>iiuitio>>
of'his F;icility Lease.The moclification by law of any statute of limitations or the waiver or extei>sio>>
of<<>>y st;itiitc of liinitations by the Owner Traastee.the Indenture Trustee.tEie Lessee.the Owiier P;irticiparit.'l>c Loaii Participaiit or'i>>ay Indeinnitee sliall>>ot affect such saarvival.
Tlic oE)Eia!atioa)s of'lic Lessee iaii<lcr Scctio)i 20 are expressly iii;i<le f'r tlac bcaiefit of'.;ui<l sE>;all E)c<.>ai'c>rc<<;al)lc l)y.:iaiy 1)i<1<~aaiaiitcc.
sc.p;ir;itcly or togetlaer.
witlioiit<lccl;iriiig'tlais Facility Lc;asc to bc i)a<I<l':>)alt;a)a<1 ia<)twithst;aai<liaa
~;aa)s;issigaaa>ac)at by tlae Lessor of'tliis Facility Lc;asc or;>>ay of'its riglits tla<.r<.'aiia(lcr
<)r;aa)y<lisp<)siti<)a)
<)I':>EE or aaiy part of;iiiy iiaterest i>>the Uaicliviclecl Iiiterest.
tlie Real Prop<.rty 1>atercst.
Uiiit 2<)r;aiiy<)tiacr property referrecl to iai this Facility Lease or;uiy other Traais;aetio>a Docaia>>eiit or Fiaa:aaaciaig Docu>>ie>>t.
All paynaents required to be niade pursuant to Section 20 slmll be macle<lirectly to.or;is otEierwise requ<'sted by.the Indemnitee entitle(1 thereto upon written<lema>>d by saach Iii<lei>>iiitcc.(c)Sever<ability of Provisions.
Any provision of this Facility Lease which>>i;ay be proE>ibit'c<l or uaienforce;able in any jurisclictioai shall.as to such jurisdictio>>.
be iiieffective to the exteiit of saacli proliibition or u>>enforceability without i>>valiclati>>g the re>>miiai>>g provisioais laereof or tliercoi.;i>a<1 any such prohibition or unenf'orceability in any juriscliction shall not iaivaliclate or render a>a>e>>for<~
able such provision in a>>y otE>er juriscliction.
To the extent peranittecl by Applicable Law.tE)e Les~
hereby waives any provision of law which renders any provision hereof prohibited or unenforceable in respect.(d)True Lease.This Facility Lease shall constitute an agreement of lease and nothing herein 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)Origi>>a1 Lease.The single executed original of this Facility Lease marked"Teens Co(>ianna,birr Is Ti>>:.Oni<nx si.Copse'nnnA>>T" and containing the receipt of the Indenture Trustee thereo>>shall be the Original of this Facility Lease.No security interest in this Facility Lease may be created through tlie trmisfer or possession of any counterpart other than the Original.(f)Cocerning Lau:.This Facility Lease shall be governed by and construed in accor<1a>>ce witli the Iaw of the State of New Yt>rk, except to the extent that pursuant to the law of the State of Arizo>>a the Iaw of the State of Arizo>>a is niandatorily applicable hereto.(g)Headings.The division of this Facility Lease into sections, the provision of a table of conte>tts aiid tlic i>>sertion of hca<li>>gs are for convenience of refcrc>>ce o>>ly and shall>>ot alfcct tli<<co>>structio>>
or interpretation of this Facility Lease.(h)Concerning the Ou>ner 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 agreenieiits herci>>nia'de o>>, the part of the Owner Trustee are made and intended>>ot as person;il represc>>tatio>>s.
warr;inties.
i>>idertaki>>gs,;iiid;igrcenie>>ts by or for the piirposc or witli tli<<intciitio>>
ol'l>i>>di>>g FN13 persoimlly but;ire inade mid iiite>>dcd for the purpose of bi>><li>>g o>>ly tlie Tr>>st Estate.;>>i<1 tlii>>icility Le;ise is executed a>>d delivered by the Owner Trustee solely i>>the exercise of'lic pow<<rs essly co>>ferred upon it as trustee u>>der the Trust Agree>>ic>>t:
a>>d>>o pcrso>>;il liability or o>>sibility is assumed hereunder by or shall at any time be e>>forceable;ig;ii>>st FiVB or a>>y successor in trust or the Owner Participant on account of any representation, warranty, undertaking or agreement hereunder of'he Owner Trustee, either expressed or implied.all such perso>>al liability.
if'ny.'eing expressly waived by the Lessee, except that the Lessee'or;i>>y Person clai>>ii>>g by.througli or iinder it, making claim hereunder, may look to the Trust Estate for satisfaction of tlie s i>>ie aii<l'th>>Owner Trustee or its successor in trust, as applicable, shall be personally liable for its ow>>gross negligence or willful misconduct.
If a siiccessor owner trustee is appointed in accor<la>>ce with tlie terms of the Trust Agreement, such successor owner trustee shall, without a>>y further;ict.
succce<l to all the rights.duties.ir>>niunities and obligations'f the Owner Tr>>stee here>>nder:i>>d tlic prc(lcccssor ow>>er trustee shall be released from all further duties and obligations hereu>>der..(i)Disclosure.
Pursuant to Arizo>>a Revised Statutes Section 3:3-40I.tlie be>>clici;iry of tlic Tr>>st Agree>>ieiit is Coiiii>>ercial Fede'ral I>>vesti>>ciit Corpor;itio>>.
a Ncl>r;isk;i corpor:itin>>.
ivl>osc ad<lr<<s>>is Co>>>>>>crcial Feder;il Tower.>120 Soiitli 72nd Street.Oiimlm.N<<l>rusk>>t>l>l>l.Att(.iitii>ii:
Jell 13;ii>>-bridi!e.A copy oi'lie Tr>>st Ag>cciiieiit is av;iil;il>lc for iiispcctioii;it tlic<>iAc<<>>(>f tli<.O(v>><<r Ti'list<<i~;it 100 Federal Street.Bosto>>.>Iassacl>ussetts 02110.Attciitioii:
Corpor;it<
Triist Divisii>>i.(j)Cou>>tert>art Execittion.
This Facility Lease may be executed in any iiuiiiber of'oiiiitcrp:irts and by each of the parties hereto or thereto on separate counterparts,;ill such coiiiiterparts together constituting but one and the sanie i>>strument.(k)Notice Prior to Erercise of Rights.Before sending any notice or otherwise exercising;uiy ri ht witli respect to any of its rights referred to in Section 12.I'3(b).1:3(c)or 14(a).tlie Lessee sli;ill give>>otice to the Owner Participa>>t of a>>y facts k>>ow>>to the Lessee with respect to;i>>y possible Eve>it ol'or Deemed Loss Event.and the Lessee shall have no right to exercise miy of its rights referred to ction I>.13(b).1'3(c)or 14 until 15 days after receipt of such notice by the Owner Participant.
0 Ih;WtTy(:ss WH('.nt'DF, each of the parties hereto has caused this Facility Lease to be duly executed in New York.New York by an ofBcer thereunto duly authorized.
THE Ftnm'AT((eAL BAiv.oF B(rsT(e.not in its individual capacity, but solely as Owner Trustee under a Trust hgreement dated as of Decem-ber 1, 1986.with cohlilEn(:IAL FEDEnAL IYvEsT-hl ENT CoRPoAATloN By hssistant Vice Pre EL PAso ELE(:Tnl(:
Cohiviiy By Vice President 0'
Ss'u'i ov NEur Yonv.C<><'xrv fir NET Yonv, ss: The forenoing instrument wes eoknowiedged before me this t Iffi doy of December.1986 by VILLi iii J.Jf>>(iaaf ti.the Vice President of EL PAso ELErvittr:
Cost@.iiv.
a Texas corporation.
on behalf of sai<l corporation.
Notary.P>>blic PAyiP A SPIVAK.NotggzT publtc, State oi New Yor~No 31<693468 gzzggogI Ia New Yogt CoaatY>~~III~Ezphee~3oe IQ P-0 STATE OF NEW YORK COUNTY OF NEW YORK~~~The foregoing instrument was acknowledged before me this/$P day of December.1986 by ARTtw P.HEsRv.an Assistant Vice President of THE FiRsr NwTtoNwr.BaNK oF'osToN, a national banking association.
on behalf of the banking association as trustee under that certain Trust Agreement.
dated as of December 1, 1986, with Commercial Federal><<c 4~c~t-Compo~~<on.Notary Public N DAm~Public$(Qfe ei Ne y No.3/+693468~~~in New yes p~~mmfmiton~~un 0 V SCHEDULE I TO FACILITY LEASE SCHEDULE OF CASUALTY VALUES1987 1987 1987 1987 1987 1987 1987 1987 1987 1987 1987 1987 1988 1988 1988 1988 1988 1988 1988 1988 1988 1988 1988 1988 1989 1989 1989 1989 1989 1989 1S89 1989 1989 1989 1989 1989 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 2 NOV 2 DEC 2 JAN 2 FEB 2 MAR 2 APR 2 MAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 DEC 2 JAN 2 FEB 2 MAR 2 APR 2 MAY 2 JUN 2'JUL 2 AUG 2 SEP 2 OCT 2 NOV Date 2 JAN 2 FEB 2 MAR~2 APR 2 MAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 DEC 2 JAN 2 FEB 2 MAR 2 APR 2 MAY 2 JUN'2 JUL 2 AUG 2 SEP 2 OCT Percentage of Facility Coo I 106.63251 107.87160 108.91404 109.87933 110.90096 111.92578 110.18816 106.32801 107.26865 108.18978 109.08869 110.01576 110.90602 107.00652 107.91591 108.78834 109.68869 110.59113 111.45652 107.53221 108.41635 109.28504 110.13435 111.00713 111.84897 107.92367 108.78528 109.61591 110.46989 111.32558 112.15022 108.20738 109.05136 109.88245 110.6SS72 111.53380 112.34438 108.38270 109.20774 110.00824 110.82746 1 1 1,.6481 8 112.44432 108.46791 109.27812 110.07820 110.86't76 Date 2 DEC 1990 2 JAN 1991 2 FEB 1991 2 ilAR 1991 2 APR 1991 2 MAY 1991 2 JUN 1991 2 JUL 1991 2 AUC 1991 2 SEP 1991 2 OCT 1991 2 NOV 1991 2 OEC 1991 2 JAN'1992 2 FEB 1992 2 MAR 1992 2 APR 1992 2 MAY 1992 2 JUN 1992 2 JUL 1992 2 AUC 1992 2 SEP 1992 2 OCT 1992 2 NOV 1992 2 DEC 1992 2 UAN 1993-2 FEB 1993 2 MAR 1993 2 APR 1993 2 MAY 1993 2 JUN 1993 2 JUL 1993 2 AUG 1993 2 SEP 1993 2 OCT 1993 2 NOV 1993 2,OEC 1993 2 JAN 1994 2 FEB 1994 2 MAR 1994 2 APR 1994 2 MAY 1994 2 JUN 1994 2 JUL 1994 2 AUC 1994 2 SEP 1994 2 OCT 1994 2 NOV, 1994 2 DEC 1994 Percentage of Facility C 111.66364 112.44128 108.44570 109.23663 110.00327 110.78813 111.57429 112.33613 108.32441 109.OS909 109.86365 110.61184 111.37780 112.11982 108.08753 108.84155 109.57156 110.31925 111.06803 111.79275 107.74280 108.47906 109.20518 109.91824 110.64643 111.35414 107.28336 107.99865 108.69341 109.40320 110.11387 110.80397 106.71510 107.41222 108.10064 108.77539 109.46462 110.13384 106.02313 106.69828 107.35337 108.02285 108.69300'09.34304 105.21262 105.86799 106.51474 107.14814 107.79533 SCHEDULE OF CASUALTY VALUES SCHEDULE 1 TO FACILITY LEASE~'ale 2 JAN 1995 2 FEB 1995 2 MAR 1995 2 APR 1995 2 MAY 1995 2 JUN 1995 2 JUL 1995 2 AUG 1995 2 SEP 1995 2 OCT 1995 2 NOV 1995 2 OEC 1995 2 JAN 1996 2 FEB 1996 2 MAR 1996 2 APR 1996 2 MAY 1996 2 JUN 1996 2 JUL 1996 2 AUG 1996 2 SEP 1996 2 OCT 1996 2 NOV 1996 2 OEC 1996 2 IJAN 1997 2 FEB 1997 2 MAR 1997 2 APR 1997 2 MAY 1997 2 JUN 1997 2 JUL 1997 2 AUG 1997 2 SEP 1997.2 OCT 1997 2 NOV 1997 2 OEC 1997 2 JAN 1998 2 FEB 1998 2 MAR 1998 2 APR 1998 2 MAY 1998 2 JUN 1998 2 JUL 19S8 2 AUG l 998 2 SEP 1998 2 OCT 1998 2 NOV 1998 2 CEC 1998 2 IJAN 1999 Percentage uf Faciiity C41 10$.42301 104.26918 104.90103 105.51331 106.13929 106.76572 107.37253 103.19728 103.80759 104.40939 104.99818 105.60002.106.18291 101.98259 102.56772 103.13656 103.71656 104.29678 104.87722 100.66122 101.23059 101.80018 102.37000 102.94005 103.51034 99.28365 99.84234 100.40127 100.96043 101.51984 102.07966 97.84183 98.38941 98.94065 99.50055 100.05370 100.61781 96.35524 96.89477 97.44522 97.98891 98.53289 99.08783 94.81834 95.34866 95.88399 96.42791 96.96459 97.51302 1999 1999 1999 1999 1999 1SSS 1999 1999 199S 1999 1999 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2002 2002 2002 2002 2002 2002 2002 2002 2002 2002 2002 2002 2003 2003 2 JAN 2 FEB 2 MAR 2 APR 2 MAY 2 JUN 2 IJUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC 2 JAN 2 FEB Date 2 FEB 2 IlAR 2 APR 2 MAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC'2 JAN 2 FEB 2 MAR.2 APR 2 MAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC.2 JAN 2 FEB 2 MAR 2 APR 2 MAY 2 JUN 2 JUL 2'UG"2 SEP 2 OCT 2 NOV 2 OEC Percen tatte of Faciliti Cu3t 93.23094 93.75291 , 94.28659 94.81303 95.33978 95.87829'1.58956 92.10171 92.61923 93.14596 93.66493 94.19650 89.89432 90.39756 90.91336 91.42140 91.92978 92.45076 88.14149 88.63426 89.13278 89: 64117 90.14126 90.65484 86.33123 86.81449 87.31122 87.79963 88.28841 88 79070 84.45955 84.93165 85.40991 85.89874 86.37869 86.87310 82.52665 82.98862 83.46501 83.93250 84.40039 84.88275 80.52827 80.97832 81.43499 81.90298 82.36145 82.83543 78.46461 0 CO13 13020.1'0.
I SCHEDULE l TO FACILITY LEASE SCHEDH.E OF CASUALTY VALUES te 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2005 2005'2005 2005 2005 2005 2005 2005 2005 2005.2005 2005 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2007 2007 2007 Da 2 NAR 2 APR 2 NAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC 2 JAN 2 FEB 2 NAR 2 APR 2 MAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC 2 JAN 2 FEB 2 NAR 2 APR 2 NAY 2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC 2 JAN 2 FEB 2'AR 2 APR~2 MAY.2 JUN 2 JUL 2 AUG 2 SEP 2 OCT 2 NOV 2 OEC.2 JAN 2 FEB 2 NAR Percentage of Facility 78.90387 79.35858 79.80376 80.24937 80.71049 76.33111 76.75766 77.19129 77.63706 78.07264 78.52483 74.12800 74.54303 74.87462 75.39601 VS.81787 76.25633.71.85041 72.25188 72.66096 73.08303 73.49419 73.92315 69.49859 69.88780 70.29474 70.69076 71~08729 71.50160 61, 06736 67.44210 67.82498 68.22180 68.60693 68.01112 64.55700 64.91867 65.28933 65.66831 66.03183 66.42641 61.96197 62.30821 62.66318 63.03308 63.39047 83.76830 59.28714 59.62021 Date 2 APR 2007 2 MAY 2007 2 JUN 2007 2 JUL 2007 2 AUG 2007 2 SEP 2007 2 OCT 2007 2 NOV 200V 2 OEC 2007 2 JAN 2008 2 FEB 2008 2 MAR 2008 2 APR 2008 2 MAY 2008 2 JUN 2008 2 JUL 2008 2 AUG 2008 2 SEP 2008 2 OCT 2008 2 NOV 2008 2 OEC 2008 2 JAN 200S 2 FEB 2009 2 NAR 2009 2 APR 2009 2 MAY 2009 2 JUN 2009 2 JUL 2008 2 AUG 2009 2 SEP 2009 2 OCT 2009 2 NOV 2009 2 OEC 2009 2 JAN 2010 2 FEB 2010 2 NAR 2010 2 APR 2010 2 MAY 2010 2 JUN 2010 2 JUL 2010 2'AUG 2010 2 SEP 2010 2 OCT 2010 2 NOV 2010 2 OEC 2010 2 JAN 2011 2 FEB 2011 2 NAR 2011 2 APR 2011 Percentage of Facility Cu t 59.97366 60.31460',60.65616 61.01816 56.55432 56.87631 57.20781 57.55600 57.89058 58.24776 53.77651 54.09130 54.42877 54.75280 55.07779 55.42555 50.94352 51.24770 51.56263 51 89640 52.21541 52.55S75 48.07136 48.36941 48.69290 49.00182 49.31212 49.64797 45.14958 45.43786 45.73838 46.06010 46.36581 46.69992 42.19654 42.48010 42.79221 43.08851 43.38672 43.71358 39.20133 39.47627 39.76515 40.07754 40 37278 40.69953 36 11319 36.37326 36.66469C.e w ver'cia'I SCHEDULE I TO FACILITY LEASE SCHEDULE OF CASUALTY VALUES 2 j 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Da MAY JUN JUL AUG SEP OCT NOV OEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV OEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT le 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 Percentage uf Facility Co t 36.93897 37.21547 37.52347 32.83341 33.05970 33.30078 33.56477 33.81109 34.08905 29.36837 29.56377 29.79034 29.99889 30.20904 30.45049 25.69296 25.85117 26.02372 26.21842 26.39479 26.60215 21.81884 21.94527 22.09361 22.22895 22.36520 22.53207 20.23598 20.48755 20.60000 Date Percentage of Facility C<>>t Ceeeewiq[
SCHEDULE n TO FACILITY LEASE SCHEDULE OF SPECIAL CASUALTY VALUES Date 2 JAN 1987 2 FEB 1987 2 MAR 1987 2 APR 1987 2 MAY 1987 2 JUN 1987 2 JUL 1987 2 AUG 1987 2 SEP 1987 2 OCT 1987 2 NOV 1987 2 OKC 1987 2 JAN 1988 2 FEB'1988 2 MAR 1988 2 APR 1988 2 MAY 1988 2 JUN 1988 2 JUL 1see 2 AUG 1988 2 SEP 1988 2 OCT 1988 2 NOV 1988 2 OEC 1988 2 JAN 1989 2 FEB 1989 2 MAR 1989 2 APR 1989 2 MAY 1989 2 JUN 1S89 2 JUL 1989 2 AUG 1989 2 SEP 1989 2 OCT 1989 2 HOV 1989 2 OEC 1989 2 JAN 1990 2 FKB 1990 MAR 1990 2 APR 1990 2 MAY 1990 2 JUN 1990 2 JUL 1990 2 AUG 1990 2 SEP 1990 2 OCT 1990 2 NOV 1990 Percentaite uf Facility C 105.64758 106.67877 107.71325 108.67054'109.68412 110.70082 108.95503 105.08666 106.01903'106.93183 107.82235 108.74098 109.62274 105.71468 106.61546 107.47922 108.37084 109.26449 110.12105 106.18783 107.06301 107.92267 108.76290 109.62654 110.45917 106.52461, 107.37690 108.19813 109.04266 109.88883 110.70390 106.75142 107.58569 108.40701 109.21344 110.03862 110.83923 106.86752 107.68245 108.47279 109.28177 110.09219 110.87796 106.89110 107.69080 108.48030 109.25320 Date 2 OEC 1990 I 2 JAN 1991 2 FEB 1991 2 MAR 1991 2 APR 1991 2 MAY 1991 2 JUN 1991 2 JUL 1991 2 AUG 1991 2 SEP 1991 2 OCT 1991 2 NOV 1991 2 OKC 1991 2 JAN 19S2 2 FEB 1992 2 MAR 1992'APR 1992 2 MAY 1992 2 JUN 1S92 2 JUL 1992 2 AUG 1992 2 SEP 1992 2 OCT 1992 2 NOV 1992" 2 OEC 1992 2 JAN 1993 2 FEB 1993 2 MAR 1993 2 APR 1993 2 IIAY 1993 2 JUN 1993 2 JUL 1993 2 AUG 1993, 2 SEP 1993 2 OCT 1S93 2 NOV 1993 2 OEC 1993'JAN 1994 2 FEB 1994 I 2 MAR 1994 i 2 APR 1994 (2 MAY 1994 2 JUN 1994 2 JUL 1994 2 AUG 1994 2 SEP 1994 2 OCT 1994 2 NOV 1994 2 OEC 1994 Percentalte uf Facilih.Cuit 110.04436 110.81120 106.'80476 107.58475 108.34038 109.11416 109.88916 110.63976 106.61672 107.38003 108.13312 108.86677 109.62413 110, 35445 106.31039 107.05256 107.77065 108.50634 10S.24302 109.95558 105.89338 106.61731 107 33102 108.03159 108.74720 109.44224'105.35872 106.06118 106.74302 107.43981 108.13739 108.81431 104.71219 105.'39595 106.07093 106.73214 107.40776 108.06326 103.93874 104.60000 105.24110 105.89650 106.55248 107.18824 103.04346 103.68437 104.31656 t04 93530 105.56775 SCHEDULE 4 TO FACILITY LEAS SCHEDULE OF SPECIAL CASUALTY VALUES 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2-2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 F 2 2 2 2'2 2 2 2 2 2 Date JAN 1995 FEB 1995 MAR 1995 APR 1995 MAY 1995 JUN 1995 JUL 1995 AUG 1995 SEP 1995 OCT 1995 NOV 1995 OEC 1995 JAN 1996 FEB 1996 MAR 1996 APR 1996 MAY 1996 JUN 1996 JUL 1996 AUG 1996 SEP 1996 OCT 1996 NOV 1996 OEC 1996 JAN 1997 FEB 1997 MAR 1997 APR 1997 MAY1997 JUN 1997 JUL 1997 AUG 1997 SEP 1997 OCT 1997 NOV 1997 OEC 1997 JAN 1998 FEB 1998 MAR 1998 APR 1998 MAY 1998 JUN 1998 JUL 1998 AUG 1998 SEP 1998 OCT 1998 NOV 1998 OEC 1998 JAN 1999 Fercentatte of Facility~t 106.18057 102.01180 102.62859 103.22572 103.83645 104.44753 105.03888.100.84808 101.44273 102.02876 102.60168 103.18754 103.75435 99.53784 100.10667'100.65911 101.22259 101.78619 102.34989 98.11704 98.66944 99.22196 99.77460 100.32735 100.88021 96.63599 97.17703 97.71819 98.25947 98.80086 99.34255 95.08648 95.61569.96.14844 96.68973 97.22414 97.76938 93.48782 94.00824 94.53944 95.06376 95.58825 96.12356 91~83430 92.34413 92.86003 93.38379 93.90017 94.42818 Date 2 FEB.1999 2 MAR l1999 2 APR 1999 2 MAY 1999 2 JUN 1999 2 JUL 1999 2 AUG 1999 2 SEP 1999 2 OCT 1999 2 NOV 1999 2 OEC 1999 2 JAN'2000.2 FEB 2000 2 MAR 2000 2 APR 2000 2 MAY 2000 2 JUN 2000 2 JUL 2000 2 AUG 2000 2 SEP 2000 2 OCT 2000 2 NOV 2000 2 OEC 2000 2 JAN 2001 2 FEB 2001 2 MAR 2001 2 APR 2001 2 MAY 2001 2 JUN 2001 2 JUL 2001 2 AUG 2001 2 SEP 2001 2 OCT 2001 2 NOV 2001 2 OEC 2001 2 JAN 2002 2 FEB 2002 2 MAR 2002 2 APR 2002 2 MAY 2002 2 JUN 2002 2 JUL 2002 2 AUG 2002 2 SEP 2002 2 OCT 2002 2 KOV 2002 2 OEC 2002 2 JAN 2003 2 FEB 2003 Percentage of Faci%ty G 90.12553 90.62680 91.13964 91.64510 92.15073 92.66798 88.35784 88.84845 89.34428 89.84917 90, 34617 90.85561 86.53116 87.01198 87.50521 87.99053 88.47604 88.91399 84.64155 85.11098 85.58602 86.07076 86.54704 87.03667 82.68893 83.14792 83.62019 84.08400 84.54801 85.02536 80.66911 81.11594 81.56816 82.03199 82.48615 82.95462 78.58205 79.01772 79.46763 79.90848 80.34954 80.80489 76.42323 76.84591 77.27503 77.71528 78.14584 78.59171 74.19260 SCHEDI:LE n TO FACILITY LEASE SCHED'ULE OF SPECIAL CASUALTY VALUES Date 2 MAR 2003 2 APR 2003 2 MAY 2003 2 JUN 2003 2 JUL 2003 2 AUG 2003 2 SEP 2003 2 OCT 2003 2 NOV 2003 2 OEC 2003 2 JAN 2004 2 FEB 2004 2 MAR 2004 2 APR 2004 2 MAY 2004 2 JUN 2004 2 JUL.2004 2 AUG 2004 2 SEP 2004 2 OCT 2004 2 NOV 2004 2 OEC 2004 2 JAN 2005, 2 FEB 2005 2 MAR 2005 2 APR 2005 2 MAY 2005 2 JUN 2005 2 JUL 2005 2 AUG 2005 2 SEP 2005'OCT 2005 2 NOV 2005 2 OEC 2005 2 JAN 2006 2 FEB 2006 2 MAR 2006 2 APR 2006 2 MAY 2006 2 JUN 2006 2 JUL 2006 2 AUG 2006 2 SEP 2006 2 OCT 2006 2 NOV 2006 2 OEC 2006 2 JAN 2007 2 FEB 2007 2 MAR 2007 Percentatte uf Facility C 74.60338 lb.02942 75.44574 75.86230 76.29417 71.88535 72.28226 72.68606 73.10179 73.50714 73.92889 69.50141 69.88561 70.28615 70.67628 71.06667 71.47346 67.03565 67.40503 67.78179 68.17133 68.54975 68.94575 64.48800 64.84381 65.21712 65.57929 65.91174 66.32176 61.85298 62.19296 62.54085 62.90243 63.25210 63.62060 59.13054 59.45603 59.80028 60.13259 60.16521 60.81664 56.31480 56.62339 56.94046 57.27221 57.59120 57.93036 53.41029 53.70418 Date 2 APR 2007 2 MAY 2007 2 JUN 2007 2 JUL 2007 2 AUG 2007 2 SEP 2007 2 OCT 2007 2 NOV 2007'OKC 2007 2 JAN 2008 2 FEB 2008 2 MAR 2008 2 APR 2008 2 MAY 2008 2 JUN 2008 2 JUL 2008 2 AUG 2008 2 SEP 2008 2 OCT 2008 2 NOV 2008 2 OEC 2008 2 JAN 2009 2 FKB 2009 2 MAR 2009 2 APR 2009 2 IIAY 2009 2 JUN 2009 2 JUL 2009 2 AUG 2009 2 SEP 2009 2 OCT 2009 2 NOV 2009'2 OEC 2009 2 JAN 20'10 2 FEB 2010 2 MAR 2010 2 APR 2010 2 MAY 2010 2 JUN 2010 ,2 JUL 2010 2 AUG 2010 2 SEP 2010 2 OCT 2010 2 NOV 2010 2 OEC 2010 2 JAN 2011 2 FEB 2011 2 MAR 2011 2Apr2011 Percentatte uf facility'(: 54.0t8 1 8 54.31943 54.62101 54.94278 50.43843 50.71966 51.01011 51.31699 51.60997 51.92528 47.41188 47.68424 47.97900 48.26003 48.51173 48.84591 44.32002 44.58004 44.85052 45.13955 45.41351 45.71251 41.17847 41.43057 41.70780 41.97015 42.23357 42.52223 37.97634 38.21679 38.46917 38.74244 38.99935 39.28436 34.73154 34.96534 35.22734 35.47322 , 35.72065 i 35, 99841'31.432T1 31.655d6 31.89260 32.15251 32.39492 32.66848 28.02b60 28.23477 28.49217 t SCHEDULE 2 TO FACILITY LEAS SCHEDULE OF SPECIAL CASUALTY VALUES Date 2 MAY 2011 2 JUN 2011 2 JUL 2011 2 AUG 2011 2 SEP 2011 2 OCT 2011 2 NOV 2011 2 OEC 2011 2 JAN 2012 2 FEB 2012 2 MAR 2012 2 APR 2012 2 MAY 2012 2 JUN 2012 2 JUL 2012 2 AUG 2012 2 SEP 2012 2 OCT 2012 2 NOV 2012 2 OEC 2012 2 JAN 2013 2 FEB 2013 2, MAR 2013 2 APR 2013 2 MAY 2013 2 JUN 2013 2 JUL 20'l3 2 AUG 2013 2 SEP 2013 2 OCT 2013 Percentage vf Facility Cu t 28.6/161 28.91312 29.16578 24.41999 24.59020 24.77481 24.98197 25.17107 25.39142 20.61277 20.74980 20.91761 21.06700 21~21760 21.39911 16.58124 16.67871 is.790iO 16.92325 1'7.03765 17.18263 12.33652 12.39974 12.48444 12.55572 12.62748 12.72943 10.36799 10.23377 io.Ooooo Date Percentage uf Facility CQit SCHEDULE 3 TO FACILITY LF<SE SCHEDULE OF TERilIXATIOY VALUES BJJC Rent Payment 0 I~Pereentatte of Facility Co t Basic Rent Payment Oate Percen tatte of FacBity C 2 JUL 19SS S2.66798 M JAN 2000 90.85561~JUL 2000 88.97399~JAN 2001 87.03667~JUL 1997 SQ.34255 2 JUL 2001 85.02536~JAN 1998 97.76938~JAN 2002 82.S5462 JUL 19SS 96.12358 2 JUL 2002 80.80489 M JAN 1S99 Qi 42818 Q JAN 2003 78.59171 SCHEDULE OF TERifINATION VALUES SCHEDI:LE 3 TO FACILITY LEASE 0 BaJc Bent Payment Dr l Percentage
'f Facility Cml itic Rent Payment Oale Percentage of Facility C 2 JUL 2003 76.29417 i(~JUL 2007 54.94278 X JAN 2004 73.9288S 2 JAN 2008 51.92528 2 JUL 2004 71.47346 2 JUL 2008 48.84591 X JAN 2005 68.S4575 M JAN 2009 45.71251 g JUL 2005 66.32176 TJUL 2009 42.5222 g JAN 2006 63.62060 f JAN 2010 39.28436"2 JUL 2006 60.81664 f JUL 2010 35.99641 2 JAN 2007~'7.93036 SCHEDULE 4 TO FACILITY LEASE SCHEDULE OF SPECIAL TER>II~>ATION VALUES Date 2 JAN 1987 2 FEB 1987 2 MAR 1987 2 APR 1987 2 MAY 1987 2 JUN 1S87 2 JUL 1987 2 AUG 1987 2 SEP 1987 2 OCT 1987 2 NOV 1S87 2 OEC 1987 2 JAN 1988 2 FEB 1988 2 MAR 1988 2 APR 1988 2 MAY 1988 2 JUN 1S88 2 JUL 1S88 2 AUG 1988 2 SEP 1988 2 OCT 1988 2 NOV 1988 2 OEC 1988 2 JAN 1S8S 2 FEB 1989 2 MAR 1S8S 2 APR 1989 2 MAY 188S 2 JUN 1989 2 JUL 1889 2 AUG 1989 2 SEP 1989 2 OCT 1989 2 NQV 1SSS 2 OEC 1989 2 JAN 1890 2 FEB 1990 2 MAR 1990 2 APR 1990 2 MAY 1990 2 JUN 1990 2 JUL 1990 2 AUG 1990 2 SEP 1990 2 OCT 1990 2 NOV 1990 Percentage of Facility Cmt 104.46264 105.4/594 106.51247 107.46175 108.46727 109.47586 107.72190 103.84531 104.76940 105.67387 106.55601 107.46619 108.33945 104.42284 105.31501 106.17010 107.05300 197.93786 108.78557 104.84345 105.70967 106.56031 107.39145 108.24594 109.06938 105.12555 105.96851 106.78036 107.61543 108.45209 109.25758 105.29546 106.1200'2 106.93157 107.72816 108.54344 109.33408.105.35234 106.15717 106.93733 107.73608 108.53619 109.31159 105.31429 106.10348 106.88239 107.64465 Date 2 OEC 1990 2 JAN 1991 2 FEB 1991 2 MAR 1991 2 APR 1991 2 MAY 1991 2 JUN 1991 2 JUL 1991 2 AUG 1991 2 SEP 1991 2 OCT 1991 2 NOV,1991 2 OEC 1991 2 JAN 1992 2 FEB 1992 2 MAR 1992 2 APR 1992 2 MAY 1992 2 JUN 1992 2 JUL 1992 2 AUG 1992 2 SEP 1992'OCT 1992 2 NOV 1992 2 OEC 1992 2 JAN 1993 Percentage of Facility Co t 108.42508 109.18113 105.16382 105.93287 106.67748 107.44018 108.20402 108.94339 104.SOS04 105.66096 106.40260 107.12771 1 I@7.87045 108.58908 104.53326 105.26358 105 96974 106.69342 107.41802 108.11841 104.04397 104.75556 105.,45686 106.14493 106.84797 107.53035
 
SCHEDULE 5 TO FACILITY LEASE DESCRIPTION OF REAL PROPERTY INTEREST The Real Property Interest consists of a.666007%undivided interest in the following:
I, Pvics P~m SnF.PARGEL No.1: Lot Four (4);the Southwest quarter of the Northwest quarter;and the West half of the Southwest quarter, all in Section Two (2), Township One (1)South, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PhncEL No.2: All of Section Three (3), Township One (1)South, Range Six (G)West of the Gila And Salt River Base and Meridian, Maricopa County, Arizona.PAncEL No.3: The East half of Section Four (4), Township One (1)South, Range Six (6)West of'he Gila and Salt River Base and Meridian, Maricopa County, Arizona.PAltcEL No.4: The West half of Section Twenty-six (2G), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.PwncEr.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.PAncF.r.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 aiid Meridian, Maricopa County.Arizona: EXCEPT of all oil, gas and other mineral cleposits and geotherncal resources recovered from or developc<l he property, as reserved in instrument recorded May 10, 1974 in Docket 10647, page 13G.Placer.No.7: The East half of Section Thirty-three (33), Township One (1)North, Range Six (G)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.'.Pincer.No.8: All of Section Thirty-four (34), Township One (1)North, Range Six (6)West of thc Gila and Salt River Base and Meridian, Maricopa County, Arizona.PARcar.No.9: The West half of Section Thirty-five (35), Township One (1)North, Range Six (6)West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona PAn(:EL 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.PAnc.EL No.11: All of Section Ten (10), Township One (1)South, Range Six (6)IVest of the Gila" and Salt River Base and Meridian.Maricopa County.Arizona: EXCEPT the East half of thc Socctlu ast quarter thereof: and EXCEPT the North Imlf of the South half'f the Nortlcwc.st quarter cif tice Northwest quarter thereof.PAncsr.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: B EGINNING 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 194646 feet to a point on the South right-of-way line of the 200 foot wide HASSAYAMPA-SALOiVIE HIGHWAY, as recorded in Book 12 of Road ivIaps.page 82.Maricopa County Recorder, Maricopa-County, Arizontu thence continuing North 0 degre 03 minutes 39 seconds West for a distance of 234.15 feet to a point on the North right-of-way li of said highway;thence South 58 degrees 43 minutes 35 seconds East, along said North right-of-way line for a distance of 892.17 feet to a point on the said East line of the East half of the Southwest quarter of Section M: 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 tr>>e 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 kittd attd nature.as set forth in'Deed recorded in Docket 11652.page 52.Maricopa County Records.Pattt:t:.t.
iVt).13: The North half of the South half of the Northwest quarter of the Northwest quarter of Section Ten (10), Townsltip O>>e (1)South, Range Six (G)West of the Gila<<>>d Salt River Base and Meridian, Maricopa County, Arizona~II, Hase.svatt'.i Pt.'xtvti(:
S't'.n'tttx aM>Et:t:t.t't:.x't'tt't:.I.IXI'.
All real property, leases, licenses, easements, rights-of-way and other property held by Title USA Contpa>>y of Arizo>>a Trust No.530 established by that certain Trust Agreement dated October 15.1975, as amended, but excluding therefrom all improvements.
III.II tst:t:.t.t.an't:.t t t'~Rt:..at.Pttt t t't:.trt'v Ix't't:.ttt:~'t
~Tliose ANPP Project Agrccme>>ts (as defi>>ed i>>tlie ANPP P;irticip;itio>>
Agree>>tc>>t).
>>tlicr tliat tlte Trust Agree>>te>>t f'r Title USA Cot>>p;i>>y of Arizotm Trust 530.co>>sisti>>, of lens<<s.lic<<>>st.ease>>tetits, and perntits.which provitle la>>d a>>d hut(i rights for (a)the pipcli>>e to sttplily ivastc ivastc emuettt to PVNGS from the 91st Avenue sewage treatment plant serving the Phoe>>ix bletropolita>>
area and (b)railroad access to the Nuclear Plant Site (as deftned in the ANPP Participatio>>
Agree>>tent).
SCHEDULE 6 TO FACILITY LEASE DESCRIPTION OF UNDIVIDED INTEREST A.A 1.998026%undivided interest in Unit 2 of the Palo Verde Nuclear Generating Station (PVNGS), located in Maricopa County, Arizona, approximately 55 miles west of the City of Phoenix, Arizona, and approximately 16 miles west of the City of Buckeye, Arizona, consisting of: Unit 2 Combustion Engineering"System 80" pressurized water reactor nuclear steam supply system (the NSSS).The NSSS is comprised of a reactor vessel containing 241~fuel assemblies with approximately 100 tons of enriched uranium (fuel assemblies, however, are not part of Unit 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 iWBV.II.Unit 2 GE TC6F-43, 1800 RPM tandem-compound, six flow, reheat turbine-generator including turbine, generator, moisture separator-reheater, exciter.controls.and auxil-iary subsystems.
The turbine-generator is conductor cooled and rated at 1,554 lvIVA at 24,000 V, 3 phase, 60 Hz, 1.5 in Hg ABS back pressure, and approximately 1,363 MW maximum gross electric output.III.Unit 2 146 ft.inside diameter, steel-lined, pre-stressed concrete cylindrical contain-rnent building with a hemispherical dome designed for 60 psig.The containment building houses the reactor system.IV.Unit 2 auxiliary systems and equipment including engineered safeguartls systeins.reactor auxiliary systems and turbine-generator auxiliary systeins associated with itenis~I, II, and III above, extending to and including the Unit 2 start-up transforiner.
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 essen-tial 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 buildi>>g.which contains two diesel generators, fuel oil systems, storage tanks, control a>><l instrumentation systems and other equipment.
VIII.Unit 2 internal communication systems, including associated interconnections anti computer data links.Bt.'v Ex(:r.tutrix<::
I.Nuclear fuel for Unit 2, including spare fuel assemblies, and nuclear waste.II.Spare Parts (Unit 2).~IV.Transmission facilities (including any and all facilities and equipment providing interconnection between the Unit 2 turbine generator and the ANPP High Voltage Switchyard, including stepup transformers and standby equipment and systems).Oil and diesel fuel inventories (Unit 2).
B.A 0.666007%undivided interest in all PVNGS common facilities, INCLUDING BUT NOT LIMITED TO: I.Surveillance systems, including associated radioactive monitoring systems and equi ment.II.Water treatment facilities and transport systems for supply of waste water effluent.III.Belated storage facilities and equipment (excluding Warehouses).
BUT EXCLUDINC:
Nuclear fuel, including spare fuel assemblies, and nuclear waste.Electrical power facilities including Construction Switchyard and 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 interconnec-tions and computer data links.VIII.Parking lot improvements, road improvements, site improvements.
fencing an<1 dik IX.Spare parts (Common Facilities).
X.Simulator.
XI.Oil and diesel fuel inventories.
XII.Evaporation Pond.XIII.Guard house.XIV.Coating facility.XV.Fire pump house.XVI.Radiation Instrument calibration lab.XVII.Service building.XVIII.Water treatment building.XIX.Shooting range.XX.WRF operations building.XXI.Warehouses.
XXII.Real Property, beneficial interest in Title USA Company of Arizona Trust 530.ar Project Agreement interests described in Schedule 5.
C>immi 3<nhrninrr, Snrfgngr, Srrnritg Agrrrmrni Btth A99tgttmPttf Of Bttt)9 Dated as of December 1, 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 December 1, 1986, with COiWViiiERCIAL FEDERAL INVESTiifEiNT CORPORATION and FIRST CITY NATIONAL BANK OF HOUSTON, as Indenture Trustee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 2 and Certain Common Facilities 0'
TABLE OF CONTENTS Page SEcvtoN 1.1 SFcvtoN L2 SEcvtoiv 1.3 SEGTIovi 1.4 ARTICLE I CONSTRUCTION, GOVERNINC LAW, INTERPRETATION AiVD DEFINITIONS Governing Law.Headings and Table of Contents.Definitions; Construction of References Disclosure of Beneficiaries 1 7 2 2 SECTIoiV SECTIoiV SECTloiV SECTION 2.1 2.2 2.3 2.4 ARTICLE II SECURITY Grant of Security Interest;Mortgage Payments Under the Facility Lease.Release of Lien on Lease Indenture Estate Power of Attorney.SECTIoiV SECTloiV SECT)ON SECTIotV.CTION ION CTION SECTION SECVloiV SEcvtor" SECTION SECTIoiV SEcvtoN SECTION SECTION SECTION SEcvtoN SECTION SECTION SECTION SECTION ARTICLE III IssUE, ExEGUTIoiv,.
AUTHENTlcATIQN>
FQRxt AND REclsTRATIoiv QF NQTEs I It 3.1 Limitation on Notes.3.2 Execution of Notes.3.3 Effect of Certificate of Authentication
..3.4 Creation of the Initial.Series Notes;Aggregate Principal Amount, Dating and Terms.3.5 Additional Notes.3.6 Security for and Parity of Notes 3.7 Source of Pay'ments Limited 3.8 Place and Medium of Payment 3.9'repayment of Notes;Assumption byILessee; Notice of Assumption or Prepayment
.3.10 Mutilated, Destroyed, Lost or Stolen Notes.3.11 Allocation of Principal and)Interest 3.12 Certain Adjustments to Amortization Schedules of Initial Series Notes....ARTICLE IV REctlsTRATIQN, TRAivsFER, ExcHANGE, CANcELLATtoN AND OwNERsHIP QF NoTEs 4.1 Register of Notes.4.2 Registration of Transfer or Exchange of Notes 4.3 Cancellation of Notes 4.4 Limitation on Timing of Registration of Notes 4.5 Restrictions on Transfer Resulting from Federal Securities Laws;Legend..4.6 Charges upon Transfer or'Exchange of Notes..4.7 Inspection of Register of Notes.4.8 Ownership of Notes 4.9 Paying Agent 6 6 6 6 pe I 8 8 9 9 10 10 ll ll 11 12 lc)12 12 12 12 13 SECTION 5.1 SECT Ioiv 5.2 SECTION 5.3 SEcTIovi 5.4 S ECTION 5.5 SECTION 5.6 SEGTIoiv, 5.7 TABLE OF CONTEiVTS-(Continued)
ARTICLE V REcEIPT, DlsTRIBUTIQN AND APPLIGATIQN oF INcoxIE AND PRocEEDs FRoxI THE LEAsE INDENTURE EsTATE Basic Rent and Interest on Overdue Installments of Basic Rent......Amounts Received as Result of Event of Loss, Deemed Loss Event, Exercise of Options to Terminate, Exercise of Cure Option.......Amounts Received After, or Held at Time of, Indenture Event of Default under Section 6.2 Amounts Received for Which Provision is Made in a Transaction Document.Amounts Received for Which No Provision is Made.Payments to Owner Trustee.Excepted Payments 13 15 15 15 15 SECTION SECTION SEcTIoiv SEGTIoiv SEcrroN SECTION SECTION SEcnoN SECTION SECTIoiv SEGTIoiv SECTION SECTION SECTION SECTION SECTION SEGTIoiv ARTICLE VI REPREsENTATIQNs>
WARRAviTIEs AND Co'VEivANTs QF OwNER TRUsTEE>EYENTs oF DEFAULT;RESIEDIEs QF THE INDENTURE TRUsTEE 6.1 Representations, Warranties and Covenants of Owner Trustee.'............
6.2 Indenture Events of Default.6.3 Enforcement of Remedies 6.4 SpeciBc Remedies;Enforcement of Claims Without Possession of Notes....6.5'ights and Remedies Cumulative 6.6 Restoration of Rights and Remedies 6.7 Waiver of Past Defaults.6.8 Right of Owner Trustee to Pay Rent;Note Purchase;Substitute Lessee.....
6.9 Further Assurances 6.10 Right of Indenture Trustee to Perform Covenants, etc'.11'ertain Other Rights of the Owner Trustee.ARTICLE VII CERTAIN DUTIEs oF THE OwNER TRUsTEE AND THE INDENTURE TRUsTEE 7.1 Duties in Respect of Events of Default;Deemed Loss Events and Events of Loss;Acceleration of iviaturity 7.2 Duties in Respect of Matters SpeciBed in Directive.7.3 IndemniBcation
.7.4 Limitations on Duties;Discharge of Certain Liens Resulting from Claims Against Indenture Trustee 7.5 Restrictions on Dealing with Lease Indenture Estate 7.6 Filing of Financing Statements and Continuation Statements
............
16 16 17 17 18 2P c)Q 2P 2Q 21 21 22 22 SECTION 8.1 SECTION 8.2 SEcnoN 8.3 SEcrIoN 8.4 ARTICLE VIII CQNGERNING THE OwNER TRUsTEE AND THE INDENTURE TRUsTEE Acceptance of Trusts;Standard of Care No Duties of iMaintenance, Etc Representations and Warranties of Indenture Trustee and the Owner Trustee.Moneys Held in Trust;Non-Segregation of Moneys.c2 c73 23>>
C:TION.ION ECTION SECTION SECTION SEcnov SECTlotv TABLE OF CONTENTS-(Continued) 8.5 8.6 8.7 Reliance on Writings, Use of Agents, Etc.Indenture Trustee to Act Solely as Trustee.Limitation on Rights Against Registered Holders, the Owner Trustee or Lease Indenture Estate S.S Investment of Certain Payments Held by the Indenture Trustee.........8.9 No Responsibility for Recitals, etc.8.10 Indenture Trustee May Engage in Certain Transactions 8.11 Construction of Ambiguous Provisions Pace t73 i74'74 e7 25 25 SUccEssoR TRUsTEEs SEGTIQN 9.1 Resignation and Removal of Indenture Trustee;Appointment of Successor..
25 ARTICLE X SUPPLESIEtvTs AND AIIENDteIEivTs To THls INDENTURE AND OTHER DocUttIENTs SECTION 10.1 SECTION 10.2 SEcrrov 10.3 SEcnov 10.4 cnoN 10.5 SEOTrov 11.1 SEcrroN 11.2 SECTION 11.3 SECTION 11.4 SEcrroN 11.5 SECTION 11.6 SECTION 11.7 SEcrroN ll.iI SEcnoN 11.9 SECTION 11.10 SEcrroN 11.11 SECTION 11.12 SECTION 11.13 Supplements, Amendments and ModiBcations to This Indenture Without Consent of Holders of Notes.'upplements and Amendments to this Indenture and the Facility Lease Wtth Consent of Holders of Notes Certlrin Limitations on Supplements and Amendments Directive Need Not Specify Particular Form of Supplement or Amendment Trustee to Furnish Copies of Supplement or Amendmerlt ARTICLE XI MISCELLAiVEOUS Moneys for Payments in Respect of Notes to be Held in Trust....[....
t....Dispositionrof Moneys Held for Payments df Notes...Transfers Not to Affect Indenture or Trusts'...........
Binding Effect of Sale of Lease Indenture Estate.....I I Limitation as to Enforcement of Rights, Reinedies and Claims.............
Separability of Provisions BeneBt of Parties, Successors and Assigns Survival of Representations and Warranties.
Bankruptcy of the Owner Trustee Bankruptcy of the Owner Pa'rticipant Counterpart Execution.Dating of Indenture.''I t76 a6 27 I 27 e78 oS 28 oS 28 29 29 29 29 29 29 30 30 30 Exhibit A-1-Form of Initial Series Note (Due 1992)Exhibit A-2-Form of Initial Series Note (Due 1997)Exhibit A-3-Form of Initial Series Note (Due 2011)Exhibit B-Assumption Agreement Exhibit C-Undivided Interest Supplemental Indenture ppendix A-DeBnitions e
TRUST INDENTURE, MORTGAGE, SECURITY AGREEMEiVT AiVD ASSIGiVMEiVT OF REiVTS dated as of December 1, 1986, between THE FIRsT NATIoNAL BANK QF BosTQN, a national anking association, not in its individual capacity, but solely as trustee under a Trust Agreement dated of December 1, 1986 between FNB (whose address is 100 Federal Street, Boston, Massachusetts 110)and CoMMERcIAL FEDERAL INYEsTMENT CoRPQRATIoN, and FIRsT CITY NATIoNAL BANK QF HOUsTON, a national banking association, whose address is First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002.WITNESSETH:
WHEREAs, the Owner Trustee has entered into a Participation Agreement, dated as of Decem-ber 1, 1986 among the Owner Participant, El Paso Funding Corporation, a Delaware corporation, El Paso Electric Company, a Texas corporation (El Paso), and the Indenture Trustee;WHEREAs, the Owner Trustee, acting on behalf of the Owner Participant, pursuant to the Trust Agreemeng and the Participation Agreement, intends to purchase the Undivided Interest and the Real Property Interest from El Paso and lease the Undivided Interest and the Real Property Interest to El Paso pursuant to the Facility Lease;W HEREAs, in order to Bnance a portion of the Purchase Price of the Undivided Interest, the Owner, Trustee desires to issue its promissory notes hereunder with such promissory notes to be substantially in the form of Exhibits A-l, A-2 and A-3 hereto;WHEREAs, in the circumstances contemplated by Sections 2(c), 2(d)and 2(e)of the Participation Agreement, the Owner Trustee may desire to Bnance a greater portion of the Purchase Price of the Undivided Interest than the portion Bnanced from the proceeds of the Initial Series Note (but in no event in an amount in excess of 80%of said Purchase Price)and in connection therewith to issue its promissory note or notes or to change the amortization of any Notes;WHEREAs, in order to Bnance all or a portion of the Supplemental Financing Amount of Capital provements and to refund Notes of any series previously issued, the Owner Trustee may desire to issue additional promissory notes hereunder (together with the Releveraging Notes and the Refunding Notes, the Additional Notes)secured on a pari passu basis with other Notes Outstanding from time to I time;s WHEREAs, in order to secure the obligations referred to herein, the Owner!Trustee desires to grant t to the Indenture Trustee the security interest herein provided and the parties hereto desire that this indenture be regnrded as a"security agreement" and as a"gnancing statement" fcr!sucb security agreement under the Uniform Commercial gode;s Now, THEREFORE, in consideration of the premises, of the acceptance by the Indenture Trustee of the trusts hereby created and of other good and valuable consideration, the receipt and sufBciency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I CoNsTRUGTIQN, GovERNING LAw, INTERPRETATION AND DEFINITIONS-SECTION 1.1.Gooerning Laio.This Indenture (i)is being executed and delivered in the State of New York, (ii)shall be deemed to be a contract made in such State and (iii)for all purposes shall be construed in accordance with and governed by the laws of the State of New York, except to the extent to which the laws of the State of t rizona are mandatorily applicable hereto.
S ECTION 1.2.Headings and Table of Contents.The division of this Indenture into articles and sections, the provision of a table of contents an the insertion of headings are for convenience of reference only and shall not afFect the construction interpretation of this Indenture.
SECTION 1.3.Definitions; Construction of References.
In this Indenture, unless the context otherwise requires: (a)the term this Indenture means this instrument together with all exhibits, appendices and schedules hereto as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto pursuant to the provisions hereof;(b)all references in this instrument to designated Articles, Sections and other subdivisions are to designated Articles, Sections and other'subdivisions of this instrument unless otherwise indicated;(c)all accounting terms not otherwise defined herein shall have the meanings assigned to them in accordance with generally accepted accounting principles;(d)capitalized terms used herein which are'not otherwise defined herein shall have the meanings set forth in Appendix A hereto, and the rules of construction set forth in Appendix A hereto shall be applicable hereto;and (e)to the extent difFerent from Appendix A hereto, the definitions of Deemed Loss Event, Event of Loss, Economic Useful Life and Final Shutdown (including for purposes of such definitions all defined terms contained in or relating to any of such definitions) shall have the respective meanings set forth in or appended to the Facility Lease as amended from time to time in accordance with its terms.SECTION 1.4.Disclosure of Beneficiaries.
Pursuant to Arizona Revised Statutes Section 33-401, (i)the beneficiary of the Trust Agreement is Commercial Federal Investment Corporation, a Nebraska corporation, whose address is Commercial Federal Tower, 2120 South 72nd Street, Omaha, Nebraska 68124, Attention:
Jeff Bainbridge and (ii)the beneficiary of this Indenture is the Holder of the Notes, El Paso Funding Corporation, whose address is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and, by pledge and assignment, First City National Bank of Houston, as trustee under the Collateral Trust Indenture, whose address is First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002: Attention:
Corporate Trust Department.
Copies of the Trust Agreement and this Indenture are available for inspection at the Indenture Trustee's office.ARTICLE II SEcuarrr SECTION 2.1.Grant of Security Interest;Mortgage.As security for the due and punctual payment of the principal of and premium, if any, and interest on the Notes according to their respective terms and efFect and the performance and observance by the Owner Trustee of all the covenants and agreements made by it or on its behalf in the Notes, the Participation Agreement and this Indenture, the Owner Trustee does by its execution and delivery hereof hereby grant a security interest in and grant, bargain, convey, warrant, assign, transfer, mortgage, pledge and set over unto the Indenture Trustee, and to its successors and assigns in trust, the following (the Lease Indenture Estate): (1)all right, title and interest of the Owner Trustee in, to and under the Facility Lease recorded December, 1986 as Instrument No., records of Maricopa County, Arizona to the extent, and only to the extent, constituting Rent (including, without limitation, Basic Rent, payments of Casualty Value, Termination Value and Special Casualty Value, and payments under and pursuant to Sections 13(c)and 16 of the Facility Lease)(the Assigned Payments), together with all rights, powers and remedies on the part of the Owner Trustee arising under the Facility Lease to demand, collect or receive the Assigned Payments;(2)all moneys and securities deposited or required to be deposited with the Indenture Trustee pursuant to any term of this Indenture and held or required to be held by the Indenture Trustee hereunder; (3)all profits, revenues and other income of all property from time to time subjected to the lien of this Indenture, and all right, title and interest of every nature whatsoever of the Owner Trustee in and to the same and every part thereof;(4)all right, title and interest of the Owner Trustee in and to any right to restitution from the Lessee in respect of any determination of invalidity of the Facility Lease;and (5)all proceeds of the foregoing; but excluding, however, from the Lease Indenture Estate any and all Excepted Payments;and subject, hou:ever, to (i)the terms and provisions of this Indenture and (ii)the rights of the Lessee under the Facility Lease.To the extent that any portion of the Lease Indenture Estate constitutes fixtures or real property, this Indenture constitutes a realty mortgage and an assignment of rents with respect to all such items of real property and in addition to all other rights~or remedies set forth in this Indenture,'the Indenture Trustee shall have, to the extent not inco)sistent with this Indenture, all of the rights, remedies and benefits of a mortgagee of real property under Applicable Law, including, without'mitation, the rights and remedies pursuant to Arizona Revised Statutes$33-702.B and the Owner ustee shall be deemed a mortgagor with respect to such items.TO HAVE AND TO HOLD all the aforesaid properties, rights and interests unto the Indenture Trustee, its successors and assigns forever, but in trust, nevertheless, for the use and purposes and witli the power and authority and subject to the terms and conditions mentioned and set forth in this Indenture.
UPON CONDITION that, unless and until an Indenture Event of Default shall have occur'red and be continuing, the Owner Trustee shall be permitted, to the'xclusion of the Indenture Trustee, to possess and use the Lease Indenture Estate and exercise all rights with respect thereto and, ivithout limitation of the foregoing, the Owner Trustee may exercise all of its rights under the Facility Lease to the same extent as if its right, title and interest therein had not been assigned to the Indenture Trustee to the extent set forth above, except that the Indenture Trustee shall receive all payments of Assigned Payments and all moneys and securities required to be held by or deposited with the Indenture Trustee hereunder.
It is expressly agreed that, anything herein contained to the contrary notwithstanding, the Owner Trustee shall remain obligated to the Lessee under the Facility Lease to perform all of the Owner Trustee's obligations thereunder in accordance with and pursuant to the terms and provisions thereof, and the Indenture Trustee shall not be required or obligated in any manner, except as expressly provided herein, to perform or fulfill any obligations of the Owner Trustee under the Facility Lease or to make any payment, or to make any inquiry as to the nature or sufficiency of any payment received by it, or to present or file any claim, or to take any action to'collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.The Owner Trustee hereby warrants and represents that it has not assigned or pledged any of its'ght, title or interest in and to the Lease Indenture Estate to anyone other than the Indenture Trustee.P 3 SEGTIOA 2.2.Payments Under tfie Facility Lease.The Facility Lease provides that (i)all payments constituting Assigned Payments shall be made to the Indenture Trustee at such office in New York, N.Y.of Mellon Trust Company, or of such ot bank or trust company in New Yorl<, N.Y., all as the Indenture Trustee shall specify in writing to t Lessee, (ii)all other payments other than Excepted Payments shall be inade to the Lessor at such address as the Lessor may direct by notice in writing to the Lessee, and (iii)all Excepted Payments shall be made to the Person entitled to receive such payments.The Owner Trustee agrees that, so long as any Notes shall be Outstanding hereunder, all payments described in clause (i)above shall be directed to be made to the Indenture Trustee or in accordance with the Indenture Trustee's instruction and that if it should receive an'y such payments or any proceeds for or with respect to the Lease Indenture Estate or otherwise constituting part of the Lease Indenture Estate, it will promptly forward such payments to the Indenture Trustee or in accordance with the Indenture Trustee's instructions.
The Indenture Trustee agrees to apply payments from time to time received by it (from the Lessee, the Owner Trustee or otherwise) with respect to the Lease Indenture Estate in the manner provided in Section 3.11 and Article V.SEertos 2.3.Release of Lien on Lease Indenture Estate.(a)Upon receiving evidence satisfactory to the Indenture Trustee that (i)it has received, or provision has been made in accordance with paragraph (c)of this Section 2.3 for, full payment of all principal of and premium, if any, and interest on the Notes and any other sums payable to the'Indenture Trustee and the Holders of the Notes under this Indenture or the Facility Lease, and (ii)all Trustee's Expenses shall have been paid in full or provision satisfactory to the Indenture Trustee shall have been made for such payment, (A)the security interest and all other estate and rights granted by this Indenture shall cease and become null and void and all of the property', rights and interests included in the Lease llndenture Estate shall revert to and revest in the Owner Trustee tvithont any other act or fonnaliti I u:hatsoecer, and (B)the Indenture Trustee shall, at the request of the Owner Trustee, execute and deliver to~the Owner Trustee such termination statements, releases or other instruments presented to the Indenture Trustee by or at the direction of the Owner Trustee.as shall be requisite to evidence the satisfaction and discharge of this Indenture and the lien hereby created with respect to the LeaseIndenture Estate, to release or reconvey to the Owner Trustee or as directed by the Owner Trustee all the Lease Indenture Estate, freed and discharged from the provisions herein contained with respect thereto, and to release the Owner Trustee from its covenants herein.contained.(b)Upon receipt by the Indenture Trustee of the Assumption Agreement and other documents, and opinions described in Section 3.9(b), (i)the security interest and all.other estate and rights granted by this Indenture by or on behalf of the Owner Trustee shall cease and become null and void and all of the property, rights and interests included in the Lease Indenture Estate shall revert to and revest in the Owner'Trustee without any other act or formality whatsoever and (ii)the Indenture Trustee shall, at the request of the Owner Trustee, execute and deliver to the Owner Trustee such-termination statements, releases or other instruments presented to the Indenture Trustee by or at the direction of the Owner Trustee as shall be requisite to evidence the satisfaction and discharge of this Indenture as to the Owner Trustee and the lien hereby created with respect to the Lease Indenture.
Estate, to release or reconvey to the Owner Trustee or as directed by the Owner Trustee all the Lease Indenture Estate, freed and discharged from the provisions herein contained with respect thereto, and to release the Owner Trustee from its covenants herein contained.(c)Any Note shall, prior to the maturity or redemption date thereof;be deemed to have been paid within the meaning and with the efFect expressed in this Section 2.3(c)if (i)there shall have been deposited with the Indenture Trustee either moneys in an amount which shall be sufficient, or direct obligations of or obligations the principal of and interest on which are unconditionall guaranteed by the United States of America or certificates of an ownership interest in the principal of or interest on obligations of or guaranteed as to principal and interest by the United States of America Federal Securities), in each case which shall not contain provisions permitting the redemption thereof'he option of the issuer, the principal of and the interest on which when due, and without any ,ivestment thereof, will provide moneys in an amount which shall be sufficient, together with the moneys, if any, deposited with or held by the Indenture Trustee at the same time (such sufficiency to be established by the delivery to the Indenture Trustee of a certificate of an independent public accountant), to pay when due the principal of and premium,-if any, and interest due and to become due on said Note on and prior to the redemption date or maturity date thereof, as the case nray be, and (ii)in the event said Note does not mature or is not to be redeemed within the next 45 days, the Indenture Trustee shall have been given irrevocable instructions to give, as soon as practicable, a notice to the registered Holder of such Note that the deposit required by subclause (i)above has been made with the Indenture Trustee and that said Note is deemed to have been paid in accordance with this Section 2.3(c)and stating such maturity or redemption-date upon which moneys are to be available for the payment of the principal of and premium, if any, and interest on said Note.Neither the Federal Securities nor moneys deposited with the Indenture Trustee pursuant to this Section 2,3(c)or principal or interest payments on any'such Federal Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any, and interest on said Note;prooided, home'er, that any cash received from such principal or interest payments on such Federal Securities deposited with the Indenture Trustee shall be reinvested pursuant to Section 8.8 in Federal Securities.
At such time as any Note shall be deemed paid as aforesaid, it shall no longer be secured by or entitled to the benefits of the Lease Indenture Estate or this Indenture, except that such Note shall be entitled to the benefits of the portions of, the Lease Indenture Estate described in Granting Clauses (2);(3)and (5), to the extent such portions relate to such moneys or Federal Securities deposited with the Indenture Trustee.~I (d)So long as any Note as to which this Indenture has been discharged remains unpaid, this Indenture shall continue in efFect with respect to such Note solely with respect to rights of registration transfer, exchange or replacement of such Note, rights to receive payment of the principal thereof premium, if any,~and interest thereon in accordance with the terms of this Indenture from such eposited funds or the proceeds of or interest on such Federal Securities and the correlative rights and responsibilities of the Indenture Trustee;provided, homeuer, that following such discharge, no claim for payment of principal of or premium, if any, or interest on such Note shall be made against the Owner Trustee or the Lease Indenture Estate other than as provided in this Section;prooided further, that the Owner Trustee, following such discharge, shall be released from any further duties or obligations under this Indenture and, except as expressly provided therein,'any other Transaction Document.SEn'roN 2.4.Power of Attorney.~'-'ubject to the other terms of this Indenture, the Owner Trustee hereby appoints, effective': ','henever an Indenture Event of Default shall have occurred and be continuing, the Indenture Trustee the Owner Trustee's attorney-in-fact, irrevocably, with full power of substitution, to collect, ask, require, demand, receive and give acquittance for any and all moneys and claims for moneys due and to become due to the Owner Trustee under or arising out of the Lease Indenture Estate, to endorse any checks or other instruments or orders in connection therewith, and to take any action (including the fling of Bnancing statements or other documents) or institute any proceedings which the Indenture Trustee may deem to be necessary or appropriate to protect and preserve the interest of the Indenture Trustee in the Lease Indenture Estate.Prior to any exercise by it (acting as attorney in fact for the Owner Trustee)of the powers, authority or rights granted by this Section 2.4, the Indenture Trustee will give three Business Days'rior written notice to the Owner Trustee and the Owner Participant.
 
ARTICLE III~ISSUE, EXECUTION, AUTHENTICATION, FOR%i AND REGISTRATION OF NOTES SECTiON 3.1.Limitation on Notes.No Notes may be issued under the provisions of, or become secured by, this Indentut'e except in accordance with the provisions of this Article III.No Note shall be issued in an original principal amount of less than$150,000.SECTION 3.2.Execution of Notes.All Notes shall be manually executed on behalf of the Owner Trustee by one of its Responsible OfBcers.In case any Responsible Oificer of the Owner Trustee who shall have executed any of the~Notes shall cease to be such a Responsible ORcer before such Notes so executed shall have been authenticated by the Indenture Trustee and delivered or disposed of by the Owner Trustee, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who executed such Notes had not ceased to be such a Responsible Oifice of the Owner Trustee;and any Note may be executed on behalf of the Owner Trustee by such person as, at the actual time of execution of such Note, shall be a Responsible Officer of the Owner Trustee, although'at the date of such Note any such person was not such a Responsible OScer.SECTION 3.3: Egect of Certificate of Authentication.
Only such Notes as shall bear thereon a certificate of authentication substantially in the following form manually executed by the Indenture Trustee shall be entitled to the benefits of this Indenture or be valid or obligatory for'ny purpose.Such certificate of authentication of the Indenture Trustee upon any Note executed, by the Owner Trustee shall be conclusive evidence that the Note so authenticated was duly iss'ued, authenticated and delivered under this Indenture:
j This Note is one','of the s'eries of Notes referred to therein and in the within-mentioned Indentur FIRST C1TY NATIONAL BANK OF HOUSTON as Indenture Trustee, By: Authorized Ofacer SECTION 3.4.Creation of the Initial Series Note;Aggregate Principal Amount, Dating and Terms.(a)There is hereby created and established a separate series of Notes of the Owner Trustee designated: "Nonrecourse Promissory Note, Initial Series," which will be substantially in the forms of Exhibits A-l, A-2 and A-3 hereto, and are herein referred to as the"Initial Series Notes." (b)Subject to the provisions of Section 3.10, the aggregate principal amount of the Initial Series Notes issued by the Owner Trustee and authenticated and delivered by the Indenture Trustee I hereunder shall not exceed$69,905,000.(c)The Initial Series Notes shall be executed and issued by the Owner Trustee and authenticated and delivered by the Indenture Trustee on the date and to the Person specified by the Owner Tru'stee in its request and authorization for issuance, shall be dated the date specified by the Owner Trustee in its request and authorization for issuance, and shall be in the form of registered Notes, registered in'he name of the Person designated in the Owner Trustee's request and authorization for issuance or its registered assigns.
(d)The Initial Series Notes slmll bear interest o>>thc pri>>cipal amounts thereof from time to time Outstanding From tlie date tliereof until paid at the rates of interest set forth i>>the form oF tlie Initial Series Notes.The principal amounts oF the Initial Series Notes sliall be payable as set Forth in the S ules of Principal Payments attached thereto.I>>tcrcst on the I>>itial Series Notes sliall be due a>>d on tlie dates specifie in t)ic forms of t)ie Initial Series Notes.SEcTIQN 3.5.Ad</itional Notes (1)Subject to Section 3.6.Additional Notes of the Owner Tnistec niay be issiie<l un<lcr and secured by this Indenture, at any tiinc or from time to time.in a<ldition to tlic lrritia)Series Notes and subject to the conditions hereinafter provided in this Section.for casli in the amount of the original principal amount of such Additional Notes, for the purpose oF (i)ref>>rrdi>>g any preiiorrs)>
issued series of Notes, in whole or in part and/or (ii)providing fun<is for thc payment of all or any portio>>of the Supplemental Financing Amount relating to Capital Improveinents made or installed From tinie to time pursuant to the Facility Lease and/or (iii)providing funds to be paid to the Owner Trustee in the event of a partial return of the Investment to the Owner Trustee as contemplated by Section 2(c)or 2(d)of the Participation Agreement; provided,/roieeuer.
that in the case of iNotes issued for the purposes set forth iiL clause (i)or (iii)of this Section 3.5(1), no'Note shall be issued by tlie Owner Trustee pursuant to this Section 3.5 unless Section 2(c)and/or 2(d)of the Participation Agrccmcnt (if applicable) shall have been complied with.(2)Before any Additional Notes shall be issued under the provisions of this Sectio>>3.5.t)ic Owner Trustee sliall have received from the Owner Participant, and delivered to thc Itrde>>turc
.':, Trustee not less than 10 nor more than 30 days prior to the proposed date of issua>>cc oF s>>cli~".'A'dditional Notes as sct fort)i in thc below->>ientioned request and authorization, a request;>>id
': authorizatioii to issue Additioiial iNotes, wliich request and authprization sliall inc)>>d<<the ainou>>t oF such Additional Notes.tlie date of issua>>ce of such Additional Notes and details wit)i respect tli<<rcto which, are>>ot inconsistent witli tliis S<<etio>>.Ad<litio>>al Notes sliall have a dcsig>>atioii so as to dis'guish sue)i A<l<liti>>>>al Notes from tlie Initial Series Notes brit otlicrwisc sliall be subst;intially in terms to tlic Iiiitial Series Notes.sliall specify maturity date, rank pari trassrr wit)i all Notes t utsta>>diiig, be<latc<t tlieir-respectIve dates of authe>>ticatio>>.
bear i>>terest at siich rates (whic)i may bc fixed or floatirrg}
as sliall bc indicated in the aforementioned request and aiit)iorization.
and-shall be stated to be payable by their terms not later than the last day of the Basic Lease Terni.(3)Except as to any dilferences in the maturity dates and amortization schcd>>lcs of thc Additio>>al Notes or the rate or rates of interest tliereon and the date or dates sue)i interest is payable or the provisions for redemption with respect thereto, if any, such Additional Notes shall be on a parity with, and shall be entitled to the same benefits and security of this Indenture as.otlier Notes issued pursuant to the terms hereof.(4)The terms, conditions and designations of such Additional Notes (which sliall be consistent with this Inde>>ture) sliall be set Forth in an indenture'supplemental to this Indenture executed by thc Owner Trustee and the Indenture Trustee.Such Additional Notes sliall be executed as proiisled i>>Section 3.2 and deposited with the Indenture Trustee for authentication, but before s>>cli A<l<litio>>al Notes shall be authenticated and delivered by the Indenture Trustee there shall be lil<<d wit)i the Indenture Trustee, in addition to the other documents and certificates require<1 by t)iis Scctioii 3.5, the following, all of which shall be dated as of the date of the supplemental indenture: (a)a copy of such supplemental i>>denture (which shall include tlic forrrr oF suc)i series of Notes in respect thereof);(b)such additioiial documents, certificates and opinions as shall be reasonably requested by.and acceptable to.the Owner Trustee and the Indenture Trustee;(c)a request and authorization to the Indenture Trustee by or on behalf of the Owner Trustee to authenticate and deliver such Additional iNotes to or upon the order oF the Person or Persons noted in such request at the address set forth therein, and in such principal amounts as are stated therein, upon payment to the Indenture Trustee, but for the account of the Owner Trustee, of the sum or sums specified in such request and authorization; and (d)an opinion of counsel to the eiFect that the conditions precedent required under th.Indenture for the issuance of such Additional Notes have been complied with.When the documents referred to in the foregoing clauses (a)through (d)above shall have been filed with the Indenture Trustee and when the Additional Notes described in the above-mentioned order and authorization shall have been executed and authenticated as required by this Indenture, the Indenture Trustee shall deliver such Additional Notes in the manner described in clause (c)above, but only upon payment to the Indenture Trustee of the sum or sums specified in such request and authorization.
SECTION 3.6.Security for and Parity of Notes.All Notes issued and Outstanding hereunder shall rank on a parity with each other and shall as to each other be secured equally and ratably by this Indenture, without preference, priority or distinction of any thereof over any other by reason of difFerence in time of issuance or otherwise.
SECTION 3.7.Source of Payments Limited.All payments to be made by.the Owner Trustee under this Indenture or on the Notes shall be made only from the Lease Indenture Estate and the Trust Estate.Each Holder of a Note, by its acceptance of such Note, and the Indenture Trustee agree that they will look solely to the Trust Estate and the 4ncome and proceeds from the Lease Indenture Estate to the extent available for distribution to such Holder or the Indenture Trustee as herein provided and that neither the Owner Participant nor, except as expressly provided in this Indenture, the Owner Trustee nor the Indenture Trustee, shall be personally liable to such Holder of a Note or the Indenture Trustee, as the case may be, for any amounts payable hereunder or under such Note;provided, hoiceoer, that in the event that tl Lessee shall assume all the obligations and liabilities of the Owner Trustee hereunder and under th Notes pursuant to Section 3.9(b), then all payments to be made under this Indenture and the Notes shall be made only from payments made by the Lessee under the Notes in accordance with the Assumption Agr'cement referred to in Section 3.9(b)and each Holder of a Note and the Indenture Trustee agree that in such event they will look solely to the Lessee for such payment.Nothing herein contained shall be interpreted as afFecting the duties and obligations of the Indenture Trustee set forth in S'ection 7.4)'iIn furtherance of the foregoing, to the fullest extent permitted by law, each Holder of a Note (and each assignee of such Person), by its acceptance thereof, and the Indenture Trustee agree, as a condition to the Notes being secured under this Indenture, that neither such Holder nor the Indenture Trustee will exercise any statutory right to negate the agreements set forth in this.Section 3.7.".\'~SECTION 3.8.Place and Medium of Payment.The principal of and premium, if any, and interest on each Note shall be payable at the Indenture Trustee's OfBce in immediately available funds in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.Notwithstanding the foregoing or any provision in any Note to the contrary, if so requested by the Holder of any Note, by written notice to the Indenture Trustee, all amounts (other than the final payment)payable with respect to such obligation shall be paid by crediting the amount to be distributed to such Hatder to an account maintained by such Holder with the Indenture Trustee or by the Indenture Trustee's:transferring such amount by wire, with such wire transfer to be initiated by such time as to permit, to the extent practicable, oral confirmation thereof (specifying the wire number)to be given no later than I:00 p.m.Houston time on the date scheduled for payment, but only to the extent of funds available for such wire transfer, to such other bank in the United States havi 8 wire transfer facilities, including a Federal Reserve Bank, as shall have been speci6ed in such notice, for credit to the account of such Holder maintained at such bank, any such credit or transfer pursuant his Section 3.8 to be in immediately available funds, without any presentment or surrender'of such.Final payment of any such Note shall be made only against surrender of such Note at the enture Trustee's Once.SEcHQN 3.9.Prepayment of Notes;Assumption bg Lessee;Notice of Assumption or Prepayment.(a)Notes shall be subject to prepayment (other than through application of the installment payments on such Notes)from time to time only as provided in this Indenture and as otherwise speci6cally provided, with respect to Notes of a particular series, in such Notes.(b)In the event of the occurrence of an Event of Loss, declaration of a Deemed Loss Event, exercise of the Cure Option, exercise of the purchase option provided in Section 13(c)of the Facility Lease or exercise of the purchase option provided in Section 10(b)(3)(xvii) of the Participation Agreement), and upon receipt by the Indenture Trustee of the documents fisted below, (i)all the obligations and liabilities of the Owner Trustee hereunder and under the Notes (including payments of accrued interest)shall be assumed by the Lessee, and (ii)the Owner Trustee shall be released and discharged without further act or formality whatsoever from all obligations and liabilities hereunder and under the Notes: (1)a duly executed Assumption Agreement substantially in the form of Exhibit B hereto;(2)an opinion of counsel addressed to the Indenture Trustee and the Holders of the Outstanding Notes, to the effect that the conditions precedent required by this Indenture for such'ssumption have been complied with, that the Assumption Agreement has been duly authorized, executed and delivered on behalf of the Lessee, that no Governmental Action.is necessary or required in connection therewith (or if any such Governmental Action is necessary or required, that the same has been duly obtained and is in full force and efFect), and that the Assumption
~~greement is a legal, valid and binding agreement'nd obligation of the Lessee, enforceable in ccordance with its terms (except as limited by bankruptcy, insolvency or similar laws of general application afFecting the enforcement of creditors'ights generally and equitable principles);
(3)copies of all Governmental Actions referred to in such opinion;(4)an indenture supplemental to this Indenture which shall, among other things, if the'essee shall so request, grant to the Indenture Trustee a Lien on all of the Owner Trustee's right, title and interest in and to the Undivided Interest and the Real Property Interest, which supplemental indenture shall, in either case, con6rm the release of the Owner Trustee and the Lease Indenture Estate thereby efFected and may contain provisions appropriately amending references to the Facility Lease in this Indenture; (5)a certi6cate of a Responsible OfBcer.of the Lessee stating that, to the best of his knowledge, (i)the conditions precedent required by this Indenture for such assumption have been complied with, (ii)no Indenture Event of Default has occurred and is continuing, (iii)such assumption is permitted by the provisions of the Lessee's Articles of Incorporation and By-Laws and (iv)the Lessee is not insolvent within the meaning of any applicable preferential transfer, fraudulent conveyance or bankruptcy law;and (6)a certi6cate of a Responsible OIBcer of the Owner Trustee stating that, to the best of his knowledge, no Indenture Event of Default has occurred and is continuing.(c)The Notes shall be prepaid on the date of the termination of the Facility Lease pursuant to Section 14(b)or 14(d)thereof at a price equal to their outstanding principal, amount, premium, if any, and accrued interest to, but not including, the date of prepayment.(d)Notice of any assumption or prepayment of Notes shall be given to the registered Holders of otes which have been assumed or are to be prepaid (and any assignee of a registered Holder 9 which has given the Indenture Trustee written notice of such assignment) as promptly as practicable after the Indenture Trustee is notified thereof, and, in the event of the exercise by the Lessee or the Owner Trustee, as the case may be, of its option to terminate the Facility Lease pursuant to Secti 14(b)or 14(d)thereof, in no event less than 30 days before the date fixed for prepayment (provid the Indenture Trustee receives such notification at least three Business Days before such 30th day).(e)If the assumption described in paragraph (b)above has not occurred, then, as required by Section 9(j)of the Facility Lease, not less than 2 Business Days prior to any Special Transfer, the Owner Trustee will execute and deliver to the Indenture Trustee an Undivided Interest Indenture Supplement substantially in the form of Exhibit C hereto.SEcrrow 3.10.Mutilated, Destroyed, Lost or Stolen Notes.If any Note shall become mutilated or shall be destroyed, lost or stolen, the Owner Trustee shall, upon the written request of the Holder of such Note, execute, and the Indenture Trustee shall authenticate and deliver in replacement thereof, a new Note, payable in the same original principal amount and dated the same date and of the same series as the Note so mutilated, destroyed, lost or stolen.The Indenture Trustee shall make a notation on each new Note of the amount of all payments of principal theretofore made on the Note so mutilated, destroyed, lost or stolen and the date to which interest on such old Note has been paid.If the Note being replaced has been mutilated, such Note shall be delivered to the Indenture Trustee who shall then deliver a certificate of destruction of the type required by Section 4.3.If the Note being replaced has been destroyed, lost or stolen, the Holder of such Note shall furnish to the Lessee, the Owner Trustee and the Indenture Trustee a bond or surety agreement of such Holder as shall be satisfactory to them to save.'>be.
Lessee, the Owner Trustee, the Indenture Trustee, the Trust Estate and the Lease Indenture Estat'e harmless from any loss, however remote, including claims for principal of, and premium, if any, and interest on the purportedly destroyed, lost or stolen Note, together with evidence satisfactory to the Lessee, the Owner Trustee and the Indenture Trustee of the destruction, loss or theft of such Note and of th ownership thereof;provided, hou:ever, that if the Holder of such Note is the Collateral Trust Trust the unsecured written undertaking of the Collateral Trust Trustee, in its individual capacity, shall suScient indemnity for purposes of this Section.SEGTIQN 3.11.Allocation of Principal and Interest.In the case of each Note, each payment of principal thereof and interest thereon shall be applied, first, to the payment of accrued but unpaid interest on such Note (as well as any interest on overdue W principal or, to the'extent permitted by,law, interest)to the date of such payment, second, to the payment of the principal amount of, and premium, if any, on such Note then due (including any overdue installment~~of principal) thereunder and third, the balance, if any, remaining thereafter, to the balance of the payment of the principal amount of, and premium, if any, on such iVote.10 SECTION 3.12.Certain Adj ustments to Amortization Schedules of Initial Series iVotes.The schedules of principal amortization attached to the Initial Series Notes may be adjusted at the'retion of the Owner Trustee at one time prior to June 30, 1990;prorided, houeuer, that no such stment shall be made by the Owner Trustee which will increase or reduce the average life of any ated maturity of principal of the Initial Series Notes (calculated in accordance'ith generally accepted financial practice from the date of initial issuance)by more than six months;prouided fiirther, hou;ecer, such adjustment only may be made in connection with an adjustment to Basic Rent pursuant to Section 3(d)of the Facility Lease.If the Owner Trustee shall elect to make the foregoing adjustment, the Owner Trustee shall deliver to the Indenture Trustee and to the Lessee at least 60 days prior to the first payment date (specified on the schedules thereto)proposed to be affected by such adjustment, a certificate of the Owner Trustee (x)stating that the Owner Trustee has elected to make such adjustment, (y).setting forth the revised schedules of principal amortization and (z)attaching calculations showing that the average life of the Initial Series Notes will not be reduced or increased except as permitted by this Section 3.12.The Indenture Trustee may rely on such Owner Trustee certificate and shall have no duty with respect to the calculations referred to in the foregoing clause (z).ARTICLE IV REOISTBATION, TBANSFEB, EXCHANGE, CANCELLATION AND OwNEBsHIP OF NQTEs SECTION 4.1.Register of Notes./The Indenture Trustee on behalf of the Owner Trustee shall maintain at the Indenture Trustee's office a register for the purpose of registration, and registration of transfer and exchange, of the Notes by series and in which shall be entered the names and addresses of the owners of such iVotes and the.rincipal amounts of the Notes owned by them, respectively.
SECTION 4.2.Registration of Transfer or Exchange of Notes.A Holder of a Note intending to register the transfer of any Outstanding Note held by such Holder (including any transfer in the form of a pledge or assignment) or to exchange any Outstanding iVote held by such Holder for a new Note or Notes of the same series may surrender such Outstanding Viote at the Indenture Trustee's Ofilce, together with the written request of such H'older, or of its attorney duly authorized in writing, in each case with signatures guaranteed, for the registration of such Note in the name of any pledgee or assignee (in the case of a transfer in the form of a pledge or assignment) or'or the issuance of a new Note or Notes of the same series, specifying the authorized denomination or denominations of any new Note or Notes to be issued and the name and address of the Person or Persons in whose name or names the Note or Notes are to be registered (either as pledgee or assignee or as owner).Promptly upon receipt by the Indenture Trustee of the foregoing and satisfaction of the requirements of Sections 4.5 and 4.6, the Indenture Trustee shall register such Note or Notes in the name or names of the Person or Persons as shall be specified in the written request and, in the case in which a.new Note or Notes are to be.<ssued, the Owner Trustee shall execute and the Indenture Trustee shall authenticate and deliver such new Note or Notes of the same series, in the same aggregate principal amount and dated the same date as the Outstanding iVote surrendered, in such authorized denomination or denominations as shall be specified in the written request.The Indenture Trustee shall make a notation on each new Note of the amount of all payments of principal theretofore made on the old Note or Notes in exchange or transfer for which any new Note has been issued and the date to which interest on such old Note or Notes has been paid.11 SEcTto>4.3.Cancellation of Notes.All Notes surrendered to the Indenture Trustee for payment in full, prepayment in full registration of transfer or exchange shall be cancelled by it;and no Notes shall be issued in lieu ther except as expressly permitted by this Indenture.
The Indenture Trustee shall destroy cancelled No held by it in a manner satisfactory to the Owner Trustee and deliver a certificate of destruction to the Owner Trustee.If the Owner Trustee shall acquire any of the Notes, such acquisition shall not operate as a redemption of or the satisfaction of the indebtedness represented by such Notes unless and until the same shall be delivered to the Indenture Trustee for cancellation.
SEn'toiv 4.4.Limitation on Timing of Registration of Notes.The Indenture Trustee shall not be required to register transfers or exchanges of Notes on any date fixed for the payment or prepayment of principal of or interest on the Notes or during the fifteen days preceding any such date.SEcrtow 4.5.Restrictions on Transfer Resulting from Federal Securities Lares;Legend.If not prohibited by the Securities Act, each Note shall be delivered to the initial Holder thereof without registration of such Note under the Securities Act and without qualification of this Indenture under the.Trust Indenture Act.Prior to any transfer of any Note, in whole or in part, to any Person other than the Collateral Trust Trustee, the Holder thereof shall furnish to the Lessee, the Indenture Trustee and the Owner Trustee an opinion of counsel, which opinion and which counsel shall be reasonably satisfactory to the Indenture Trustee, the Owner Trustee and the Lessee, to the effect that such transfer will not violate the registration provisions of the Securities Act or require qualification of this Indenture under the Trust Indenture Act, and all Notes issued hereunder shall be endorsed with a legend which shall read substantially as follows: The Note has not been registered under the Securities Act of 1933 and inane not be transferred, sold overed for sale in oiolation of such Act.SEn~ow 4.6.Charges upon Transfer or Exchange of Notes.As a further condition to registration of transfer or exchange of any Note, the Indenture Trustee and the Owner Trustee may charge the Holder thereof for any stamp taxes or governmental charges required to be paid with respect to such registration of transfer or exchange.II I~SEGTIQN 4.7.Inspection of Register of Notes.~The register of the Holders of the Notes referred to in Section 4.1 shall at all reasonable times be open for inspection by any Holder'of a Note.Upon request by any Holder of a Note, or the Owner Trustee or the Lessee, the Indenture Trustee shall furnish such Person, at the expense of such Person, with a list of the names and addresses of all Holders of Notes entered on the register kept by the Indenture Trustee indicating the series, principal amount and number of each Note held by each such Holder.S EcT[ov 4.8.Ownership of Notes.(a)Prior to due presentment for registration of transfer of any Note, the Owner Trustee and the Indenture Trustee may deem and treat the Holder of record of such Note as the absolute owner of such Note for the purpose of receiving payment of all amounts payable with respect to such Note and for all other purposes, and neither the Owner Trustee nor the Indenture Trustee shall be affected by any notice to the contrary.(b)The Owner Trustee and the Indenture Trustee may, in their discretion, treat the Holder of record of any Note as the owner thereof without actual production of such Note for any purpose hereunder, except as provided in the last sentence of Section 3.8.Io (c)Neither the Owner Trustee nor the Indenture Trustee shall be bound to take notice of or carry out the execution of any trust in respect of any Note, and may register the transfer of the same the direction of the Holder of record thereof, whether named as trustee or otherwise, as though Holder were the beneficial owner thereof.(d)The receipt by the Holder of record of any Note of any payment of principal, premium or'nterest shall be a good discharge to the Owner Trustee and the Indenture Trustee for the same and neither the Owner Trustee nor the Indenture Trustee shall be bound to inquire into the title of any such Holder.SECTION 4.9.Paying Agent.The Owner Trustee agrees at all times to have in effect a Paying Agent which shall be a bank or trust company in New York, N.Y., as agent for purposes of making payments on'the Notes.Mellon Trust Company has initially been appointed as the Paying Agent.The Paying Agent may not be replaced without the consent of the Indenture Trustee, which consent shall not be unreasonably withheld.The Indenture Trustee will notify the Collateral Trust Trustee of the name and address of any replacement Paying Agent.The making by the Paying Agent of any payment required to be made by the Indenture Trustee pursuant to Article III shall be deemed to be a payment by the Indenture Trustee for the purposes of Article III.ARTICLE V RECEIPT, DISTRIBUTION AND APPLICATION OF INCOilE AND PRocEEDs FRoxl THE LEAsE INDENTURE EsTATE SECTION 5.1.Basic Rent and Interest on Ocerd<<e Instaltments of Basic.Rent.Except as otherwise provided in Section 5.3 or 5.7 and the fourth sentence of Section 6.8(a), each nent of Basic Rent, as well as any payment of Supplemental Rent representing interest on overdue tallments of Basic Rent, received by the Indenture Trustee at any time, shall be distributed by the Indenture Trustee in the following order of priority:first, so much of such payment as shall be required to,pay in full the aggregate amount of the payment or payments of principal and/or interest (as well as any.interest on overdue principal or, to the extent permitted by law, interest)then due and unpaid on all~Votes shall be distributed to the Holders of the Notes ratably, without priority of one over the other, in the proportion that the aggregate amount of such payment or payments then due and unpaid'on all Notes held by each such Holder on sUch date bears to the aggregate amount of such payment or payments then due and unpaid on all Notes Outstanding on such date, without priority of interest over principal or principal over interest;and second, the balance, if any, of such payment remaining thereafter shall be distributed, concurrently with any distribution pursuant to clausefirst hereof, to the Owner Trustee or as the Owner Trustee may direct.If there shall not otherwise have been distributed on any date (or within any applicable period of grace), pursuant to this Section 5.1, the full amount then distributable pursuant to clause first of this Section 5.1, the Indenture Trustee shall distribute other payments of the character referred to in Section's'5.4 and 5.5 then held by it or thereafter received by it, except as otherwise provided in Section 5.3, to the Holders of all Notes to the extent necessary to enable it to make all the distributions then due pursuant to such,clausefirst; prooided that to the extent any distribution is made from amounts held pursuant to Section 5.4 and the Lessee subsequently makes the payment of Basic Rent or Supplemental Rent in respect of which such distribution was made, such payment of Basic Rent or Supplemental Rent shall, unless a Default or Event of Default shall have occurred and be continuing, be applied to the purpose for which such amount held pursuant to Section 5.4 had been held, subject, in.all cases, to the terms of Section 5.4.The portion of each such payment made to the Indenture Trustee which is to be distributed by the Indenture Trustee in payment of Notes shall be applied in accordance with Section 3.11.Any payment eived by the Indenture Trustee pursuant to Section 6.8 shall be distributed to the Holders of the Notes, ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due and unpaid on aB Notes held by each such Holder bears to the aggregate amount of the payments then due and unpaid on aB Notes Outstanding.
Amounts distributed by the Indenture Trustee pursuant to this Section 5.1 shall be distributed as promptly as practicabl after such amounts are actually received by the Indenture Trustee;in the event the Indenture Trustee shall be directed to make payments to thc Holder of any Note by wire transfer in accordance with Section 3.8, any amounts received by the Indenture Trustee after 1:00 p.m..Houston time, may be so distributed on the following Business Day.SEGTloN 5.2.Amounts Received as Result of Event of Loss.Deemed Loss Event, Exercise of Options to Terminate, Exercise of Cure Option.If an Event of Loss shall occur or Deemed Loss Event shall be declared or the Lessee shall exercise the Cure Option or the Lessee shall exercise its purchase option under Section 13(c)of the Facility Lease or Section 10(b)(3){xvii)of the Participation Agreement, and if either the Assumption Agreement or the Undivided Interest Indenture Supplement shall have been executed and delivered, any amounts of Casualty Value, Special Casualty Value, Special Termination Value or Fair Market Sales Value received or held by the Indenture Trustee in respect of such Event of Loss or Deemed Loss Event or exercise of the Cure Option or such purchase option shaB be distributed forthwith to the Owner Participant.
If the Lessee or the Owner Trustee, as the case may be, shall exercise its option to~terminate the Facility Lease pursuant to Section 14 thereof, then there shall be prepaid, on the date payments or proceeds with respect thereto are received by the Indenture Trustee (or as soon thereafter as practicable) under Section 14 of the Facility Lease, the unpaid principal amount of aB Notes, together with the premium, if any, and aB accrued but unpaid interest thereon to the date of such prepayment.
Notice of such prepayment shall be given as provided in Section 3.9(d)and may provide that it is subject to receipt of funds for such prepayment.
Except as otherwise provided in Section 5.3 or 5.7, any payments received and amounts realized by tlie Indenture Trustee upon exercise of the Lessee's or the Owner Trustee's option to tcrniinate the Facility Lease under Section 14 thereof shall in each case be distributed on tlic date of prcpayinent as proi ided in'claiises first.'sccon and fifth of Section 5.3.Sacmo~~5.3.Amounts Received After, or Held at Tiuie of Indenture Event of Default under Section 6.2.Except as otherwise provided in Section 5.7.aB payments received and ainounts realized by the Indenture Trustee in respect of the Lease Indenture Estate{including any amounts realized by the Indenture Trustee from the exercise of any remedies pursuant to the Facility Lease or Article VI of this Indenture) after an Indenture Event of Default referred to in Section 6.2 shall have occurred and be continuing and the Notes have been accelerated pursuant to Section 7.1, as well as aB payments thereafter received or amounts then held by the Indenture Trustee as part of the Lease Indenture Estate, shall be distributed by the Indenture Trustee in the following order of priority: 'rst, so much of such payments or amounts as shall be required to reimburse the Indenture Trustee f'r any Trustee's'Expenses (to the extent not previously reimbursed) and to pay the reasonable remuneration of the Indenture Trustee, shall be applied by the Indenture Trustee to such reimbursement and payment;second, so much of such payments or amounts remaining as shall be required to pay in full the aggregate unpaid principal amount of aB.Notes, together with premium, if any, plus accrued but unpaid interest (as well as interest on overdue principal and, to the extent permitted by law, on overdue interest)thereon to the date of distribution, shall be distributed to the Holders of such Notes and in case the aggregate amount so to be distributed shall be insufBcient to pay all such Notes in full as aforesaid, then ratably, without priority of one over the other, in the proportion that the aggregate unpaid principal amount of aB such Notes held by each such Holder, together with premium, if any, plus accrued but unpaid interest thereon to the date of distribution bears t 14 the aggregate unpaid principal amount of all Notes, together with premium, if any, plus accrued but unpaid interest thereon to the date of distribution; third, so much of such payments or amounts Jemaining as shall be required to pay the present or former Holders of the Notes the amounts payable to them as Indemnitees (to the extent not previously reimbursed) shall be distributed to such Holders;and in case the aggregate amount so to be paid to all such Holders in accordance with this clause third shall be insuScient to pay all such amounts as aforesaid, then ratably, without priority of one over the other, in the proportion that the amount of such indemnity or other payments to which such Person is entitled bears to the aggregate amount of such indemnity or other payments to which all such Persons are entitled: fourth, the balance, if any, of such payments or amounts remaining shall be applied to the payment of any other indebtedness at the time due and owing to the Indenture Trustee or the.Holders of the Notes which this Indenture by its terms secures;and fifth, the balance, if any, of such payments or amounts remaining thereafter shall be distributed to or upon the direction of the Owner Trustee.SEGTlQ."i 5.4.Amounts Received for Which Provision is Made in a Transaction Document.4 Except as otherwise provided in Section 5.1, 5.3 or 5.7, any payments received by the Indenture Trustee in respect of the Lease Indenture Estate for which provision as to the application thereof is made in a Transaction Document shall be applied to the purpose for which such payment was made in accordance with the terms of such Transaction Document, as determined in the Brst instance from instructions or other information accompanying such payment or otherwise in accordance with instructions from the payor of such payments.Scanoiw 5.5.Amounts Received for Which No Provision is Made.Except as otherwise provided in Section 5.1, 5.3 or 5.7, any payments received and any amounts lized by the Indenture Trustee in respect of the Lease Indenture Estate (a)for which no provision as to the application thereof is made in a Transaction Document or elsewhere in this Article V shall be held by the Indenture Trustee as part of the Lease Indenture Estate, and (b)to the extent received or realized at any time after payment in full of the principal of and premium, if any, and interest on all the Notes, as well as any other amounts remaining as part of the Lease Indenture Estate after payment in full of the principal of and premium, if any, and interest on all the Notes, shall be distributed by the Indenture Trustee in the order of priority set forth in Section 5.3 (omitting clause second thereof).SEcrtov 5.6.Payments to Ou:ner Tnistee.Unless otherwise directed by the Owner Trustee, all payments to be made to the Owner Trustee hereunder shall be made to the Owner Participant by wire transfer of immediately available funds as'oon as practicable but in any event no later than the close of business on the date of receipt (assuming the Indenture Trustee (at the office of any bank or trust company in New York, N.Y.specified by the Indenture Trustee in accordance with Section 11(b)of the Facility Lease)has received such funds prior to 12:30 p.m., New York time, on the same day), to such account at such bank or trust company as the Owner Participant shall from time to time designate in writing to the Indenture Trustee.SEGTloN 5.7.Excepted Payments.Anything in this Article V or elsewhere in this Indenture to the contrary notwithstanding, any Excepted Payment received at any time by the Indenture Trustee shall be distributed as promptly as practicable to the Person entitled to receive such Payment (such entitlement to be conclusively ermined by reference to payment instructions from such Person).15 ARTICLE VI REPRESEYTATIOYS, WVARRAYTIES AYD COVEYAiTS oF OwYER TRUsTEE;EvENTs oF DEFAULT;RE>IEDIEs oF THE INDENTURE TRUSTEE SEcTIO>6.1.Representations, warranties and Covenants of Ou:ner Trustee.The Owner Trustee hereby covenants and agrees that (i)it.will duly and punctually pay the principal of, and premium, if any, and interest on, the Notes in accordance with the terms thereof and this Indenture, (ii)it will not pledge, create a security interest in or mortgage, so long as this Indenture shall remain in effect, any of its estate, right, title or interest in and to the Lease Indenture Estate or otherwise constituting part of the Trust Estate, to anyone other than the Indenture Trustee, (iii)so long as this Indenture shall remain in effect, it will not purchase or agree to purchase any property or asset other than the Undivided Interest and the Real Property Interest and other than as contemplated by the Transaction Documents, (iv)it will not, except with the prior written concur-re>ce of the Indenture Trustee or as expressly provided in or permitted by, this Indenture, or with respect to the Trust Agreement or any property not constituting part of the Lease Indenture Estate, take any action which would result in an impairment of any Note or the obligation of the Lessee to pay any amount under the Facility Lease which is part of the Lease Indenture Estate (not in any event including ln respect of Excepted Payments)or any of the other rights or security created or effected thereby, or (v)issue, or incur any obligation in respect of, indebtedness for borrowed money except for its obligations in respect of Notes.A signed copy of any amendment or supplement to the Trust Agreement shall be delivered by the Owner Trustee to the Indenture Trustee and the Lessee.This Indenture and the Lease Indenture Estate shall not be affected by any action taken under or in respect of the Trust Agreement except as otherwise provided in or permitted by this Indenture.
The Owner Trustee may resign as 0'wner Trustee, appoint a successor Owner Trustee and take all necessary and proper action to constitute or more Persons as co-trustee(s) jointly with the Owner Trustee or as separa)e trustee(s), il accordance with the terms and conditions of Article IX of the Trust Agreement.
SEcrIOI'.2.
Indenture Events af Default The term Indenture Event of Default, wherever used herein, shall mean any of the following events (whatever the reason for such Indenture Event of Default and whether it shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any, r judgment, decree or order of any court or any order, rule or regulation of Iany administrative or governmental body): (a)any of the Events of Default speci6ed in the following clauses of Section 15 of the Facility Lease: (1)clause (i)(y), except a failure of the Lessee to pay any amount which shall constitute an Excepted Payment;('2)clause (i)(x), except a failure of the Lessee to pay any amount which shall constitute an Excepted Payment or except where the Owner Trustee shall not have rescinded or terminated the Facility Lease pursuant to Section 16(a)(i)of the Facility Lease;.or (3)clause (vii);or (b)the rescission or termination of, or the taking of action by the Owner.Trustee or the Owner Participant the effect of which would be to rescind or terminate, the Facility Lease, whether pursuant to Section 16(a)(i)of the Facility Lease or otherwise; or-(c)any failure by the Lessee to perform and observe Section 10(b)(3)(iii)of the Participation Agreement; or (d)the Owner Trustee shall fail to make any payment in respect of the principal of, or premium, if any, or interest on, the Notes within ten Business Days after the same shall have become due (other than by virtue of any failure by the Lessee to make any payment of Rent therefor);
or 16 (e)the Owner Trustee shall fail to perform or observe any covenant or agreement to be performed or observed by it under Section 6.1, or the Owner Participant shall fail to perform or bserve any covenant or agreement to be performed or observed by it under Section 7(b)(1)of the ticipation Agreement, and, in any such case, such failure shall continue for a period of 30 days after.ice thereof shall have been given to the Owner Trustee apd the Owner Participant and the Lessee y the Indenture Trustee, specifying such failure and requiring it to be remedied.San'toi 6.3.Enforcement of Remedies.(a)In the event that an Indenture Event of Default shall have occurred and be continuing, then and in every such case the Indenture Trustee, subject to paragraph (b)of this Section 6.3 and Section 6.11, may, and when required pursuant to the provisions of Article VII hereof, shall, exercise any or all of the rights and powers and pursue, subject to the rights of the Lessee under the Facility Lease, (x)in the event such Indentule, Event of Default is referred to in paragraph (d)or (e)of Section 6.2, any or all of the remedies then available pursuant to this Article VI and Article VII, or (y)in the event such Indenture Event of Default is referred to in paragraph (a), (b)or (c)of Section 6.2, any or all of such remedies concurrently with the exercise and pursuit by the Owner Trustee of any or all of the remedies then available to the Owner Trustee under the Facility Lease.(b)Any provisions of the Facility Lease or this Indenture to the contrary notwithstanding, if the Lessee shall fail to pay any Excepted Payment to any Person entitled thereto as and when due, such Person shall have the right at all times, to the exclusion of the Indenture Trustee, to demand, collect, sue for, enforce performance of obligations relating to, or otherwise obtain all amounts due in respect of, such Excepted Payment.', San'[Oiw 6.4.Specific Remedies;Enforcement of Claims unthont Possession of Notes.Subject to Sections 6.2, 6.3 and 6.11 and the terms of the documents constituting a part of the Lease Indenture Estate, upon the occurrence and during the continuance of an Indenture Event of fault: (a)The Indenture Trustee'may, in order to enforce the rights of the Indenture Trustee and of the olders of the Notes, direct payment to it of all moneys and enforce any agreement or undertaking constituting a part of the Lease Indenture Estate by any action, suit, remedy or proceeding authorized or permitted by this Indenture or by law or by equity, and whether for the speci6c performance of any agreement contained herein, or for an injunction against the violation of any of the terms hereof, or in aid'of the exercise of any power'grarited hereby or by Applicable Law, and in addition may sell, assign, transfer and deliver, from time to time to the extent permitted by Applicable Law, all or any part of the Lease Indenture Estate or any interest therein, at any private sale or public auction with or without demand, advertisement or notice (except as herein required or as may be required by Applicable Law)of the date, time and place of sale and any adjournment thereof, for cash or credit or other property, for immediate or future delivery and for such price or prices and on such terms as the.Indenture Trustee, in its uncontrolled discretion, may determine, or as may be required by Applicable Law, so long as the Owner Participant and the Owner Trustee are afForded a commercially
'reasonable opportunity to bid for all or such part of the Lease Indenture Estate in connection therewith.
It is agreed that 90 days'otice to the Owner Participant, the Owner Trustee and the Lessee of the date, time and place of any proposed sale by the Indenture Trustee of all or any'part of the Lease Indenture Estate or interest therein is reasonable.
The Indenture Trustee may Ale such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee and of the Holders of the Notes asserted or upheld in any bankruptcy, receivership or other judicial proceedings.(b)Without limiting the foregoing, the Indenture Trustee, its assigns and its legal representa-tives, subject to the rights of the Lessee under the Facility Lease, shall have as to such of the Lease Indenture Estate as is subject to the Uniform Commercial Code or similar law in each relevant isdiction all the remedies of a secured party under the Uniform Commercial Code or similar law in 17 such jurisdiction and such further remedies as from time to time may hereafter be provided in such jurisdiction for a.secured party.(c)All rights of action and rights to assert claims under this Indenture or under any of the N may be enforced by the Indenture Trustee without the possession of the Notes at any trial or ot proceedings instituted by the Indenture Trustee, and any such trial or other proceedings shall be brought in its own name as trustee of an express trust, and any recovery or judgment shall be for the ratable benefit of the Holders of the Notes as herein provided.In any proceedings brought b>the Indenture Trustee (and also any proceedings involving the interpretation of any'provision of this Indenture to which the Indenture Trustee shall be a party)the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any such Holders parties to such proceedings.(d)The Indenture Trustee may exercise any other right or remedy that may be available to it under Applicable Law or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof.SEGTIQN 6.5.Rights and Remedies Cumulative.
Subject to Sections 6.2, 6.3 and 6.11, (a)each and every right, power and remedy herein specifically given to the Indenture Trustee under this Indenture shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Indenture Trustee, and the exercise or the beginning of the.exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy, and (b)no delay or omission by the Indenture Trustee in the exercise of any right, power or remedy or in the pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any default on the part of'wner Participant, the Owner Trustee or the Lessee or to bean acquiescence therein.SEcrIoN 6.6.Restoration of Rights and Remedies.In case the Indenture Trustee shall have proceeded to enforce any right, power or remedy under this Indenture by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Indenture Trustee<then and in every such case the Owner Trustee, the Owner Participant, the Indenture Trustee and the Lessee shall be restored to their former positions and rights hereunder with res'pect to the ILease Indenture Estate, and all rights, powers and remedies of the Indenture Trustee shall continue as if no such proceedings had been taken.SEcTIoN 6.7.Waiver of Past Defaults.Any past Indenture Default or Indenture Event of Default and its consequences may be waived by the Indenture Trustee, except an Indenture Default or an Indenture Event of Default (i)in the payment of the principal of or interest on any Note, subject to the provisions of Section 7.1,'r (ii)in respect of a covenant or provision hereof which, under Section 10.2, cannot be modified or amended without the consent of each Holder of a Note then Outstanding.
Upon any'uch waiver, such Indenture Default or Indenture Event of Default shall cease to exist, and any other Indenture Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Indenture Default or Indenture Event of Default or impair any right consequent thereon.SECTION 6.8.Right of OIvner Trustee to Pay Bent;Note Purchase;Substitute Lessee.Anything in this Article VI or Article VII to the contrary notwithstanding:
.18 (a)An Indenture Event of Default shall be deemed cured if such Indenture Event of Default results from non-payment of Basic Rent or Supplemental Rent under the Facility Lease, and the wner Trustee or the Owner Participant shall have paid all principal of and interest on the Notes due her than by acceleration) on the date such Rent was payable (plus interest on such amount as uired hereby)within 15 days after the receipt by the Owner Trustee.of notice of such non-payment;such receipt to be evidenced by, among other things, any notice thereof given to the Owner Trustee in accordance with the notice provisions of the Participation Agreement.
The Owner Trustee or the Owner Participant, upon exercising cure rights under this paragraph (a), shall not obtain any Lien on any part of the Lease Indenture Estate on account of such payment for the costs and expenses incurred in connection therewith nor, except as expressly provided in the succeeding sentence, shall any claims of the Owner Trustee or the Owner Participant against the Lessee or any other Person for the repayment thereof impair the prior right and security interest of the Indenture Trustee in and to the Lease Indenture Estate.Upon any payment by the Owner Trustee or the Owner Participant pursuant to this Section 6.8, the Owner Trustee or the Owner Participant, as the case may be, shall (to the extent of such payment made by it)be subrogated to the rights of the Indenture Trustee and the Holders of the Notes to receive the payment of Rent with respect to which the Owner Trustee or the Owner Participant made such payment and interest on account of such Rent payment being overdue in the manner set forth in the next sentence.If the Indenture Trustee shall thereafter receive such payment of Rent or such interest, the Indenture Trustee shall, notwithstanding the requirements of Section 5.1, on the date such payment is received by the Indenture Trustee, remit such payment of Rent (to the extent of the payment made by the Owner Trustee or the Owner Participant pursuant to.this Section 6.8)and such interest to the Owner Trustee or the Owner Participant, as the case may be, in.reimbursement for the funds so adv'anced by it.(b).Each Holder of a Note agrees, by acceptance thereof, that if the Notes have been accelerated pursuant to Section 7.1, and the Owner Trusteewithin 30 days after receiving notice from the Indenture Trustee pursuant to Section 7.1, shall give written notice to the Indenture Trustee of the Owner Trustee's intention to purchase all of the Notes in accordance with this paragraph, accompa-d by assurances of the Owner Trustee to purchase the Notes, then, upon receipt within 10 Business s after such notice from the Owner Trustee'of an amount equal to the aggregate unpaid principal amount of and any premium with respect to any unpaid Notes then held by such Holder, together with accrued but unpaid interest thereon to the date of such receipt (as well as any interest on overdue principal and, to the extent permitted by law, interest), such Holder will forthwith sell, assign, transfer.and convey to the Owner Trustee (without recourse or warranty of any kind other than of title to the Notes so conveyed)all of the right, title and iriterest of.such Holder in and to the Lease Indenture Estate, this Indenture and all Notes held by such Holder;provided, that no such Holder shall be required so to convey unless (1)the Owner Trustee shall have simultaneously tendered payment for all other Notes issued by the Owner Trustee at the time Outstanding pursuant to this paragraph and'(2)such conveyance is not in violation of any Applicable Law.(c)Each Holder of a Note further agrees by its acceptance thereof that the Owner Trustee shall have the right, pursuant to Section 16 of the Facility Lease, to terminate the Facility Lease and, in connection therewith, to arrange for the substitution of another Person as lessee under a new lease substantially similar to the Facility Lease (hereinafter the Substituted Lessee)and, subject to (i)any Indenture Event of Default under paragraphs (d)and (e)of Section 6.2 having been cured by the Owner Trustee and (ii)the Substituted Lessee'.s assuming all of the obligations of the Lessee under the Facility Lease, the Facility Lease between the Owner Trustee and such Substituted Lessee shall, for all purposes of this Indenture, be deemed to be the Facility Lease subject to the lien of this Indenture.
The Owner Trustee shall use its best efforts to obtain a Substituted Lessee having an assigned credit rating by Standard R Poor's Corporation or Moody's Investors Service, Inc.(or, if either of such organizations shall not rate securities issued by such Substituted Lessee, by any other nationally recognized rating organization in the United States of America)with respect to at least one series of its debt obligations or preferred stock equal to or better than the ratings assigned, immediately prior to ch substitution, by such organizations to comparable securities of the Lessee immediately prior to 19 such substitution, but in no event less than the"investment grade" rating assigned by such organizations.
t SECrtOY, 6.9.Further Assurances.
Subject to Section 7.6,'the Owner Trustee covenants and agrees from time to time to do all such acts and execute all such instruments of further assurance as shall be reasonably requested by the Indenture Trustee for the purpose of fully carrying out and effectuating this Indenture and the intent hereof.SEcrtOY, 6.10.Right of Indenture Trustee to Perfor7n Covenants, etc.If the Owner Trustee shall fail to make any payment or perform any act required to be made or performed by it hereunder or under the Facility Lease or if the Owner Trustee shall fail to release any Lien affecting the Lease Indenture Estate which it is required to release by the terms of this Indenture, the Indenture Trustee, without notice to or demand upon the Owner Trustee and without waiving or releasing any obligation or default, may (but shall be under no obligation to)at any tfme thereafter
" make such payment or perform such act for the account and at the expense of the Lease Indenture Estate.All sums so paid by the Indenture Trustee and all costs and expenses (including without limitation reasonable fees and expenses of legal counsel and other professionals) so incurred, together with interest thereon from the date of payment or occurrence, shall constitute additional indebtedness secured by this Indenture and shall be paid from the Lease Indenture Estate to the Indenture Trustee on demand.The Indenture Trustee shall not be liable for any damages resulting from any such payment or action unless such damages shall be a consequence of willful misconduct or gross negligence on the part of the Indenture Tr'ustee.SEanoi 6.11.Certain Other Rights of the Ou:ner Trustee.Notwithstanding any provision to the contrary in this Indenture, the Owner Trustee shall at times retain, to the exclusion of the Indenture Trustee.all rights of the Owner Trustee to exercise election or option or to make any decision or determination or to give or receive any notice, conse waiver or approval or to take any other action under or in respect of the Facility Lease, as well as all rights, powers and remedies on the part of the Owner Trustee, whether arising under the Facility Lease or by statute or at law or in equity or otherwise, arising out of any Default or Event of Default subject, hou;ever, to Section 10.2.without the prior written consent of the Indenture Trustee, the exercise of any of the aforesaid rights so retained by the Owner Trustee shall not be exercised in such a manner as to (i)reduce the amounts payable by the Lessee under', the Facility Lease below the'mounts necessary to provide the Owner Trustee with sufBcient moneys to make timely payments in l full of amounts due with respect to the principal of and premium, if a'y, and interest on all Notes or'ii)rescind or terminate the Facility Lease pursuant to Section 16 thereof.The Owner Trustee shall'ot exercise any other riglit or remedy under the Facility Lease the effect of which would be to effect such rescission or termination.
ARTICLE VII CERTAIN DUTIEs QF THE OwiNER TRUsTEE Avo THE Ii4DEi4TURE TRUsTEE SECTlON 7.1.Duties in Respect of Events of Default, Deemed Loss Events and Events-of Loss;Acceleration of ilfaturity.
In the event the Owner Trustee shall have actual knowledge of an Indenture Event of Default, an Event of Default, a Deemed Loss Event or an Event of Loss, the Owner Trustee shall give prompt written notice thereof to the Owner Participant, the Lessee and the Indenture Trustee.In the event the Indenture Trustee shall have actual knowledge of an Event of Default, an Indenture Event of Default, a Deemed Loss Event or an Event of Loss, the Indenture Trustee shall give prompt wri o0 notice thereof to the Owner Participant, the Owner Trustee, the Lessee and each Holder of a iVote.Subject to the terms of Sections 6.2, 6.3, 6.4, 6.8, 6.11 and 7.3, (a)the Indenture Trustee shall take such ction (including the waiver of past Defaults in accordance with Section 6.7), or refrain from taking h action, with respect to any such Indenture Event of Default, Event of Default, Deemed Loss-ent or Event of Loss as the Indenture Trustee shall be instructed by a Directive, (b)if the Indenture Trustee shall not have received instructions as above provided within 20 days after mailing by the Indenture Trustee of notice of such Indenture Event of Default, Event of Default.Deemed Loss Event or Event of Loss to the Persons referred to above, the Indenture Trustee may, subject to.instructions thereafter received pursuant to the preceding sentence, take such action, or refrain from taking such action, but shall be under no duty to take or refrain from taking any action, with respect to such Indenture Event of Default, Event of Default, Deemed Loss Event or Event of Loss as it shall determine advisable in the best interests of the Holders of the Notes of all series and (c)in the event that an Indenture Event of Default shall have occurred and be continuing, the Indenture Trustee in its discretion may, or upon receipt of a Directive shall, by written notice to the Owner'rustee, declare the unpaid principal amount of all Notes with accrued interest thereon to be immediately due and payable, upon which declaration such principal amount and such accrued interest shall immediately become due and payable without further act or notice of any kind.For all purposes of this Indenture, in the absence of actual knowledge, neither the Owner Trustee nor the Indenture Trustee shall be deemed to have knowledge of an Indenture Event of Default or Event of Default except that, the Indenture Trustee shall be deemed to have knowledge of the failure of the L'essee to pay any installment of Basic Rent within 10 Business Days after the same shall become due.For purposes of this Section 7.1, neither the Owner Trustee nor the Indenture Trustee shall be deemed to have actual knowledge of any Indenture Event of Default, Event of Default, Deemed Loss Event or Event of Loss unless it shall have received notice thereof pursuant to Section 11.6 or such Indenture Event of Default or Event of Default shall actually be known by an olHcer,in the corporate trust department of the Owner Trustee or by an officer in the corporate trust department of the Indenture Trustee, as the case may be.SEOTIoN 7.2.Duties in Respect of;platters Specified in Directice.
Subject to the terms of Sections 6.2, 6.3, 6.4, 6.8, 6.11, 7.1 and 7.3, upon receipt of a Directive, the Indenture Trustee shall take such of the following actions as may be specified in such Directive: (i)give such notice or direction or exercise such right, remedy or power permitted hereunder or permitted with respect to the Facility Lease or in respect of any part or all of the Lease Indenture Estate as shall be specified in such Directive; and (ii)take such action to preserve or protect the Lease Indenture Estate as shall be specified in such Directive, it being agreed that without such a Directive, the Indenture Trustee shall not waive, consent to or approve any such matter as satisfactory to it.SEGTIQN 7.3.Indemnijication The Indenture Trustee shall not be required to take or refrain from taking any action under Section 7.1 or 7.2 or Article VI which shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability unless the Indenture Trustee shall have been indemnified by the Holders of the Notes against liability, cost or expense (including counsel fees)which may be incurred in connection therewith, or unless, in the reasonable judgment of the Indenture Trustee, the indemnities of the Lessee shall be adequate for such purpose;provided, however, that if the Holder of such Notes is the Collateral Trust Truste'e, the unsecured written undertaking of the Collateral Trust Trustee, in its individual capacity, shall be suFicient indemnity for purposes of this Section.The Indenture Trustee shall not be required to take any action under Section 7.1 or 7.2 or Article VI nor shall any other provision of this Indenture be deemed to impose a duty on the Indenture Trustee to take any action', if the Indenture Trustee shall reasonably determine, or shall have been advised by counsel, that such action is likely to result in personal liability or is contrary to e terms hereof or of the Facility Lease or is otherwise contrary to law.
SEGTION 7.4.Limitations on Duties;Discharge of Certain Liens Resulting from Claiurs Against Indenture Trustee.The Indenture Trustee shall have no duty or obligation to take or refrain from taking any ac under, or in connection with, this Indenture or the Facility Lease, except as expressly provided by i terms of this Indenture.
The Indenture Trustee nevertheless agrees that it will, in its individual capacity and at its own cost and expense, promptly take such action as may be necessary duly to discharge all Liens on any part of the Lease Indenture Estate whic)>result from acts by or claims against it arising out of events or conditions not related to its rights in the Lease Indenture Estate or the administration of the Lease Indenture Estate or the transactions contemplated hereby.SEcrtON 7.5.Restrictions on Dealing unth Lease Indenture Estate.Except as provided in the Transaction Documents, the Owner Trustee shall not use, operate, store, lease, control, manage, sell, dispose of or otherwise deal with any part of the Lease Indenture Estate.SECT'ION 7.6.Filing of Financing Statnnents and Continuation Statements.
Pursuant to Section 10(b)(2)of the Participation Agreement, the Lessee has covenanted to maintain the priority of the lien of this Indenture on the.Lease Indenture Estate.The Indenture Trustee shall, at the request and expense of the Lessee as provided in the Participation Agreement, execute and deliver to the Lessee and.the Lessee will Ble, if not already filed, such Bnancing statements or other documents and such continuation statements or other documents with respect to financing statements or other documents previously Bled relating to the lien created under this Indenture in the Lease Indenture Estate as may be necessary to protect, perfect and preserve the lien created under this Indenture.
At any time and from time to time, upon the request of the Lessee or the Indenture Trustee, at the expense of the Lessee as provided in the Participation Agreement (and upon receipt of the form of document so to be executed), the Owner Trustee shall promptly and c~execute and deliver any and all such further instruments and documents as the Lessee or~Indenture Trustee may request in order for the Indenture Trustee to obtain the full benefits of the security interest, assignment and mortgage created hereby and of the rights and powers herein granted.Upon the reasonable instructions (which instructions shall be accompanied by the form of document to be filed)at any time and from time to time of the Lessee or the Indenture Trustee, the Owner Trustee shall execute and Ble any financing statement (and any continuation statement with respect to any such financing statement), any certificate of title or any other document, in each case relating to the security interest, assignment and mortgage created by this Indenture, as may be specified in such instructions.
In addition, the Indenture Trustee and the Owner Trustee will execute such continuation statements with respect to Bnancing statements and other documents relating to the lien created under this Indenture in the Lease Indenture Estate as may be reasonably specified from time to time in written instructions of any Holder of a Note (which instr'uctions may, by their terms, be.operative only at a future date and which shall be accompanied by the form of such continuation statement or other document so to be Bled).ARTICLE VIII CONCERNNO THE OwNER TRUSTEE AND THE INDENTURE TRUSTEE SEGTlON 8.1.Acceptance of Trusts;Standard of Care.The Indenture Trustee accepts the trusts hereby created and applicable to it and agrees to perform the same but only upon the terms of this Indenture and the Participation Agreement and agrees to receive and disburse all moneys constituting part of the Lease Indenture Estate o1 accordance with the provisions hereof, but no implied duties or obligations shall be read into this Indenture or the Participation Agreement against the Indenture Trustee.The Indenture Trustee shall ter into and perform its obligations under the Participation Agreement, and, at the request of the ner Trustee, any other agreement relating to'any transfer of the Undivided Interest or the Real perte Interest or the assignment of rights under the Assignment and Assumption or, at the request of the Owner Trustee, the purchase by any Person of Notes or Additional iVotes issued hereunder, all's contemplated hereby.The Indenture Trustee shall not be liable under any circumstances, except for its own willful misconduct or gross negligence.
If any Indenture Event of Default shall have occurred and be continuing, the Indenture Trustee shall exercise such of the rights and remedies vested in it by'..-this Indenture, subject to the provisions hereof, and shall use the same degree of care in their exercise as a prudent man would exercise or use in the circumstances in the conduct of his own affairs, but if in the opinion of the Indenture Trustee such action may tend to involve expense or liability, it shall not be obligated to take such action unless it is furnished with indemnity satisfactory to it.SECTION 8.2.No Duties of Maintenance, Etc.Except pursuant to Section 7.2 and except as provided in, and without limiting the generality of, Sections 7.1 and 7.4, the Indenture Trustee shall have no duty (i)to see to any recording or filing of any Transaction Document, or to see to the maintenance of any such recording or filing, or (ii)to see to the payment or discharge of any tax, assessment or other governmental charge or any lien or encumbrance of any kind owing with respect to, or assessed or levied against, any part of the Lease Indenture Estate (except such as are required to be paid or discharged by it pursuant to this Indenture or any of the other Transaction Documents) or to make or file any reports or returns related thereto.SECTION 8.3.Representations and Warranties of Indenture Trustee and the Ou;ner Trustee...;NEITHER THE OWNER TRUSTEE iVOR THE INDEiVTURE TRUSTEE iWIAKES AiVY REPRE-SENTATION OR WARRANTY AS TO THE VALUE, CONDITION, MERCHANTABILITY OR FIT-NESS FOR USE OF UNIT 2, THE UNDIVIDED INTEREST OR AiVY PART OF THE LEASE EiVTURE ESTATE OR AS TO ITS IiVTEREST THEREIiV, OR AiVY OTHER REPRESEiVTATION WARRANTY WITH RESPECT TO UNIT 2, THE UiVDIVIDED INTEREST OR ANY PART OF E LEASE INDENTURE ESTATE WHATSOEVER.
The Owner Trustee and the Indenture Trustee each represents and warrants, in its individual capacity, as to itself that this Indenture has been executed and delivered by one or more of its officers who are duly authorized to execute and deliver this'Indenture on its behalf..SECTtON 8.4.'oneys Held in Taut;Non-Segregation of i>loneys.All moneys and securities deposited with and held by the Indenture Trustee under this Indenture for the purpose of paying, or securing the payment of, the principal of or premium or interest on the iVotes shall be held in trust.Except as provided in Sections 2.3(c), 8.8 and 11.1, moneys received by the Indenture Trustee under this Indenture need not be segregated in any manner except to the extent~required by law, and may be deposited under such general conditions as may be prescribed by law;provided, hou:ever, that any payments received or applied hereunder by the Indenture Trustee shall be accounted for by the Indenture Trustee so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.Except as otherwise expressly provided herein, the Indenture Trustee shall not be liable for any interest on any money held pursuant to this Indenture.
SECTiON 8.5.Reliance on writings, Use of Agents, Etc.The Indenture Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, telegram, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties.In the case of the Lessee, the Indenture Trustee may accept a copy of a'resolution of the Board of Directors or any duly constituted and authorized committee of the Board of Directors of the Lessee, certified by the Secretary or an Assistant Secretary of the Lessee as duly adopted and in full force and ct, as conclusive evidence that such resolution has been duly adopted by such Board or Committee 23 and that the same is in full force and effect.As to the aggregate unpaid principal amount of the Notes Outstanding as of any date, the Owner Trustee may for all purposes hereof rely on a certificate signed by any Authorized OfBcer of the Indenture Trustee.As to any fact or matter the manner ascertainment of which is not specifically described herein, the Indenture Trustee may for all purpo hereof rely on a certificate, signed by the Chairman of the Board, the President, any Vice Preside and the Treasurer or the Secretary or any Assistant Treasurer or Assistant Secretary of the Lessee, or a Holder of a Note or any Responsible Officer of the Owner Trustee, as the case may be, as to such fact or matter, and such certificate shall constitute full protection to the Indenture Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.The Indenture Trustee shall furnish to the Owner Trustee upon request such information and copies of such documents as the Indenture Trustee may have and as are necessary for the Owner Trustee to perform its duties under Article III.In the administration of the trusts hereunder, the Indenture Trustee may execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents or attorneys selected by it in good faith and with reasonable care, and, with respect to matters relating to the Notes, the Lease Indenture Estate and its rights and duties under this Indenture and the other Transaction Documents, may, at the expense of the Lessee, or, if the T.essee shall have failed to pay or provide for the payment thereof, at the expense of the Lease Indenture Estate, consult with counsel, accountants and other skilled persons to be selected and employed by it in good faith and with reasonable care, and the Indenture Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons so selected.Unless otherwise specified herein or in any other Transaction Document, any opinion of counsel referred to in this Indenture or in such other Transaction Document nray be relied on by the Indenture Trustee to the extent it is rendered by an attorney or firm of attorneys satisfactory to the Indenture Trustee (which may be counsel to the Owner Participant, the Owner Trustee, the Lessee or any party to any Transaction Document).
SEGTIQN 8.6.Indenture Trustee to Act Solely as Trustee.The Indenture Trustee acts hereunder solely as trustee as herein provided and not in individual capacity, except as otherwise expressly provided herein;and except as provided in Sectioi 9(a)and 9(b)of the Participation Agreement or Section 7.4 or 8.1, all Persons having any claim against the Indenture Trustee arising from matters relating to the Notes by reason of the transactions contemplated hereby shall, subject to the lien and priorities of payment as herein provided and to Sections 3.6 and 5.7, look only to the Lease Indenture Estate for payment or satisfaction thereof.SEn'ioN 8.7.Limitation on Bights Against Registered Holders, the Owner Trustee or Lease Indenture Estate.The Indenture Trustee shall be entitled to be paid or reimbursed for Trustee's Expenses as provided herein and in the other Transaction Documents.
Nonetheless, the Indenture Trustee agrees that it shall have no right against the Holders of the Notes, the Owner Trustee (except to the extent included in Transaction Expenses payable by the Owner Participant) or, except as provided in Article V and Section 6.4 or this Article VIII, the Lease Indenture Estate for any fee as compensation for its services hereunder.
SEcTIQN 8.8.Inuestment of Certain Payments Held by the Indenture Triistee.Any amounts held by the Indenture Trustee hereunder other than pursuant to Section 2.3(c)or 11.1 shall be invested by the Indenture Trustee from time to time as directed in writing by the Owner Trustee or by the Owner Participant as agent of the Owner Trustee and at the expense and risk of the Owner Participant in (i)obligations of, or guaranteed as to interest and principal by, the United States Government maturing not more than 90 days after such investment, (ii)open market commercial paper of any corporation incorporated under the laws of the United States of America or any State thereof rated"prime-1" or its equivalent by Moody's Investors Service, Inc.or"A-1" or its equiva o4 by Standard R Poor's Corporation or (iii)certiflcates of deposit maturing within 90 days after such investment issued by commercial banks organized under the laws of the United States of America or of any political subdivision thereof having a combined capital and surplus in excess of$500,000,000; oided, hou:eoer, that the aggregate amount at any one time so invested (a)in open market mmercial paper of any corporation shall not exceed$2,000,000 ahd (b)in certiflcates of deposit issued by any one bank shall not exceed$10,000,000.
Any income or gain realized as a result of any such investment shall be applied to make up any losses resulting from any such investment touche extent such losses shall not have been paid by the Owner Trustee or the Owner Participant pursuant to this Section 8.8.Any further income or gain so realized shall be promptly distributed (in no event later than the next Business Day)to the Owner Trustee or the Owner Participant, except after the occurrence and during the continuance of an Indenture Event of Default.The Indenture Trustee shall have no liability for any loss resulting from any investment made in accordance with this Section.Any such investment may be sold (without regard to maturity date)by the Indenture Trustee ivhenever necessary to make any distribution required by Article V.SEcrtow 8.9.No Responsibility for RecitaIs, etc.'he Indenture Trustee makes no representation or warranty as to the correctness of any statement, recital or representation made by any Person other than the Indenture Trustee.in this Indenture, any other Transaction Document or the Notes.SEcrtoN 8.10.Indenture Tn~tee May Engage in Certain Transactions.
The Indenture Trustee may engage in or be interested in any Gnancial or other transaction with the Lessee, the Owner Participant, the Owner Trustee and any other party to a Transaction Document, pr'ovided that if the Indenture Trustee determines that any such relation is in conflict with its duties un'der this Indenture, it shall eliminate the conflict or resign as Indenture Trustee.SEn'tow 8.11.Construction of Ambiguous Prooisions.
The Indenture Trustee, subject to Section 8.1, may construe any ambiguous or inconsistent provisions of this Indenture, and any such construction by the Indenture Trustee shall be binding upon the Noteholders.
In Construing any such provision, the Indenture Trustee will be entitled to rely upon opinions of counsel and will not be responsible for any loss or damage resulting.
from reliance in good faith thereon, except for its own gross negligence or willful misconduct.
ARTICLE IX SUCCESSOR TRUSTEES SEcYtoN 9.1.Resignation and Removal of Indenture Tnmtee;Appointment of Successor (a)The Indenture Trustee may resign at any time without cause by giving at least 30 days'rior written notice to the Owner Participant, the Owner Trustee, the Lessee and to each Holder of a Note, such resignation to be efFective upon the acceptance of such trusteeship by a successor.
In addition, the Indenture Trustee may be removed without cause by a Directive delivered to the Owner Participant, the Owner Trustee, the Lessee and the Indenture Trustee, and the Indenture Trustee shall promptly give notice thereof in writing to each Holder of a Note.In the case of the resignation or removal of the Indenture Trustee, a successor trustee may be appointed by such a Directive.
If a successor trustee shall not have been appointed within 30 days after such notice of resignation or removal, the Indenture Trustee, the Owner Trustee or any Holder of a Note may apply to any court of competent jurisdiction to appoint a successor to act until such time, if any, as a successor shall have been appointed as above provided.The successor so appointed by such court shall immediately and without further act be superseded by any successor appointed as above provided within one year from e date of the appointment by such court.
(b)Any successor trustee, however appointed, shall execute and deliver to its predecessor and to the Owner Trustee an instrument accepting such appointment, and thereupon such successor, without further act, shall become vested with all the estates, properties, rights, powers and duties of predecessor.
hereunder in the trusts under this Indenture applicable to it with like effect as if origin named the Indenture Trustee;but, nevertheless, upon the written request of such successor trustee receipt of a Directive, its predecessor shall execute and deliver an instrument transferring to such successor trustee, upon the trusts herein expressly applicable to it, all the estates, properties.
rights and powers of such predecessor under this Indenture, and such predecessor shall duly assign, transfer, deliver and pay over to such successor trustee all moneys or other property then held by such predecessor under this Indenture.(c)Any successor trustee, however appointed, shall be a bank or trust company organized under the laws of the United States or any jurisdiction thereof having a combined capital and surplus of at least 8100,000,000, if there be such an institution willing, able and legally qualified to perform the duties of the Indenture Trustee hereunder upon reasonable or customary terms.(d)Any corporation into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolida-tion to which the Indenture Trustee shall be a party, or any corporation to which substantially all the corporate trust business of the Indenture Trustee may be transferred, shall, subject to the terms of paragraph (c)of this Section 9.1, be the Indenture Trustee under this Indenture without further act.SvPPLESIENTs AivD AMENDSIENTs To THls INDENTUIIE AND OTHEII DocvxlENTs SEcTION 10.1.Supplements, AInendments and hfodipeatione to T/u's Indenture YVithoIit Consent of Holders of Notes.The Indenture Trustee may, with the written consent of the Owner Trustee, from time to time, at any time execute a supplement to this Indenture without the consent of the Holders of iNotes Outstanding in order to (i)cure any defect, omission or ambiguity in this Indenture or for any other purpose if such action does not adversely affect the interests of such Holders, (ii)grant or confer upon the Indenture Trustee for the benefit of such Holders any additional rights, remedies, powers, authority or security which may be lawfully granted or conferred and which are not contrary to or inconsistent with this Indenture, (iii)add to the covenants or agreements to be observed by the Owner Trustee and which are not contrary to this Indenture or surrender any right or power of the Owner Trustee, (iv)confirm or amplify, as further assurance, any pledge under, and the subjection to any lien or pledge created or to be created by, this Indenture, of the properties covered hereby, or subject to the lien or pledge of this Indenture additional revenues, properties or other collateral, including pursuant to an Undivided Interest Indenture Supplement, (v)qualify this Indenture under the provisions of the Trust Inden'ture Act, (vi)evidence the appointment of any successor Indenture Trustee pursuant to the terms hereof, (vii)evidence the assumption and release effected by the Assumption Agreement, or (viii)execute supplemental indentures to evidence the issuance of and to provide the terms of, Additional Notes to be issued hereunder in accordance with the terms hereof.SEcTION 10.2.Supplements and Amendments to this Indenture and tlIe Facility Lease IVith Consent of Holders of Notes.Except as provided in Section 10.1, at any time and from time to time, (i)upon receipt of a Directive, the Indenture Trustee shall execute a supplement to this Indenture for the purpose of adding provisions to, or changing or eliminating provisions of, this Indenture, but only as specified in such Directive, and (ii)upon receipt of a written instruction from the Lessee and the Owner Trustee, the Indenture Trustee shall consent to any amendment of or supplement to the Facility Lease execute and deliver such written waiver or modification of the terms of the Facility Lease to which the Owner Trustee may agree;provided, hou:ever, that, without the consent of the Holders of all the Notes then Outstanding no such supplement or amendment to this Indenture or the Facility Lease, or waiver odification of the terms of either thereof, shall (x)modify any of the provisions of this Section or ection 7.1 or 7.2 or Section 4 of, the Facility Lease or of the definition of Directive contained in ppendix A hereto or the definition of Indenture Event of Default herein, reduce the amount of the Basic Rent, Casualty Value, Termination Value or any payment under or pursuant to Section 16 of the Facility Lease as set forth in the Facility Lease below such amount as is required to pay the full principal of, and premium, if any, and interest on, the Notes when due, or extend the time of payment thereof, (/)except as permitted by clause (x)above, modify, amend or supplement the Facility Lease or consent to the termination or any assignment thereof, in any case reducing the Lessee's obligations in respect of the payment of the Basic Rent, Casualty Value, Termination Value or any payment under or pursuant to Section 16 of the Facility Lease below the amount referred to in clause (x)above, or (z)deprive the Holder of any Note of the lien of this Indenture on the Lease Indenture Estate (except as contemplated by Section 3.9(b))or materially adversely affect the rights and remedies for the benefit of such Holder provided in Article VI;and, provided fiirther, that, without the consent of the Holders of all the Notes then Outstanding and affected thereby, no such supplement or amendment to this Indenture or the Facility Lease, or waiver or modification of the terms of either thereof, shall reduce the amount or extend the time of payment of any amount payable under any Note, reduce or modify the provisions for the computation of the rate of interest owing or payable thereon, adversely alter or modify the provisions of Article V with respect to the order of priorities in which distributions thereunder with respect to the Notes shall be made, or reduce, modify or amend any indemnities in favor of the Holders of the Notes.Anything to the contrary contained.
herein notwithstanding, without the necessity of the consent of the Holders of Notes or the Indenture Trustee, (a)any indemnities in favor of the Owner Trustee or the Owner Participant may be modified, amended or changed and (b)the Owner Trustee may enter into any agreement with respect to the Lease Indenture Estate which by its ternis does not become effective prior to the satisfaction and discharge of this Indenture, but any reement entered into by the Owner Trustee pursuant to this clause (b)shall not materially rsely affect the Indenture Trustee or the Holder of any Note.Notwithstanding the foregoing, the enture Trustee shall, upon receipt of a written instruction from the Lessee and the Owner Trustee, consent to an amendment of any definitions contained in or appended to this Indenture which are being changed pursuant to the amendments referred to in Section 10(b)(3)(xiii)of the Participation Agreement.
The Owner Trustee shall deliver to the Indenture Trustee a copy of each amendment to the.Facility Lease whether or not the Indenture Trustee is required to consent or otherwise act with respect.thereto.SEcTlov 10.3.Certain Limitations on Suppleinents and Amendments.
If in the opinion of the, Owner Trustee or the Indenture Trustee, each of which shall be entitled to rely on counsel for purposes of this Section 10.3, any document required to be executed by either of them pursuant to the'te'I'ms of Section 10.1 or 10.2 does not comply with the provisions of this Indenture or adversely afFects any right, immunity or indemnity in favor of, or increases any duty of, the Owner Trustee or the Indenture Trustee under this Indenture, the Facility Lease or the Participation Agreement, the Owner Trustee or the Indenture Trustee, as the case may be, may in its , discretion decline to execute such document.SEGTIQN 10.4.Directive iVeed iVot Specific Particular Form of Supplement or Amendnient.
It shall not be necessary for any Directive furnished pursuant to Section 10.2 to specify the particular form of the proposed documents to be executed pursuant to such Section, but it shall be sufHcient if such request shall indicate the substance thereof.
SECTrON 10.5.Trustee to Furnisfi Copies of Supplement or Amendment Promptly after the execution by the Owner Trustee or the Indenture Trustee of any docume'ntered into pursuant to Section 10.2, the Indenture Trustee shall mail, by first-class mail, post, prepaid, a conformed copy thereof to each Holder of an Outstanding Note at the address of sui.Person set forth in the register kept'pursuant to Section 4.1 but the failure of the Indenture Trustee to mail such conformed copies shall not impair or affect the validity of such document.ARTICLE XI MISCELLANEOUS SEGTloN 11.1.Moneys for Payments in Respect of Notes to be Held in Tritest.P In case the Holder of any Note shall fail to present the same for payment on any date on which the principal thereof or interest thereon becomes payable, the Indenture Trustee may set aside in trust the moneys then due thereon uninvested and shall pay such moneys to the Holder of such Note or such Person upon due presentation or surrender thereof in accordance with the provisions of this Indenture, subject alu:ass, hoivever, to the provisions of Sections 3.8 and 1I.2.SECTION 11.2.Disposition of A1oneys Held for Payments of Notes.Any moneys set aside under Section 11.1 and not paid to Holders of Notes as provided in Section 11.1 shall be held by the Indenture Trustee in trust until the latest of (i)the date three years after the date of such setting aside, (ii)the date all other Holders of the Notes shall have received full payment of all principal of and interest and other sums payable to them on such Notes or the Indenture Trustee shall hold (and shall have notified such Persons that it holds)in trust for that purpose an amou sufficient to make full payment thereof when due and (iii)the date the Owner Trustee shall have fi performed and observed all its covenants and obligations contained in this Indenture with respect the liiotes;and thereafter shall be paid to the Owner Trustee by the Indenture Trustee on demand: and thereupon the Indenture Trustee shall be released from all further liability with respect to such moneys;and thereafter the Holders of the Notes in respect of which such moneys were so paid to the Owner Trustee shall have no rights in respect thereof except to obtain payment of such moneys from the Owner Trustee.Upon the setting aside of such moneys, interest shall cease to accrue on the iNotes.SECTiON 11.3.Transfers Not to Agect Indenture or Trusts.No Holder of a Note shall have legal title to any part of the Lease Indenture Estate.No transfer, by operation of law or otherwise, of any Note or other right, title and interest, of any Holder of a Note in and to the Lease Indenture Estate or hereunder shall operate to terminate this Indenture or the trusts hereunder with respect to such Note or entitle any successor or transferee of such Holder to an accounting or to the transfer to it of legal title to any part of the Lease Indenture Estate.SECTtON 11.4.Binding Egect of Sale of Lease Indenture Estate.Any sale or other conveyance of the Lease Indenture Estate or any part thereof by the Indenture Trustee made pursuant to the terms of this Indenture or the Facility Lease shall bind the Holders of the Notes and shall be effective to'transfer or convey all rights, title and interest of the Indenture Trustee, the Owner Trustee and such Holders in and to the same.No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of such sale or conveyance, or as to the application of any sale or other proceeds with respect thereto by the Indenture Trustee.28 Sccrtow 11.5.Liinitation as to Enforcement of Rights, Remedies and Claims.Nothing in this Indenture, whether express or implied, shall be construed to give to any Person, other than the Owner Trustee, the Owner Participant, the Lessee (to the extent the Lessee's consent other action by the Lessee is expressly provided For), the Indenture Trustee and the Holders of the tes, any legal or equitable right, remedy or claim under or in respect of this Indenture or any Note.Scn'tow 11.6.notices.Unless otherwise expressly specified or permitted by the terms hereof, all communications and notices given hereunder to the Lessee, the Owner Trustee, the Owner Participant or the Indenture Trustee shill be given in the manner provided in Section 18 of the Participation Agreement.
Notices by the Indenture Trustee to any Holder of a Note shall be in writing and shall be given in person or by means of telex, telecopy or other wire transmission (with request for assurance of receipt in a manner typical with respect to communications of that type), or mailed by registered or certified mail, addressed to such Holder at the address set forth in the register kept pursuant to Section 4.1.Whenever any notice in writing is required to be given by the Indenture Trustee to any Holder of a Note such notice shall be effective (x)if sent by telex, telecopy or other wire transmission, on the date of transmission thereof, or (y)if sent by mail, three Business Days after being mailed.SEcTtoN 11.7.Separabilitrg of Provisions In case any one or more of the provisions of this Indenture or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisipn's hereof and any other application thereof shall not in any way be affected or impaired.~4, SccrtoN 11.8.Benefit of Parties, Successors and Assigns.All representations, warranties, covenants and agreements contained herein shall be binding n, and inure to the benefit of, the Owner Trustee, the Indenture Trustee and their respective cessors and assigns and each Holder of a Note, all as herein provided.Any request, notice, irection, consent, waiver or other instrument or action by any Holder of a Note shall bind the successors and assigns of such Holder and any Holder of a Note issued in transfer or exchange of such Note.SEGTIOiv 11.9.Survival of Representations and Warranties.
All representations and warranties made with respect to the Notes shall survive the execution and delivery of this Indenture and the issue, sale and delivery of any Notes and.shall continue in effect so long as any Note issued hereunder is Outstanding and unpaid.SecrroN 11.10.Banl;ruptcy of the Oivner Trustee.If (a)the Owner Trustee becomes a debtor subject to the reorganization provisions of the Bankruptcy Code, or any successor provision, (b)pursuant to such reorganization provisions the Owner Ttustee is required, by reason of the Owner Trustee being held to have recourse liability directly or indirectly to the Holder of any Note or the Indenture Trustee, to make payment on account of any amount payable as principal or interest on such Note and (c)such Holder or the Indenture Trustee actually receives any Excess Amount (as hereinafter defined)which reflects any payment by the Owner Trustee on account of clause (b)of this Section, then such Holder or the Indenture Trustee, as the case may be, shall promptly refund to the Owner Trustee such Excess Amount.For purposes of this Section,"Excess Amount" means the amount by which such payment exceeds the amount which would have been received on or pri'or to the date of such payment by such Holder or the Indenture Trustee if the Owner Trustee had not become subject to the recourse liability referred to in clause (b)of this Section.29 SECriON 11.11.Bankruptcy of the Owner Participant.
The Indenture Trustee and the Holders of the Notes shall be bound by the provisions of Secti 19(f)of the Participation Agreement.
SECTION 11.12.Counterpart Execution.
This Indenture and any amendment or supplement to this Indenture may be executed in any number of counterparts and by the diferent parties hereto and thereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.
SECI'ION 11.13.Dating of Indenture.
Although this Indenture is dated for convenience and for the purpose of reference as of the date mentioned, the actual date or dates of execution by the Owner Trustee and the Indenture Trustee are as indicated by their respective acknowledgments hereto annexed.30 IN WITNESs WHEREQF, the Owner Trustee and the Indenture Trustee have each caused this Indenture to be duly executed by their respective oHicers thereunto duly authorized, all as of the date erst set forth above.THE FIRsT NATIoNAL BANK QF BosToN,'not in its individual capacity, but solely as Owner Trustee under the Trust hgreement dated as of Decem-ber 1, 1986, with CQMMERGIAL FEDERAL INYEsT-MENT CORPORATION By: Assistant ice Presi FIRST CITY NATIONAL BANK OF HOUSTON By: ant Vice re t 0
Sr~vs oF NEw Yoax Couvn OF Nmv Yoax On the/leg,day of December, 1986, before me personally came MARTIN P.HEiVRY, to me nown, who, being by me duly sworn, did acknowledge, depose and say that he resides at Boston,.assachusetts:
that he is Assistant Vice President of THE Ftasr NwTIomr.BawK OF BosroN, a national banking association, described in and which executed the foregoing instrument; and that he signed his name thereto on behalf of said association by authority of the Board of Directors of said association.
Notary Public[NOT~ant.S~)Term Expires: DAVID A~~N~M Hc St~e of N~YCFJf No, 31~93468 Qucitit~tn N4~Yerlr, Cotta~Exp'atch Xi)8P'Q
 
SThTE OF NEW YORK CoUNTy oF NEw YoRK On the&day of December, 1986, before me personally came JOHN CHASE III, to me known,~ho, beingby me duly sworn, did acknowledge, depose and say that he resides at Houston, Texas;that e is Assistant Vice President of FiRsT CITY NhTIoNhL BhNK oF HoUsToN, a national banking association, described in and which executed the foregoing instrument; and that he signed his name thereto on behalf of said association by authority of the Board of Directors of said association.
[NOThRlhL SEhL j Term Expires: Notary Public DAVID A.SPIVAK Notary Public, State oi New York No.31-4693468 QuaMed in New York County Coaadsslaa ErpUea Marcb 30, I+%.
e EXHIBIT A-1 FORM OF INITIAL SERIES NOTE (DUE JULY 2, 1992)THIS NOTE HAS NOT BEEiV REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IiV VIOLATIOiV OF SUCH ACT NONRECOURSE PROMISSORY NOTE, INITIAL SERIES (DUE JULY 2, 1992)Issue Date: December 18, 1986 THE FIRsT NATIoNAI.BANK oF BosToN, not in its individual capacity, but solely as Owner Trustee (the Owner Trustee)under a Trust Agreement dated as of December 1, 1986 with Commercial Federal Investment corporation (the oIcner Participant), hereby promises to pay to EI.PAso FUNDING CORPORATIoN, or registered assigns, the principal sum of six million four hundred forty-seven thousand"Dollars ($6,447,000) on July 2, 1992 together with interest (computed on the basis of a 360-day year of twelve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Initial Series Note until due and payable, in arrears, at fhe rate of 8.10%per annum.Payments of principal installments of this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Payment Dates" speci6ed in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 and July 2, commencing July 2, 1987, until the principal amount of this Initial Series Note phai(have been paid in full.~.P"~Capitalized terms used in this Initial Series Note which a'e not otherwise de6ned herein shall have the meanings ascribed thereto in the Indenture (as hereinafter dellned).Interest on any overdue principal and premium, if any, and (to the extent pe'rmitted by applicable any overdue interest shall be paid, on demand;from the due date thereof at the rate of interest.nnum (computed on the basis of a 360-day year of twelve 30-day months)equal to 1%above the rest rate stated above for this Initial Series Note for the period during which any such principal, premium or interest shall be overdue.In the event any date on which a payment is due under this Initial Series Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.All payments of principal, premium', if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with tl>e provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Tncstee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suilicient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the term's of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and'proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, hoIcever, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture, then all payments to be made under this Initial Series Note shall be made from payments made by the Lessee under this Initial Series Note in accordance with the Assumption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that in such event it will look solely to the Lessee for such payment.Principal, premium, if any, and interest shall be payable, in the manner provided in the Indentur on presentment of this Initial Series Note at the Indenture Trust'ee's OfBce, or as otherwise provided it the Indenture.
In the manner and'to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations have been duly made.This Initial Series Note is one of the Initial Series Notes referred to'in the Indenture.
The Indenture permits the issuance of additional series of Notes, as provided.in Section 3.5 of the Indenture, and the several series may be.for varying aggregate principal amounts and may have different maturity dates, interest.rates, redemption provisions and other terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes issued and outstanding from time to time under the Indenture.
Reference is hereby made to the Indenture for a stateinent of the rights of the Holders of, and the nature and extent of the security for this Initial Series Note and of the rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust created by the Indenture, to all of which terms and conditions the Holder hereof agrees by its acceptance of thi Initial Series Note.This Initial Series Note is subject,to purchase by the Owner Trustee as provided in Section 6.8(b)of the Indenture.
This Initial Series Note is not subject to prepayment in whole or in part.In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the principal of this Initial Series Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the'ffect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior'o the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufBcient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's OSce a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Initial Series Note and for all other purposes whatsoever, whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indentur Trustee shall be afFected by notice to the contrary.
This Initial Series Note shall be governed by, and construed in accordance with, the laws of the State of New York.IN WITYiEss WHEREoF, the Owner Trustee has caused this Initial Series Note to be duly executed f the date hereof.THE FIRsT N*TIoYAL BALI'F BOsToN, not in its individual capacity, but solely as Ouner Trustee under a Trust Agreement dated as of December 1, 1986, with COXIXIERCIAL FEDERAL IYVESTXIEYT CORPORATIOY By: Assistant Vice President'-1-3 ASSIGiVMEiVT Date: December 18, 19 For value received, EL PAso FUNDING CQRPQRATIoN hereby sells, assigns and transfers to FIR Crrv NATIoNAL BANK oF HousToN as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August 1, 1986, as amended and supplemented, among Er.PAso FUNDPNG CoRPoRATIoN, El Paso Electric Company and said Collateral Trust Trustee, without recourse, the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PAso FUNDING CoRPQRATIQN By: Vice President SCHEDULE 1 TO THE lYITIAL SERIES ilOTE (DLiE JULY'99')SCHEDULE Of PRINCIPAL AWIORTIZATION Payment Date (monthldavlyear) 7/2/1987 1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 Principal Amount Pavable$0.0000000 0.0000000 7000.00 698000.00 726000.00 755000.00 786000.00 818000.00 851000.00 885000.00 921000.00$6,447.000 Principal Amount Paid
'UI 0 EXHIBIT A-2 FORM OF INITIAL SERIES NOTE (DUE JULY 2, 1997)THIS NOTE HAS NOT BEEN REGISTERED UNDER THE-SECURITIES ACT.OF 1933 AiVD MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATIOtV OF SUCH ACT NONRECOURSE PROMISSORY NOTE, INITIAL SERIES (DUE JULY 2, 1997)Issue date: December 18, 1986 THE FIRsT NATIoNAL BANE oF BosToN, not in its individual capacity, but solely as Owner Trustee (the Oloner Trustee)under a Trust Agreement dated as of December 1, 1986 with Commercial'Federal Financial corporation (the otoner Participant), hereby promises to pay to EI.PAso FUNDINc coRFoRA-TION, or registered assigns, the principal sum of eleven million eight hundred thirty-four thousand dollars ($11,834,000) on July 2, 1997 together with interest (computed on the basis of a 360-day year of twelve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Initial Series Note until due and payable, in arrears, at the rate of 9.20%per annum.Payments of principal installments of this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Payment Dates" speciBed in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 and July 2 commencing July 2, 1957.': until the principal amount of this Initial Series Note shall have been paid in full.Capitalized terms used in this Initial Series Note which are not otherwise de8ned herein shall have the meanings ascribed thereto in the Indenture (as hereinafter deGned).nIerest,on any overdue principal and prentium, if any, and lto the extent permitted by applicable any overdue interest shall be paid, on demand, from the due date thereof.at the rate of interest annum (computed on the basis of a 360-day year of twelve 30-day months)equal to 1%above the interest rate stated above for this Initial Series Note for the period during which any such principal,'remium or interest shall be overdue.Zn the event any date on which a payment is due under this Initial Series Note is not a Business~l'ay, then payment thereof may be made on the'next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.s All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture,'ortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the~'provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suScient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indent'ure Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, hou:ever, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-A-2-1 tion 3.9(b)of the Indenture, then all payments to be made under this Note shall be made only from payments made by the Lessee under this Initial Series Note in accordance with the Assumption Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that such event it will look solely to the Lessee for such payment.Principal, premium, if any, and interest shall be payable, in the manner provided, in the Indenture, on presentment of this Initial Series Note at the Indenture Trustee's OfHce, or as otherwise provided in-the Indenture.
In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent'under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose'of this Initial Series Note unless and until all such notations have been duly made.This Initial Series Note is one of the Initial Series Notes referred to in the Indenture.
The Indenture permits the issuance of additional series of Notes, as provided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have diferent maturity dates, interest rates, redemption provisions and other terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes issued and outstanding from time to time under the Indenture.
Reference is hereby made to the Indenture for a statement of the rights of the Holders of, and the nature and extent of the securtty for, this Initial Series Note and of the rights of,-and the nature and extent of the security for, the Holders of the other Notes and of certain rights the Owner Trustee, as well as for a statement of the terms and conditions of the trust created by Indenture, to all of which terms and conditions the Holder hereof agrees by its acceptance of t Initial Series Note.This Initial Series Note is subject to purchase by the Owner Trustee as provided in Section 6.8(b)of the Indenture.
This Initial Series Note may be prepaid in whole or in part at any time on and after January 2, 1992 by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment:
Twelve Month Period Beginning Prepayment January 2, Price 1992 1993 102.63%101.31 and thereafter at the principal amount thereof, together with interest accrued to the prepayment date.This Initial Series Note is not otherwise subject to prepayment in whole or in part.'n case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the principal of this Initial Series Note and any other Notes, together with all accrued by unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the efFect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to t maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or cer A-2-2 securities sufBcient to pay this Initial Series iNote when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's OfBce a register for the purpose of istering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner.Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Initial Series Note and for all other purposes whatsoever, whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture Trustee shall be afFected by notice to the contrary.This Initial Series Note shall be governed by, and construed in accordance with, the laws of the State of New York.IN WITNEss WHEREOF, the Owner Trustee has caused this Initial Series Note to be duly executed as of the date hereof.THE FIRST NATloivAL BANI: oP BosTov, not in its individual capacity, but solely as Ou:ner Trustee under a Trust Agreement, dated as of Decem-ber I, 1986, with coxI~IERGIAL FEDERAL I(vvEsT-MEiVT CORPORATIOV By: Assistant Vice President A-2-3 ASSIGi&IEiVT Date: December 18,1 For value received, Er.PASO FUNDINC CoRPORATION hereby sells, assigns and transfers to FIRS Crn NATIQNAL BANK oF HQUsToN as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August 1, 19S6, as amended and supplemented, among Er.PAso FUNDINc CORPORATION, El Paso Electric Company and said Collateral Trust Trustee, without recourse, the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PASO FUiVDIiVC CORPORATION By: Vice President SCHEDULE 1 TO THE INITIAL SERIES NOTE (DVE JULY 2, 1997)SCHEDVLE OF PRINCIPAL AWIORTIZATION Payment Date (month/da/ear)7/2/19871/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 1/2/1993 7/2/1993 1/2/1994 7/2/1994 1/2/1995 7/2/1995 1/2/1996'/2/1996, 1/2/1997 7/2/1997 Principal Amount Payable$0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 959000.00 1003000.00 1049000.00 1097000.00 1147000.00 1200000.00 1255000.00 1313000.00 1374000.00 1437000.00
$11,834,000 Principal Amount Paid~~~a~g A-2-5
 
EXHIBIT A-3 FoRM oF INITIAL SERIEs NQTE (DUE JANUARY 2, 2011)THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND iMAY NOT BE TRAiNSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROI IISSORY NOTE, INITIAL SERIES (DUE JANUARY 2, 2011)Issue date: December 18, 1986 THE FIRsT NATIQNAL BANK QF BosToN, not in its individual capacity, but solely as Owner Trustee (the OIvner Trustee)under a Trust Agreement dated as of December 1, 1986 with Commercial Federal Investment Corporation (the OIvner Participant), hereby promises to pay to EI.PAso FUNDING CORPORATION, or registered assigns, the principal sum of fifty-one million six hundred twenty four thousand dollars ($51,624,000) on January 2, 2011, together with interest (computed on the basis of a 360-day year of twelve 30-day months)on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Initial Series Note until due and payable, in arrears, at the rate of,10.375%
per annum.Payments of principal installments of this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Payment Dates" specified in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each January 2 and July 2, commencing July 2, 1987;until the principal amount of this Initial Series Note shall have been paid in full.II Capitalized terms used in this Initial Series Note which are not otherwise defined herein shall e the meanings ascribed thereto in the Indenture (as hereinafter defined).Interest on an>overdue principal and premium, if a'y, and (to the'extent permitted by applicable v)any overdue interest shall be paid, on demand, from the due date thereof at the rate of interest per annum (computed on the basis of a 360-day year of twelve 30-day months)equal to 1%above the interest rate stated above for this Initial Series Note for the period during which any such principal, premium or interest shall be overdue.i In the event any'date on which a payment is due under this Initial Series Note is not a Business Day, then payment thereof ma)be made on the next succeeding Business Day with the same force and efFect as if made on)he date on which such payment was due.I All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and-under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1986, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Indenture Tutee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sufficient income or proceeds from the Lease Indenture Estate to.make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, hoIvever, that in the event the Lessee shall assume he obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture, then all payments to be made under this Note shall be made only from payments made by the Lessee under this Initial Series Note in accordance with the Assumptio Agreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees that such event it will look solely to the Lessee for such payment.Principal, premium, if any, and interest shall be payable, in the manner provided in the Indenture, on presentment of this Initial Series Note at the Indenture Trustee's OfBce, or as otherwise provided in the Indenture.
In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
=The Holder of.this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations have been duly made.This Initial Series Note is one of the Initial Series Notes referred to in the Indenture.
The Indenture permits the issuance of additional series of Notes, as provided in Section 3.5 of the Indenture,'and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other.terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes issued and outstanding from time to time under the Indenture.IReference is hereby made to the Indenture for a statement of the rights of the Holders of, andIthe nature and extent of the security for, this Initial Series Note and of the rights and the nature and extent of the, security for, the Holders of the other Notes and of certain right the Owner Trustee, as well as for a statement of the terms and conditions of the trust created by t Indent'ure, to all of which terms and conditions the Holder hereof agrees by its acceptance of this Initial Series Note.Prepayment Price (his Initial Series Note is subject to purchase by the Owner Trustee as provided in Section 6.8(b)of the Indenture and to mandatory prepayment in full as provided in Section 5.2 of the Indenture, such prepayment being without premium but including accrued interest to the date of prepayment.
In addition, this Initial Series Note may be prepaid in whole or in part at any time on and after January', 1992 by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date Bxed for prepayment:
d Twelve Month Twelve Month Period Beginning Prepayment Period Beginning January", Price January~~1992 1993 1994 1995 1996 1997 1998 1999 107.78%107.26 106.74 106.23 105.71 105.19 104.67 104.15 2000 2001 2002 2003 2004 2005 2006 103.63%103.11 102.59 102.08 101.56 101.04 100.52 and thereafter at the principal amount thereof, together with interest accrued to the prepayment da This Initial Series Note is not otherwise subject to prepayment in whole or in part.A-3-2 In case an Indenture Event of Default shall occur and be continuing,.the unpaid balance of the principal of this Initial Series iVote and any other iVotes, together with all accrued but unpaid interest ereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or rred to in the Indenture, be declared or may become due and payable in the manner and with the ct provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufficient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's Office a register For the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Initial Series Note and for all other purposes whatsoever, whether or not this'Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture II Trustee shall be affected by notice to the contrary.This Initial Series Note shall be governed by, and construed in accordance with, the laws of the State of New York.!IN WITNEss WHEREOF, the Owner Trustee has caused this Initial Series Note to be duly executed as of the date hereof.THE FIRsT NATioNAL BANK oF BosToN, not, in its individual capacity', but solely as Ou;ner Trustee under a Trust Agreement, dated as of Decem-ber 1,"1986, with CoxlxiERGIAL FEDERAL INvEsT-i~lENT CORPORATION I By: 'ssistant Vice President A 33 ASSIGNMEiNT Date: December 18, 1986 For value received, EL PAso FUNDING CoRPoRATIQN hereby sells, assigns and transfers to FI CITY NATIoNAL BANrc oF HoUsToN as Collateral Trust Trustee pursuant to the Collateral Tr Indenture dated as of August 1, 1986, as amended and supplemented, among EI.PAso FUNDINQ-CORPORATION, El Paso Electric Company and said Collateral Trust Trustee, without recourse, the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PASO FUNDINC CORPORATION By: Vice President A-3-4 Payment Date (month/day/iear) 7/2/198(1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 1/2/1993 7/2/1993 1/2/1994 7/2/1994 1/2/1995 7/2/1995 1/2/1996 7/2/1996 1/2/1997 I/2/1997 1/2/1998 7/2/1998 1/2/1999.7/2/1999 1/2/2000 7/2/2000 1/2/2001.7/2/2001 1/2/2002?/2/2002 1/2/2003 7/2/2003 1/2/2004 7/2/2004 1/2/2005 7/2/2005 1/2/2006 7/2/2006 1/2/2007 7/2/2007 1/2/2008 7/2/2008 1/2/2009 7/2/2009 1/2/2010 7/2/2010 1/2/2011 SCHEDULE 1 TO THE INITIAL SERIES NOTE (DUE JANUARY Q 2011)SCHEDI:LE OF PRINCIPAL AMORTIZATION Principal Amount Payable q 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 964000.00 1088000 0P 1008000.00 1163000.00 1077000.00 1243000.'00 1151000.F00 1329000.00 1231000.00 1421'000.I'0 1316000;00 1519000.'00 1406000.00 1624000.00 1503000.00 1736000.00 1607000.00 1856000.00 1839000.00 2856000.00 3004000.00 3160000.00 3324000.00 3496000.00 3677000.00 3868000.00 2158000.00
$51.624.000 Principal Amount Paid 0 I 0 EXHIBIT B AssUMPTIoN AGREEMENT: The Holders (as defined below)from time to time of the Notes (as defined below)of The First National Bank of Boston, not in its individual capaJity, but solely as owner trustee under a Trust Agreement dated as of December 1, 1986 with Commercial Federal Investment Corporation (in such capacity,.the"Issuer")under the Trust Indenture, Xfortgage, Security Agreement and Assignment of Rents (the"Indenture")dated as of December 1, 19S6 between the Issuer and First City National Bank of Houston, as trustee (the"Trustee").The undersigned, EI.PAso EI.EcTRIc CoMPANY, a Texas corporation (the"Obligor"), for the purpose of satisfying in part its obligation to make certain payments under that certain Facility Lease dated as of December 1, 1986 between the Issuer and the Obligor (the"Facility Lease"), does hereby covenant and agree with the Holders (as defined in the Indenture) from time to time of the Notes (as defined in the Indenture) as follows: SEGTIoN 1~The Obligor does hereby agree to, and does hereby, assume unconditionally the payment of the principal of the Notes and of the interest and premium, if any, thereon, at the rates provided in the Notes, when and as the same shall become due and payable, whether at maturity or upon mandatory prepayment or upon declaration or otherwise, according to the terms of the Notes and of the Indenture.
SEcTIoN 2.The assumption herein contained shall be binding upon the Obligor, its successors and assigns, and shall remain in full force and effect irrespective of the power or authority of the Issuer to issue the Notes or to execute, acknowledge and deliver the Indenture or.the'validity of the Notes, or the Indenture, or of any defense whatsoever that the Issuer may or might have to the payment of the.I ,Notes (principal, interest or premium), or to the performanceor observance of any of the provIsions or conditions of the Indenture or any Note, or of the existence or continuance of the Issuer as a legal'ty;nor shall said assumption be affected by the merger, consolidation, or other dissolution of the er or the sale or other transfer of the property of the Issuer as an entirety, or substantially so, to y other person;nor shall the assumption be discharged or impaired by any act, failure or omission whatsoever on the part of any Holder of any Notes or the Trustee, including, among other such acts,'failures and omissions, the following: (a)any failure to present any Note for payment or to demand payment thereof, or to give to the Obligor notice of dishonor and non-payment of any Note when and as~the same may bec'ome l due and payable, or notice of any failure on the part of the Issuer to do~any act or thing or to.perform or keep any covenant or agreement by it to be done, kept or performed under the terms of the Notes or the Indenture;(b)any extension of the obligation of any Note, either indefinitely, or for any period of time, or any other modification in the obligations under any Note or the Indenture or of the Issuer thereon or in connection therewith;(c)any act or failure to act with regard to any Note or the Indenture or anything which might vary the risk of the Obligor;and'(d)any action taken under the Indenture and the Notes in the exercise oF, any right or power thereby conferred or any failure or omission on the part of the Trustee or the Holder of any Note to enforce any right or security given under the Indenture or any No'te, or any waiver of any right or any failure or omission on the part of the Trustee or any Holder of any Note to enforce any right of any Holder of any Note against the Issuer;provided, always, that the specific enumeration of the above mentioned acts, failures, waiv'ers or omissions shall not be deemed to exclude any other acts, failures, waivers or omissions though not specifically mentioned herein, it being the purpose and intent of this Assumption Agreement that the'~ation of the Obligor shall be absolute and unconditional to the extent herein specified and shall B-1 not be discharged, impaired or varied except by the payment of the principal of and interest on any Note and any premium thereon in case of prepayment, and then only to the extent of such payments.Secrros 3.(a)Subject to the requirements of Sections IO(b)(3)(iii) and IO(b)(3)(iv) of t Participation Agreement and to the provisions, of paragraph (b)of this Section, nothing contained this Assumption Agreement shall prevent any consolidation ormerger of the Obligor with or into any other corporation or corporations (whether or not afBliated with the Obligor), or successive consolidations or mergers in which the Obligor or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance or lease of all or substantially all the property of the Obligor, to any other corporation authorized to acquire and operate the same;provided, hou'euer, and the Obligor hereby covenants and agrees, that upon any such consolidation, merger, sale, conveyance or lease, all obligations of the Obligor under this Assumption Agreement on or in respect of any Note, and the due and punctual performance and observance of all of the covenants and conditions of this Assumption Agreement to be performed by the Obligor, shall be expressly and duly assumed;by an agreement reasonably satisfactory in form and substance to the Trustee, executed and delivered by the corporation
{if other than the Obligor)formed by such consolidation, or into which the Obligor shall have been merged, or by the corporation which shall have acquired such property.(b)The Trustee, subject to applicable provisions of the Indenture, may rely upon an opinion of counsel to the Obligor as conclusive evidence that any such merger, consolidation, sale or conveyance complies with the provisions of this Section.SEGTIoN 4.The.Obligor does hereby consent to all of the terms and conditions of each series of Notes and of the Indenture, and hereby waives any and all rights of notice of any fact or facts or circumstance or circumstances whatsoever and consents to any extension or extensions of time of any payment or payments, or of any other act or thing which any Holder, or Holders of any Note or the Issuer may agree to consent to, either expressly, by acquiescence or otherwise, and hereby agrees not I to claim or enforce any rights of subrogation or any other right or privilege which might otherwise.I arise on account of any payment made by it or act or thing done, by it on account of or in accorda with i'ssumption herein contained, unless and until all of the Notes have been fully paid discharged.
Sacro'.The assumption herein expressed may be transferred or assigned at any time or from time to time and shall be considered to.be transferred and assigned upon the transfer of any Note, whether with or without.the consent of or notice to~the Obligor or the Issuer.The Obligor hereby agrees to execute and deliver such instruments and to do such acts and things requested by the Trustee's shall be reasonably necessary to c'arry out and efFectuate the purposes and intents of this Assumption Agreement.
This Assumption Agreement may not be amended or modiBed in any respect without the prior written consent (evidenced as pro'vided in the Indenture) of the Holders of not less than a majority.in principal amount of the Notes Outstanding (as deBned in the Indenture);
provided, I however, that without the written consent of the Holders of all of the Notes Outstanding, no such amendment or modiBcation shall be elFective~hich will change any of the provisions of Sections I, 2, 4 or 5 of this Assumption Agreement.
The Obligor agrees to Ble with the Indenture'rustee a duplicate original of each such consent.SEcTIoN 6.Capitalized terms used herein, but which are not deBned herein, shall have the meanings set forth in Appendix A to the Indenture.
EL PAso Er.EcraK: Co~ieAxv ATIEST: By: Title: B-2 EXHIBIT C UNDIVIDED INTEREST SUPPLEiIENTAL INDENTURE SUPPLESIENTAL INDENTURE No.dated as of , to the TRUsT.DENTURE, i4ioRTc:AOE, sEcUBin'OREESIENT AND AsslcNiIENT oF RENTs (hereinafter, together with supplements thereto, the Indenture) dated as of December 1, 1986, between THE FIRsT lvATIQNAL BANI;ol'osToN (FiNB), not in its individual capacity, but solely as trustee (the Ou:ner Trnstee)under a Trust Agreement, dated as of December 1, 1986, between FNB, whose address is 100 Federal Street, Boston, hlassachusetts 02110, and Commercial Federal Investment Corporation, and FIRsT CITY NATIoNAL BANK oF HoUsTQN, a national banking association (the Indenture Trlistee), whose address is First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 7700'2.WITNESSETH:
WHEREAs, in accordance with Section 9(j)of the Facility Lease, the Owner Trustee is obligated, in certain cases, to cause the Undivided Interest and the Real Property-Interest to be subjected to the lien of the Indenture; and WHEREAs, in order to further secure the obligations referred to in the Indenture, the Owner Trustee desires to grant to the Indenture Trustee the security interest and realty mortgage herein provided and the parties-hereto desire that the Indenture be regarded (i)to the extent that the Undivided Interest constitutes personal property, as a"security agreement" and as a"financing statement" under the Uniform Commercial Code and (ii)to the extent that the Undivided Interest and the Real Property Interest constitute fixtures or real property, as a realty mortgage;" Now, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt and sulllciency of which are hereby a'cknowledged, the parties hereto agree as follows: SEcTIoN 1.1.Tile Indenture.
This Supplemental Indenture shall be construed as supplemental to amendatory of the Indenture and shall form a part thereof, and the Indenture is hereby orporated by reference herein and is hereby ratified, approved and confirmed.
SEOTION 1.2.Definitions.
Capitalized terms used herein, but which are not otherwise defined herein, shall have the meanings set forth in Appendix A to the Indenture.
SEcTloN 1.3.Recording Information.
The Indenture was recorded on December, 1986, in iifaricopa County, Arizona[describe[
[specify other recorded documents J[specifyi other phces of recordation J.SEcTIoN 1.4.Governing Lalv.This Supplemental Indenture and the Indenture shall, for alllpurposes, be construed in accordance with and governed by the laws of the State of New York except to the extent that the laws of the State of Arizona shall be mandatorily applicable thereto.SEcTI'ov 1.5.Security Interest and Realty hlortgage.
As further security for the due and punctual payment of the principal of and premium, if any, and interest on the, Notes according to their respective terms and effect and the performance and observance by the Owner Trustee.of all the covenants and agreements made by it or on its behalf in the Notes, the Participation Agreement and the Indenture, the Owner Trustee does, by its execution and delivery hereof, hereby grant a security interest in, bargain, convey, warrant, assign, transfer, mortgage, pledge and set over unto the Indenture Trustee, and to its successors and assigns in trust, the following (which shall be a part of the Lease Indenture Estate for all purposes of the Indenture and the other Transaction Documents):
(1)the Undivided Interest and the Real Property Interest, including, without limitation, the Owner Trustee's interest in all Capital Improvements (including any which constitute fixtures under Applicable Law)now existing or which hereafter may become part of the Undivided Interest;C-1 (2)all right, title and interest of the Owner Trustee in, to and under (a)the Bill of Sale, (b)the ANPP Participation Agreement and (c)lthe Deed and the Assignment of Beneficial Interest[the ground lease described in Section 10(b)(3)(xiv)-of the Participation Agreement), includi without limitation, all amounts of Rent, insurance proceeds and condemnation, requisition a other awards and payments of any kind for'or with respect to any part of the Lease Indenture Estate as contemplated in such documents; (3)all other property of every kind.and description, real, personal and mixed, and interests therein now held or hereafter acquired by the Owner Trustee pursuant to any term of any Transaction Document, whether or not subjected to the lien of the Indenture by an indenture supplemental hereto;and (4)all proceeds of the foregoing; but excluding, however, from the Lease Indenture Estate any and all Excepted Payments;and subject, however, to (i)the terms and provisions of the Indenture and (ii)the rights of the Lessee under the Facility Lease.To H~vE hND To HoLD all the aforesaid properties, rights and interests unto the Indenture Trustee, its successors and assigns, forever, but in trust, nevertheless, for the use and purposes and with the power and authority and subject to the terms and conditions mentioned and set forth in the Indenture.
UpON CoNDITIoN that, unless and until an Indenture Event of Default shall have occurred and be continuing, the Owner Trustee shall be permitted, to the exclusion of the Indenture Trustee, to possess and use'the Lease Indenture Estate and exer'cise all rights with respect thereto and, without limitation II of the foregoing, the Owner Trustee may exercise all of its rights under the documents specified in clause (2)above to the same extent as if its right, title and interest therein had not be'en assigned to I the Indenture Trustee to the extent set forth above, except that the Indenture Trustee shall receive payments of Assigned Payments and all moneys and securities required to be held by or deposited,w the Indenture Trustee hereunder.
The Owner Trustee hereby warrants and represents that it has not assigned or pledged any of its right, title or interest in and to the Lease Indenture EstateIto anyone other than the Indenture Trustee.SEGTIQN 1.6.Real Estate Remedies.In addition to the remedies specified in the Indenture (including but without limitation Section 6.4 thereof)or otherwise available pursuant to Applicable Law, to the extent that any portion of the Lease Indenture Estate constitutes Bxtures or real property, the Indenture and this Supplemental Indenture shall be, and shall be'eemed to be, a realty mortgage and-assignment of rents with respect to all items of real property and Bxtures and the Indenture Trustee"sh'all have, to the extent not inconsistent with the Indenture, all the rights, remedies and benefits of a mortgagee of real property under Applicable Law (including, but without limitation, rights and remedies pursuant to Arizona Revised Statutes Section 33-702.B, or any comparable successor provision) and the Owner Trustee shall be and be deemed to be a mortgagor with respect to such fixtures and re'al property.SECTIQN 1.7.Certain Beteases.In case a-release from the security and other interests created by Section 1.5 hereof by the Indenture Trustee of a portion of the'Undivided Interest shall be necessary in order to enable the Owner Trustee or the Lessee to perform its covenants and agreements set forth in the Transaction Documents or in the ANPP Participation Agreement or the Owner Trustee or the Lessee to carry out any action required by Section 8 of the Facility Lease, the Indenture Trustee shall execute and deliver to, or as directed by, the Owner Trustee or the Lessee an appropriate instrument or instruments provided to the Indenture Trustee by the Owner Trustee or the Lessee (in due, form for fling or recording), so releasing a portion of the Undivided Interest, provided, however, that the Indenture Trustee shall have Brst received an OfBcer's Certificate, executed by the Lessee, accomp nied by an opinion of counsel, each of which shall be to the efFect that all necessary actions have b II C-2 or are being taken simultaneously with such release in connection with the proposed action to comply with the terms of the Indenture and Section 8 of the Facility Lease.SEcrto&#xc3;1.8.Seueranee.
The parties hereto understand and agree that Unit 2 and the Common ilities (including the Undivided Interest), each Capital Improvement and each part thereof is or 1 be severed, and shall be and remain severed, from the real estate constituting the PViVGS Site and even if physically attached thereto, shall retain the character of personal property, s)iall be treated as personal property with respect to the rights of all persons whomsoever.
shall not be or become fixtures or otherwise part of the real estate constituting the PVNGS Site, and, by virtue of its nature as personal property, shall not be affected in any way by any instrument dealing with the real estate constituting the PVNGS Site.SEn'tow 1.9.Appointment of Co-Trustees or Separate Trustees.(a)At any time or times, when necessary or prudent or for the purpose of meeting the legal requirements of any jurisdiction in which any part of the Lease Indenture Estate may, at any time, be located, the Indenture Trustee, except as set forth in subsection (b)(6)of this Section 1.9, may, and upon receipt of a Directive shall, appoint one or more Persons to act as co-trustee of 611 or any such-part of the Lease Indenture Estate or to act as separate trustee of any property constituting part thereof, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons any property, title, right or power deemed necessary or desirable, subject to the remaining provisions of this Section 1.9.Except as set forth in subsection (b)(6)of this Section 1.9 the Owner Trustee shall join in any such appointment upon the request of the Indenture Trustee, but such joining will not be necessary for the effectiveness of such appointment.
: '-"('b)Every separate trustee or co-trustee shall be appointed subject to the following terms: (1)The rights, powers, duties and obligations conferred or imposed upon any such separate trustee or co-trustee shall not be greater than those conferred or imposed upon the Indenture Trustee, and such rights and powers shall be exercisable only jointly with the Indenture Trustee, except to the extent that, under any law of any jurisdiction in which any particular act or acts are to be performed, the Indenture Trustee shall be incompetent or unqualified'to perform such act or acts, in which event, except as set forth in subsection (b)(6)of this Section 1.9, such rights and powers shall be exercised by such separate trustee or co-trustee subject to the provisions of subsection (b)(4)of this Section 1.9.(2)The Indenture Trustee may at any time, by an instrument in writing executed by it, accept the resignation of, and may (and upon the receipt of a Directive, shall)remove any(separate trustee or co-trustee appointed under this Section 1.9.(3)No trustee under the Indenture and this Supplemental Indenture shall be liable by reason of any act or omission of any other trustee or co-trustee under this Indenture.
(4)Except as set forth in subsection (b)(6)of this Section 1.9, no power given to such separate trustee or co-trustee shall be separately exercised hereunder by such separate trustee or co-trustee except with the consent in writing of the Indenture Trustee.(5)The Indenture Trustee shall maintain custody of all money and securities.
(6)Notwithstanding anything contained to the contrary in this Section 1.9, to the extent the laws of any jurisdiction preclude the Indenture Trustee from taking any action hereunder either" alone, jointly or through a separate trustee under the direction and control of the Indenture Trustee, the Owner Trustee, at the instruction of the Indenture Trustee, shall appoint a separate trustee for such jurisdiction, which separate trustee shall have full power and authority to take all action hereunder as to matters relating to such jurisdiction without the consent of the Indenture Trustee, but subject to the same limitations in any exercise of his power and authority as those to which the Indenture Trustee is subject.C-3 l'c)Upon the acceptance in writing of such appointment by any such separate trustee or co-trustee, it shall be vested with the estates or property to which its appointment relates as specified in the instrument of appointment, subject to all the terms of the Indenture and this Supplemental Indenture.(d)Any separate trustee or co-trustee may, at any time, constitute the Indenture Trustee, i agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of the Indenture and this Supplemental Indenture on its behalf and in its name.If a separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.SEn'ION 1.10.Separability of Provisions.
In case any one or more of the provisions of this Supplemental Indenture or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof and the Indenture and any other application hereof and thereof shall not in any way be afFected or impaired.I~SEGTION 1.11.Counterpart ExecIfition.
This Supplemental Indenture may be executed in any number of counterparts and by the different parties hereto and thereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IIV WITi JESS WHEREOF, the Owner Trustee and the Indenture Trustee have each caused this Indenture to be duly executed by their respective officers thereunto duly authorized, all as of the date first set forth above.THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee under t)Ie Trust Agreement dated as of December 1.1986, with Connnercial Federal Investment Corporation By: Title: (FIRST CITY NATIONAL BANK OF HOuSTON By: Title:
THIS NOTE HhS NOT BEE".I REGIHiIRED UNDER THE SEcURITIEs hcT oF 1933 AND SIAY NoT BE TRANsFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACf NONRECOURSE PROMISSORY NOTE, INITIAL SERIES (DuE JUI.Y 2, 1992)Issue Date: December 18, 1986 THE FIRsT NATIoNAL BANK oF BosTQN, not in its individual capacity, but solely as Owner Trustee (the Owner Trustee)under a Trust Agreement dated as of December 1, 1986 with Commercial Federal Investment Corporation (the OIuner Participant), hereby promises to pay to EI.Phso FUNDINc CORFORATION, or registered assigns, the principal sum of six million four dred forty-seven thousand Dollars ($6,447,000) on July 2, 1992 together with interest (computed asis of a 360-day year of twelve 30-day months)on the aggregate amount of such principal sum re ining unpaid from time to time from the date of this Initial Series Note until due and payabl'n arrears, at the rate of 8.10%per annum.Payments of principal installments of this Initial Series aH be made in the"Principal Amount Payable" and on the"Payment Dates" specified in Schedu 1 hereto.Payments of accrued interest on this Initial Series Note shall be made on each ary 2 and July 2, commencing July 2, 1987, until the principal amount of this Initial Series No aVe been paid in full, Capitalized terms used in this Initial Series Note which e not otherwise defined herein shall have the meanings ascribed thereto in the Indentur hereinafter defined).Interest on any overdue principal and premi if any, and (to the extent permitted by applicable
~~~~~~~~law)any overdue interest shall be paid, on dern d, om the due date thereof at the rate of interest annum (computed on the basis of a 360-day y of twelve 30-day months)equal to 1%above the crest rate stated above for this Initial S Note for the period during which any such principal, premium or interest shall be overdue.In the event any date on which a ayment is due under this Initial Series Note is not a Business Day, then payment thereof may be on the next succeeding Business Day with the same force and efFect as if made on the date on whic ch payment was due.All payments of principal ium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust nture, Mortgage, Security Agreement and Assignment of Rents dated as of December 1, 1988, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture);
between the Owner Trustee and First City National Bank of.Houston, as Trustee (the Indenture Tnetcc), shall be made only from the Lease Indenture Estate and the Trust.Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suRcient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; proofed, howlet;that in the event the Lessee shall assume aH the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-tion 3.9(b)of the Indenture, then all payments to be made under this Initial Series Note shaH be made from payments made by the Lessee under this Initial Series Note in accordance with the hssumption agreement referred to in said Sec'tion 3.9(b)and the Holder of this Initial Series Note agrees that in such event it will look solely to the Lessee for such payment.Principal, premium, if any, and interest shall be payable, in the manner provided in the Inden on presentment of this Initial Series Note at the Indenture Trustee's OfBce, or as otherwise provid the Indenture.
In the manner and to the extent provided in the Indenture.
Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to June 30, 1990.in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.-The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Initial Series Note unless and until all such notations have been duly made.This Initial Series Note is one oF the Initial Series Notes ref o in the Indenture.
The Indenture permits the issuance of additional series of Notes, as p i ed in Section 3.5 of the Indenture, and the several series may be for varying aggregat princi al amounts and may have diiferent maturity dates, interest rates, redemption provisions a t r terms.The properties of the Owner Trustee included in the Lease Indenture Estate are pl o the Indenture Trustee to the extent provided in the Indenture as security for the payme of the principal of and premium, if any, and interest on this Initial Series Note and all other Notes and outstanding
&om time to time under the Indenture.
Reference is hereby made to the I e for a statement oF the rights of the.Holders of, and the nature and extent of the security for th Initial Series Note and of the rights oF, and the nature and extent of the security for, the H~rs of the other Notes and of certain rights of the Owner Trustee, as well as for a statement oF the tehp8 and conditions of the trust created by the Indenture.
to all of which terms and conditio e Holder hereof agrees by its acceptance of this Initial Series Note.This Initial Series Note is subject to pu chase by the Owner Trustee as provided in Section 6.of the Indenture.
This Initial Series Note subject to prepayment in whole or in part.In case an Indenture Event of Default s l occur and be continuing, the unpaid balance of the principal of this Initial Series Note y other Notes, together with all accrued but unpaid interest thereon, may, subject to certain ri f the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declar or may become due and payable in the manner and with the efFect provided in the Inden The lien upon the Lease In nture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon the deposit with the Indenture Trustee of cash or certain securities sufBcient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's ORce a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in the Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed, together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Inibal Series Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Initial Series Note and for all other purposes whatsoever, whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture t Trustee shall be afected by notice to the contrary.
This Initial Series Note shall be governed by, and construed in accordance with.the laws of the State of New York.IN WITNFcs WHEREoF, the Qwner Trustee has caused this Initial Series Note to be duly executed~~as of the date hereof.THE FtR~T.'i.iTtni it.B.iiv.or.BosToi.not in its individual capacity.but solely as OLvter Trustee under a Trust Agreement dated as of December l.19S6.with CoststERctAL FEDERAt.INvEsTilEYT CoRPoKATtox Qy" Assist Vice Pres ASSIGN&VI'ate: December 18, 1 6 For value received, Et.PAso FuNDtNc CoBpoBATtoN hereby sells, assigns and transfers to Crry iVAT'toNAt.
BANx oF'ousToN as Collateral Trust Trustee pursuant to the Collateral Trust Indenture dated as of August l.1986.as amended and supplemented.
among Et.PAso Ft:NorNc CoRpoRAvloN, El Paso Electric Company and said Collateral Trust Trustee, without recourse, the Initial Series.'4ote to which this Assignment is annexed and all rights thereunder.
Et PAso FUNDtNG COBPOBATloN "7 e resident SCHEDULE 1 TO THE LtlTlAL SENES DEVOTE (Dl:K JLXV 5 1992)SCHKDl:LK OF PRDtClPAL A.itOltTlZATIOi Payment Date imonthl dayl yearl 7/2/1987 1/2/1988 7/2/1988 1/2/1989 7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 Principal Amnnnt Payable$0.0000000 0.0000000 7000.00 698000.00 726000.00 755000.00 7860OO.OO 818000.00 851000.0 88500-92100 Principal Amount Paid
 
THIs NoTE HAs NoT BEEN REOIsTERED UNDER THE SEcURITIEs AcT oF 1933 AND MAY NoT BE TRANsFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACI'oNREcoURsE PRoMlssoRY NOTE, INITIAL SERKs (DUE JUI.Y 2, 1997)Issue date: December 18, 1986 THE FIRST NATIONAI BANK OF BOSTON, nOt in itS indiVidual CapaCity, but SOlely aS Owner TruStee (the Ou:ne Trustee)under a Trust Agreement dated as of December 1, 86 with Commercial Federal" Financial corporation (the Gunner Participant), hereby promises to pa PAso FUNDINc coRpoRA-dollar TroN, or registered assigns, the principal sum of eleven million eig un red thirty-four tho d ur ousan o ars ($11,834,000) on July 2, 1997 together with interest (computed on e basis of a 3604ay year of twelve 30-day months)on the aggregate amount of such princip remaining unpaid from time to time from the date of this Initial Series Note until due and paya'ars, at the rate of 9.20%per'nnum.Payments of principal installments of this Initial Se es No shall be made in the"Principal Amount Payable" and on the,"Payment Dates" speciBed i edule 1 hereto.Payments of accrued interest on this Initial Series kat shall be'made on each and July 2 commencing July 2, 1987, until the principal amount'of'this Initial Series Note shall e been paid in full.Capitalized terms used in this Initial Series No hich are not otherwise deBned herein shall have the meanings ascribed thereto in the Indenture (hereinafter deBned).Interest on any overdue principal and pre m, any, and (to the extent permitted by applicable w)any overdue interest shall be paid, on dern, from the due date thereof at the rate of interest r annum (computed on the basis of a 3 ay year of twelve Sunday months)equal to 1%above the interest rate stated above for this Initial ote for the period during which any such principal, premium or interest shall be overdue.'n the event any date on whic ayment is due under this Initial Series Note is not a Business Day, then payment thereof may be ma n the next succeeding Business Day with the same force and eH'ect as if made on the date o which such payment was due.hll payments of princip, ium, if any, and interest to be made by the Owner Trustee ereunder and under the Trust denture, Mortgage, Security Agreement and Assignment of Rents ated as of December 1, 1988, as at any time amended or supplemented in accordance with the provisions thereof (the Indenture), between the Owner Trustee, and First City National Bank of Houston, as Trustee (the Incknhav Trustca), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sualcient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article U of the Indenture.
~The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to t e'Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered undeF the Indenture or any other Transactio ocument or for any liability thereunder, provided, bouncer, that in the event the Lessee shall assume ransac'on all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Sec-
'In the, manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior.to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereoF, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or, interest made hereon and that it will not in event transfer or otherwise dispos'e of this Initial Series Note unless and until all such notation een duly made.This Initial Series Note is one of the Initial Series Note referred to in the Indenture.
The Indenture permits the issuance of additional series of Not rovided in Section 3.5 oF the Indenture, and the several series may be for varying aggregat'ncipal amounts and may have diFerent maturity dates, interest rates, redemption provisi s and other terms.The properties of the.Owner Trustee included in the Lease Indenture Estate ged to the Indenture Trustee to the extent provided in the Indenture as security for the pay the principal of and premium, if any, and interest on this Initial Series Note and all other Notes sued and outstanding from time to time under the Indenture.
Reference is hereby made to ndenture For a statement of the rights of the Holders of, and the nature and extent of the security M'his Initial Series Note and of the rights of, and the nature and extent of the security for, Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement h terms and conditions of the trust created b Indenture, to all of which terms and conditions e Holder hereof agrees by its acceptance o Initial Series Note.This Initial Series Note is subject to p ase by the Owner Trustee as provided in Section 6.8(b)of the Indenture.
This Initial Series e may be prepaid in whole or in part at any time on and after January 2, 1992 by the Owner Tru as follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the lowing prepayment prices (expressed as a percentage of the unpaid principal amount here together with interest accrued to the date Bxed for prepayment:
Twelve Month Period Prepayment Price 1992 1993 102.63%101.31 tion 3.9(b)of the Indenture, then all payments to be made under this Note shall be made only From-payments made by the Lessee under this Initial Series Note in accordance with the hssumption hgreement referred to in said Section 3,9(b)and the Holder of this Initial Series Note agrees that in such event it will look solely to the Lessee for such payment.Principal.
premium.if any, and interest shall be payable, in the manner provided in the Inden on presentment of this Initial Series Note at the Indenture Trustee's OfBce, or as otherwise provided in the Indenture.
and thereafter at the principal amount thereof, together with interest accrued to the prepayment date.This Initial Series Note is not otherwise subject to prepayment in whole or in part.In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the principal of this Initial Series Note and any other Notes, together with all accrued by unpaid interest thereon, may, subject to certain rights oF the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the eFect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the maturity of this Initial Series Note upon'the deposit with the Indenture Trustee of cash or ce h-2-R securities sulacient to pay this Initial Series Note when due or an assumption by the Lessee of the obligation of the Owner Trustee under this Initial Series Note and the Indenture.
in each case in accordance with the terms of the Indenture.
T here shall be maintained at the Indenture Trustee's OfBce a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable.
as provided in the Indenture.
upon surrender of this Injt)ai Series Vote for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guaranteed.
together with the amount of any applicable transfer taxes.Prior to due presentment for registration of transfer of this Initial Series Note.the Owner Trustee and the Indenture Trustee may treat the person in whose name this Initial Series Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium.if any, and interest on this Initial Series Note and for all other purposes whatsoever.
whether or not this Initial Series Note be overdue, and neither the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary, This Initial Series Note shall be governed by, and construed in a dance with, the laws of the State of New York.Ix WITNEss WHEREoF;the Owner Trustee has caused this In tial Se es Note to be duly executed as of the date hereof.THE F NA oNAL BANK oF BosToN, not in its indivl capacity, but solely as Otcnel.Tncstee u rust hgreement, dated as of Decem-ber I, 86, with coMMERclAl.
FEDERAl.IwvEST-.KIT CORPORAYlON Q, hssistant Vice Pres hSSIGViMENT Date: December 18,1986 For value received, EI.Pwo FUNDING coRpoRhTIoN hereby sells, assigns and transfers to CITY iVATIoN*I.
B~Nx oF HoUsToN as Collateral Trust Trustee pursuant to the Collateral Indenture dated as of hugust 1.1986.as amended and supplemented.
among EI.Pmo FUNDING CoRPORATION, El Paso Electric Company and said Collateral Trust Trustee.without recourse, the Initial Series iVote to which this hssignment is annexed and all rights thereunder.
EI.PRO FUNDING CORPORhTION resident Qo~~~~~~~o, SCEKDULE 1 TO THE QITIAL SERI'C'DUE JULy 2, 1997)SCHEDULE OF PRINCIPAL hMORTIZATION Payment Date (monthlda I ear)7/2/1987 I/2/1988 7/2/1988 1/2/1989-7/2/1989 1/2/1990 7/2/1990 1/2/1991 7/2/1991 1/2/1992 7/2/1992 1/2/1993 7/2'/1993 1/2/1994 7/2/1994 1/2/1995 7/2/1995 1/2/1996 7/2/1996 1/2/1997 7/2/1997 Principal Amount Payable$0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0.0.000.00 100 0.00 049000.00 7000.00 1147000.00 1200000.00 1255000.00 131.3.000.
00 1374000.00 1437000.00
$11.834 MO Principal Amount Patd 0~~~~~a~h-2-5
 
THls NQTE HAs NoT BEEN REGIsTERED UNDER THE SEcURITIEs AcT oF 1933 HAND MhY NoT BE TRhNsFERRED, SQLD QR OFFERED FoR SALE IN VloLCTIoN QF SI:cH AcT NONRECOURSE PROMISSORY NOTE, INITIAL SERIES (DUE JANUARY 2, 2011)Issue date: December 18, 1986 THE FIRsT NwTIONwL BaNK oF BosTON, not in its individual capacity, but solely as Owner Trustee (the Ou:ner Tnatee)under a Trust Agreement dated as of December 1, 1 86 with Commercial Federal Investment Corporation (the Ou:ner Participant), hereby promises o y to EI.Paso FUNDING CQRPoRATIQN, or registered assigns, the principal sum of fifty-one ix hundred twenty four thousand dollars ($51,624,000) on January 2, 2011, together with interest omputed on the basis of a 360-day year of twelve 30-day months)on the aggregate amo of such principal sum remaining unpaid from time to time from the date of this Initial Series Note'ue and payable, in arrears, at the rate of 10.375%per annum.Payments of principal instal ents this Initial Series Note shall be made in the"Principal Amount Payable" and on the"Paym ates" specified in Schedule 1 hereto.Payments of accrued interest on this Initial Series Note maBi:on each January 2 and July 2, commencing July 2, 1987, until the principal amount of this'al Se?ies'Note shall have been paid in full.Capitalized terms used in this Initial Series Note w Ich are not otherwise defined herein shall have the meanings ascribed thereto in the Inde re (as hereinafter defined).Interest on any overdue principal and premiu any, and (to the extent permitted by applicable
)any overdue interest shall be paid, o emand, from the due date thereof at the rate of interest r annum (computed on the basis of a ear of twelve 304ay months)equal to 1%above the interest rate stated above for this Initial SerI ote for the period during which any such principal, premium or interest shall be overdu In the event any date on which a ment is due under this Initial Series Note is not a Business Day, then payment thereof may made on the next succeeding Business Day with the'same force and effect as if made on the date o h such payment was due.hll payments of principal, pr mium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and hssignmcnt of Rents dated as of December l.1986, as at any time amended or supplemented in accordance with the provisions thereof (the Incknture), between the Owner Trustee and First City National Bank of Houston, as Trustee (the Incknttcrc Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sufiicient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture.
The Holder hereof, by its acceptance of this Initial Series Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof'as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Initial Series Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; prouided, hacueeer, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Scc-a~h-3-1 tion 3.9(b)of the Indenture, then all payments to be made under this Note shall be made only from payments made by the Lessee under this Initial Series Note'n accordance with the hssumption hgreement referred to in said Section 3.9(b)and the Holder of this Initial Series Note agrees tha such event it will look solely to the Lessee for such payment, Principal.
premium, if any, and interest shall be payable, in the manner provided in the Indenture, on presentment of this Initial Series Note at the Indenture Trustee's OlBce, or as otherwise provided in the Indenture.
In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion oF the Owner Trustee prior to June 30, 1990, in connection with an adjustment to Basic Rent under Section 3(d)of the Facility Lease.The Holder hereof, by its acceptance of this Initial Series Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Initial Series Note agrees, by its acceptance hereof, that it will duly te by appropriate means all payments of principal or interest made hereon and that it will not i nt transfer or otherwise dispose of this Initial Series Note unless and until all such notations ha been duly made.This Initial Series Note is one of the Initial Series Not ed to in the Indenture.
The Indenture permits the issuance of additional series of Notes, rovided in Section 3,5 of the Indenture, and the several series may be for varying a ate principal amounts and may have difFerent maturity dates, interest rates, redemption provi other terms.The properties of the Owner Trustee included in the Lease Indenture Estate ged to the Indenture Trustee to the extent provided in the Indenture as security for the aymen of the principal of and premium, if any, and interest on this Initial Series Note and all other es issued and outstanding from time to time under the Indenture.
Reference is hereby made to the denture for a statement of the rights of the Holders of, and the nature and extent of the se ty for, this Initial Series Note and of the rights of, and the nature and extent of the security for, t ders of the other Notes and of certain rig the Owner Trustee, as well as for a statement of t e terms'and conditions of the trust created b Indenture, to all of which terms and co'o s the Holder hereof agrees by its acceptance of t is Initial Series Note, Prepayment Price This Initial Series Note is subje purchase by the Owner Trustee as provided in Section 6.8(b)of the Indenture and to mandatory p ment in full as provided in Section 5.2 of the Indenture, such prepayment being.without premium b t including accrued interest to the date of prepayment.
In addition, this Initial Series Not be prepaid in whole or in part at any time on and after January 2, 1992 by the Owner Trustee as o': upon the giving of not less than 30 days'otice as provided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment:
Twelve Montb Twelve Month Period Begianiag Prepayment Period Begiaaiag Price 1992 1993 1994 1995 1996 1997 1998 1999 107.78%10726 106.74 106.23 105.71 105.19 104,67 104.15 2000 2001 2002 2003 2004 2005 2006 103.63%103.11 102.59 102.08 101.56.101.04 100.52 and thereafter at the principal amount thereof, together with interest accrued to the prepayment date.This Initial Series Note is not otherwise subject to prepayment in whole or in pait.h-3-2
~In case an Indenture Event of Default shall occur and be continuing, the unpaid balance oF the principal of this Initial Series Note and any other Notes, together with all accrued but unpaid interest thereon, may.subject to certain rights oF the Owner Trustee or the Owner Participant contained or reFerred to in the Indenture, be declared or may become due and payable in the manner and with the efFect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the nraturity of this initial Series Note upon the deposit ivith the Indenture Trustee of cash or certain securities sulBcient to pay this Initial Series Note when due or an assumption bv the Lessee of th obl e ob igation of the Owner Trustee under this Initial Series Note and the Indenture, in each case in accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's OfRce a register for the purpose of registering transfers and exchanges of Notes in the manner provided in the Indenture.
The transfer of this Initial Series Note is registrable, as provided in th'e Indenture, upon surrender of this Initial Series Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof with signature guarant, together with the amount of any applicable transfer taxes.Prior to due presentment for regi of transfer oF this Initial Series Note.the Owner Trustee and the Indenture Trustee may treat t person in whose name this Initial Series Note is registered as the owner hereof for the purp of receiving payments of principal oF and premium.if any, and interest on this Initial Series Note all other purposes whatsoever.
whether or not this Initial Series Note be overdue, and neither the wner Trustee nor the Indenture Trustee shall be aa'ected by notice to the contrary.This Initial Series Note shall be governed by, and c in accordance with, the laws of the State of New York.Ii Wm'Ess WHEREOF, the Owner Trustee has ca this Initial Series Note to be duly executed.<<as of the date hereof.)THE Frost Nina'.iL Bixv.Or BosToi, not in its individual capacity.but solely as Ou;acr Trustee~under a Trust Agreement, dated as of Decem-ber I, 1986, with CoxoiEacr~t.
FEDEaa,r.LsvEsv-0 age CoapoaAYroN.
Qyo Assistant Vice Pres h-3-3 ASSIGaAiKVg Date: December I8, I986 For value received.EL PASO FUNDINC CORPORATION hereby sells, assigns and transfers to Fr Crn NATIoNAL BANx oI'oUsToN as Collateral Trust Trustee pursuant to the Collateral Indenture dated as of August I, 1986, as amended and supplemented, among EI.PAso FUN CoRpoRATIoN.
El Paso Electric Company and said Collateral Trust Trustee, without recourse.the Initial Series Note to which this Assignment is annexed and all rights thereunder.
EL PASO FUNDING CORPORATION
")Vice President Payment Date t mi>n thi dia!I!eaj')7/2/1987 I/2/1988 7/2/1988 I/2/1989 7/2/1989 I/2/1990 7/2/1990 I/O/1991 7/2/1991 I/2/1992 7/2/1992 I/2/1993 7/2/1993 I/2/1994 7/2/1994 I/2/1995 7/2/1995 I/2/1996 7/2/1996 I/2/1997 7/2/1997 I/2/1998 7/2/1998 I/O/1999 7/2/1999 I/2/2000 7/2/2000 I/2/2001 7/2/2001 I/2/2002.7/.2/2002 I/2/2003 7/2/2003 I/2/2004 7/2/2004 I/2/2005 7/2/2005 I/2/2006 7/2/2006 I/2/2007 7/2/2007 1/2/2008 7/2/2008 I/2/2009 7/2/2009 I/O/2010 7/2/2010 I/2/2011 SCHEDULE l To tom l~SEtuas NoTE (DM Jhmhlr 2, 20II).SmKDnx oF~otphL h~ottnz.irido't Ps~rpd hmoant Payable$0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0.0..0.0.96 000.00 1 88000.00 08000.00 1163000.00 107'7000.00 1243000.00 1151000.00 1329000.00 1231000;00 1421000.00 1316000.00 1519000.00 1406000.00 1624000.00 1503000.00 1736000.00'607000.00 1856000.00 1839000.00 2856000.00 3004000.00 3160000.00 3324000.00 3496000.00 3677000.00 3868000.00 2158000.00$51.6R4.000 Principal Amount Paid h-3-5 0 e COLLATERAL TRUST INDENTURE dated as of August 1, 1986 Among EL PASO FUNDI NG CORPORAT ION~EL PASO ELECTRIC COMPANY and F I RST C I TY NAT I ONAL BANK OF HOUSTON p as Trustee Providing for the Issuance from Time to Time of Securities To Be Issued in One or More Series PALO VERDE NUCLEAR GENERATING STATION e
EL PASO FUNDING CORPORATION EL PASO ELECTRIC COMPANY Reconciliation and tie between Indenture dated as of August 1, 1986 and Trust Indenture Act of 1939 Section of Act 310(a)(1)(2)(3)(4)(b)(c)311(a)(b)(c)312 (a)(b)(c)313 (a)313 (b)(1)(2)(c)(d)k 314 (a)(b)(c)(1)(2)(3)(d)(1)(2)(3)(e)315(a)(1)(2)Section of Indenture 9.09 9.09 Inapplicable Inapplicable 9.08, 9.10(a), 9.10(d), 9.10(e), 9.11 Inapplicable 9.13 Inapplicable 10.01 10.02(a)10.02 (b)10.02 (c)10~03 (a)10.03(b)(1) 10.03(b)10.03(a)&(b)10.03 (c)10.04 5.06 1'2 1.02 Inapplicable Inapplicable Inapplicable Inapplicable 1.02 9.01(a)(1)9.01(a)(2)
'?1.CHRYSLER.1106.53:1 Section of Act 315(a)(last clause)(b)(c)(d)(1)(2)(3)(e)316 (a)(1)(A)(8)(2)(a)(last sentence)(b)317 (a)(1)(2)(b)318 (a)Section of Indenture 9.01(a)(2)9.02 9.01(b)9.01(c)(1) 9.01(c)(2)9.01(c)(3)8.10 8.07 8.08 Inapplicable F 01 (" Outstanding")F 11 8.05(a)8.05 (d)5.03 9.14 (c)(2)1.07 0 NOTE: This reconciliation and tie shall not, for any pur be deemed to constitute a part of the Indenture.
1021.CHRYSLER.1106.53: 1 TABLE OF CONTENTS ECITALS GRANTING CLAUSES~~~~~~~Pacae~'~~1~~~~2 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
..........,..3 Section 1.01.Section 1.02.Section 1.03.Section 1.04.Section 1.05..Section-1.06.Section 1.07, Section 1.08.Section 1.09.Section 1.10.Section 1,11.Section 1.12.Section 1.13.Definitions.
Compliance Certificates.
and Opinions.Form of Documents Delivered to Trustee.Acts of Holders.Notices, etc.;to Trustee, El Paso and Company.~~~~~~~~~~~~~~Notices to Holders;Waiver.Conflict with Trust Indenture Act.Effect of Heading and Table of Contents Successors and Assigns.Separability Clause.Benefits of Indenture.
Governing Law.Legal Holidays.J'~3.10.11.12.13.13.14.14.14.14.14.15.15 Section Section Section=Section Section 2.05.2.06.2.07'.08'.09'ection 2.10.Section 2.11.Section 2.12.Section 2.13.ARTICLE, TWO Section 2.01.Section 2.02.Section 2.03.Section 2.04.~THE SECURITIES Forms Generally.
Form of Trustee's Authentication.
Amount Unlimited Issuable in Series;Limitations on Issuance.Authentication and Delivery of Securities.
Form and Denominations.
Execution of Securities.
Temporary Securities.
Registration, Transfer and Exchange.Mutilated, Destroyed, Lost and Stolen Securities.
Payment of Interest:;
Interest Rights Preserved.
Persons Deemed Owners.Cancellation.
Dating of Securities; Authentication.
.15.15.15.16.18.19.20.20.21.22.23.24.25.25 21.CHRYSLER.1106..53:1 TABLE OF CONTENTS, Continued Section 2.14.Section 2.15.Source of Payments: Rights and Liabilities of Lessors and Equity Investors.
~~~~~~~"~~~~~~Sale of Securities; and Application of Proceeds from the Sale of Securities.
Pacae P1~o~2 5.26 ARTICLE'HREE Section 3.01.Section 3.02..Section 3.03.'ection 3.04.Section 3.05.PROVISZONS AS TO PLEDGED PROPERTY Holding of Pledged Securities.
Disposition of Payments on Pledged Property.Exercise of Rights and Powers Under Pledged Lessor Notes and Lease Zndentures.
Certain Actions in Case of Judicial Proceedings~
~~~~~~~~~I~Cash Held by Trustee Treated as a Deposit.~~~~~~~t~~~~~.26.26.27.27~28.28'RTICLE FOUR WITHDRAWAL OF COLLATERAL.
Section 4.01.Section 4.02.Nithdrawal of Collateral.
Reassignment of Pledged Lessor Notes upon Payment................28 Section 5.02.Section 5.03.Section Section'Section Section Section Section Section 5.04.5.05.5.06.5.07.5.08.5.09.5.10.ARTICLE FIVE Section 5.01.COVENANTS'~~~~~~~~~~~~~~Payment of Principal, Premium (if any)and Interest.Maintenance of Office or Agency.Money for Security Payments to be Held zn Trustl~~~~~~~~~~~~~~~Maintenance of Corporate Existence.
Protection of Pledged Property.Opinions as to Pledged Property.Performance of Obligations Negative Covenants Administration of Principal Instruments.
Annual Statement as to Compliance.
.29.29.29.29.30.30.31.32.32..33.35 1021.CHRYSLER;1106.53: 1' TABLE OF CONTENTS, Continued TICLE SIX Section 6.01.Section 6.02.Section 6.03.Section 6.04.Section 6.05.Section 6.06.REDEMPTION OF SECURITIES Notice to Trustee of Redemption.
Selection by Trustee of Securities to Redeemed.Notice of Redemption.
Deposit of Redemption Price.Securities Payable on Redemption Date Securities Redeemed in Part.~~be.Pa<ac.36.36.36~~3 7'38~~38.39 ARTICLE SEVEN S INKING HHfDS~~.~~.~.-.~.....3 9 Section 7.01.Section 7.02.Sinking Funds for Securities.
.......39 Selection by Trustee of Securities to be Redeemed Through Operation of Sinking Fund....................40 ARTICLE EIGHT EVENTS OF DEFAULT;REMEDIES.41 ection 8.01.ction 8.02.'Section 8.03.Section 8.04.Section 8.05.Section 8.06.Section 8.07.Section 8.08.Section 8.09.Section 8.10.Section 8.11.Section 8.12.Section 8.13.Events of Default.Acceleration of Maturity;Rescission and Annulment.
Trustee's Power of Sale of Pledged Property;Notice Required;Power to Bring Suit.Incidents of Sale of Pledged Property.Judicial Proceedings Instituted by Trustee Securityholders May Demand Enforcement of Rights by Trustee.Control by Securityholders.-
Waiver of Past Defaults.Securityholder May Not Bring Suit Except under Certain Conditions.
Undertaking To Pay Court Costs.Right of Securityholders To Receive Payment Not To Be Impaired.Application of Moneys Collected by Trustee.~~~~~~~~~~~~~~~~Securities Held by Certain Persons Not To Share in Distribution.
.41.43.44.45.46.49.49.50.50.51.52.52.53 j 21.CHRYSLER.1106.53: 1-iii-TABLE OP CONTENTS, Continued Section 8.1'.Section 8.15.Waiver of Appraisement, Valuation, Stay, Right to Marshalling.
Remedies Cumulative; Delay or Omission Not a Waiver..54 F.54 ARTICLE NINE THE TRUSTEE................55 Section Section Section Section Section Section 9.01.9 F 0'.03.9.04.9.05~9.06'ection Section Section Section 9.07.9.08'.09.9.10.Section 9.13.Section 9.14.Section 9.11.Section 9.12.Certain Duties and Responsibilities.
Notice of Defaults.Certain.Rights of Trustee.Not.Responsible for Recitals or Issuance of Securities.
May Hold Securities.
Funds May Be Held by Trustee or Paying Agent;Investments.
Compensation and Reimbursement Disqualification; Conflicting Interests.
Corporate Trustee Required;Eligibility.
Resignation and Removal;Appointment of Successor.
~~~~~~~~~~~~~~~Acceptance of Appoin'tment by Successor.
Merger, Conversion, Consolidation or Succession to Business.Pre f erential Collection o f Claims against any Obligor.Maintenance.
of Agencies..55.56.56.57.58.58.59.59.65.66.67.68.72 ARTICLE TEN SECURITYHOLDERS'ISTS AND REPORTS BY TRUSTEE AND EL PASO.74 Section 10.01'ection 10.02.Section 10.03.Section 10.04.El Paso to Furnish Txustee Names and Addresses of Secuxityholders.
Preservation of Information; Communications to Securityholders.
Reports by Trustee.Reports by'El Paso.~74.74.76.78 1021.CHRYSLER.1106.53: 1 iv-
<TICLE ELKWI2t TABLE OF CONTENTS, Continued P Pacae SUPPLEMENTAL INDENTURES
..........
79 Section 11.01.Section 11.02.Section 11.03.Section 11.04.Section 11.05.Section 11.06.Section 11.07.Supplemental Indentures Without Consent of Securityholders.
Supplemental Indenture With Consent of Securityholders.
Documents Affecting Immunity or Indemnity., Execution of Supplemental Zndentures.
Effect of Supplemental Indentures.
Conformity with Trust Indenture Act.Reference in Securities to Supplemental Indentures.
.79.80.81.81.82.82.82 ARTICLE TWELVE Section 12.01.-';Section 12.02.DEFEASANCE
.................82 Payment of Indebtedness; Satisfaction and Discharge of this Indenture.
......82 Application of Deposited Money.......84 TICLE THIRTEEN RELEASE OF FUNDS BY THE TRUSTEE FOR PAYMENT OF THE PLEDGED LESSOR NOTES AND RELEASE AND SUBSTITUTION OF PLEDGED PROPERTY~~...~..~~~~...~..84.Section 13.01.Conditions Precedent to Release of Funds by the Trustee for Payment of'the Pledged Lessor, Notes............84 ARTICLE FOURTEEN SUNDRY PROVISIONS Section 14.01.Execution in Counterparts.
PART I ES~~~~o~~~~~~~~~~~~~~~~EXHIBIT A Requirements for Pledged Lessor Notes, Zndentures, Leases and Participation Agreements Lease~~~85~~~85~~~8 5~~o 90 21.CHRYSLER.1106.53: 1 e
COLLATERAL TRUST INDENTURE, dated as of August 1, 1986, among EL PASO FUNDING CORPORATION, a Delaware corporation (hereinafter called the Company), having its principal office and ailing address at Corporation Trust Center, 1209 Orange Street,~.lmington, Delaware 19801, EL PASO ELECTRIC COMPANY, a Texas orporation, having its principal office and mailing address at 303 North Oregon Street, El Paso, Texas 79901 (hereinafter called El Paso), and FIRST CITY NATIONAL BANK OF HOUSTON, a national banking association, as Trustee (hereinafter called the Trustee), having its corporate trust office at First City Financial Center, 1301 Fannin Street, 21st Floor, Houston, Texas 77002.RECITALS WHEREAS, the Company has duly authorized the creation of an issue of its debentures, notes or other evidences of indebtedness to be issued in one or more series (the Securities) up to such principal amount or amounts as may from time to time.be authorized in accor-dance with the terms of this Indenture; and to secure the Securities and to provide for the authentication and delivery thereof by the Trustee, the Company has duly authorized the execution and delivery of this Indenture; and WHEREAS, all acts necessary to make this Indenture a valid.instrument for the security of the Securities, in accordance with its and their terms, have been done;~~NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, to secure e payment of the principal of, premium (if any)and interest on all e Securities authenticated and delivered hereunder and issued by the Company and outstanding, and the performance of the covenants therein and herein contained, and in consideration of the premises:and of the covenants herein contained and of the purchase of the, Securities by the holders thereof, and of the sum of one dollar ($1.00)paid to the Company by the Trustee at or before the'delivery hereof, the receipt whereof is hereby acknowledged, the Company by these presents does grant, bargain, sell, release, convey, assign, pledge, transfer, mortgage, hypothecate, and confirm unto the Trustee all and singular the following (which collectively are hereinafter,.
called the Pledged Property), excluding, in any event, any moneys which are specifically stated herein not.to constitute part of the Pledged Property, to wit: CLAUSE FIRST All Pledged Lessor Notes (as hereinafter defined)as shall be actually pledged and assigned by the Company to the Trustee, together with the interest of the Company (if any)in the Lease Indentures (as hereinafter defined)securing said Lessor Notes, pursuant to the Series Supplemental Indentures or other supplemental 21.CHRYSLER.1106.S3:1 indentures to be executed and delivered as provided in this Indenture.
CLAUSE SECONDAll right, title and interest, of the Company in,-to and under any agreements with respect to commitment fees or other amounts payable by El Paso entered into between El Paso and the Company in connection with the issuance and sale of any series of Securities, if actually assigned by the Company to the Trustee pursuant to a Series Supplemental Indenture or other supplemental indentures to be exe-cuted and delivered as provided in this Indenture.
CLAUSE THIRD All the proceeds received by'he Company from the sale of the Securities, all the tolls, rents, issues, profits, products, rev-enues and other income of the property subjected or required to be subjected to the lien of this Indenture, and all the estate, right, title and interest of every nature whatsoever of the Company in and to the same and every part thereof.CLAUSE FOURTH 0 Any property, including cash, that may, from time to hereaf ter be sub j ected to the lien and/or pledge hereof b Company or which pursuant to any provision of this Indenture o y Series Supplemental Indenture or other supplemental indentures to be executed and delivered as provided in this Indenture may become sub-j ected to the lien and/or pledge hereof;and the Trustee is hereby authorized to receive the same at any time as additional security hereunder.
Such subjection to the lien hereof of any such property as additional security may be made subject to any reservations, limita-tions or conditions which shall be set forth in a written instrument executed by the Company and/or by the Trustee respecting the scope or priority of such lien and/or pledge or the use and disposition of such property or the proceeds thereof.TO HAVE AND TO HOLD the Pledged Property unto the Trustee and its successors and assigns forever subject to the terms of this Indenture, including, without limitation, Section 12.01.P benefit and.security of the holders from time to time of all the Securities authenticated and delivered hereunder and issued by the Company and outstanding, without any priority of any one Security over any other.1021.CHRYSLER.1106.53: 1 AND UPON THE TRUSTS and subject to the covenants and condi-tions hereinafter set forth.ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GEN1HVG APPLICATION.
SECTION 1.01.Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1)the terms defined in this Article have the mean-ings assigned to them in this Article, and include'he plural as well as the singular;(2)all other terms used herein which are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein;(3)all accounting terms not otherwise.
defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (4)all re f erence in this Indenture to designated"Articles","Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Indenture; and (5)the words"herein","hereof" and"hereunder" and other words of similar import refer to this Indenture.
as a whole and not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Nine, are defined in that Article."Act" when used with respect to any Holder has the meaning specified in Section 1.04."Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.For the pur-poses of this definition,"control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the 21.CHRYSLER.1106.53: 1 terms"controlling" and"controlled" have meanings correlative to the for'cgoing."Authorized Agent" means any Paying Agent or Secv Registrar."Authorized Officer" shall mean any officer of the Trustee or any other individual who shall be duly authorized by appropriate corporate action on the part of the Trustee to authenticate Securities.
>>Board of Directors" means the board of directors of the Company, when used with respect to the Company, and either the board of directors, or any committee of that board duly authorized to act for it hereunder, when used with respect to El Paso."Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or El Paso, as the case may be, to have been duly adopted by the Board of Directors of such entity and to be in full force and effect on the date of such certification, and delivered to the Trustee."Business Day>>means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York, New York, the City of Boston, Massachusetts, the City of El Paso, Texas or the City of Houston, Texas are autho-rized by law to remain closed."Change" with respect to any instrument means any con amendment, waiver, approval, notice or direction or the execu grant or giving of any thereof."Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body per-.forming such duties on such date."Company" means the Person named as the"Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter"Company" shall mean such successor corporation."Company Request" and"Company Order" mean, respectively, a written request or order signed in the name of the Company by its President or one of its Vice Presidents, and by its Treasurer, Secretary, or one of its Assistant Treasurers or Assistant Secretaries, and delivered to the Trustee.1021.CHRYSLER.1106.53: 1
-"Corporate Trust Office" means the principal office of the Trustee at which at any particular time corporate trust business of the Trustee shall be administered, which at the date of this ndenture is First City Financial Center, 1301 Fannin Street, 21st loor, Houston, Texas 77002: Attention of Corporate Trust epartment.
>>El Paso" means El Paso Electric Company, a Texas corpora-tion, and, subject to the provisions hereof, its successors and assigns.>>Equity Investor" means any Equity Investor identified in a Schedule to a Series Supplemental Indenture, until a successor or assignees thereof shall have become such pursuant to the applicable provisions of the Participation Agreement to which such Equity Investor is a party, and thereafter"Equity Investor" means such suc-cessor or assignees;"Equity Investors" means each and every Equity Investor.8.01'Event of Default" has the meaning specified in Section" Extension Letter" means the Extension Letter, to be dated the date of issue of a Pledged Lessor Note and addressed to the-:Trustee by the parties to the Participation Agreement, extending to.:.the Trustee the representations, warranties and covenants of such ,.parties set forth in the Participation Agreement."Holder" or>>Securityholder>>
means a Person in whose name a curity is registered in the Security Register."Indenture" means this instrument as originally executed.and as it may from time to time be supplemented, or amended by one or'ore indentures supplemental hereto entered into pursuant to the applicable provisions hereof.'Initial Interest Date" with respect to any series of Securities means the date of the Stated Maturity for the initial installment of interest on Securities of such series."Lease Indenture" means any Lease Indenture and any Lease Indenture Supplement identified in a Schedule to a Series Supplemental Indenture, as such Lease Indenture and Lease Indenture Supplement may be amended or supplemented from time to time pursuant to the applicable provisions thereof and of this Indenture;"Lease Indentures>>
means each and every Lease Indenture."Leases" means any Lease and any Lease Supplement identified, in a Schedule to a Series Supplemental Indenture, as such Lease and Lease Supplement may be amended from time to time pursuant 21.CHRYSLER.1106.53: 1 to the applicable provisions thereof and of this Indenture;"Leases" means each and every Lease."Lease Indenture Trustee" means the Lease Indenture Tri~identified in a Schedule to a Series Supplemental Indenture, unt~successor Lease Indenture Trustee shall have become such pursuant to the applicable provisions of the Lease Indenture to which such Lease Indenture Trustee is a party, and thereafter"Lease Indenture Trustee" means the successor Lease Indenture Trustee;~'Lease Indenture Trustees" means each and every Lease Indenture Trustee."Lease Payments" with respect to any Lease shall mean amounts payable by El Paso under such lease in respect of (i)interim rent (if any), (ii)basic rent, (iii)casualty value, (iv)special casualty value, (v)termination value or (vi)any other amounts pay-able in connection with termination of the Lease, in each case as more fully described in and assigned pursuant to the related Lease Indenture;"Lease Payments" with respect tq all Leases means the aggregate of Lease Payments under any and all Leases."Lessee Request" and"Lessee Order" mean, respectively, a written request and a written order signed in the name of El Paso by its President or one of its Vice Presidents or Assistant Vice Presidents and by-its Treasurer or Secretary or one of its Assistant Treasurers or Assistant Secretaries, or by any authorized agent of El Paso, and delivered to the Trustee."Lessor" or"Owner Trustee" means any Lessor or 0 r Trustee identified in a Schedule to a Series Supplemental Inden until,a successor shall have become such pursuant to the appli e provisions of the related Trust Agreement, identified in said Schedule, and thereafter"Lessor" or"Owner Trustee" means such suc--cessor;"Lessors" or"Owner Trustees" means each and ev'ery Lessor or Owner Trustee."Lien of this Indenture" or"lien hereof" means the lien and security interest created by these presents, or created by any.concurrent or subsequent conveyance to the Trustee (whether made by the Company or any other Person and whether pursuant to a Series Supplemental Indenture or otherwise), or otherwise created, consti-tuting any property a part of the Pledged Property held by the Trustee for the benefit of the Securities Outstanding hereunder."Obligor", when used with reference to the Securities or this Indenture, means El Paso and any successor to the obligations of El Paso under a Lease, and does not include the Trustee, the Lease Indenture Trustee, an Owner Trustee or an Equity Investor so long as they have not assumed such obligations; provided, however, that no reference to El Paso as an Obligor herein shall be construed as implying any guaranty by El Paso of the Securities.
1021.CHRYSLER.1106.53:1
 
"Officers'ertificate" means a certificate signed by the President or a Vice President, and by the Treasurer, the Secretary,~or one of the Assistant Treasurers or Assistant Secretaries, of El aso, any Lessor-or the Company, as the case may be, and delivered to he Trustee."Opinion of Counsel" means a written opinion of counsel for any Person either expressly referred to herein or otherwise satisfac-tory to the Trustee which may include, without limitation, counsel to the Company, any Lessor, the Lease Indenture Trustee, any Equity Investor or El Paso, whether or not such counsel is an employee of any of them."Outstanding" when used with respect to Securities means, as of-the date of determination, all Securities theretofore authenti-cated and delivered under this Indenture, except: 4 (i)Securities theretofore-cancelled by the Trustee or delivered to the Trustee for cancellation;(ii)Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee in trust for the Holders of such Securities as provided in Section 12.01, provided that, if such Securities are to be redeemed (otherwise than through the operation of the Sinking Fund), notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;and (iii)Securities paid in full or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture unless held by a Holder in whose hands such Securities constitute valid.obligations of the Company;provided, however, that in determining whether the Holders'f the requisite principal amount of Securities Outstanding have given any request, demand, authorization, direction, notice, consent or waiver I hereunder, Securities owned by the Company or, owned by El Paso, any Lessor or any Equity Investor,'or any Af filiate of El Paso, of'ny Lessor or of any Equity Investor, shall be disregarded and deemed not to be Outstanding, unless such Persons own 100%of the Securities owried by all Persons, except that, in determining'whether the Trustee shall be protected in relying upon any such request, demand, authori-zation, direction, notice, consent or waiver, only Securities which the T'rustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee, the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or El Paso, any Lessor or any 21.CHRYSLER.1106.53: 1 Equity-Investor or any Affiliate of the Company, of El Paso, of any Lessor or of any Equity Investor."Participation Agreement" means any Participation Agre or other similar Lessor Note purchase document to which the Co is a part r identified in a Schedule to a Series Supplemental Indenture, as such Participation Agreement or other purchase document may be amended from time to time pursuant to the applicable provi-sions thereof and of this Indenture;"Participation Agreements" means each and every Participation Agreement."Paying Agent" means any Person acting as Paying Agent hereunder pursuant to Section 9.14."Paying Agent's Office" means the principal office of the Paying Agent at which at any particular time corporate trust business of the Paying Agent shall be administered, which at.the date of this Indenture is 120 Broadway, New York, New York."Permitted Investment" means (i)direct obligations of the United States of America, or (ii)obligations fully guaranteed by the United States of America, or (iii)certificates of deposit issued by,, or bankers'cceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing busi-ness under the laws of the United States of America or one of the States thereof (but not exceeding$15,000,000 in principal amount of all certificates of deposit and time deposits at any given time for any one bank, trust company or national banking association) hav'combined capital and surplus of at least.$300,000,000 (includi e Trustee, any Lease Indenture Trustee, any Lessor and any Paying'if such conditions are met), or (iv)commercial paper of companies incorporated or doing business under the laws of the United States of America or one of the States thereof (but not exceeding$15,000,000 in principal amount at any given time for any one company)and in each case having a rating assigned.to such commercial paper by Standard&Poor's Corporation or Moody's Investors Service, Inc.(or, if neither such organization shall rate such commercial paper at any time, by*any nationally recognized rating organization in the United States of America)equal to the highest rating assigned by such orga-nization, or (v)repurchase agreements fully collateralized by an obligation of the type described in clause (i)or (iv)above, pursu-a'nt to which a bank, trust'ompany or national banking association referred to in clause (iii)above or another financial institution having a net worth of at least$200,000,000 is obligated to repur-'hase any such obligation not later than 90 days after the purchase of any such obligation."Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust,'021.CHRYSLER.1106.53:1 unincorporated organization or;,government or any agency or political subdivision thereof.~~~"Place o f Payment", when used with respect to the ecurities of any series, means the office or agency maintained pur-suant to Section 5.02 hereof and such other place or places, if any, where the principal of (and premium, if any)and interest on the Securities of that series are payable as specified in the Series Supplemental Indenture setting forth the terms of the Securities of such series."Pledged Lessor Note" means any Lessor Note identified in a Schedule to.a Series Supplemental Indenture, as such Lessor Note may be amended or supplemented from time to time pursuant to the appli-cable provisions thereof, of the related Lease Indenture and of this Indenture;"Pledged Lessor Notes" means'each and every Pledged Lessor Note."Pledged Property" has the meaning set forth in the Granting Clauses."Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same debt, as that evidenced by such particular Security;and,'for the purposes of this definition, any Security authenticated and delivered under.Section 2.09 in lieu of a lost, destroyed or stolen Security shall be'..;deemed to evidence the same debt as the lost, destroyed or stolen ecurity."Principal Instructs" means the Pledged Lessor Notes, the Lease Indentures, the Participation Agreements and the Leases."Redemption Date" when used with respect to any Security to., be redeemed means the date fixed for such redemption by or pursuant'to this Indenture.
~"Redemption Price" when used with respect to any Security.to be redeemed means the price (inclusive of accrued interest)at which itf is to be redeemed pursuant to this Indenture and the terms of such Security."Regular Record Date" for the Stated Maturity of any installment of interest means the 15th day (whether or not a Business Day)next preceding such Stated Maturity."Responsible Officer" when used with respect to the Trustee means any officer of the Trustee customarily performing corporate trust functions.
21.CHRYSLER.1106.53: 1 2.08."Security Register" has,the meaningspecified in Section"Security Registrar" means any Person acting as Secu Registrar hereunder pursuant to Section 9.14."Series Supplemental Indenture" means an indenture supple-mental to this Indenture, for the purpose of specifying, in accor-dance with Article Two hereof, the form of the Securities of any series, and/or for the purpose of subjecting to the Lien of this Indenture the Pledged Lessor Notes related to such'series;
<<Series Supplemental Indentures<<
means each and every Series Supplemental.
Indenture."Sinking Fund" has the meaning specified in Section 7.01."Special Record Date" for the payment of any defaulted interest means a date fixed by the Trustee pursuant to Section.2.10."Stated Maturity" when used with respect to any Security or any installment of interest thereon means the date specified in such Security as the fixed date on which the principal of, such Security or such installment of interest is due and payable.<<Trust Indenture Act>>or<<TIA>>means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 11.06."Trustee" means the Person named as the"Trustee>>i'irst paragraph of this instrument until a successor Trustee.have become such pursuant to the applicable provisions of this Indenture, and thereafter"Trustee" shall mean such successor Trustee.SECTION 1.02.Compliance Certificates and Opinions.Upon any'pplication or request by the Company, any Lessor or El Paso to the Trustee to take any action under any provision of this Indenture, the Company, such Lessor or El Paso, as the case may be,'shall furnish to the Trustee an Officers'ertificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provi-sion of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished; provided that any action which may be taken under any provision of this Indenture by a Lessor may be taken by El Paso on behalf of such 1021.CHRYSLER.1106.53:1 Lessor pursuant'to the agency granted to El Paso pursuant to the Participation Agreement unless and until the Trustee has been noti-fied of the revocation of such agency.Every certificate or opinion with respect to compliance ith a condition or covenant provided for in this Indenture shall include (1)a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;(2)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained-in such certificate or opinion are based;(3)a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opin-ion as to whether or not such covenant or condition has been complied with;and (4)a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.SECTION 1.03.Form of Documents Delivered to Trustee.In any case where several matters are required to be certi-fied by, or covered by an opinion of, any specified Person, it is not ,necessary that all such matters be certified by, or covered by the.opinion of, only one such Person, or that they be so certified or..covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
h Any certificate or opinion of an'officer of the Company, of any Lessor or=-of El Paso may be based, in so far as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows that the-certificate or opin-ion or representations with respect to the matters upon which his certificate or opinion is based are.erroneous.
Any such certificate or Opinion of Counsel may be based, in so far as it relates to fac-tual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company,-of any Lessor or of El Paso, as the case may be, stating that the information with respect to such factual matters's in the possession of the Company, such Lessor or El,Paso, respectively, unless such counsel knows that the 21.CHRYSLER.1106.53: 1 certificate or opinion or representations with respect to such matters are erroneous.
Any Opinion of Counsel stated to be based on the opinio other counsel shall be accompanied by a copy of such other opi hhere any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 1.04.Acts of Holders.(a)Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such.Holders in person or by an agent duly appointed in writing;and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company and to El Paso.Such instrument or instruments (and the action embodied therein and evidenced thereby)are herein sometimes referred to as the"Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writ-ing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 9.01)conclusive in favor of the Trustee, the Company and El Paso, if made in the manner prov'in this Section.(b)The fact and date of the execution by any Person of any such instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the Person execut-ing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn to before any such notary or other such officer and where such execution is by an offi-cer of a corporation or association or a member of a partnership, on behalf of such corporation, association or partnership, such certifi-cate or affidavit shall also constitute sufficient proof of his authority.
The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may.also be proved in any other manner which the Trustee deems sufficient.(c)The ownership of Securities shall be proved by the Security Register.(d)Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall 1021.CHRYSLER.1106.53: 1 bind the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, whether or not notation of uch action is made upon such Security.SECTION 1.05.Notices, etc., to Trustee, El Paso and Company.Any request, demand, authorization, direction, notice, con-sent, waiver or Act of Holders or other document provided or permit-ted by this Indenture to be made upon, given or furnished to, or filed with, (1)the Trustee by any Holder, by the Company, by El Paso or by an Authorized Agent shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2)the Company by the Trustee, by any Holder, by El Paso or by an Authorized Agent shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee and El Paso by the Company-for such purpose, or (3)El Paso by the Trustee, by any Holder, by the Company or by an Authorized Agent shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to El Paso addressed to it at the address of its principal office specified in the first paragraph of this instrument or at-any other address previ-ously furnished in writing to the Trustee and the Company by El Paso for such purpose.SECTION 1.06.Notices to Holders;Waiver.Wher'e this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided)if in writing and mailed, first-class postage prepaid, to each Holder, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, eith'er before or after the event, and such waiver shall be the equivalent of such notice.Waivers of notice by Holders shall be filed with the Trusted, but such filing shall not be a condition precedent to the validity.of any action taken in reliance upon such 21.CHRYSLER.1106.53:1 waiver.In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency f such notice with respect.to other Holders, and any notice whic mailed in the manner herein provided shall be conclusively pres to have been duly given.SECTION 1.07.Conflict with Trust Indenture Act.If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the TIA, such required provi-sion shall control.Notwithstanding the foregoing, the provisions of the TIA contained in Sections 9.08, 9.13 and 10.03 shall not become operative under.this Indenture until this Indenture shall have been qualified under the TIA.SECTION 1.08.Effect of Heading and Table of Contents.The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construc-tion hereof.SECTION 1.09.Successors and Assigns.All covenants, agreements, representations and warranties in this Indenture by the Trustee, El Paso and the Company shall bind and, to the extent permitted hereby, shall inure to the benefi and be enforceable by their respective successors and assi whether so expressed or not.SECTION 1.10.Separability Clause.In case any provision in this Indenture or in the Securities shall be i'nvalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.SECTION 1.11.Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Holders of Securities, and the Lessors and the Equity Investors as expressly provided herein, any benefit or any legal or equitable right, remedy or claim under this Indenture.
1021.CHRYSLER.1106.53: 1 SECTION 1.12.Governing Law.This Indenture and each Security are being executed and elivered in the State of New York, shall be deemed to be contracts de in such State and for all purposes shall be construed in accor-ance with and governed by the laws of the State of New York.SECTION 1.13.Legal Holidays.In any case where the Redemption Date or the Stated Maturity of any Security'or of any installment of interest, or any date on which any defaulted interest is proposed to be paid, shall not be a Business Day, then (notwithstanding any other provision of this Indenture) payment of interest and/or principal (and premium, if any)need not be made on such date, but may be made on the next suc-ceeding Business Day with the same force and effect as if made on the Redemption Date or at the Stated Maturity, or on the date on which the defaulted interest is proposed to be paid, and no interest shall accrue for the period from and after such Redemption Date or Stated Maturity, or date for the payment of defaulted interest, as the case may be.ARTICLE TWO THE SECURITIES SECTION 2.01.Forms Generally.
The Securities of each series shall be in the form (not nconsistent with this Indenture) as shall be established in one or more Series Supplemental Indentures, in each case with such appropri-ate insertions, omissions, substitutions and other variations in and to such form as are required or permitted by this Indenture and may'have imprinted or otherwise reproduced thereon such legend or leg-ends, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may beni determined by the officers executing such Securities, as evidenced by their execution thereof.SECTION 2.02.Form of Trustee's Authentication.
The Trustee's certificate of authentication on all Securities shall be in substantially the following form: 21.CHRYSLER.1106.53:1 This is one of the Securities of the series des-ignated therein referred to in the within-mentioned Indenture.
FIRST CITY NATIONAL BANK OF HOU as Trustee By Authorized Officer SECTION 2.03.Amount Unlimited; Issuable in Series;Limitations on Issuance.The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
Securities may be issued hereunder up to the aggregate principal amount which may be authorized from time to time by the Board of Directors of the Company.The terms of any series of Securities relative to payment of principal thereof, and premium (if any)and interest thereon, need not correspond exactly to the schedule for such payments under the related Pledged Lessor Notes.The Securities may be issued in one or more series.There shall be established in one or more Series Supplemental Indentures, prior to the issuance of Securities of any series, (1)the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities) and the form or forms of Securities of such series;(2).any limit upon the aggregate principal amount of the Securities of such series that may be authenticated and deliv'ered under this Indenture (except for Securities authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 2.07, 2.08, 2.09, 6.06 or 11~07)I (3)the date or dates on which the principal of the Securities of such series is payable;(4)the rate or rates at which the Securities of such series shall bear interest, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates 1021.CHRYSLER.1106.53:1 for the determination of Holders to whom interest is payable;r (5)the place or places where the principal and interest on Securities of such series shall be payable (if other than as provided in Section 5.02);(6)the price or prices at which, the period or per-iods within which and the terms and conditions upon which Securities of such series may be redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise; (7)the obligation, if any, of the Company to redeem, purchase or repay Securities of such series pursu-ant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursu-ant to such obligation; (8)if other.than denominations of$1,000 and any multiple thereof, the denominations in which Securities of such series shall be issuable;(9)any other terms of such series (which terms shall not be inconsistent with the provisions of this Indenture);
and (10)any trustees,'authenticating or paying agents, warrant agents, transfer agents or registrars with respect to the Securities of such series;provided, however, that, after giving effect to the issuance of a new series of the Securities and the subjection to the Lien of this Indenture of the related Pledged Lessor Notes, the average of the daily balance of Excess Funds for each fiscal year of the Company shall not exceed 10%of the average of the aggregate principal amount of, Securities Outstanding on each day in such fiscal year.For pur-poses of the foregoing proviso,"Excess Funds" shall mean, for any day, amounts actually paid to the Trustee under the Pledged Lessor Notes in excess of amounts then due and payable in-respect of*Securities.
21.CHRYSLER.1106.53:1 SECTION 2.04.Authentication and Delivery of Securities.
At any time and from time to time after the execution d delivery of this Indenture, the Company may deliver Securities o series executed by the Company to the Trustee for authentica together with a Company Order for the authentication and delivery of such Securities, and the Trustee shall thereupon authenticate and deliver such Securities in accordance with such Company Order, with-out any further action by the Company.In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be enti-, tled to receive, and (subject to Section 9,01)shall be fully pro-tected in relying upon: (1)an executed Series Supplemental Indenture; (2)an Officers'ertificate of the Company (a)certifying as to resolutions of the Board of Directors of the Company by or pursuant to.which the terms of the Securities of such series were established, (b)certifying that all conditions precedent under this Indenture to the Trustee's authentication and delivery of such Securities have been complied with and (c)certifying that (x)the terms o f the documents re f erred to in clauses (3)and (4)below are not inconsistent with the terms of this Indenture as then and theretofore supplemented and (y)such documents comply with Exhibit A hereto'(if applicable);
(3)fully executed counterparts (but not the origi-nal thereof)of (a)the Lease Indentures under which were issued the Pledged Lessor Notes relating to such series of, Securities and (b)the Leases relating to such Pledged Lessor Notes;(4)the origirval of the Pledged Lessor Notes relat-ing to such series of Securities;
.(5)signed copies, either addressed to the Trustee or accompanied by statements that the Trustee may rely on such documents, of all certificates and opinions of counsel delivered to the Company in connection with its purchase pursuant to the applicable Participation Agreements of the Pledged Lessor Notes relating to such series of Securities and, to the extent not covered by such opinions, Opinions of Counsel (x)to the effectthat: (a)the form or forms and the terms of such Securities have been established by a Series Supplemental Indenture as permitted by Sections 2.01 and 2.03 in conformity with the provisions of this Indenture;(b)such Securities, when authenticated and delivered by the Trustee and issued by the Company in the 1021.CHRYSLER.1106.53:1 ,
manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obli-gations of the Company;and (c)all laws and requirements in respect of the execution and delivery by the Company of the Securities have been complied with;and (y)covering such other matters as the Trustee may reasonably request;and (6)duly executed Extension Letters relating to the Pledged Lessor Notes;provided, however, that if a series of Securities is to be authenti-cated by the Trustee in advance of the actual delivery to the Trustee of the Pledged Lessor Notes relating thereto, (X)the documents described in the foregoing clauses (2)(c), (3), (4);(5)(other than the opinion described in subclauses (x)and (y))and (6)need not be delivered in connection with such authentication, but shall be deliv-ered in connection with the release of the proceeds of the sale of such series of Securities in accordance with Sections 2.15 and 13.01 hereof and (Y)the form of the Series Supplemental Indenture shall be appropriately modified to reflect the later delivery and pledge of the related Pledged Lessor Notes.Receipt by the Trustee of the Officer's Certificate
---referred to in clause (2)above shall be conclusively presumed for--all purposes o f this Indenture to establish.that the Lease--Indentures, the Leases and the Pledged Lessor Notes referred to in uch certification comply with the requirements of Exhibit A hereto.The Trustee shall have the right to decline to authenticate and deliver any Securities under this.Section if the Trustee, being-'-advised by counsel, determines that such action may not lawfully be taken by the Company or.if the Trustee in good faith by its board of directors or board of trustees,.executive committee,.or a trust com-mittee of directors or trustees and/or responsible officers shall determine that such action would expose the Trustee to personal liability.
SECTION 2.05.Form and Denominations.
The Securities of each series shall be in registered form and may have such letters, numbers or other marks of identification and such legends or endorsements printed, lithographed or engraved thereon, as may be required to comply with the rules of any securi-ties exchange or to conform to any usage in respect thereof, or as may, consistently.herewith, be prescribed by the Board of Directors l of the Company or by the officers executing such Securities, such determination by said officers to be evidenced by their signing the Securities.
21.CHRYSLER.1106.53: 1 The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitte y the rules of any securities exchange, all as determined by the cers executing such Securities, as evidenced by their executi such Securities.
All Securities of any one series shall be substantially identical except as to denomination and Stated Maturity and except as may otherwise be provided herein or in the Series Supplemental Indenture setting forth the terms of the Securities of such series.SECTION 2.06.Execution of Securities.
The Securities shall be executed on behalf of the Company by its President or one of its Vice Presidents under its corporate seal reproduced thereon and attested by its Secretary or one of its Assistant Secretaries.
The signature of any such officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at the time such signatures were affixed the proper officers of the Company shall bind the Company, notwithstand-ing that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
SECTION 2.07.Temporary Securities.
Pending the preparation of definitive Securities af y series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities of such series which are printed, lithographed, typewritten, photocopied or other-wise produced, in any denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be pre-pared without unreasonable delay.After the preparation of defini-tive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company, for such purpose, in the Place of Payment, without charge to the Holder.Upon surrender for cancella-tion of any one.or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like aggregate principal amount of definitive 1021.CHRYSLER.1106.53: 1<<20~
Securities of such series of authorized denominations.
Until so exchanged such temporary Securities of any series shall in all espects be entitled to the same benefits under this Indenture as finitive Securities of such series.SECTION 2.08.Registration, Transfer and Exchange.The Trustee shall cause to be kept at the Corporate Trust Office a register in which, subject to such reasonable regulations as the Company may prescribe, the Company shall provide for the regis-tration of Securities and of registration of transfers and exchanges of Securities.
This register and, if there shall be more than one Security Registrar, the combined registers maintained by all such Security Registrars, are herein sometimes referred to as the"Security Register".
Upon surrender for registration of transfer.of any Security of any series at the Corporate Trust Office, or at any office or agency maintained for such purpose pursuant to Section 9.14(a), the Company shall execute, and the Trustee shall authenticate and deliv-er, in the name of the designated transferee or transferees, one or more new Securities of the same series and of the same Stated Maturity for principal and interest and of a like aggregate principal.-amount.
At the option of the Holders, Securities of any series may"be exchanged for an equal aggregate principal amount.of Securities of e same series and of the same Stated Maturity for principal and terest and of any authorized denominations, upon surrender of the ecurities to be exchanged at the Corporate Trust Office, or at any ,office or agency maintained for such purpose pursuant to Section ,.9.14 (a).Whenever any Securities are so surrendered for exchange,.:,,the Company shall execute, and the Trustee or any other.-Authenticating Agent shall'authenticate and deliver, the Securities which the Securityholder making the exchange is entitled to receive.All Securities issued upon any transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same security and benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.Every Security presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by awritten instrument.
of transfer in form satisfactory to the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.No service charge shall be required of any Securityholders participating in any transfer or exchange of Securities in respect of 21.CHRYSLER.1106.53:1 such transfer or exchange, but the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Securities, other than exchanges pursuant to Sect 2.07, 6.06 or 11.07 not involving any transfer.The Security Registrar shall not be required (i)to issue, transfer or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series selected for redemption under Section 6.02 or 7.02 and ending at the close of business on the day of such mailing, or (ii)to transfer or exchange any Security so selected for redemption in whole or in part except the unredeemed portion of any Security selected for redemption in part.SECTION 2.09.Mutilated, Destroyed, Lost and Stolen Securities.
I f (i)any mutilated Security is surrendered to the Trustee, or the Company, the Security Registrar and the Trustee.receive evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii)there is delivered to the Company, to the Security Registrar and to the Trustee evidence to their satisfac-tion of the ownership and authenticity thereof, and such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company, to the Security Registrar or to the Trustee that such Security has been acquired a bona fide purchaser, the Company shall execute and upon its re the Trustee shall authenticate and deliver, in exchange for o lieu of any'such mutilated, destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company may, upon satisfaction of the conditions set forth in clauses (i)and (ii)of the preceding paragraph, instead of issuing a new Security, pay such Security.Upon the issuance of any new Security under this Section, the Security Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an origi-nal additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the security and 1021.CHRYSLER.1106.53:1 benefits of this Indenture equally and'roportionately with any and all other Securities duly issued hereunder.
T he provisions of this Section are exclusive and shall pre-ude (to the extent lawful)all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10.Preserved.
Payment of Interest;Interest Rights f Interest on any Security which is payable, and is punctu-ally paid or duly provided for, at any Stated Maturity of an install-ment of interest shall be paid to the Person in whose name that Security{or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.At the option of the Company, payment of interest on any Security may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.t Any interest on any.Security of any series which is pay-able, but is not punctually paid or duly provided for, at any Stated Maturity of an installment of interest shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder;and such defaulted interest may be paid by the Company, at its election in each case, as provided in paragraph (1)or paragraph (2)below: (1)The Company may elect, which election shall be at the direction of any Lessor whose Pledged.Lessor Note is in default in respect of the payment of interest and who is proposing to make payment of all or part of such defaulted interest, to make payment of any defaulted interest to the Persons in whose names the Securities of such series in respect of which interest is in default (or their respec-tive Predecessor Securities) are registered at the close of business on a Special Record Date'or the payment of such defaulted interest, which shall be fixed in the following manner.Such Lessor shall notify the Trustee and the Paying Agent in writing of the amount of defaulted interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time there shall be deposited with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or there shall be made arrangements sat-isfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to.such defaulted interest as in this paragraph provided.~Thereupon the Trustee shall fix a Special Record Date for 1.CHRYSLER.1106.53:1 the payment o f such def aulted interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.The Trustee shall promptly notify the Company and the Security Registrar of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such defaulted interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each holder of a Security of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date.Notice of the proposed payment of such defaulted interest and the Special Record Date therefor having been mailed as aforesaid, such defaulted interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following paragraph (2).(2)The Company may make, or cause to be made, pay-~ment of any defaulted interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities in respect, of which inter-est, is in default may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such payment shall be deemed practicable by the Trustee.Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security, and each such Security shall bear interest from whatever date shall be necessary so that neither gain nor loss in interest shall result from such transfer, exchange or replacement.
t SECTION 2.11.Persons Deemed Owners.Prior to due presentment for registration of transfer, the Person in whose name any Security is registered shall be deemed to be the owner of such Security for the purpose of receiving payment of principal of (and premium, if any), and (subject to Section 2.10)interest on, such Security and for all other purposes whatsoever, whether or not such Security be overdue, regardless of any notice to anyone to the contrary.1021.CHRYSLER.1106.53: 1-24-e SECTION 2.'12.Cancellation.
All Securities surrendered for payment, redemption, credit gainst any Sinking Fund payment or redemption payment, transfer or cchange shall, if surrendered to any Person other than the Trustee, e delivered to the Trustee for cancellation.
The Company may at any time deliver to the Trustee for cancellation any Securities previ-ously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so deliv-ered shall be promptly cancelled by the Trustee.No Securities shall be authenticated in lieu of or in exchange for any Securities can-celled as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Securities held by the Trustee shall be destroyed and certification of their destruction delivered to the Company unless, by Company Request, the Company otherwise directs.SECTION 2.13.Dating of Securities; Authentication.
Each Security of any series shall be dated the date of the original issuance of the Securities of such series by the Company, which date shall be specified by the Company in the Company Order delivered to the Trustee pursuant to Section 2;04 in connection with the original authentication and delivery of the Securities of such series.No Security shall be secured by or entitled to any benefit-under this Indenture or be valid or obligatory for any purpose.unless'there appears on such Security a certificate of authentication, in-the form provided for herein, executed by the Trustee by the manual signature of one of its Responsible Officers or any Authorized ficer, and such certificate upon any Security shall be conclusive idence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.
SECTION 2.14.Source of Payments: Rights and Liabilities
" of Lessors and Equity Investors.
All payments of principal and premium (if any)and interest to be made under the Securities and this'Indenture (other than pay-ments made in connection with an optional redemption by a Lessor)shall be made only from assets subject to the lien of this Indenture or the income anti proceeds received by the Trustee therefrom.
Each Holder,, by its acceptance of a Security, agrees that (x)it will look solely to the assets subject to the lien of this Indenture or the income and proceeds received by the Trustee therefrom to the extent.available for distribution-to such Holder as herein provided and (y)none of any Equity Investor, any Lessor, any Lease Indenture Trustee or the Trustee is liable to any Holder or, in the case of any Equity Investor, Lessor and Lease Indenture Trustee, to the Trustee for any amounts payable under any Security or, except as provided herein with respect to the Trustee, for any liability under this Indenture.
An Equity Investor, Lessor or Lease Indenture Trustee shall not have any 21~CHRYSLER.1106.53:1 duty or responsibility under this Indenture or the Securities to any Holder or to 0he Trustee.SECTION 2.15.Sale of Securities; and Applicatio.
Proceeds from the Sale of Securities.(a)Promptly upon receipt by the Company of the proceeds from any sale of a series of the Securities, the Company shall deposit such proceeds with the Trustee.The funds so deposited shall be held by the Trustee in a separate account as part of the Pledged Property and shall be invested, applied and distributed by the Trustee asprovided herein.(b)Subject to the provisions of Section 13.01, upon the issuance of the Pledged Lessor Notes related to any series of Securities and the delivery thereof to the Trustee to be subjected to the Lien of this Indenture pursuant to a Series Supplemental Indenture, the Trustee shall pay to the Lessor obligated in respect of any such Pledged Lessor Note, out of funds held by the Trustee in such separate account as Pledged Property, an amount equal to the principal amount of such Pledged Lessor Note in respect of which such Lessor is obligated.
All payments to be made by the Trustee to any Lessor shall be made in immediately available funds at the respective offices'designated by such Lessor.ARTICLE THR2Z PROVIS IONS AS TO PLEDGED PROPERTY SECTION 3.01.Holding of Pledged Securities.
The Trustee is authorized in its discretion to cause to be registered in its name, as Trustee, or in the name of its.nominee, any and all coupon bonds which it may receive as part of the Pledged-'roperty, or it may cause the same to be exchanged for registered bonds without coupons of any denomination.
The Trustee may cause to be transferred into its name, as Trustee, or into the name of its nominee, any and all registered bonds which it may receive as part of the Pledged Property, or may cause such registered bonds to be exchanged for coupon bonds.All Pledged Lessor Notes assigned to and pledged with the Trustee pursuant to any provision of this Indenture or any Series Supplemental Indenture shall.be endorsed in blank for transfer or be accompanied by proper instruments of assignment satis-factory to the Trustee, duly executed by the Company.The Company will deliver promptly to the Trustee such documents, certificates and opinions as the Trustee may reasonably request in connection with subjection of any securities to'the Lien of this Indenture to the extent contemplated hereby.1021.CHRYSLER.1106~53: 1-26-e SECTION 3.02.Disposition of Payments on Pledged Property.Unless and until all Outstanding Securities have been paid~~in full or provision for the payment of such Securities has been made n accordance with this Indenture, the Trustee shall be entitled to eceive all principal, premium (if any)and interest paid in respect of any Pledged Lessor Notes and interest paid on bonds or other obli-gations or indebtedness which may be subject to the lien of this Indenture and shall apply the same to the payment of the principal of, and premium (i f any)and interest on, the Securities when and as they become due and payable pursuant to, and in accordance with, this Indenture.
The Trustee shall duly note on the Schedules attached to the Pledged Lessor Notes or by'ther appropriate means all payments of principal, premium, if any, and interest made on the Pledged Lessor Notes.SECTION 3.03.Exercise of Bights and Powers Under Pledged Lessor Notes and Lease Indentures.
The Trustee shall not take any action as the holder of the Pledged Lessor Notes to direct any Lease Indenture Trustee in any respect or to vote any Pledged Lessor Note or any portion thereof except as specified in this Section.The Trustee shall give notice to the Securityholders of the occurrence of any Indenture Event of Default or Indenture Default under any Lease Indenture (as defined therein), and of every Event of Loss, Deemed Loss Event, or Special'Loss Event occurring under a Lease, but only to the extent the same shall actually be known by an officer in the corporate trust depart-nt of the Trustee.The Trustee may, at any time, and shall, upon e request of any Lease Indenture Trustee made to the Trustee to ive any direction or to vote its interest in the Pledged Lessor Notes, request from Securityholders directions as to (i)whether or.not to direct such Lease Indenture Trustee to take or refrain from;taking any action which holders of a Pledged Lessor Note have the...;option to direct and (ii)how to vote any Pledged Lessor Note if a vote has been called for with respect thereto.In addition, any Securityholder may at any time request the Trustee to direct, or to participate in the direction of, any action under any Lease Indenture to the extent that the Trustee may do so under such Lease Indenture.
In directing any action or casting any vote as the holder of a Pledged Lessor Note, the Trustee shall specify to the Lease Indenture Trustee the principal amount of the Pledged Lessor Note which is in favor of the action or vote, the principal amount of the Pledged Lessor Note which is opposed to the action or vote, and the principal amount of the Pledged Lessor Note which is not taking any position~for the action or vote.Such principal amounts shall be determined.
by allocating the total principal amount of the Pledged Lessor Note with respect to which direction was requested in accordance with the.principal amount of Securities taking corresponding positions or not taking any position.Zn addition, the Trustee shall certify to the 21~CHRYSLER.3.106.53: 1 Lease Indenture Trustee that the principal amounts of Securities taking such corresponding positions or not taking any position was determined in accordance with the provisions of this Indentu SECTION 3.04.Certain Actions in Case of Judic Proceedings.
In case all or any part of the property of any Lessor or any other Person which may be deemed an obligor in respect of the Pledged Lessor Notes shall be sold at any judicial or other involun-tary sale, the Trustee shall receive any portion of the proceeds of such sale accruing on the Pledged Property held hereunder, and such proceeds shall be held as provided in Section 3.05.SECTION 3-05.Cash Held by Trustee Treated as a Deposit.Any and all cash held by the Trustee under any provision of this Indenture may be treated by the Trustee, until required to be paid out hereunder, as a deposit, in trust, without any liability for interest.ARTICLE FOUR WITHDRAWAL OF COLLATERAL SECTION 4.01.Withdrawal of Collateral.
Except as provided in Section 4.02 and Article Thi none of the Pledged Property shall be subject to withdrawal un ss and until all Outstanding Securities have been paid in full or provi-sion for such payment has been made in accordance with the terms of this Indenture and the Trustee shall have received the documents and opinions required by Article Twelve.SECTION 4.02.Reassignment of Pledged Lessor Notes upon Payment.Upon receipt of payment in full of the principal of, and premium (if any)and interest on, any Pledged Lessor Note held by the Trustee, the Trustee shall deliver to the Company said Pledged Lessor Note and any instrument of transfer or assignment necessary to reas-sign to the Company said Pledged Lessor Note and the ihterest of the Company (if any)in the Lease Indenture relating thereto;provided that nothing herein contained shall prevent the Trustee from present-.ing any Pledged Lessor Note to a Lease Indenture Trustee for final payment in accordance with the applicable provisions of the related Lease Indenture.
1021.CHRYSLER.1106.53:1 ARTICLE FIVE*COVENANTS nterest.SECTION 5.01.Payment of Principal, Premium (if any)and The Company will duly and punctually pay, or cause to be paid, the principal of, and premium, if any, and interest on, the Securities in accordance with the.terms of the Securities and this Indenture.
SECTION 5.02.Maintenance of Office or Agency.The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surren-dered for transfer or exchange and where notices and demands to or upon the Company in respect of Securities and this Indenture may be served.The Paying Agent's Office is hereby designated as such office or agency.El Paso will give prompt written notice to the Trustee of the location, and of any change in the location, of each such office or agency.If at any time the Company shall fail to maintain any such office or agency or the Company or El Paso shall fail to furnish the Trustee with the address thereof, such presenta-t'ions, surrenders, notices and demands may be made or served at the Corporate Trust Of fice of the Trustee, and the Company hereby points the Trustee its agent to receive all such presentations, rrenders, notices and demands.SECTION 5.03.Money for Security Payments to be Held in Trust.Wl All moneys deposited with the Trustee or with any Paying Agent for the purpose of paying the principal of or'remium, if any, or interest on Securities shall be deposited and held in trust for the benefit of the Holders of the Securities entitled to such princi-pal, premium, if any, or interest, subject to the provisions of this Section.Moneys so deposited and he3,d in trust shall not be a part of the Pledged Property but shall constitute a separate trust fund for the benefit, of.the Holders of the relevant Securities.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or'for any other purpose, pay, or direct any Paying Agent to pay, to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same.trusts as those upon which such sums were held by such Paying Agent;and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.~1.CHRYSLER.1106.53:1 Any money deposited with the Trustee or any Paying Agent in trust for the payment of the principal of or premium, if any, or interest on any Security and remaining unclaimed for three years (or such lesser period as may be required by law to give effect to provision) after such principal, premium or interest has become and payable shall be paid to the Company on Company Request (to extent such monies shall have been deposited by the Company)or to any other Person on its request (to the extent such monies shall have been deposited by such.other Person);and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company or such other Person, to the extent such monies shall have been paid to the Company or such other Person, as the'case may be, for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease;provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company or, to the extent such monies are to be paid to another Person, such other Person cause to be mailed to each such Holder notice that such money remains unclaimed and that, after a date spec-ified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be repaid to the Company or such other Person.SECTION 5.04.Maintenance of Corporate Existence.
The Company, at its own cost and expense, will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights and franchises, except s otherwise specifically permitted in this Indenture; provi however, that the Company shall not be required to preserve any or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not dis-advantageous in any material respect to the Securityholders.
SECTION 5.05.Protection of Pledged Property.The Company and El Paso will from time to time execute and deliver all such supplements and amendments hereto and all such f financing statements, continuation statements, instruments of further assurance, and other instruments necessary to (i)grant more effectively all or any portion of the Pledged Property, (ii)maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof, 1021.CHRYSLER.1106.53:1 (iii)perfect, publish notice of, or protect the validity'f, any grant made or to be made by this Indenture, (iv)enforce any of the Securities, or I (v)preserve and defend title to any Securities or other instrument included in the Pledged Property and the rights of the Trustee, and of the Securityholders, in such Securities'r other instrument against the claims of all persons and parties.The Company hereby designates the Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required pursuant to this Section.SECTION 5.06.Opinions as to Pledged Property.Promptly after the execution and delivery of this Indenture and of each Series Supplemental Indenture or other supplemental indenture or other instrument of further assurance, the Company shall furnish to the Trustee an Opinion of Counsel stating that, in the opinion of such Counsel, this Indenture and all such Series Supplemental Indentures, other supplemental indentures and other instruments, of further assurance have been properly recorded, regis-tered and filed to the extent necessary.
to make effective the lien i'ntended'o be created by this Indenture, and reciting the details of such action or referring to prior Opinions of Counsel in which such tails are given, and stating that all financing statements and con-nuation statements have been executed and filed that are necessary fully to preserve and protect the rights of the Securityholders and the Trustee, or stating that, in the opinion of such Counsel, no such action is necessary to make such lien effective.
On or before May 1, in each calendar year, beginning with the first calendar year commencing more than three months after the date of'authentication and delivery of any Securities, the Company shall furnish to the Trustee an Opinion of Counsel.either stating that, in the opinion of such counsel,.such.action has been taken with respect to the recording, filing,'e-recording and re-filing of this Indenture, any Series Supplemental Indenture and any other requisite documents and with respect to the execution and filing of any financ-ing statements and continuation statements as is necessary to main-, tain the lien and security interest created by this Indenture with respect to the Pledged Property and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.Such Opinion-of Counsel shall also'escribe the recording, filing, re-recording and re-filing of this Indenture,.any Series Supplemental Indenture and any other requisite documents and the execution and 21.CHRYSLER.1106.53:1 filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture with respect to the Pledged Property until May 1 in the following calendar year.SECTION 5.07.Performance of Obligations (a)Neither the Company nor El Paso will take any action or permit any action to be taken by others which would release any Person from any of such Person'covenants or obligations under any instrument included in the Pledged Property, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument, except as expressly provided in this Indenture.(b)El Paso will fully perform all of its obligations under the Leases, SECTION 5.08.Negative Covenants t During such time as any Security issued hereunder is Outstanding, the Company will not: (i)sell, transfer, exchange or otherwise dispose of any portion of the Pledged Property except as expressly permitted by this Indenture;(ii)engage in any business or activity other than in connection with, or relating to, the issuance of Securities pursuant to this Indenture or amend Article Third, Fourth or Sixth of its Certificate of Incorporation as in effect on the date of execution and delivery of this Indenture, without, in each case, the consent of the Holders of not less than 66 2/3%of the aggregate principal amount of the Securities then Outstanding; notwithstanding the foregoing, however, the Company may, with respect to one or more series of Securities (or one or more Stated Maturities within any series), enter into credit or liquidity support facilities (including, but without limitation, bank letters of credit, bank lines of credit and bonds of insurance).
and'ay engage in interest rate swaps;(iii)issue bonds, notes or other evidences of indebt-edness other than (i)Securities issued hereunder or (ii)bonds, notes or other evidences of indebtedness secured by a pledge of Securities issued hereunder or evi-dencing indebtedness permitted by clause (ii)above;(iv)incur., assume or guaranty any indebtedness of any Person;1021.CHRYSLER.1106.53:1 (v)dissolve or liquidate in whole or in part;(vi)take any action which would (1)permit the validity or effectiveness of this Indenture 0r any grant of any of the Pledged Property to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subor-dinated, terminated or discharged, or permit any Person to be released from any covenant or obligation under this Indenture, (2)permit any Lien, charge, security, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Pledged Property or any part thereof or any}}

Latest revision as of 03:03, 8 January 2025

Forwards Two Vols of Transaction Documents Re 861218 Closing of Sale & Leaseback Transactions W/Chrysler Corp & Commercial Federal Corp
ML17303A264
Person / Time
Site: Palo Verde Arizona Public Service icon.png
Issue date: 02/03/1987
From: Toy T
EL PASO ELECTRIC CO., MUDGE, ROSE, GUTHRIE, ALEXANDER & FERDEN
To: Miraglia F
Office of Nuclear Reactor Regulation
References
TAC-63146, NUDOCS 8702060196
Download: ML17303A264 (967)
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