When Recorded, Return to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS AMENDED BY THIS
AMENTMENT NO.1 THERETO HAVE BEEN ASSIGNED TO, AND ARE TO A SECURITY IN FAVOR OF,
CHEMICAL BANK, AS INDEUTURE, TRUSTEE UNDER A ASSIGNMENT OF RENTS DATED AS OF
DECEMBER 15,1986. THIS FACILITY LEASE HAS BEEN EXECUTED IN SERVERAL
COUNTERPARTS.SEE SECTION 22(e) OF THIS AMENDMENT NO.1 FOR INFORMATION CONCERNING
THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
FACILITY LEASE
Dated as of December 15, 1986
between
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity,
but solely as Owner Trustee
under a Trust Agreement, dated as
of December 15, 1986,
with Chase Manhattan Realty
Leasing Corporation,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Sale and Leaseback of a .7933333% Undivided Interest
in Palo Verde Nuclear Generating Station Unit 2 and
a .2644444% Undivided Interest in Certain Common
Facilities
================================================================================
6091.CHASEU2.LEASE.47:1
TABLE OF CONTENTS
Page
SECTION 1 Definitions............................................ 1
SECTION 2 Lease of Undivided
Interest; Term; Personal
Property............................................... 1
a Lease of Undivided
Interest............................................... 1
b Term................................................... 1
c Personal Property...................................... 1
d Description............................................ 2
SECTION 3 Rent; Adjustments to
Rent................................................... 2
a Basic Rent............................................. 2
b Supplement Rent........................................ 3
c Form of Payment........................................ 4
d Adjustments to Rent.................................... 4
e Further Adjustments.................................... 5
f Computation of
Adjustments............................................ 5
g Sufficiency of Basic
Rent and Supplemental
Rent................................................... 6
SECTION 4 Net Lease.............................................. 7
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6091.CHASEU2.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
SECTION 5 Return of the Undivided
Interest............................................... 9
a Return of the Undivided
Interest............................................... 9
b Disposition Services................................... 11
SECTION 6 Warranty of the Lessor................................. 12
a Quiet Enjoyment........................................ 12
b Disclaimer of Other
Warranties............................................. 12
c Enforcement of Certain
Warranties............................................. 13
SECTION 7 Liens ................................................ 13
SECTION 8 Operation and Maintenance;
Capital Improvements................................... 14
a Operation and
Maintenance............................................ 14
b Inspection............................................. 15
c Capital Improvements................................... 14
d Reports................................................ 16
e Title to Capital
Improvements........................................... 17
f Funding of the Cost of
Capital Improvements................................... 18
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6091.CHASEU2.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
SECTION 9 Event of Loss; Deemed
Loss Event............................................. 20
a Damage or Loss......................................... 20
b Repair................................................. 21
c Payment of Casualty
Value.................................................. 21
d Payment of Special
Casualty Value......................................... 22
e Requisition of Use..................................... 23
f Termination of
Obligation............................................. 23
g Application of Payments
on an Event of Loss.................................... 24
h Application of Payments
Not Relating to an Event
of Loss................................................ 24
i Other Dispositions..................................... 25
j Assumption of Notes;
Creation of Lien on
Undivided Interest .................................... 25
SECTION 10 Insurance.............................................. 25
a Required Insurance..................................... 25
b Permitted Insurance.................................... 27
SECTION 11 Rights to Assign or
Sublease............................................... 27
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6091.CHASEU2.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
a Assignment or Sublease
by the Lessee.......................................... 27
b Assignment by Lessor as
Security for Lessor's
Obligations............................................ 28
SECTION 12 ▇▇▇▇▇ ▇▇▇▇▇▇▇.......................................... 28
SECTION 13 Notices for Renewal or
Purchase; Purchase
Options................................................ 29
a Notice, Determination of
Values, Appraisal
Procedure.............................................. 29
b Purchase Option at
Expiration of the Lease
Term................................................... 29
c Special Purchase Event................................. 30
SECTION 14 Termination for
Obsolescence........................................... 30
a Termination Notice..................................... 30
b Right of Lessor to
Retain Undivided
Interest upon
Termination............................................ 31
c Events on the
Termination Date....................................... 31
d Early Termination
Notice................................................. 32
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6091.CHASEU2.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
e Events on the Early
Termination............................................ 32
SECTION 15 Events of Default...................................... 33
SECTION 16 Remedies............................................... 37
a Remedies............................................... 37
b No Release............................................. 42
c Remedies Cumulative.................................... 42
d Exercise of Other Rights
or Remedies............................................ 43
e Special Cure Right of
Lessee................................................. 43
SECTION 17 Notices................................................ 44
SECTION 18 Successors and Assigns................................. 45
SECTION 19 Right to Perform for
Lessee................................................. 46
SECTION 20 Additional Covenants................................... 46
SECTION 21 Lease of Real Property
Interest............................................... 46
SECTION 22 Amendments and
Miscellaneous.......................................... 46
a Amendments in Writing.................................. 46
b Survival............................................... 46
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6091.CHASEU2.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
c Severability of
Provisions............................................. 47
d True Lease............................................. 47
e Original Lease......................................... 47
f Governing Law.......................................... 48
g Headings............................................... 48
h Concerning the Owner Trustee........................... 48
i Disclosure............................................. 49
j Counterpart Execution.................................. 49
APPENDIX A Definitions
SCHEDULE 1 Casualty Values
SCHEDULE 2 Special Casualty Values
SCHEDULE 3 Termination Values
SCHEDULE 4 Real Property Interest Description
SCHEDULE 5 Undivided Interest Description
FACILITY LEASE, dated as of December 15, 1986, between THE FIRST
NATIONAL BANK OF BOSTON, a national banking association, not in its individual
capacity, but solely as Owner Trustee under a Trust Agreement, dated as of
December 15, 1986, with Chase Manhattan Realty Leasing Corporation (the Lessor),
and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico Corporation (the Lessee).
WITNESSETH:
WHEREAS, the Lessor owns the Undivided interest and the Real
Property interest;
WHEREAS, the Lessee desires to lease the Undivided interest
and the Real Property Interest from the Lessor on the terms and conditions set
forth herein; and
WHEREAS, the Lessor is willing to lease the Undivided Interest
and the Real Property interest to the Lessee on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein shall have
the meanings assigned to such terms in Appendix A hereto. References in this
Facility Lease to sections, paragraphs and clauses are to sections, paragraphs
and clauses in this Facility Lease unless other-wise indicated.
SECTION 2. Lease of Undivided Interest; Term: Personal
Property.
(a) Lease of Undivided Interest. Upon the terms and subject to
the conditions of this Facility Lease, the Lessor hereby leases to the Lessee,
and the Lessee hereby leases from the Lessor, the Undivided Interest.
(b) Term. The term of this Facility Lease shall begin on
December 17, 1986, and shall end on the last day of the Lease Term.
6091.CHASEU2.LEASE.47:1
(c) Personal Property. It is the express intention of the
Lessor and the Lessee that title to the Undivided Interest and every portion
thereof be, and hereby is, severed, and shall be and remain severed, tram title
to the real estate constituting the Real Property Interest and the PVNGS Site.
The Lessor and the Lessee intend that the Undivided Interest shall constitute
personal property to the maximum extent permitted by Applicable Law.
(d) Description. The Real Property Interest is described on
Schedule 4 hereto. The Undivided interest is described on Schedule S hereto.
SECTION 3. Rent; Adjustments to Rent.
(a) Basic Rent. The Lessee shall pay to the Lessor, as basic
rent (herein referred to as Basic Rent) for the Undivided Interest and the Real
Property Interest, the following amounts:
(i) on January 15, 1987, an amount equal to .02585778%
of the Facility Cost for each day from, and including,
December 17, 1986 to, but excluding, January 15, 1987;
(ii) on July 15, 1987 and on each Basic Rent Payment
Date thereafter to and including January 15, 2016, an amount
equal to 4.654400% of Facility Cost; and
(iii) if the Lessee shall elect the Renewal Term1 on July
15, 2016 and on each Basic Rent Payment Date thereafter during
the Renewal Term, an amount equal to one-half of an amount
determined by dividing the aggregate amount of all payments of
Basic Rent payable with respect to the Basic Lease Term
pursuant to clause (ii) of this Section 3(a) (taking into
account any adjustments pursuant to Sections 3(d) and 3(e)),
by 58.
It an interest payment on any Note shall be due on a date other than a Basic
Rent Payment Date, the Lessee shall pay additional Basic Rent on such date equal
to such interest payment and such payment of additional Basic Rent shall be
credited against the Basic Rent due on the Basic Rent Payment Date next
succeeding tie date that such additional Basic Rent shall have been paid.
6091.CHASEU2.LEASE.47:1
(b) Supplemental Rent. The Lessee shall pay the following
amounts (herein referred to as Supplemental Rent):
(i) when due or, where no due date is specified, on
demand, any amount (other than Basic Rent, Casualty Value,
Termination Value and Special Casualty Value) which the Lessee
assumes the obligation to pay or agrees to pay to the Lessor,
the Owner Participant, the indenture Trustee, the Collateral
Trust Trustee or any Indemnitee under this Facility Lease, any
other Transaction Document or the Collateral Trust indenture,
any amount which is to be paid under Section E.9,.7.E or 9.7 of
the Indenture and any amount that the Lessee is required to pay,
or provide for the payment of, under Section 8.5 of the
Indenture:
(ii) when due, any amount payable hereunder as Casualty
Value, Termination Value or Special Casualty Value, and an
amount equal to any premium or prepayment penalty with respect
to the Notes;
(iii) on demand and in any event on the Basic Rent Payment
Date next succeeding the date such amounts shall be due and
payable hereunder, to the extent permitted by Applicable Law,
interest (computed on the same basis as interest on the Notes is
computed) at a rate per annum equal to (A) the Overdue interest
Rate, on that portion of the payment of Basic Rent or
Supplemental Rent distributable pursuant to clause first" of
Section 5.1 or clause "second" of Section 5.3 of the indenture
(determined prior to the computation of interest on overdue
payments referred to in such clauses) , and CS) the Penalty
Rate, on the balance of any such payment of Basic Rent or
Supplemental Rent (including, in the case of both clause (i) and
clause (ii) above, but without limitation, to the extent
permitted by Applicable Law, interest payable pursuant to this
clause (iii)) not paid when due (without regard to any period of
grace) for any period for which the same shall be overdue.
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6091.CHASEU2.LEASE.47:1
The Lessor shall have all rights, powers and remedies provided tar in this
Facility Lease, at law, in equity or otherwise, in the case of non-payment of
Basic Rent or Supplemental Rent.
(c) Form of Payment. Subject to Section 11(b), each payment of
Rent under this Facility Lease shall be made in immediately available funds no
later than 11:00 a.m., local time at the place of receipt, on the date each such
payment shall be due and payable hereunder and shall be paid either (A) in the
case of payments other than Excepted Payments, to the Lessor at its address
determined in accordance with Section 17, or at such other address as the Lessor
may direct by notice in writing to the Lessee, or (B) in the case of Excepted
Payments, to such Person as shall be entitled to receive such payment at such
address as such Person may direct by notice in writing to the Lessee. If the
date on which any payment of Rent is due hereunder shall not be a Business Day,
the payment otherwise due thereon shall be due and payable on the preceding
Business Day, with the same force and effect as if paid on the nominal date
provided in this Facility Lease.
(d) Adjustments to Rent. Basic Rent and the schedules of
Casualty Values, Termination Values and Special Casualty Values attached hereto
shall be adjusted (upward or downward) to preserve Net Economic Return if there
is any Change in Tax Law other than a Change in respect of a minimum tax;
provided, however, that the aggregate amount of such downward adjustments shall
not exceed the aggregate amount of such upward adjustments. Adjustments under
this paragraph (d) shall be (1) made not more than once a year and (2) limited
in the aggregate to the extent necessary such that the aggregate amount of Basic
Rent theretofore and thereafter payable throughout the Basic Lease Term
(computed for such purposes only without regard to any adjustments theretofore
made pursuant to Section 3(e)) shall not exceed by more than 4% the aggregate
amount of Basic Rent which would have been payable throughout the Basic Lease
Term (calculated as aforesaid) had no such adjustments been made.
The provisions of this Section 3(d) to the contrary
notwithstanding, if any Change in Tax Law is, or becomes, applicable to the
transaction contemplated by this Facility Lease in consequences of the transfer
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6091.CHASEU2.LEASE.47:1
of the Owner Participant's beneficial interest in the Trust (whether or not
permitted by Section 15 of the Participation Agreement) or if such Change in Tax
Law would not have been applicable to such transaction had no such transfer
occurred, then no adjustment shall be, or be required to be, made pursuant to
this Section 3 (d); provided, however, that this sentence shall not apply to the
initial transfer of the Owner Participant's beneficial interest in the Trust to
one of its Affiliates.
(e) Further Adjustments. Basic Rent and the schedules of
Casualty Values, Special Casualty Values and Termination Values attached hereto
shall be appropriately adjusted (upward or downward) to preserve Net Economic
Return if there is (i) any Supplemental Financing, (ii) the payment of
Transaction Expenses in an amount which is other than 3.0% of the Purchase Price
or (iii) any other change (other than a change in items 4, 5, 9 (as to the basis
for amortization of Transaction Expenses) , 14, 15 and 17, but without limiting
the effect of Section 3(d) hereof) in the Pricing Assumptions.
(f) computation of Adjustments. Upon the occurrence of an
event requiring an adjustment to Basic Rent payable pursuant to clause (ii) of
Section 3(a), and the schedules of Casualty Values, Special Casualty Values and
Termination Values attached hereto, pursuant to paragraph (d) or (e) of this
Section 3, the Owner Participant shall make the necessary computations and
furnish to the Lessee, the Loan Participant, the Lessor and the Indenture
Trustee the revised amounts and percentages, which amounts and percentages shall
be implemented upon delivery thereof and effective as of the date of occurrence
of the event requiring such adjustment (taking into account any payment of Basic
Rent already made) and shall remain effective until changed in consequence of
any verification procedure set forth below. Such revised amounts and percentages
shall be subject to verification (at the Lessee9s request within 90 days after
the Owner Participant furnishes the revised amounts to the Lessee, the Loan
Participant, the Lessor and the Indenture Trustee) by the Owner Participant's
nationally recognized independent public accountants, in which case such
accountants shall either (i) confirm to the Lessee in writing that such revised
amounts were computed on a basis consistent with the original calculations, or
(ii) compute and provide to the Lessee, the Lessor, the Owner Participant, the
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6091.CHASEU1.LEASE.47:1
Loan Participant and the indenture Trustee revised amounts and percentages which
are on such a basis. The revised amounts and percentages, as so confirmed or
computed if applicable, shall be conclusive and binding upon the Lessee, the
Lessor, the Owner Participant, the Loan Participant and the Indenture Trustee.
The cost of any such verification shall be borne by the Lessee unless such
accountants shall require an adjustment to the revised amounts and percentages
originally provided by the Owner Participant which differs by more than 10% from
the adjustment so provided, in which case such cost shall be divided and paid by
the Lessee and the Owner Participant in equal amounts. Each adjustment pursuant
to paragraph (d) or (e) of this Section 3 may, but need not, be evidenced by the
execution and delivery of a supplement to this Facility Lease in form and
substance satisfactory to the Lessee and the Owner Participant, but shall be
effective as provided herein without regard to the date on which such supplement
to this Facility Lease is so executed and delivered. Any adjustment referred to
in this Section 3 shall satisfy the provisions of Revenue Procedure 75-21,
Revenue Procedure 75-28 and any other applicable statute, regulation, revenue
procedure, revenue ruling or technical information release relating to the
subject matter of Revenue Procedure 75-21 or Revenue Procedure 75-28, but, in
the case of any upward adjustment, shall be no less than the oadjustment
otherwise required pursuant to this Section 3.
(g) sufficiency of Basic Rent arid Supplemental Rent.
Notwithstanding any other provision of this Facility Lease, any other
Transaction Document or any Financing Document (i) the amount of Basic Rent
payable on each Basic Rent Payment Date shall be at least equal to the aggregate
amount of principal, premium, if any, and accrued interest payable on all Notes
then Outstanding and (ii) each payment of Casualty Value, special casualty Value
and Termination Value shall in no event be less (when added to all other
amounts, other than Excepted Payments, required to be paid by the Lessee under
this Facility Lease in respect of any Event of Loss or Deemed Loss Event or
termination of this Facility Lease) than an amount sufficient, as of the date of
payment, to pay in full all principal of, and premium, if any, and interest then
due on all Notes Outstanding on and as of such date of payment (taking into
account any assumption of the Notes by the Lessee).
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6091.CHASEU2.LEASE.47:1
SECTION 4. Net Lease.
This Facility Lease (as originally executed and as modified,
supplemented and amended from time to time) is a net lease, and the Lessee
hereby acknowledges and agrees that the Lessee's obligation to pay all Rent
hereunder, and the rights of the Lessor in and to such Rent, shall be absolute,
unconditional and irrevocable and shall not be affected by any circumstances of
any character, including, without limitation, (i) any set-off1 abatement,
counterclaim, suspension, recoupment, reduction, rescission, defense or other
right or claim which the Lessee may have against the Lessor, the Owner
Participant, the Indenture Trustee, the Collateral Trust Trustee, the Loan
Participant, the Operating Agent, any ANPP Participant, any vendor or
manufacturer of any equipment or assets included in the Undivided interest, Unit
2, any Capital Improvement, the Real Property interest, the PVNGS Site, PINGS,
or any part of any thereof, or any other Person for any reason whatsoever, (ii)
any defect in or failure of the title, merchantability, condition, design,
compliance with specifications, operation or fitness for use of all or any part
of the undivided Interest, Unit 2, any Capital Improvement, the Real Property
Interest, the PVNGS Site or PVNGS, (iii) any damage to, or removal, abandonment,
decommissioning, shutdown, salvage, scrapping,' requisition, taking, loss, theft
or destruction of all or any part of the Undivided ▇▇▇▇▇▇▇▇▇ Unit 2, any Capital
Improvement, the Real Property Interest, the PVNGS Site or PVNGS, or any
interference, interruption or cessation in the use or possession thereof or of
the Undivided Interest by the Lessee or by any other Person (including, but
without limitation, the Operating Agent or any other ANPP Participant) for any
reason whatsoever or of whatever duration, (iv) any restriction, prevention or
curtailment of or interference with any use of all or any part of the Undivided
Interest, Unit 2, any capital Improvement, the Real Property Interest, the PVNGS
Site or PVNGS, (V) any insolvency, bankruptcy, reorganization or similar
proceeding by or against the Lessee, the Lessor, the Owner Participant, the
Indenture Trustee, the Collateral Trust Trustee, the Loan participant, the
Operating Agent, any other ANPP Participant or any other Person, (vi) the
invalidity, illegality or unenforceability of this Facility Lease, any other
Transaction Document, any Financing Document, the ANPP Participation Agreement
or any other instrument referred to herein or therein or any other infirmity
-7-
6091.CHASEU2.LEASE.47:1
herein or therein or any lack of right, power or authority of the Lessor, the
Lessee, the Owner Participant, the Indenture Trustee, the Collateral Trust
Trustee, the Loan Participant or any other Person to enter into this Facility
Lease, any other Transaction Document or any Financing. Document,. or any
doctrine of force majeure, impossibility, frustration, failure of consideration,
or any similar legal or equitable doctrine that the Lessee's obligation to pay
Rent is excused because the Lessee has not received or will not receive the
benefit for which the Lessee bargained, it being the intent of the Lessee to
assume all risks from all causes whatsoever that the Lessee does not receive
such benefit, (vii) the breach or failure of any warranty or representation made
in this Facility Lease or any other Transaction Document or any Financing
Document by the Lessor, the Owner Participant, the Indenture Trustee, the
Collateral Trust Trustee, the Loan Participant or any other Person, (viii) any
amendment or other change of, or any assignment of rights under, this Facility
Lease, any other Transaction Document, any Financing Document or any ANPP
Project Agreement, or any waiver, action or inaction under or in respect of this
Facility Lease, any other Transaction Document, any Financing Document or any
ANPP Project Agreement, or any exercise or non-exercise of any right or remedy
under this Facility Lease, any other Transaction Document, any Financing
Documents any ANPP Project Agreement, including, without limitation, the
exercise of any foreclosure or other remedy under the Indenture, the Collateral
Trust indenture or this Facility Lease, or the sale of Unit 2, any Capital
Improvement, the undivided interest, the Real Property Interest, the PVNGS Site
or PVNGS, or any part thereof or any interest therein, or (ix) any other
circumstance or happening whatsoever whether or not similar to any of the
foregoing. The Lessee acknowledges that by conveying the leasehold estate
created by this Facility Lease to the Lessee and by putting the Lessee in
possession of the Undivided Interest and the Real Property Interest, the Lessor
has performed all of the Lessor's obligations under and in respect of this
Facility Lease, except the covenant under Section 6(a) hereof that the Lessor
and Persons acting for the Lessor will not interfere with the Lessee's quiet
enjoyment of the Undivided Interest and the Real Property Interest. The Lessee
hereby waives, to the extent permitted by Applicable Law, any aid all rights
which it may now have or which at any time hereafter may be conferred upon it,
-8-
6091.CHASEU2.LEASE.47:1
by statute or otherwise, to terminate, cancel, quit or surrender this Facility
Lease or to effect or claim any diminution or reduction of Rent payable by the
Lessee hereunder, including without limitation the provisions of Arizona Revised
Statutes Section 33-343, except in accordance with the. express terms hereof. If
for any reason whatsoever this Facility Lease shall be terminated in whole or in
part by operation of law or otherwise, except as specifically provided herein,
the Lessee nonetheless agrees to pay to the Lessor or other Person entitled
thereto an amount equal to each installment of Basic Rent and all Supplemental
Rent at the time such payment would have become due and payable in accordance
with the terms hereof had this Facility Lease not been terminated in whole or in
part. Each payment of Rent made by the Lessee hereunder shall be final and the
Lessee shall not seek or have any right to recover all or any part of such
payment from the Lessor or any other Person for any reason whatsoever. All
covenants, agreements and undertakings of the Lessee herein shall be performed
at its cost, expense and risk unless expressly otherwise stated. Nothing in this
Section 4 shall be construed as a guaranty by the Lessee of any residual value
in the Undivided Interest or as a guaranty of the Notes. Any provisions of
Section 7(b) (2) or 8(c) of the Participation Agreement to the contrary
notwithstanding, if the Lessee shall fail to make any payment or Rent to any
Person when and as due (taking into account applicable grace periods), such
Person shall have the right at all times, to the exclusion of the ANPP
Participants, to demand, collect, sue for, enforce obligations relating to and
otherwise obtain all amounts due in respect of such Rent.
SECTION 5. Return of the Undivided Interest.
(a) Return of the Undivided Interest. On the
Lease Termination Date, the Lessee will (1) surrender possession of the
Undivided Interest and the Real Property Interest to the Lessor (or to a Person
specified by the Lessor to the Lessee in writing not less than 6 months prior to
the Lease Termination Date) (i) with full rights as a Transferee" and the sole
"Participant" with respect to the Undivided Interest and the Real Property
Interest within the meaning of Section 15.10 of the ANPP Participation Agreement
and (ii) without a ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Event (as hereinafter defined) having arisen
prior to, or arising upon, or immediately following, such surrender and (2)
furnish to the
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6091.CHASEU2.LEASE.47:1
Lessor: (i) copies certified by a senior officer of the Lessee of all
Governmental Action necessary to effect such surrender (including, but without
limitation, appropriate amendments to the License permitting the Lessor (without
the Lessor being required to change its business) or such Person to possess the
Undivided Interest and the Real Property interest with or without the continued
involvement of the Lessee as Agent), which Governmental Action shall be in full
force and effect; and (ii) an opinion of counsel (which may be ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ or another counsel experienced with
NRC and other nuclear matters reasonably satisfactory to the Owner Participant)
to the effect that (A) the Lessee has obtained all Governmental Action and
action under the ANPP Participation Agreement necessary to effect such surrender
by the Lessee and receipt of Possession by the Lessor (or by the Person so
specified by the Lessor) and (B) such Governmental Action is in full force and
effect. At the time of such return the Lessee shall pay or have paid all amounts
due and payable, or to become due and payable, by it as an ANPP Participant
under each and every ANPP Project Agreement allocable or chargeable (whether or
not payable during or after the Lease Term) to the Undivided Interest or the
Real Property Interest in respect of any period or periods ending on or prior to
the Lease Termination Date (including, but without limitation, all amounts
payable with respect to any and all discretionary Capital Improvements to Unit 2
or the PVNGS Site approved or authorized (without the concurrence of the Owner
Participant) within the 3-year period preceding the end of the Lease Term,
whether or not implementation thereof has been completed on or prior to the
Lease Termination Date), and the Undivided Interest and the Real Property
Interest shall be free and clear of all Liens (other than Permitted Liens
described in clauses (i), (V) (other than those arising by through or under the
Lessee alone) , (vi) , (vii) (other than as aforesaid), (viii) (other than as
aforesaid), (ix) and (x) of the definition of such term) and in the condition
and state of repair required by Section 8. In the event that on or prior to the
Lease Termination Date there shall have occurred a default by any ANPP
Participant (other than the Lessee) under the ANPP Participation Agreement and
such default shall not have been cured by the defaulting ANPP Participant, then
(i) the Lessee agrees to indemnify and hold the Lessor (and each successor,
assign and transferee thereof) harmless against any and all obligations under
the ANPP
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6091.CHASEU2.LEASE.47:1
Participation Agreement with respect to contributions or payrnents required to
be made thereby as a result of such default and (ii) the Lessor (and each
successor, assign and transferee thereof) agrees to reimburse the Lessee for all
amounts paid by the Lessee pursuant to the foregoing clause (i) to the extent,
but only to the extent, that the Lessor (or such successor, assign or
transferee) shall have actually received proceeds from the sale of the
Generation Entitlement Share of the defaulting ANPP Participant as a result of
the payment made by the Lessee pursuant to the foregoing clause (i), and, to the
extent the Lessor (or such successor, assign or transferee) shall have received
such proceeds, the amount to be reimbursed to the Lessee pursuant to this clause
(ii) shall include interest at the Prime Rate from the date of any payment by
the Lessee pursuant to the foregoing clause (i) through the date of
reimbursement of such amount pursuant to this clause (ii). For purposes of this
Section 5(a) a "▇▇▇▇▇-▇▇▇▇▇▇▇▇. Event" shall mean any change in, or new
interpretation by Governmental Authority having jurisdiction of, Applicable Law,
including without limitation the ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Act, the Atomic Energy Act and
the regulations of the NRC, in each case as in effect on the Closing Date, but
only if such change is specified in clauses (2) (i) through (iv) of the
definition of "Deemed Loss Event" (other than a change which is specified in
clause (A) of the definition of "Acceptable Change").
(b) Disposition Services. The Lessee agrees that if it does
not exercise its option to renew or purchase as provided in Sections 12 and 13,
respectively, then during the last thirty-six months of the Lease Term1 the
Lessee will fully cooperate with the Lessor in connection with the Lessor's
efforts to lease or dispose of the Undivided interest and the Real Property
Interest, including using the Lessee's reasonable efforts to lease or dispose of
the Undivided Interest and the Real Property Interest. The Lessor agrees to
reimburse the Lessee for reasonable out-of-pocket costs and expenses of the
Lessee incurred at the request of the Lessor or the Owner Participant in
connection with such cooperation and such efforts.
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SECTION 6. Warranty of the Lessor.
(a) Quiet Enjoyment. The Lessor warrants that until the Lease
Termination Date, so long as no Event of Default shall have occurred and be
continuing, the Lessee's use and possession of Unit 2, including the Undivided
Interest, shall not be interrupted by the Lessor or any Person claiming by,
through or under the Lessor, and their respective successors and assigns.
(b) Disclaimer of Other Warranties. The warranty set forth in
Section 6(a) is in lieu of all other warranties of the Lessor or the Owner
Participant, whether written, oral or implied, with respect to this Facility
Lease, Unit 2, any Capital Improvement, the Undivided Interest, PVNGS, the Real
Property Interest or the PVNGS Site. As among the Owner Participant, the Loan
Participant, the Indenture Trustee, the Collateral Trust Trustee, the Lessor and
the Lessee, execution by the Lessee of this Facility Lease shall be conclusive
proof. of the compliance of Unit 2 (including any Capital Improvement) , the
Undivided Interest and the Real Property Interest with all requirements of this
Facility Lease, and the Lessee acknowledges and agrees that (i) NEITHER THE
LESSOR NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN PROPERTY OF
SUCH KIND AND (ii) THE. LESSOR LEASES AND THE LESSEE TAKES THE UNDIVIDED
INTEREST AND THE REAL PROPERTY INTEREST, AND SHALL TAKE EACH CAPITAL
IMPROVEMENT, AND ANY PART THEREOF, AS IS AND WHERE IS, and neither the Lessor
nor the Owner Participant shall be deemed to have made, and THE LESSOR AND THE
OWNER PARTICIPANT EACH HEREBY DISCLOSE, ▇▇▇ OTHER REPRESENTATION OR WARRANTY,
EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, THE DESIGN OR CONDITION OF UNIT 2, ANY CAPITAL IMPROVEMENT, THE
UNDIVIDED INTEREST; THE REAL PROPERTY INTEREST, THE PVNGS SITE OR PVNGS, OR ANY
PART THEREOF, THE MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR ANY
PARTICULAR PURPOSE, TITLE TO UNIT 2, ANY CAPITAL IMPROVEMENT, THE UNDIVIDED
INTEREST, THE REAL PROPERTY INTEREST, THE PVNGS SITE OR PVNGS, OR ANY PART
THEREOF, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY
THEREOF TO SPECIFICATIONS, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT OR THE
ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL
THE LESSOR OR THE OWNER PARTICIPANT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES (INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE) , it being agreed
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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 provisions are intended to be a complete exclusion and
negation of any representations or warranties by the Lessor, the Owner
Participant, the Loan Participant, the Collateral Trust Trustee or the indenture
Trustee, express or implied, with respect to Unit 2 (including any Capital
Improvement), the Undivided Interest, pvngs, the Real Property Interest or the
PVNGS Site that may arise pursuant to any law now or hereafter in effect, or
otherwise.
(a) Enforcement of Certain Warranties. The Lessor authorizes the
Lessee (directly or through agents, including the Operating Agent), at the
Lessee's expense, to assert for the Lessor's account, during the Lease Term, all
of the Lessor's rights (if any) under any applicable warranty and any other
claims (under this Facility Lease or any Purchase Document) that the Lessee or
the Lessor may have against any vendor or manufacturer with respect to Unit 2
(including any Capital Improvement) or the Undivided Interest, and the Lessor
agrees to cooperate, at the Lessee's expense, with the Lessee and the Operating
Agent in asserting such rights. Any amount received (without regard to any right
of setoff or other similar right of any Person against the Lessee) by the Lessee
as payment under any such warranty or other claim against any vendor or
manufacturer (or, if such warranty or claim relates to the Undivided Interest
and the Retained Assets, the portion of such received amount appropriately
allocable to the Undivided Interest) shall be applied in accordance with
Sections 9(g), (h) and (i).
Section 7. Liens.
The Lessee will not directly or indirectly create, incur6 assume
or permit to exist any Lien on or with respect to the undivided Interest, the
Real Property Interest, the Lessor's title thereto or any interest of the Lessor
or Lessee therein (and the Lessee will promptly, at its own expense, take such
action as may be necessary duly to discharge any such Lien), except permitted
Liens.
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SECTION 8. Operation and Maintenance; Capital Improvements.
(a) Operation and Maintenance. The Lessee agrees that it will
exercise its rights, powers, elections and options as an ANPP Participant under
the ANPP Project Agreements to cause the Operating Agent to (A) maintain Unit 2
in such condition that Unit 2 will have the capacity and functional ability to
perform, on a continuing basis (ordinary wear and tear excepted), in normal
commercial operation, the functions and substantially at the ratings at which it
is, from time to time, rated, (B) operate, service, maintain and repair Unit 2
and replace all necessary or useful parts and components thereof so that its
condition and operating efficiency will be maintained and preserved, ordinary
wear and tear excepted, in all material respects in accordance with (1) prudent
utility practice for items of similar size and nature, (2) such operating
standards as shall be required to take advantage of and enforce all available
warranties and (3) the terms and conditions of all insurance policies maintained
in effect at any time with respect thereto, (C) use, possess, operate and
maintain Unit 2 in compliance with all material applicable Governmental Actions
(including the License) affecting PVNGS or Unit 2 or the use, possession,
operation and maintenance thereof and (D) otherwise act in accordance with the
standards set forth in the ANPP Participation Agreement. The Lessee will comply
with all its obligations under Applicable Law affecting Unit 2, the Undivided
Interest, PVNGS, the Real Property Interest and the PVNGS Site, and the use,
operation and maintenance thereof. The Lessee agrees to (i) exercise its rights
under the AMP? Participation Agreement so that there will always be an Operating
Agent under the AN?? Participation Agreement and (ii) maintain in full force and
effect a license from the NRC adequate to possess the Undivided Interest and the
Real Property Interest under the circumstances contemplated by the AMP?
Participation Agreement. The Lessee will keep and maintain proper books and
records (i) relating to all Operating Funds (as defined in the ANPP
Participation Agreement) provided by it to the Operating. Agent under the ANPP
Participation Agreement and (ii) upon receipt of the requisite information from
the Operating Agent, relating to the application of such Operating Funds to the
operation and maintenance of Unit 2 and the acquisition, construction and
installation of Capital Improvements, all in accordance with the Uniform System
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of Accounts. The Lessor shall not be obliged in any way to maintain, altar,
repair, rebuild or replace Unit 2, any Capital Improvement, the Undivided
Interest or the Real Property Interest, or any part thereof, or, except as
provided in Section 8(f), to pay the cost of alteration, rebuilding,
replacement, repair or maintenance of Unit 2, any Capital Improvement, the
Undivided Interest or the Real Property Interest, or any part thereof, and the
Lessee expressly waives the right to perform any such action at the expense of
the Lessor pursuant to any law at any time in effect.
(b) Inspection. The Lessor and the Owner Participant and their
respective authorized representatives shall have the right to inspect .PVNGS
(subject, in each event, to the ANPP Participation Agreement, Applicable Law,
applicable confidentiality undertakings and procedures established by the
Operating Agent) at their expense. The Lessor and the Owner Participant and
their respective authorized representatives shall have the right to inspect, at
their expense, the books and records of the Lessee relating to PVNGS, and make
copies of and extracts therefrom (subject as aforesaid) and may, at their
expense, discuss the Lessee's affairs, finances and account with its executive
officers and its independent public accountants (and by this provision, the
Lessee authorizes such' accountants, in the presence of the Lessee, to discuss
with the Lessor and the Owner Participant and their respective authorized
representatives the affairs, finances and accounts of the Lessee), all at such
times and as often as may be reasonably requested. None of the Lessor, the Owner
Participant, the Indenture Trustee and the Collateral Trust Trustee shall have
any duty whatsoever to make any inspection or inquiry referred to in this
Section 8(b) and shall not incur any liability or obligation by reason of not
making any such inspection or inquiry.
(C) Capital Improvements. If and to the extent required by the
ANPP Participation Agreement, the Lessee shall, at its sole expense, promptly
participate in the making of any Capital Improvement to Unit 2 or the Common
Facilities. Of the net proceeds of (i) any sale or other disposition of property
removed from Unit 2 or the Common Facilities receivable (without regard to any
right of setoff or other similar right of any Person against the Lessee) by, or
credited to the account of the Lessee in accordance with the ANPP Participation
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Agreement and (ii) any insurance proceeds receivable (without regard to any
right of setoff or other similar right of any Person against the Lessee) for the
account of the Lessor or the Lessee in respect of the loss or destruction of, or
damage or casualty to, any such property, 7 777778% in the case of Unit 2, or
2.592593% in the case of Common Facilities, of either such amount shall be
applied as provided in Section 9(g), (h) or (i), as the case may be. A
.7933333%, in the case of Unit 2, or .2644444%, in the case of Common
Facilities, undivided interest in property at any time removed from Unit 2 or
the Common Facilities shall remain the property of the Lessor, no matter where
located, until such time as a Capital improvement constituting a replacement of
such property shall have been installed in Unit 2 or the Common Facilities or
such removed property has been disposed of by the Operating Agent in accordance
with the NAP Participation Agreement. Simultaneously with such disposition by
the Operating Agent, title to a .7933333%, in the case of Unit 2, or .2644444%,
in the case of Common Facilities, undivided interest in the removed property
shall vest in the Person designated by the Operating Agent1 free and clear of
any and all claims or rights of the Lessor. Unless subparagraph (3) of Section
8(e) shall be applicable, upon the incorporation of a Capital Improvement in
Unit 2 or the Common Facilities, without further act, (i) title to a .7933333%,
in the case of Unit 2, or .2644444%, in the case of Common Facilities, undivided
interest in such Capital improvement shall vest in the Lessor and (ii) such
applicable undivided interest in such Capital Improvement shall become subject
to this Facility Lease and be deemed to be part of the Undivided Interest for
all purposes hereof to the same extent that the Lessor had a like undivided
interest in the property originally incorporated or installed in Unit 2 or the
Common Facilities. The Lessee warrants and agrees that the Lessor's .7933333% or
.2644444%, as the case may be, undivided interest in all Capital Improvements
shall be tree and clear of all Liens, except Permitted Liens other than the type
specified in clauses (ii), (iii) and (xii) at the definition thereof.
(d) Reports. To the extent permissible, the Lessee shall prepare
and file in timely fashion, or, where the Lessor shall be required to file, the
Lessee shall prepare and deliver to the Lessor within a reasonable time prior to
the date for filing, any reports with respect to Unit 2, the Undivided Interest
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or the Real Property Interest or the condition or operation thereof that shall
be required to be filed with any governmental or regulatory authority. On or
before March 1 of each year (commencing on March 1, 1988) and on the Lease
Termination Date, the Lessee shall furnish the Lessor and the Owner Participant
with a report stating the total cost of all Capital Improvements and describing
separately and in reasonable detail each Capital Improvement (or related group
of Capital Improvements) made during the period from the date hereof to December
31, 1987 in the case of the first such report or during the period from the end
of the period covered by the last previous report to the December 31 prior to
such report in the case of subsequent reports. On or before March 1 in each year
(commencing March 1, 1987) and at such other times as the Lessor or the Owner
Participant shall reasonably request in writing (which request shall provide a
reasonable period for response), the Lessee will report in writing to the Lessor
with respect to (i) the most recent annual capital expenditure budget submitted
by the Operating Agent to the Lessee in accordance with the ANPP Participation
Agreement and (ii) the then plans (if any) which the Lessee may have for the
financing of the same under Section 8(f).
(e) Title to Capital Improvements. Title to a .7933333%, in the
case of Unit 2, or .2644444%, in the case of Common Facilities, undivided
interest in each Capital Improvement to Unit 2 or the Common Facilities, as the
case may be, shall vest as follows:
(1) in the case of each Nonseverable Capital Improvement,
whether or not the Lessor shall have financed or provided financing (in
whole or in part) for such undivided interest in such Capital
Improvement by an Additional Equity Investment or a Supplemental
Financing, or both, effective on the date such Capital Improvement shall
have been incorporated or installed in Unit 2 or the Common Facilities,
as the case may be, the Lessor shall, without further act, acquire title
to such undivided interest in such Capital Improvement;
(2) in the. case of each Severable Capital improvement, if the
Lessor shall have financed (by an Additional Equity Investment or a
supplemental Financing, or both) .7933333%, in the case of unit 2, or
.2644444%, in the case of Common Facilities, of the cost of such
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Capital Improvement, the Lessor shall, without further act, acquire
title to such undivided interest in such Capital Improvement; and
(3) in the case of each Severable Capital Improvement, if the
Lessor shall not have financed (by an Additional Equity Investment or a
Supplemental Financing, or both) .7933333%, in the case of Unit 2, or
.2644444%, in the case of Common Facilities, of the cost of such Capital
Improvement, the Lessee shall retain title to such undivided interest in
such Capital Improvement.
Immediately upon title to such .7933333%, in the case of Unit
2, or .2644444%, in the case of ▇▇▇▇▇▇ Facilities, undivided interest in any
Capital Improvement vesting in the Lessor pursuant to sub-paragraph (1) or
sub-paragraph (2) of this Section 8(e), such undivided interest in such Capital
improvement shall, without further act, become subject to this Facility Lease
and be deemed part of the Undivided Interest for all purposes hereof.
(f) Funding of the Cast or Capital Improvements. Before
placing in service any Capital Improvement to Unit 2 or the Common Facilities
the cost of which exceeds $1OO,000,000 in respect of the interests of all ANPP
Participants, the Lessee shall give the Lessor and the Owner Participant
reasonable advance notice thereof. The Owner Participant shall have the option,
in its sole discretion, of financing through the Lessor .7933333%, in the case
of Unit 2, or .2644444%, in the case of Common Facilities, of the cost of any
such Capital Improvement, or any other Capital Improvement presented to the
Owner Participant for financing, including or not including the making of an
investment by the Owner Participant (an Additional Equity Investment) and the
issuance of one or more Additional Notes, all on terms acceptable to the Lessee
and the Owner Participant. If the Owner Participant does not finance, or arrange
the financing of, .7933333%, in the case of Unit 2, or .2644444%, in the case of
Common Facilities, of the cost of such Capital Improvement, the Lessee may cause
the Lessor to issue, if and to the extent permitted by the Indenture, to one or
more Persons (other than any Person affiliated with the Lessee within the
meaning of Section 318 of the Code) one or more Additional Notes and to use the
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proceeds thereof to pay the applicable percentage of the cost of such Capital
Improvement, subject to satisfaction off the following conditions:
(i) there shall be no more than one Supplemental Financing
in any calendar year;
(ii) the sum of the Supplemental Financing Amounts in any
calendar year shall equal or exceed .7933332% of $5,000,000;
(iii) the Lessee may include in any request for a
Supplemental Financing only Capital Improvements not
previously financed in any Supplemental Financing and which
have been installed or affixed no earlier than three calendar
years before the beginning of the calendar year in which such
Supplemental Financing occurs;
(iv) the total amount of all Supplemental Financings
during the Basic Lease Term shall not exceed 7.777778% of
$100,000,000;
(v) unless waived by the Owner Participant, the Bonds
issued and outstanding under the Collateral Trust Indenture
shall be rated no less than "investment grade", as determined
by Standard & Poor's Corporation and ▇▇▇▇▇'▇ Investors
Service, Inc.;
(vi) the Supplemental Financing Amount shall not exceed
that portion of the cost of Capital Improvements which, when
financed, will constitute an addition to the Owner
Participant's basis under section 1012 of the Code;
(vii) in the opinion of independent tax counsel to the
Owner Participant, such Supplemental Financing shall not
result in adverse tax Consequences to the Owner Participant or
adversely affect the status of this Facility Lease as a "true
lease for Federal, New York State or New York City tax
purposes, and the Owner Participant and the Lessee shall have
agreed upon the amount and manner of payment of the indemnity
(if any) payable by the Lessee as a consequence of such
supplemental Financing:
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(viii) the Additional Notes shall have a final maturity
date no later than January 15, 2016:
(ix) the Lessee shall have made such representations,
warranties and covenants regarding the tax characteristics of
the Lessor's undivided interest in each Capital Improvement as
the Owner Participant reasonably requests, and the Tax
indemnification Agreement shall have been appropriately
modified;
(x) appropriate adjustments to Basic Rent and the
schedules of Casualty Values, Special Casualty Values and
Termination Values shall have been agreed to by the Owner
Participant to support the amortization of the Additional Notes
issued in respect of such Supplemental Financing and to preserve
Met Economic Return;
(xi) the Lessee shall pay to the Lessor an amount equal
to all out-of-pocket costs and expenses reasonably incurred by
the Lessor or the Owner Participant and not financed as a part
of such Supplemental Financing or reflected in adjustments to
Basic Rent;
(xii) no Default or Event of Default shall have occurred
and be continuing; and
(xiii) the Lessee shall enter into such agreements and
shall have provided such tax indemnities, representations,
warranties1 covenants, opinions, certificates and other
documents as the Owner Participant shall reason-ably request.
SECTION 9. Event of Loss; Deemed Loss Event.
(a) Damage or Loss. In the event that Section 16.2 of the ANPP
Participation Agreement (as in effect on the date hereof) shall become
applicable, or an Event of Loss, a Requisition of Use or a Requisition of Title
shall occur, or Unit .2 or any substantial4 part thereof shall suffer
destruction, damage, loss, condemnation, confiscation, theft or seizure for any
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reason whatsoever, such fact shall promptly, and in any case within five
Business Days following such event, be reported by the Lessee to the Lessor and
the Owner Participant.
(b) Repair. The Lessee shall promptly make any and all payments
required of the Lessee under the provisions of the AMP? Participation Agreement
relating to damage or destruction or the like to Unit 2 or any portion thereof;
provided, however, that the Lessee shall in no event be obligated to make or
join in any agreement under Section 16.2 of the AN?? Participation Agreement (as
in effect on the date hereof) concerning repairs to or reconstruction of Unit 2.
(c) Payment of Casualty Value. On the Basic Rent Payment Date
next following receipt by the Lessee of a written notice from the Lessor that an
Event of Loss has occurred, the Lessee shall pay to the Lessor all Basic Rent
due on such Basic Rent Payment Date, plus an amount equal to the excess of (i)
Casualty Value determined as of such Basic Rent Payment Date over (ii) the
unpaid principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such date. An Event of Loss shall not be deemed to have occurred unless and
until the Lessor delivers the notice specified in the preceding sentence. Upon
compliance in full by the Lessee with the foregoing provisions of this Section
9(c) and assumption by the Lessee of all the obligations and liabilities of the
Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b) of
the Indenture, the Lessor shall (so long as no Default or Event of Default shall
have occurred and be continuing), and at any time after the occurrence of an
Event of Loss, the Lessor may:
(1) in the case of an Event of Loss arising from a Final
Shutdown, if the Lessee shall have declined, but one or more
of the other ANPP Participants shall have elected, to
reconstruct or restore Unit 2, as permitted by the ANPP
Participation Agreement, Transfer the Undivided Interest and
the Real Property Interest to such electing ANPP Participants,
as required by and in the proportions set forth in the ANPP
Participation Agreement, in which case the Lessee shall be
entitled to receive the portion of the "salvage value"
purchase price allocable to the Undivided Interest; or
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(2) if clause (1) shall not be applicable, Transfer the
Undivided Interest and the Real Property Interest to the
Lessee.
If the Lessee shall not have assumed all the obligations and liabilities of the
Owner Trustee under the Indenture and the Notes in accordance with Section
3.9(b) of the Indenture, but the Owner Participant shall have received under
Section 5.2 of the Indenture all amounts required to be paid by the Lessee
pursuant to this Section 9(c) (including interest, if any, thereon pursuant to
Section 3(b) (iii) hereof), the Lessor shall retain the Undivided Interest and
the Real Property Interest subject to the terms of this Facility Lease and
Section 7(b)(4) of the Participation Agreement; provided, however, that (i) the
obligation of the Lessee to pay further Basic Rent shall be reduced to an amount
on each Basic Rent Payment Date equal to the aggregate amount of principal,
premium, if any, and accrued interest then payable on' all Notes then
Outstanding and (ii) this Facility Lease shall become a security agreement for
all purposes of Applicable Law.
(d) Payment of special Casualty Value. If a Deemed Loss Event
occurs, the party hereto having knowledge thereof shall promptly notify the
other thereof (provided that the failure by the Lessor to furnish to the Lessee
the foregoing notification shall not impair the right of the Lessor to exercise
the option referred to below) and, at the Lessor's option, exercisable by
delivery of written notice to the Lessee, on the day (specified in Schedule 2)
of the month next following the month during which such notice is delivered to
the Lessee, the Lessee shall pay to the Lessor an amount equal to the excess of
(i) Special Casualty Value determined as of the date such payment is due over
(ii) the principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such day. Upon compliance in full by the Lessee with the foregoing provisions of
this Section 9(d) and assumption by the Lessee of all the obligations and.
liabilities of the Owner Trustee under the Indenture and the Notes pursuant to
Section 3.9(b) of the Indenture, the Lessor shall (so long as no Default or
Event of Default shall have occurred and be continuing, and at any time after
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the occurrence of a Deemed Loss Event, the Lessor may, Transfer the Undivided
Interest and the Real Property Interest to the Lessee. If the Lessee shall not
have assumed all the liabilities and obligations of the Owner Trustee under the
Indenture and the Notes in accordance with Section 3.9(b) of the Indenture, but
the Owner Participant shall have received under Section 5.2 of the Indenture all
amounts required to be paid by the Lessee pursuant to this Section 9(d)
(including ▇▇▇▇▇▇▇▇▇ if any, thereon pursuant to Section 3(b)(iii)), the Lessor
shall retain the Undivided Interest and the Real Property Interest subject to
the terms of this Facility Lease and Section 7(b) (4) of the Participation
Agreement; provided, however, that (i) the obligation of the Lessee to pay
further Basic Rent shall be reduced to an amount on each Basic Rent Payment Date
equal to the aggregate amount of principal, premium, if any, and accrued
interest then payable on all Notes Outstanding and (ii) this Facility Lease
shall became 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 Obligation. Until the Lessee shall have made
the payments specified in Section 9(c) or 9(d), the Lessee shall make all
payments of Rent when due; and the Lessee shall thereafter be required to make
all payments of Supplemental Rent as and when due. In the event that the Lessee
shall assume all the obligations and liabilities of the Owner Trustee under the
Indenture and the Notes pursuant to Section 3.9(b) of the Indenture, upon
receipt by the Owner Participant under Section 5.2 of the Indenture of the
payments specified in Section 9(c) or 9(d) and payment by the Lessee of all
other Rent due and owing through and including the date of payment (including
Basic Rent due on or accrued through such date, as the case may be), the Lease
Term shall end and the Lessee's obligation to pay further Basic Rent shall
cease.
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(g) Application of Payments on an Event of Loss. Any payments
receivable (without regard to any right at setoff or other similar right of any
Person against the Lessee) at any time by the Lessor or the Lessee (other than
insurance placed by the Owner Trustee or the Owner Participant pursuant to
Section 10(b)) from any Governmental Authority, insurer or other Person (except
the Lessee, the Owner Trustee or the Owner Participant) as a result of the
occurrence of an Event of Loss shall be applied as follows:
(i) all such payments received at any time by the
Lessee shall be promptly paid to the Lessor for application
pursuant to the following provisions of this Section 9(g),
except that the Lessee may retain any amounts that would at
the time be payable to the Lessee as reimbursement under the
provisions of clause (ii) below;
(ii) so much of such payments as shall not exceed the
amount required to be paid by the Lessee pursuant to Section
9(c) (ignoring, for this purpose, clause (ii) of the first
Sentence thereof) shall be applied in reduction of the
Lessee's obligation to pay such amount if not already paid by
the Lessee or, if already paid by the Lessee, shall be applied
to reimburse the Lessee for its payment of such amount; and
(iii) the balance, if any, of such payments remaining
thereafter shall be divided between the Lessor and the Lessee as
their interests may appear.
(h) Application of Payments Not Relating to an Event of Loss.
Payments receivable (without regard to any right of setoff or other similar
right of any Person against the Lessee) at any time by the Lessor (other than
insurance placed by the Owner Trustee or the Owner Participant pursuant to
Section 10(b)) or the Lessee from any Governmental Authority, insurer or other
Person with respect to any destruction, damage, loss, condemnation,
confiscation, theft or seizure of or Requisition of Title to or Requisition of
Use of the Undivided Interest or any part thereof not constituting an Event of
Loss shall be applied first to reimburse the Lessee for all amounts expended in
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respect of the repair, replacement or reconstruction of the Undivided Interest
or any part thereof as provided in Section 9(b), and second the balance, if any,
of such payments shall be divided between the Lessor and the Lessee as their
interests may appear.
(i) Other Dispositions. Notwithstanding the foregoing
provisions of this Section 9, so long as a Default or Event of Default shall
have occurred and be continuing, any amount that would otherwise be payable to
or for the account of, or that would otherwise be retained by, the Lessee
pursuant to Section 10 or this Section 9 shall be paid to the Lessor as security
for the obligations of the Lessee under this Facility Lease and, at such time
thereafter as no Default or Event of Default shall be continuing, such amount
shall be paid promptly to the Lessee unless this Facility tease shall have
theretofore been declared to be in default, in which event such amount shall be
disposed of in accordance with the provisions hereof, of the Indenture and of
the Trust Agreement.
(j) Assumption of Notes; Creation of Lien on Undivided Interest.
In connection with; an Event of Loss, a Deemed Loss Event or the exercise of the
Cure Option, (i) the Lessee agrees to use its best efforts to comply with the
conditions respecting its assumption of all the obligations and liabilities of
the Owner Trustee under the Indenture and the Notes set forth in Section 3.9(b)
of the Indenture, and (ii) the Lessor agrees that, if the Lessee fails to assume
all the obligations and liabilities of the Owner Trustee under the Indenture and
the Notes in accordance with Section 3.9(b) of the indenture, not later than two
Business Days prior to the date on which the Lessee is required to make the
payments specified in Section 9(c) or 9(d), the Lessor will cause the Undivided
Interest and the Real Property Interest to be subjected to the Lien of the
Indenture by executing and delivering to the Indenture Trustee the Undivided
Interest Indenture Supplement.
SECTION 10. Insurance.
(a) Required Insurance. The Lessee will use its best efforts
to cause the Operating Agent to carry and maintain insurance required under the
ANPP Participation Agreement and will make all payments required of the Lessee
under the ANPP Participation Agreement in respect of such insurance. The Lessee
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will at all times maintain, directly or through the Operating Agent, policies of
casualty and liability insurance with respect to the Undivided Interest and the
Real Property Interest in such amounts and with such coverage as shall be
adequate in accordance with prudent utility practice. Any policies of insurance
in respect of destruction, damage, loss, theft or other casualty to the
Undivided Interest, the Real Property Interest, unit 2 or any part thereof shall
name the Lessor (and, to the extent practicable, the Owner Participant) as an
additional insured, as its interest (or their interests) may appear, and any
policies with respect to nuclear liability insurance with respect to the
Undivided Interest, the Real Property Interest, Unit 2, or any part thereof,
shall include all Indemnities as insureds through an omnibus definition of
"insured" or through endorsement: provided however, that if the Operating
Agent as trustee, shall become the loss payee under any policy of insurance
constituting Project Insurance, then the Lessor and the Owner Participant shall
be and be made beneficiaries of the trust arrangement under which the Operating
Agent acts as trustee. The Lessee shall, on or before March 1 of each year,
commencing March 1, 1987, furnish to the Lessor and the Owner Participant (A) a
report signed by the broker or brokers for the PVNGS insurance (or if insurance
is placed directly by the Operating Agent, a certificate signed by the Operating
Agent) (i) showing the insurance then maintained by the ANPP Participants with
respect to PVNGS, (ii) stating that no premiums are then delinquent, and (iii)
stating that the insurance maintained by the ANPP Participants with respect to
PVNGS is in accordance with the terms of (1) the ANPP Participation Agreement
and (2) this Section 10, (B) a report signed by the broker or brokers for the
Lessee's insurance (or it insurance is placed directly by the Lessee, a
certificate signed by the Lessee) showing the separate insurance, if arty, 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
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broker with respect to clause (A) (iii) (1) may be made in reliance upon a
schedule provided by the Lessee (a copy of which shall be attached) identifying
the insurance (by coverage, limits, insureds and other pertinent details)
required to be maintained under the ANPP Participation Agreement. Any report
with respect to clause (A) (iii) (2) may be made in reliance upon a similar
schedule provided by the Lessee (a copy of which shall be attached) identifying
the insurance required to be maintained under this Section 10. All insurance
proceeds paid in respect of damage, destruction, loss, theft or other casualty
to the Undivided Interest or the Real Property Interest shall be applied as
provided in Section 9(g), (h) or (i), as the case may be, subject, however, to
any priority allocations of such proceeds to decontamination and debris removal
set forth in the insurance policies or required under Applicable Law. In the
event that either the Operating Agent or the Lessee delivers a certificate
pursuant to clause (A) or (B) of the foregoing, the Owner Participant shall be
entitled to receive (if it so requests and if the insurer will issue the same) a
report from any insurer listed in such certificate.
(b) Permitted Insurance. Nothing in this Section 10 shall
prohibit the Lessee from placing, at its expense, insurance on or with respect
to the cost of purchasing replacement power, naming the Lessee as insured and/or
loss payee, unless such insurance would conflict with or otherwise limit the
availability of insurance to be provided or maintained in accordance with
Section 10(a). Nothing in this Section 10 shall prohibit the Lessor or the Owner
Participant from placing at its expense other insurance on or with respect to
Unit 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).
SECTION 11. Rights to Assign or sublease.
(a) Assignment or sublease by the Lessee. Without the prior
written consent of the Lessor, the Lessee shall not assign, sublease, transfer
or encumber (except for Permitted Liens) its leasehold interest in the Undivided
Interest or the Real Property Interest under this Facility Lease. The Lessee
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shall not, without the prior written consent of the Lessor and the Owner
Participant, part with the possession of, or suffer or allow to pass out of its
possession, the Undivided interest, the Real Property Interest or any interest
therein, except to the extent required pursuant to the ANPP Participation
Agreement or expressly permitted by the provisions of this Facility Lease or any
other Transaction Document.
(b) Assignment by Lessor as Security for ▇▇▇▇▇▇'s Obligations.
To secure the indebtedness evidenced by the Notes, the Lessor will assign to the
Indenture Trustee its right, title and interest to receive certain payments of
Rent (not including, in any event, Excepted Payments), to the extent provided in
the Indenture and may assign to the Indenture Trustee its right, title and
interest in the Undivided Interest and the Real Property Interest as
contemplated by Section 9(j). The Lessee hereby (a) consents to such assignment
pursuant to the terms of the Indenture, (b) agrees to pay directly to the
Indenture Trustee at the Indenture Trustee's Office (so long as the lien 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, without limitation, those
circumstances set forth in Section 4 and (d) agrees that, to the extent provided
in the Indenture and until the Indenture is discharged in accordance with its
terms, the Indenture Trustee shall have all the rights of the Lessor hereunder
with respect to Assigned Payments as if the Indenture Trustee had originally
been named herein as the Lessor.
SECTION 12. Lease Renewal.
Subject to the notice requirements set forth in Section 13(a),
at the end of the Basic Lease Term, provided that no Default, Event of Default,
Event of Loss or Deemed Loss Event shall have occurred and be continuing and the
Notes shall have been paid in full, the Lessee shall have the right to renew the
term of this Facility Lease for a period commencing January 15, 2016, and ending
oh the later of January 15, 2018 and the end of the Maximum Option Period (the
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renewal Term), during which the Basic Rent payable shall be the rental provided
in Section 3(a)(iii) and one-halt of the rental provided in Section 21.
SECTION 13. Notices for Renewal or Purchase; Purchase Options.
(a) Notice; Determination of Values; Appraisal Procedure. Not
later than three years nor earlier than five years prior to the expiration date
of the Basic Lease Term, and not later than three years nor earlier than five
years prior to the expiration date of the Renewal Term, as the case may be, the
Lessee shall give to the Lessor written notice of its election either to (A)
return the Undivided Interest arid the Real Property Interest to the Lessor
pursuant to Section 5, or (B) exercise the renewal option permitted by Section
12 (in the case of the notice delivered in respect of the expiration date of the
Basic Lease Term) or the purchase option permitted by Section 12(b). If the
notice specified in clause (B) of the preceding sentence is given three years
prior to the expiration of the Basic Lease Term, then not later than two years
prior to the expiration date of the Basic Lease Term, the Lessee will give the
Lessor written notice of its election either to exercise the renewal option
permitted by Section 12 or the purchase option permitted by Section 13(b). Any
such election shall be irrevocable as to the Lessee, but no such election shall
be binding on the Lessor if, on the effective date thereof, an Event of Default
shall have occurred and be continuing or an Event of Loss or a Deemed Loss Event
shall have occurred. Promptly after giving notice, (i) in case the renewal
option has been elected, the Maximum Option Period shall be determined by the
Appraisal Procedure, or (ii) in case the purchase option permitted by Section
13(b) has been elected, the Lessee and the Owner Participant shall agree upon
the Fair Market Sales Value of the undivided Interest and the Real Property
Interest, or, if within three months after the date of the Lessee's notice the
Lessee and the Owner Participant shall be unable so to agree, such value shall
be determined by the Appraisal Procedure.
(b) Purchase Option at Expiration of the lease Term. Subject to
the notice requirements set forth in Section 13(a), unless a Default or an Event
of Default shall have occurred and be continuing or an Event of Loss or Deemed
Loss Event shall have occurred, on the date of the expiration of the Basic Lease
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Term or the Renewal Term (if elected), the Lessee shall have the right to
purchase the Undivided Interest and the Real Property Interest for a purchase
price equal to the Fair Market Sales Value thereof.
(c) Purchase of the Undivided Interest; Payment, Etc. If the
Lessee shall have elected or be required to purchase the Undivided Interest and
the Real Property Interest pursuant to Section 13(b), payment by the Lessee of
the purchase price for the Undivided Interest and the Real Property Interest
shall be made in immediately available funds, whereupon the Lessor shall
Transfer the Undivided Interest and the Real Property Interest to the Lessee.
SECTION 14. Termination for obsolescence.
(a) Termination Notice. Notwithstanding any provision herein
contained to the contrary, unless a Default or an Event of Default shall have
occurred and be continuing or an Event of Loss or a Deemed Loss Event shall have
occurred, the Lessee shall have the option (provided that the Lessee shall have
delivered to the Lessor an Officers' Certificate to the effect that the Lessee's
Board of Directors has adopted and there is in effect a resolution determining
that Unit 2 is (A) uneconomic to the Lessee or (B) economically obsolete for any
reason; and provided that the Lessee shall be disposing of all its other leased
interests in Unit 2), on at least 360 days' prior written notice (a Termination
Notice) to the Lessor, the Owner Participant and the Indenture Trustee (which
notice shall be irrevocable)) to terminate this Facility Lease on any Basic Rent
Payment Date after January 15, 1999, and prior to January 15, 2013 (the
Termination Date). If the Lessee shall give the Lessor a Termination Notice, the
Lessee shall, as agent for the Lessor, use its best efforts to obtain cash bids
for the purchase of the undivided Interest and the Real Property Interest,
together with the interest of the Lessor under the Assignment and Assumption.
The Lessor shall also have the right to obtain such cash bids, either directly
or through agents other than the Lessee. The Lessee shall certify to the Lessor
within ten days after the Lessee's receipt of each bid (and, in any event, prior
to the Termination Date) the amount and terms thereof and the name and address,
of the party (which shall not be the Lessee or an Affiliate of the Lessee)
submitting such bid.
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(b) Right of Lessor to Retain Undivided Interest upon
Termination. If a Termination Notice has been delivered pursuant to Section
14(a), the Lessor may elect to retain, rather than sell, the Undivided Interest
and the Real Property Interest by giving notice to the Lessee and the indenture
Trustee prior to the Termination Date. It shall be a condition precedent to the
Lessor's right to retain the Undivided Interest and the Real Property Interest
that on or prior to the Termination Date the Lessor shall have paid (or made
provision for payment) to the Indenture Trustee, the unpaid principal amount of
all Notes Outstanding on such date and all premium, if any, and interest accrued
and unpaid on the date of payment. If the Lessor elects to retain the Undivided
Interest and the Real Property interest pursuant to this Section 14 (b), the
Lessee shall pay to the Lessor on the Termination Date the Basic Rent and any
other Rent due or accrued, as the case may be, to and including the Termination
Date, together with an amount equal to the excess, if any, of the Termination
Value as of the Termination Date over the highest bona fide offer received
pursuant to Section 14(a).
(c) Events on the Termination Date. If the Lessor has not
elected to retain the Undivided Interest and the Real Property Interest as
provided in Section 14(b), on the Termination Date the Lessor shall (upon
receipt of the sale price and all additional payments specified in the next
sentence) Transfer the Undivided Interest and the Real Property Interest for
cash to the bidder (which shall not be the Lessee or an Affiliate of the Lessee)
that shall have submitted the highest bid on or before the Termination Date: The
total sale price realized at such sale shall be retained by the Lessor (subject,
however, to the terms of the Indenture and the requirement that there shall have
been paid, or provision for payment made, to the Indenture Trustee the unpaid
principal amount of all Notes Outstanding on the Termination bate and all
premium, if any, and interest accrued and unpaid on the date of payment) and, in
addition, on the Termination Date the Lessee shall pay to the Lessor (A) the
excess, if any, of the Termination Value as of the Termination Date over the net
sale price of the Undivided Interest and the Real Property Interest and (B) any.
Basic Rent due or accrued, as the case may be, to and including the Termination
Date and shall pay to the Person or Persons entitled thereto all Supplemental
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Rent (other than Termination Value). Upon compliance by the Lessee with the
applicable provisions of this Section 14, the obligation of the Lessee to pay
Basic Rant due hereunder for any period after the Termination Date shall cease
and the Basic Lease Term shall end on the Termination Date; provided, however,
that, in the event of termination of this Facility Lease pursuant to this
Section 14, the obligations of the Lessee under the ANPP Participation Agreement
(except as therein expressly provided) and the Assignment and Assumption shall
continue in full force and effect and shall not be impaired by reason of any
such termination. If, other than as a result of the Lessor's election to retain
the Undivided Interest and the Real Property Interest as provided in Section
14(b), on or as of the Termination Date no such sale shall occur or the Lessee
shall not have complied in full with this Section 14, this Facility Lease shall
continue in full force and effect in accordance with its terms without prejudice
to the Lessee's right to exercise its rights under this Section 14 thereafter,
except that the Lessee shall not be entitled to deliver another Termination
Notice during the 3-year period. following such Termination Date. The Lessor
shall be under no duty to solicit bids, to inquire into the efforts of the
Lessee to obtain bias or otherwise take any action in connection with any such
sale other than, if the Lessor has not elected to retain the Undivided Interest
and the Real Property interest, to Transfer the Undivided Interest and the Real
Property Interest to the purchaser named in the highest bid certified by the
Lessee to the Lessor or obtained by the Lessor, against receipt of the payments
provided for herein (but only if such purchaser has obtained all Governmental
Action by the NRC necessary in connection therewith).
(d) Early Termination Notice. In the event that the Lessee
shall fail to exercise its renewal option or purchase option within the time
limit provided by Section 13 (a) , the Lessor shall have the option, on any
Basic Rent Payment Date thereafter, on at least 120 days prior written notice
(an Early Termination Notice) to the Lessee and the Indenture Trustee, to
terminate this Facility Lease on the Basic Rent Payment Date specified in such
notice (the Early Termination Date). My Early Termination Notice may be revoked
by the Lessor at any time on or prior to the Early Termination Date.
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(e) Events On the Early Termination Date. On the Early
Termination Date the Lessor shall, at its option, (i) Transfer the Undivided
Interest and the Real Property Interest to the bidder (other than the Lessee or
an Affiliate of the Lessee) selected by the Lessor or (ii) retain the Undivided
interest and the Real Property Interest. It shall be a condition precedent to
the Lessor's right to sell or retain the Undivided Interest and the Real
Property Interest that on or prior to the Early Termination Date the Lessor
shall have paid (or made provision for payment) to the Indenture Trustee the
unpaid principal amount of all Notes Outstanding on such date and all premium,
if any, and interest accrued and unpaid on the date of payment. The total sale
price realized at any such sale shall be retained by the Lessor and, in
addition, on the Early Termination Date the Lessee shall pay to the Lessor any
Basic Rent due or accrued, as the case may be, to and including the Early
Termination Date, and shall pay to the Person or Persons entitled thereto all
Supplemental Rent (other than Termination Value) . Upon compliance by the Lessee
with the applicable provisions of this Section 14, the obligation of the Lessee
to pay Basic Rent due thereunder for any period after the Early Termination Date
shall cease and the Lease Term shall end on the Early Termination Date;
provided, however, that in the event of the termination of this Facility Lease
pursuant to this Section 14, the obligations of the Lessee under the AMP?
Participation Agreement (except as therein expressly provided) and the
Assignment and Assumption shall continue in full force and effect and shall not
be impaired by reason of any such termination.
SECTION 15. Events of Default.
The term Event of Default, wherever used herein, shall mean
any of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary, or come about or be effected by
operation of law, or be pursuant to or in compliance with any Applicable Law or
Governmental Action)
(i) the Lessee shall rail to make, or cause to be made,
(x) payment of Casualty Value, Termination Value, Special
Casualty Value or payment due pursuant to exercise of the Cure
Option when due, (y) any payment of Basic Rent within S
Business Days after the same shall Become due or (z) any
payment of Supplemental Rent (other than Casualty Value,
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Termination Value, Special Casualty Value or payment due
pursuant to exercise of the Cure Option) Within 20 days after
the same shall become due or demanded, as the case may be; or
(ii) the Lessee shall fail to perform or observe any
covenant, condition or agreement to be performed or observed
by it under Sect ion 10(b) (3) (i) , 10(b) (3) (ii) 10(b) (3)
(iii) or 10(b) (3) (v) of the Participation Agreement or
Section 7, 10 (other than failure of the Lessee to cause to be
delivered the insurance certificates (other than a certificate
of the Lessee) described therein) or 11 of this Facility
Lease: or
(iii) the Lessee shall fail to perform or observe any
covenant or agreement to be performed or observed by it under
Section 10(b) (3) (viii) of the Participation Agreement and such
failure shall continue for a period of 30 days after there
shall; have been given to the Lessee by the Lessor or the Owner
Participant a notice specifying such failure and requiring it to
be remedied and stating that such notice is a "Notice of Default
hereunder: or
(iv) the Lessee shall fail to perform its agreements set
forth in Section 5(a) hereof; or
(v) the Lessee shall fail to perform or observe any
covenant, condition or agreement (other than covenants,
conditions or agreements referred to in clauses (i) through
(iv) above) to be performed or observed by it under this
Facility Lease or any other Transaction Document, and such
failure shall continue for a period of 30 days after there
shall have been given to the Lessee by the Lessor or the Owner
Participant a notice specifying such failure and requiring it
to be remedied and stating that such notice is a "Notice of
Default" hereunder: or
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(vi) any representation or warranty made by the Lessee, in
this Facility Lease, any other Transaction Document (other
than the Tax Indemnification Agreement) or any agreement,
document or certificate delivered by the Lessee in connection
herewith or therewith shall prove to have been incorrect in
any material respect when any such representation or warranty
was made or given and shall remain material and materially
incorrect at the time in question; or
(vii) the Lessee shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or
to the appointment of or taking of possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit
of creditors, or shall take any corporate action to authorize
any of the foregoing; or an involuntary case or other
proceeding shall be commenced against the Lessee seeking
liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed or unstayed for a period of 60 consecutive days;
or
(viii) final judgment for the payment of money in excess
of $l,O0O,0O0 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
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which the Lessee's right to receive its Generation Entitlement
Share in PVNGS is suspended by the other ANPP Participants, or
(2) the giving by any ANPP Participant of a notice under
Section 23.2 (or any comparable successor provision) of the
ANPP Participation Agreement respecting a default thereunder by
the Lessee and the lapse of 20 Business Days from the giving of
such notice without the Lessee having cured such default;
provided, however, that for purposes of this clause (2) if the
Lessee shall have, in good faith, disputed the existence or
nature of a default and such dispute shall have become the
subject of an arbitration under Section 24 (or any comparable
successor provision) of the ANPP Participation Agreement, such
20 Business Day period shall commence on the date of the final
determination of the board of arbitrators under such Section
24; or
(x) (1) the Lessee shall fail to pay when due (whether by
scheduled maturity, required prepayment, acceleration, demand
or otherwise) any Debt (which term shall mean (A) indebtedness
for borrowed money, (B) obligations as lessee under leases and
(C) obligations under direct or indirect guarantees in respect
of, and obligations (contingent or otherwise) to purchase or
otherwise acquire or otherwise to assure a creditor against
loss in respect of, indebtedness or obligations of others of
the kinds referred to in clause (A) or (B) above, in each case
if the principal amount (or equivalent) thereof (or in the
case of any operating lease, an equivalent on the assumption
such lease were a lease required to be capitalized in
accordance with generally accepted accounting principles) is
greater than $20,000,000 ($5,000,000 in the case of any PVNGS
operating lease)) of the Lessee, and such failure shall
continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt, but only
it the Lessee shall have received notice of such failure or a
Responsible Officer of the Lessee shall have actual knowledge
of such failure; or (2) any other default under any agreement
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or instrument relating to any such Debt, or any other event,
shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Debt, but
only if the Lessee shall have received notice of such default
or event or a Responsible Officer of the Lessee shall have
actual knowledge of such default or event.
SECTION 16. Remedies.
(a) Remedies. Upon the occurrence of any Event of Default and
so long as the same shall be continuing, the Lessor may, at its option, declare
this Facility Lease to be in default by written notice to such effect given to
the Lessee, and may exercise one or more of the following remedies as the Lessor
in its sole discretion shall elect:
(i) the Lessor may, by notice to the Lessee, rescind or
terminate this Facility Lease;
(ii) the Lessor may (x) demand that the Lessee, and
thereupon the Lessee shall, return possession of the undivided
interest and the Real Property Interest promptly to the Lessor
in the manner and condition required by, and otherwise in
accordance with the provisions of, this Facility Lease as if
the Undivided interest and the Real Property Interest were
being returned at the end of the Lease Term and the Lessor
shall not be liable for the reimbursement of the Lessee for
any costs and expenses incurred by the Lessee in connection
therewith and (y) subject to Applicable Law, enter upon the
PVNGS Site and take immediate possession of (to the exclusion
of the Lessee) the undivided Interest and the Real Property
Interest, by summary proceedings or otherwise, all without
liability to the Lessee for or by reason of such entry or
taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise;
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(iii) the Lessor may sell the Undivided Interest and the
Real Property Interest, or any part thereof, together with any
interest of the Lessor under the Assignment and :'assumption,
at public or private sale in a commercially reasonable manner,
as the Lessor may determine, free and clear of any rights of
the Lessee in the Undivided Interest and the Real Property
Interest and without any duty to account to the Lessee with
respect to such action or inaction or any proceeds with
respect thereto (except to the extent required by clause (v)
or (vi) below if the Lessor shall elect to exercise its rights
thereunder), in which event the Lessee's obligation to pay
Basic Rent hereunder for periods commencing after the date of
such sale shall be terminated or proportionately reduced, as
the case may be (except to the extent that Basic Rent is to be
included in computations under clause (v) or (vi) below if the
Lessor shall elect to exercise its rights thereunder);
(iv) the Lessor may hold, keep idle or lease to others
all or any part of the Undivided interest and the Real Property
Interest, as the Lessor in its sole discretion may determine,
free and clear of any rights of the Lessee and without any duty
to account to the Lessee with respect to such action or inaction
or for any proceeds with respect to such action or inaction,
except that the Lessee's obligation to pay Basic Rent for
periods commencing after the Lessee shall have been deprived of
use of the Undivided Interest and the Real Property interest
pursuant to this clause (iv) shall be reduced by an amount equal
to the net proceeds, if any, received by the Lessor from leasing
the Undivided Interest and the Real Property Interest to any
Person other than the Lessee for the same periods or any portion
thereof;
(v) except in the case of an Event of Default specified
in clause (iv) of Section 15 (subject, however, to the provisos
to the first sentence of Section 16(c) hereof), the Lessor may,
whether or not the Lessor shall have exercised or shall
thereafter at any time exercise its rights under clause (i),
(ii),
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(iii) or (iv) above, demand, by written notice to the Lessee
specifying a payment data which shall be a Basic Rent Payment
Date not earlier than 10 days after the date of such notice,
that the Lessee pay to the Lessor, and the Lessee shall pay to
the Lessor, on the Basic Rent Payment Date specified in such
notice, as liquidated damages for loss of a bargain and not as
a penalty (in lieu of the Basic Rent due after the Basic Rent
Payment Date specified in such notice), any unpaid Rent due
through the Basic Rent Payment Date specified in such notice
plus whichever of the following amounts the Lessor, in its sole
discretion, shall specify in such notice (together with
interest on such amount at the interest rate specified in
Section 3(b) (iii) from the Basic Rent Payment Date specified
in such notice to the date of actual payment) (and, in the case
of (D) below, upon receipt of such payment the Lessor shall (or
may prior to the receipt of such payment) Transfer to the
Lessee the Undivided Interest and the Real Property Interest):
(A) an amount equal to the excess, if any, of
(1) Casualty Value, computed as of the Basic Rent
Payment Date specified in such notice, over (2) the
Fair Market Rental Value of the Undivided Interest
and the Real Property Interest (determined on the
basis of the then actual condition of Unit 2) until
the end of the remaining useful life of Unit 2, after
discounting such Fair Market Rental Value
semi-annually to present value as of the Basic Rent
Payment Date specified in such notice at a rate of
10% per annum;
(B) an amount equal to the excess, if any, of
(1) such Casualty Value over (2) the Fair Market Sales
Value of the Undivided Interest and the Real Property
Interest (determined on the basis of the then actual
condition of Unit 2) as of the Basic Rent Payment Date
specified in such notice;
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6091.CHASEU2.LEASE.47:1
(C) an amount equal to the excess, if any, of
(1) the present value as of the Basic Rent Payment Date
specified in such notice of all installments of Basic
Rent until the end of the Basic Lease Term or the
Renewal Term, as the case may be, discounted
semi-annually at a rate of 10% per annum, over (2) the
present value as of such Basic Rent Payment Date of the
Fair Market Rental Value of the Undivided Interest and
the Real Property Interest (determined on the basis of
the then actual condition of Unit 2) until the end of
the Basic Lease Term or the Renewal Term, as the case
may be, discounted semi-annually at a rate of 10% per
annum:
or
(D) an amount equal to the higher of (1) the
Casualty Value (Special Casualty Value if the
(pound)vent of Default is an event specified in
clause (V), (viii) or (x) (2) of Section 15 hereof),
computed as of the Basic Rent Payment Date specified
in such notice or (2) the Fair Market Sales Value of
the Undivided Interest and the Real Property
interest;
(vi) if the Lessor shall have sold all the Undivided
interest and the Real Property Interest pursuant to clause (iii)
above, the Lessor, in lieu of exercising its rights under clause
(v) above with respect to the Undivided interest and the Real
Property Interest may, if it shall so elect, demand that the
Lessee pay to the Lessor and the Lessee shall pay to the Lessor
on the date of such sale, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of Basic Rent due for
periods commencing after the next Basic Rent Payment Date
following the date of such sale), any unpaid Basic Rent due
through such Basic Rent Payment Date, plus the amount of any
deficiency of the Sale Proceeds under the Casualty Value,
computed as of such Basic Rent Payment Date, together with
interest at the interest rate specified in Section 3(b) (iii)
on the amount of such Rent and such deficiency from the date
of such sale until the date of actual payment: or
-40-
6091.CHASEU2.LEASE.47:1
(vii) in the case of an Event of Default specified in
clause (iv) of Section 15, the Lessor may demand, by written
notice to the Lessee specifying a payment date which shall be
not earlier than the date 30 days after the last Basic Rent
Payment Date of the Lease Term, that the Lessee pay to the
Lessor, and the Lessee shall pay to the Lessor, on such last
payment date, as liquidated damages for loss of a bargain and
not as a penalty, any unpaid Rent due through such last Basic
Rent Payment Date plus an amount (not less than zero) equal to
the Fair Market Sales Value (determined without regard to the
obligation of the Lessee under Section l0(b)(3)(xi) of the
Participation Agreement) of the Undivided interest and the Real
Property Interest (determined on the basis of the actual
condition of Unit 2) determined as of such last Basic Rent
Payment Date (together with interest on such amount at the
interest rate specified in Section 3(b)(iii) from such last
Basic Rent Payment Date to the date of actual payment) and upon
receipt of such payment the Lessor shall (or may prior to the
receipt of such payment) Transfer to the Lessee the Undivided
Interest and the Real Property Interest); provided, however,
that the Lessor may not exercise the foregoing remedy if the
Lessor shall have failed to Transfer the Undivided Interest and
the Real Property Interest to the bidder (which shall not be the
Lessee or an Affiliate of the Lessee) that shall have submitted
the highest cash bid on or before the date on which such Event
of Default arose excluding, however, any such cash bid which the
Lessor or the Owner Participant determines was not submitted in
good faith, or as to which the bidder fails to certify to the
Lessor such information as the Lessor or Owner Participant may
reasonably request in order to determine whether or not such bid
was submitted in good faith (and the Lessor agrees that it will,
if and to the extent so requested by the Lessee on or after the
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6091.CHASEU2.LEASE.47:1
date 90 days preceding such last Basic Rent Payment Date, use
reasonable efforts (at the expense of the Lessee) for a period
ending on the day 90 days after such last Basic Rent Payment
Date, to find a Person willing to submit such cash bid;
provided, however, that the failure of the Lessor to do so
shall not relieve the Lessee of its obligations under this
clause (vii)).
(b) No Release. No rescission or termination of this
Facility Lease, in whole or in part, or repossession of the Undivided Interest
or the Real Property Interest or exercise of any remedy under paragraph (a) of
this Section 16 shall, except as specifically provided therein, relieve the
Lessee of any of its liabilities and obligations hereunder. In addition, the
Lessee shall be liable, except as otherwise provided above, for any and all
unpaid Rent due hereunder before, after or during the exercise of any of the
foregoing remedies, including all reasonable legal fees and other costs and
expenses incurred by the Lessor or the Owner Participant by reason of the
occurrence of any Event of Default or the exercise of the Lessor's remedies with
respect thereto. At any sale of the Undivided Interest, the Real Property
Interest or any part thereof pursuant to this Section 16, the Owner Participant,
the Lessor or the Indenture Trustee may bid for and purchase such property.
(c) Remedies cumulative. No remedy under paragraph (a) of this
Section 16 is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy provided under such paragraph (a) or otherwise
available to the Lessor at law or in equity; provided, however, that
notwithstanding anything to the contrary set forth in this Facility Lease, the
remedy set forth in section 16(a) (vii) shall be the sole and exclusive remedy
under this Section 16 in the case of an Event of Default specified in clause
(iv) of Section 15, unless the Lessee is in default of its payment obligations
under Section 16(a) (vii), in which case the Lessor may exercise its other
remedies under Section 16(a); (except that the maximum amount payable by the
Lessee in the event of the exercise by the Lessor of any of the remedies
provided for in Section 16 (a) (v) or (vi) shall not exceed the total amount
payable by the Lessee under Section 16(a) (vii) minus the amount provided in
subclause (2) of clause (A), (S) or (C) of such Section 16(a) (v) , if the
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6091.CHASEU2.LEASE.47:1
Lessor elects a remedy specified in said clause (A) , (S) or (C) , or the
deficiency referred to in Section 16(a)(vi), if the Lessor elects the remedy
specified in section 16 (a) (vi) hereof) . No express or implied waiver by the
Lessor of any Default or Event of Default hereunder shall in any way be, or be
construed to be, a waiver of any future or subsequent Default or Event of
Default. The failure or delay of the Lessor in exercising any right granted it
hereunder upon any occurrence of any of the contingencies set forth herein shall
not constitute a waiver of any such right upon the continuation or recurrence of
any such contingencies or similar contingencies and any single or partial
exercise of any particular right by the Lessor shall not exhaust the same or
constitute a waiver of any other right provided herein. To the extent permitted
by Applicable Law, the Lessee hereby waives any rights now or hereafter
conferred by statute or otherwise which may require the Lessor to sell, lease or
otherwise use the Undivided interest or Unit 2 in mitigation of the Lessor's
damages as set forth in paragraph (a) of this section 16 or which may otherwise
limit or modify any of the Lessor's rights and remedies provided in this Section
16.
(d) Exercise of Other Rights or Remedies. In addition to all
other rights and remedies provided in this Section 16, the Lessor may, except to
the extent expressly limited by provisions of this Section 16, exercise any
other right or remedy that may be available to it under Applicable Law or
proceed by appropriate court action to enforce the terms hereof or to recover
damages for the breach hereof.
(e) Special Cure Right of Lessee. In the event a "Notice of
Default" is given under Section 15(iii), the Lessee may, on or prior to the
occurrence of an Event of Default resulting therefrom, give written notice to
the Lessor stating that the Lessee has elected to exercise the option (the Cure
Option) provided in this Section 16(e), which election shall be irrevocable as
to the Lessee. Promptly after the giving of such notice, the Lessee and the
Owner Participant shall agree upon the Fair Market Sales Value of the Undivided
Interest and the Real Property Interest or, if they shall be unable so to agree
within one month after the date of the Lessee's notice, such value shall be
determined by the Appraisal Procedure. On the Basic Rent Payment Date next
following the date that such Fair Market sales Value shall have been determined,
-43-
6091.CHASEU2.LEASE.47:1
the Lessee shall pay to the Lessor all Rent due on such Basic Rent Payment Date,
plus an amount equal to the excess of (i) the greater of such Fair Market sales
Value and the Casualty Value determined as of such Basic Rent Payment Date over
(ii) the unpaid principal amount of the Notes Outstanding on such date after
giving effect to the payment, if any, of the principal installment due and
payable on such date. Upon compliance in full by the Lessee with the foregoing
provisions of this paragraph (e) and assumption by the Lessee of all the
obligations and liabilities of the Owner Trustee under the Indenture and the
Notes pursuant to Section 3.9(b) of the indenture1 the Lessor shall (so long as
no Default or Event of Default shall have occurred and be continuing) Transfer
the Undivided Interest and the Real Property interest to the Lessee. If the
Lessee shall not have assumed all the obligations and liabilities of the Owner
Trustee under the Indenture and the Notes in accordance with Section 3.9(b) of
the indenture, but the Owner Participant shall have received under Section 5.2
of the indenture all amounts required to be paid by the Lessee pursuant to this
paragraph (e) (including interest, if any, thereon pursuant to Section
3(b)(iii)), the Lessor shall retain the Undivided Interest and the Real Property
interest subject to the terms of this Facility Lease and Section 7(b) (4) of the
Participation Agreement; provided, however, that the obligation of the Lessee to
pay further Basic Rent shall be reduced to an amount on each Basic Rent Payment
Date equal to the aggregate amount of principal, premium, if any, and accrued
interest then payable on all Notes then Outstanding and this Facility Lease
shall become a security agreement for all purposes of Applicable Law. The Lessee
agrees to use its best efforts to comply with the conditions respecting its
assumption set forth in Section 3.9(b) of the 'Indenture and, failing such
assumption, agrees to accept a transfer of the Owner Participant's right, title
and interest in the Trust Estate pursuant to Section 7(b) (4) of the
Participation Agreement.
SECTION 17. Notices.
All communications and notices provided for in this Facility
Lease shall be in writing and shall be given in person (with signed receipt of
an officer of the Owner Participant in the case of a delivery to the Owner
Participant) or by means of telex, telecopy, or other wire transmission, or
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6091.CHASEU2.LEASE.47:1
mailed by registered or certified mail, or delivered by express delivery
service, addressed as provided in the Participation Agreement. All such
communications and notices given in such manner shall be effective on the date
of receipt of such communication or notice.
SECTION l8. Successors and Assigns.
This Facility Lease, including all agreements, covenants,
indemnities, representations and warranties, shall be binding upon and inure to
the benefit of the Lessor and its successors and permitted assigns, and the
Lessee and its successors and, to the extent permitted hereby, assigns.
SECTION 19. Right to Perform for Lessee.
If the Lessee shall fail to make any payment of Rent to be
made by it, or shall fail to perform or comply with any of its other agreements
contained herein, or fail to make any payment to be made by it under any ANPP
Project Agreement, or shall fail to perform or comply with any of its other
agreements contained in any ANPP Project Agreement, either the Lessor or the
Owner Participant may, but shall not be obligated to, tender such payment, or
effect such performance or compliance, and the amount of such payment and the
amount of all costs and expenses (including, without limitation, attorneys' and
other professionals' fees and expenses) of the Lessor or the Owned Participant,
as the case may be, incurred in connection with such payment or the performance
of or compliance with such agreement, as the case may be, together with interest
thereon at the Penalty Rate, shall be deemed Supplemental Rent, payable by the
Lessee upon demand. In the event that the Lessor or the Owner Participant shall
cure any default by the Lessee under the ANPP Participation Agreement, then (so
long as an Event of Default has occurred and is continuing) the Lessor, together
with each other Person contributing to such cure, shall be entitled (to the full
extent enforceable in accordance with Applicable Law) to receive the Generation
Entitlement Share of the Lessee under the ANPP Participation Agreement (not
limited to Unit 2), with each contributor to receive a percentage of such
Generation Entitlement Share equal to the percentage of the cure contributed
thereby.
-45-
6091.CHASEU2.LEASE.47:1
SECTION 20. Additional Covenants.
The Lessee agrees to comply with and to pay, as Supplemental
Rent, all amounts payable by it under the provisions of Section 13 of the
Participation Agreement and under the provisions of the Tax Indemnification
Agreement, which provisions are incorporated herein by this reference as fully
as if set forth in full at this place. The Lessee agrees to comply with its
covenants and agreements set forth in Sections 10(b), 14 and 16 or the
Participation Agreement and Articles III, IV, V and VI of the Assignment and
Assumption, which covenants and agreements are incorporated herein by this
reference as fully as if set forth in full at this place.
SECTION 21. Lease of Real Property Interest.
Pursuant to the Deed and the Assignment of Beneficial
Interest, the Lessee has sold to the Lessor the Real Property Interest. The
Lessor hereby grants to the Lessee a leasehold interest in the Real Property
interest, such leasehold to be coterminous with the lease of the Undivided
Interest hereunder and to be at a rent per annum equal to the respective
percentages of the Real Estate investment for the applicable period set forth or
derived from the respective percentages of Facility Cost in clauses (i), (ii)
and (iii), respectively, of Section 3(a) hereof (which rent is incorporated as
part of Basic Rent payable pursuant to Section 3(a) hereof).
SECTION 22. Amendments and Miscellaneous.
(a) Amendments in Writing. The terms of this Facility Lease
may not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever except by written instrument signed by the Lessor and the
Lessee.
(b) Survival. (1) All indemnities, representations and
warranties contained in this Facility Lease and the other Transaction Documents
and the Financing Documents and in any agreement, document or certificate
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive, and continue in effect following, the execution and delivery of
this Facility Lease and the expiration or other termination of this Facility
Lease.
-46-
6091.CHASEU2.LEASE.47:1
(2) The obligations of the Lessee to pay Supplemental Rent and
the obligations of the Lessee under Sections 5, 16, 19 and 20 hereof shall
survive the expiration or termination of this Facility Lease. The extension of
any applicable statute of limitations by the Owner Trustee, the Indenture
Trustee, the Lessee, the Owner Participant, the Loan Participant or any
Indemnitee shall not affect such survival. The obligations of the Lessee under
Section 20 are expressly made for the benefit of, and shall be enforceable by,
any Indemnitee, separately or together, without declaring this Facility Lease to
be in default and notwithstanding any assignment by the Lessor of this Facility
Lease or any of its rights thereunder or any disposition of all or any part of
any interest in the Undivided Interest, the Real Property Interest, Unit 2 or
any other property referred to in this Facility Lease or in this Facility Lease
or any other Transaction Document or Financing Document. All payments required
to be made pursuant to Section 20 shall be made directly to, or as otherwise
requested by, the Indemnitee entitled thereto upon writ-ten demand by such
Indemnitee.
(c) Severability of Provisions. Any provision of this Facility
Lease which may be determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by Applicable Law, the Lessee hereby waives any provision of law which renders
any provision hereof prohibited or unenforceable in any respect.
(d) True lease. This Facility Lease shall constitute an
agreement of lease and nothing herein or elsewhere shall be construed as
conveying to the Lessee any right, title or interest in or to the Undivided
Interest or the Real Property Interest, except as lessee only.
(e) Original Lease. The single executed original of this
Facility Lease marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and
containing the receipt of the Indenture Trustee thereon shall be the "Original"
-47-
6091.CHASEU2.LEASE.47:1
of this Facility Lease. To the extent that this Facility Lease constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Facility
Lease may be created through the transfer or possession of any counterpart other
than the "Original".
(f) Governing raw. 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 Trustee. FNB is entering into this
Facility Lease solely as Owner Trustee under the Trust Agreement and not in its
individual capacity. Anything herein to the contrary notwithstanding, all and
each of the representations, warranties, undertakings and agreements herein made
on the part of the Owner Trustee are made and intended not as personal
representations, warranties, undertakings and agreements by or for the purpose
or with the intention of binding FNB personally but are made and intended for
the purpose of binding only the Trust Estate, and this Facility Lease is
executed and delivered by the Owner Trustee solely in the exercise of the powers
expressly conferred upon it as trustee under the Trust Agreement; and no
personal liability or responsibility is assumed hereunder by or shall at any
time be enforceable against r~8 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
-48-
6091.CHASEU2.LEASE.47:1
and obligations of the Owner Trustee hereunder and the predecessor owner trustee
shall be released from all further duties and obligations hereunder.
(i) Disclosure. Pursuant to Arizona Revised Statutes Section
33-401, the beneficiary of the Trust Agreement is Chase Manhattan Realty Leasing
Corporation, a New York corporation whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇ Floor), flew York, New York 10081, Attention of Leasing Administrator. The
address of the beneficiary is also therein described. A copy of the Trust
Agreement is available for inspection at the offices of the Owner Trustee at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Corporate Trust
Division.
(j) Counterpart Execution. This Facility Lease may be executed
in any number of counterparts and by each of the parties hereto or thereto on
separate counterparts, all such counterparts together constituting but one and
the same instrument.
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6091.CHASEU2.LEASE.47:1
IN WITNESS WHEREOF, each of the parties hereto has caused this
Facility Lease to be duly executed in New York, New York by an officer thereunto
duly authorized.
THE FIRST NATIONAL RANK OF BOSTON, not
in its individual capacity, but solely as
Owner Trustee under a Trust Agreement,
dated as of December 15, 1986, with Chase
Manhattan Realty Leasing Corporation
By
---------------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY OF NEW MEXICO
By
---------------------------------
Senior Vice President and
Chief Financial Officer
6091.CHASEU2.LEASE.47:1
State of New York )
) ss.
County of New York )
The foregoing instrument was acknowledged before me this 15th
day of December, 1986, by ▇.▇. ▇▇▇▇▇▇▇, Senior Vice President and Chief
Financial Officer of Public Service Company of New Mexico, a New Mexico
corporation, on behalf of the corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Notary Public
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notary Public State of New York
No ▇▇-▇▇▇▇▇▇▇
Qualified In Queens County
Commission Expires March 30, 1987
State of New York )
) ss.
County of New York )
The foregoing instrument was acknowledged before me this 15th
day of December, 1986, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Assistant Vice President of The First
National Bank of Boston, a national banking association, on behalf of the
banking association as owner Trustee under that certain Trust Agreement dated as
of December 15, 1986.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Notary Public
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of New York
No. ▇▇-▇▇▇▇▇▇▇
Qualified in New York County
Commission Expires March 10, 1987
6091.CHASEU2.LEASE.47:1
SCHEDULE 1
TO FACILITY
LEASE
SCHEDULE OF CASUALTY VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
------------ -------------
15JAN87 106.53611
15JUL87 105.53335
15JAN88 107.07918
15JUL88 106.17858
15JAN89 109.42323
15JUL89 108.43402
15JAN90 111.01369
15JUL90 109.97758
15JAN91 112.00086
15JUL91 110.94964
15JAN92 112.38274
15JUL92 111.28104
15JAN93 112.14605
15JUL93 110.95717
15JAN94 111.21117
15JUL94 109.88662
15JAN95 109.49132
15JUL95 108.10138
15JAN96 107.43704
15JUL96 106.11823
15JAN97 105.42555
15JUL97 104.04483
15JAN98 103.23626
15JUL98 101.76861
15JAN99 100.82360
15JUL99 99.25609
15JAN100 98.15967
15JUL100 96.47795
15JAN101 95.22783
15JUL101 93.45710
SCHEDULE OF CASUALTY VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
------------ -------------
15JAN102 92.07347
15JUL102 90.21857
15JAN103 88.71529
15JUL103 86.77283
15JAN104 85.15757
15JUL104 83.11902
15JAN105 81.38095
15JUL105 79.23904
15JAN106 77.36934
15JUL106 75.11630
15JAN107 73.10563
15JUL107 70.73318
15JAN108 68.57156
15JUL108 66.07099
15JAN109 63.74791
15JUL109 61.10991
15JAN110 58.61418
15JUL110 55.82895
15JAN111 53.14878
15JUL111 50.20591
15JAN112 47.32863
15JUL112 44.21696
15JAN113 41.12929
15JUL113 37.83716
15JAN114 34.52492
15JUL114 31.83716
15JAN115 27.48785
15JUL115 23.79647
15JAN116 20.00000
SCHEDULE 2
TO
FACILITY LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
------------ ------------- ------------ -------------
15JAN87 106.53255 15JUN90 109.50229
15FEB87 107.01607 15JUL90 109.59771
15MAR87 107.50825 15AUG90 109.69058
15APR87 106.50559 15SEP90 109.19018
15MAY87 106.87841 15OCT90 109.27162
15JUN87 105.15431 15NOV90 109.35606
15JUL87 105.50694 15DEC90 109.32859
15AUG87 105.84743
15SEP87 105.06266 15JAN91 111.52602
15OCT87 105.38322 15FEB91 111.59608
15NOV87 105.71011 15MAR91 111.66906
15DEC87 105.77597 15APR91 111.24112
15MAY91 111.29506
15JAN88 107.02636 15JUN91 110.31900
15FEB88 107.28351 15JUL91 110.36054
15MAR88 107.54606 15AUG91 110.39851
15APR88 106.86252 15SEP91 109.92992
15MAY88 107.10110 15OCT91 109.95564
15JUN88 105.85414 15NOV91 109.98371
15JUL88 106.08006 15DEC91 109.92689
15AUG88 106.29372
15SEP88 105.72306 15JAN92 111.67582
15OCT88 105.92405 15FEB92 111.68749
15NOV88 106.12965 15MAR92 111.70138
15DEC88 106.16281 15APR92 111.34764
15MAY92 111.34349
15JAN89 109.27545 15JUN92 110.45252
15FEB89 109.45576 15JUL92 110.43700
15MAR89 109.64037 15AUG92 110.41618
15APR89 109.04760 15SEP92 109.97484
15MAY89 109.21337 15OCT92 109.94272
15JUN89 108.06254 15NOV92 109.91229
15JUL89 108.21768 15DEC92 109.82333
15AUG89 108.35955
15SEP89 107.82054 15JAN93 111.16133
15OCT89 107.95166 15FEB93 111.11368
15NOV89 108.08639 15MAR93 111.06757
15DEC89 108.08146 15APR93 110.77365
15MAY93 110.70939
15JAN90 110.72523 15JUN93 109.88905
15FEB90 110.84723 15JUL93 109.81248
15MAR90 110.97275 15AUG93 109.72935
15APR90 110.46123 15SEP93 109.30353
15MAY90 110.56836 15OCT93 109.20803
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
------------ ------------- ------------ -------------
15NOV93 109.11348 15MAR97 102.43914
15DEC93 108.98371 15APR97 102.22241
15MAY97 102.00569
15JAN94 109.90295 15JUN97 101.45723
15FEB94 109.78866 15JUL97 101.24050
15MAR94 109.67514 15AUG97 101.01314
15APR94 109.43114 15SEP97 100.69041
15MAY94 109.29832 15OCT97 100.46305
15JUN94 108.54183 15NOV97 100.23570
15JUL94 108.39558 15DEC97 100.00834
15AUG94 108.24139
15SEP94 107.82253 15JAN98 100.17698
15OCT94 107.65470 15FEB98 99.93844
15NOV94 107.48698 15MAR98 99.69990
15DEC94 107.30680 15APR98 99.46136
15MAY98 99.22283
15JAN95 107.81390 15JUN98 98.67364
15FEB95 107.63082 15JUL98 98.43510
15MAR95 107.44774 15AUG98 98.18483
15APR95 107.25645 15SEP98 97.84920
15MAY95 107.07337 15OCT98 97.59892
15JUN95 106.40136 15NOV98 97.34865
15JUL95 106.21828 15DEC98 97.09838
15AUG95 106.02733
15SEP95 105.65088 15JAN99 97.21230
15OCT95 105.45994 15FEB99 96.94969
15NOV95 105.26899 15MAR99 96.68708
15DEC95 105.07804 15APR99 96.42447
15MAY99 96.16186
15JAN96 105.34471 15JUN99 95.61030
15FEB96 105.14554 15JUL99 95.34769
15MAR96 104.94637 15AUG99 95.07212
15APR96 104.74719 15SEP99 94.72130
15MAY96 104.54802 15OCT99 94.44573
15JUN96 103.99654 15NOV99 94.17016
15JUL96 103.79737 15DEC99 93.89459
15AUG96 103.58961
15SEP96 103.27654 15JAN100 93.95063
15OCT96 102.06878 15FEB100 93.66145
15NOV96 102.86102 15MAR100 93.37227
15DEC96 102.65326 15APR100 93.08309
15MAY100 92.79391
15JAN97 102.87260 15JUN100 92.23815
15FEB97 102.65587 15JUL100 91.94897
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
------------ ------------- ------------ -------------
15AUG100 91.64572 15JAN104 78.10052
15SEP100 91.27744 15FEB104 77.72275
15OCT100 90.97585 15MAR104 77.34498
15NOV100 90.67428 15APR104 76.96722
15DEC100 90.37273 15MAY104 76.58945
15JUN104 76.02017
15JAN101 90.37535 15JUL104 75.65062
15FEB101 90.06210 15AUG104 75.26080
15MAR101 89.74885 15SEP104 74.83520
15APR101 89.43560 15OCT104 74.44539
15MAY101 89.12343 15NOV104 74.05557
15JUN101 88.56778 15DEC104 73.66576
15JUL101 88.26182
15AUG101 87.93741 15JAN105 73.49763
15SEP101 87.55829 15FEB105 73.09685
15OCT101 87.23403 15MAR105 72.69607
15NOV101 86.90977 15APR105 72.29529
15DEC101 86.58552 15MAY105 71.89451
15JUN105 71.31376
15JAN102 86.53183 15JUL105 70.92151
15FEB102 86.19716 15AUG105 70.50794
15MAR102 85.86248 15SEP105 70.06087
15APR102 85.52780 15OCT105 69.64729
15MAY102 85.19313 15NOV105 69.23372
15JUN102 84.63866 15DEC105 68.82015
15JUL102 84.31128
15AUG102 83.96535 15JAN106 68.61405
15SEP102 83.57514 15FEB106 68.18884
15OCT102 83.22921 15MAR106 67.76363
15NOV102 82.88328 15APR106 67.33842
15DEC102 82.53735 15MAY106 66.91321
15JUN106 66.32021
15JAN103 82.43880 15JUL106 65.90395
15FEB103 82.08273 15AUG106 65.46515
15MAR103 81.72665 15SEP106 64.99524
15APR103 81.37057 15OCT106 64.55645
15MAY103 81.01449 15NOV106 64.11765
15JUN103 80.45596 15DEC106 63.67885
15JUL103 80.10784
15AUG103 79.74041 15JAN107 63.43265
15SEP103 79.33501 15FEB107 62.98150
15OCT103 78.96758 15MAR107 62.53034
15NOV103 78.60015 15APR107 62.07918
15DEC103 78.23272 15MAY107 61.62802
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
------------ ------------- ------------ -------------
15JUN107 61.02195 15NOV110 40.33502
15JUL107 60.58029 15DEC110 39.77883
15AUG107 60.11471
15SEP107 59.62051 15JAN111 39.34802
15OCT107 59.15492 15FEB111 38.77615
15NOV107 58.68934 15MAR111 38.20428
15DEC107 58.22375 15APR111 37.63242
15MAY111 37.06055
15JAN108 57.93519 15JUN111 36.39286
15FEB108 57.45650 15JUL111 35.83382
15MAR108 56.97781 15AUG111 35.24363
15APR108 56.49912 15SEP111 34.63599
15MAY108 56.02043 15OCT111 34.04579
15JUN108 55.40040 15NOV111 33.45560
15JUL108 54.93186 15DEC111 32.86541
15AUG108 54.43786
15SEP108 53.91784 15JAN112 32.38166
15OCT108 53.42383 15FEB112 31.77483
15NOV108 52.92982 15MAR112 31.16799
15DEC108 52.43581 15APR112 30.56116
15MAY112 29.95433
15JAN109 52.10246 15JUN112 29.26861
15FEB109 51.59453 15JUL112 28.67581
15MAR109 51.08660 15AUG112 28.04955
15APR109 50.57867 15SEP112 27.40897
15MAY109 50.07074 15OCT112 26.78271
15JUN109 49.43582 15NOV112 26.15644
15JUL109 48.93884 15DEC112 25.53018
15AUG109 48.41465
15SEP109 47.86718 15JAN113 24.99040
15OCT109 47.34299 15FEB113 24.34648
15NOV109 46.81881 15MAR113 23.70257
15DEC109 46.29462 15APR113 23.05866
15MAY113 22.41475
15JAN110 45.91393 15JUN113 21.70984
15FEB110 45.37498 15JUL113 21.08124
15MAR110 44.83603 15AUG113 20.41669
15APR110 44.29708 15SEP113 19.74111
15MAY110 43.75813 15OCT113 19.07657
15JUN110 43.10734 15NOV113 18.41202
15JUL10 42.58022 15DEC113 17.74748
15AUG110 42.02403
15SEP110 41.44741 15JAN114 17.14841
15OCT110 40.89121 15FEB114 16.46511
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
------------ ------------- ------------ -------------
15MAR114 15.78181
15APR114 15.09851
15MAY114 14.41521
15JUN114 13.68984
15JUL114 13.02337
15AUG114 12.31816
15SEP114 11.60536
15OCT114 10.90016
15NOV114 10.19495
15DEC114 9.48974
15JAN115 8.82800
15FEB115 8.10291
15MAR115 7.37781
15APR115 6.65272
15MAY115 5.92763
15JUN115 5.18048
15JUL115 4.47388
15AUG115 3.72551
15SEP115 2.97317
15OCT115 2.22480
15NOV115 1.47643
15DEC115 0.72805
15JAN116 0.00000
Schedule 3
to
Facility Lease
SCHEDULE OF TERMINATION VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
------------ -------------
15JAN87 106.53611
15JUL87 105.53335
15JAN88 107.07918
15JUL88 106.17858
15JAN89 109.42323
15JUL89 108.43402
15JAN90 111.01369
15JUL90 109.97758
15JAN91 112.00086
15JUL91 110.94964
15JAN92 112.38274
15JUL92 111.28104
15JAN93 112.14605
15JUL93 110.95717
15JAN94 111.21117
15JUL94 109.88662
15JAN95 109.49132
15JUL95 108.10138
15JAN96 107.43704
15JUL96 106.11823
15JAN97 105.42555
15JUL97 104.04483
15JAN98 103.23626
15JUL98 101.76861
15JAN99 100.82360
15JUL99 99.25609
15JAN100 98.15967
15JUL100 96.47795
15JAN101 95.22783
15JUL101 93.45710
SCHEDULE OF TERMINATION VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
------------ -------------
15JAN102 92.07347
15JUL102 90.21857
15JAN103 88.71529
15JUL103 86.77283
15JAN104 85.15757
15JUL104 83.11902
15JAN105 81.38095
15JUL105 79.23904
15JAN106 77.36934
15JUL106 75.11630
15JAN107 73.10563
15JUL107 70.73318
15JAN108 68.57156
15JUL108 66.07099
15JAN109 63.74791
15JUL109 61.10991
15JAN110 58.61418
15JUL110 55.82895
15JAN111 53.14878
15JUL111 50.20591
15JAN112 47.32863
15JUL112 44.21696
15JAN113 41.12929
15JUL113 37.83716
15JAN114 34.52492
15JUL114 31.03977
15JAN115 27.48785
15JUL115 23.79647
15JAN116 20.00000
SCHEDULE 4
to
FACILITY LEASE
REAL PROPERTY INTEREST DESCRIPTION
The Real Property interest is a (i) .2333334% undivided
interest in the land described in r below, a (ii) .2644444% undivided interest
in the rights and interests described in III below, and (iii) a .2644444%
undivided interest in the rights and interests described in III below.
I. PVNGS PLANT SITE
PARCEL NO. 1: Lot Four (4); the Southwest quarter of the Northwest quarter; and
the West half of the Southwest quarter, all in Section Two (2), Township One (1)
South, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 2: All of Section Three (3), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
PARCEL NO. 3: The East half of Section Four (4), Township One (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.
6091.CHASEU2.LEASE.47:1
PARCEL NO. 7: The East half of Section Thirty-three (33), Township One (1)
North, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 8: All of Section Thirty-four. (34) Township One (1) Worth, Range Six
(6) West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
PARCEL NO. 9: The West half of Section Thirty-five (35), Township One (1) North,
Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 10: The Southeast quarter of Section Nine (9), Township One (1)
South, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona; EXCEPT the Northwest quarter thereof.
PARCEL NO. 11: All of Section Ten (10), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
EXCEPT the East half of the Southeast quarter thereof; and EXCEPT the North half
of the South half of the Northwest quarter of the Northwest quarter thereof.
PARCEL NO. 12: That part of the East half of the Southwest quarter of Section
Twenty-three (23), Township One (1) Worth, 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 i946.46 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
-2-
6091.CHASEU2.LEASE.47:1
58 degrees 43 minutes 35 seconds East, along said North right-of-way
line for a distance of 892.17 tact to a point on the said East line of
the East half of the Southwest quarter of Section 23; thence South 0
degrees On minutes 39 seconds East, along said East line for a distance
of 234.15 feet to a point on the said South right-of-way line; thence
continuing South 0 degrees On minutes 39 seconds East for a distance of
1483.31 feet to the true point of beginning;
EXCEPT the East 305 feet of the South 305 feet thereof; and
EXCEPT one-half of the minerals and mineral rights and mineral
estates of every kind and nature, as set forth in Deed recorded in
Docket 11652, page 52, Maricopa County Records.
PARCEL NO. 13: The North half of the South half of the Northwest quarter of the
Northwest quarter of Section Ten (10), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
II. HASSAYAMPA PUMPING STATION AND EFFLUENT PIPELINE
All real property, leases, licenses, easements, rights-of-way
and other property held by Title USA Company of Arizona Trust No. 530
established by that certain Trust Agreement dated October 15, 1975, as amended,
but excluding therefrom all improvements.
III. MISCELLANOUS REAL PROPERTY INTERESTS
Those ANPP Project Agreements (as defined in the AMP?
Participation Agreement), in addition to the Trust Agreement for Title USA
Company of Arizona Trust 530, consisting of leases, licenses, easements, and
permits, which provide land and land rights for (a) the pipeline to supply waste
water effluent to PVNGS from the 91st Avenue sewage treatment plant serving the
Phoenix Metropolitan area and (b) railroad access to the Nuclear Plant Site (as
defined in the ANPP Participation Agreement).
-3-
6091.CHASEU2.LEASE.47:1
SCHEDULE 5
to
FACILITY LEASE
UNDIVIDED INTEREST DESCRIPTION
The Undivided Interest is a (i) .7933333% undivided interest
in and to the property described under A below and (ii) a .2644444% undivided
interest in and to the property described in B below.
A. Unit 2 cc 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 NSSS). The NSSS is
comprised of a reactor vessel containing 241 fuel assemblies
with approximately 100 torn of enriched uranium (fuel
assemblies, however, are not part of Unit 2 and are not included
in the Undivided Interest being sold) two steam generators,
four reactor coolant pumps and various additional systems and
subsystems. The licensed thermal rating of the NSSS
is 3800 MW.
II. Unit 2 GE TC6F-43, 1800 RPM tandem-compound, six flow, reheat
turbine-generator including turbine, generator, moisture
separator-reheater, exciter, controls, and auxiliary subsystems.
The turbine-generator is conductor cooled and rated at 1,554 MVA
at 24,000 V, 3 phase, 60 Hz, 1.5 in Hg ABS back pressure, and
approximately 1,363 MW maximum gross electric output.
III. Unit 2 146 ft. inside diameter,steel-lined, prestressed concrete
cylindrical containment building with a hemispherical dome
designed for 60 psig. The containment building houses the
reactor system.
6091.CHASEU1.LEASE.47:1
IV. Unit 2 auxiliary systems and equipment including engineered
safeguards systems, reactor auxiliary systems and
turbine-generator auxiliary systems associated with items r, II,
and III above, extending to and including the unit 2 start-up
transformer.
V. Unit 2 cooling tower system consisting of three (3) mechanical
draft cooling towers, including a closed cycle circulating water
system, make-up water systems and essential spray ponds.
VI. Unit 2 radioactive waste treatment system, including liquid,
gaseous, and solid waste subsystems, controls, instrumentation,
storage, handling and shipment facilities.
VII. Unit 2 emergency diesel-generator system, including a
diesel-generator building which contains two diesel generators1
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.
BUT EXCLUDING:
I. Nuclear fuel for Unit 2, including spare fuel assemblies.
II. Spare Parts (Unit 2).
III. Transmission facilities (including any and all facilities
and equipment providing interconnection between the Unit 2
turbine generator and the ANPP High Voltage Switchyard,
including step-up transformers and standby equipment and
systems).
-2-
6091.CHASEU2.LEASE.47:1
IV. Oil and diesel fuel inventories (Unit2).
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 effluent.
III. Warehouse and related storage facilities and equipment.
BUT EXCLUDING:
I. Nuclear fuel, including spare fuel assemblies.
II. All transmission and ANPP High Voltage Switchyard facilities.
III. Administration Building.
IV. Administration Annex Building.
V. Technical Support Center.
VI. Visitor Center.
VII. External communication Systems and equipment, including
associated interconnections and computer data links.
VIII. Parking lot improvements, road improvements, fencing and dikes.
IX. Spare parts (common facilities)
X. Simulator.
XI. Oil and diesel fuel inventories.
XII. Real property, beneficial interest in Title USA Company of
Arizona Trust No. 530, and Project Agreement interests described
in Schedule 4.
-3-
6091.CHASEU2.LEASE.47:1
When Recorded, Return to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS AMENDED BY THIS
AMENTMENT NO.1 THERETO HAVE BEEN ASSIGNED TO, AND ARE TO A SECURITY IN FAVOR OF,
CHEMICAL BANK, AS INDEUTURE, TRUSTEE UNDER A ASSIGNMENT OF RENTS DATED AS OF
DECEMBER 15,1986. THIS AMENDMENT NO. 1 HAS BEEN EXECUTED IN SERVERAL
COUNTERPARTS. SEE SECTION 3(e) OF THIS AMENDMENT NO.1 FOR INFORMATION CONCERNING
THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
AMENDMENT NO.1
Dated am of April 8, 1987
to
FACILITY LEASE (Unit 2)
Dated as of December 15, 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 15, 1986,
with Chase Manhattan Realty
Leasing Corporation,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Original Facility Lease Recorded on December 17, 1986, as Instrument No.
86-695936, in Maricopa County Recorder's Office.
================================================================================
6091.CHASEU2.LEASE.203:1.
AMENDMENT NO. 1, dated as of April 8, 1987 (Amendment No. 1),
to the Facility Lease dated as of December 15, 1986, between THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, not in its individual capacity1
but solely as Owner Trustee under a Trust Agreement, dated as of December 15,
1986, with Chase Manhattan Realty Leasing Corporation a New York corporation
(the lessor), and PUBUC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation
(the Lessee).
WITNESSETH
WHEREAS, the Lessee and the Lessor have heretofore entered
into a Facility Lease dated as of December 15, 1986 (the Facility Lease),
providing for the lease by the Lessor to the Lessee of the Undivided Interest
and the Real Property Interest;
WHEREAS, the Lessee and the Lessor desire to amend the
Facility Lease as set forth in Section 2 hereof; and
WHEREAS, the Indenture Trustee has consented to this Amendment
No. 1 pursuant to the Request, Instruction and Consent effective on April 8,
1987;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and not
otherwise defined herein or in the recitals shall have the meanings assigned to
such term in Appendix A to the Facility Lease.
6091.CHASEU2.LEASE.203:1
SECTION 2. Amendments.
(a) A new Section 8(g) of the Facility Lease is inserted
therein, to read in its entirety as follows:
"(g) Useful Life. If the Lessee shall not theretofore have
exercised its option under section 13 to purchase the Undivided Interest
and the Real Property interest, then (i) if the Lessee shall not
theretofore have exercised its option to renew the Lease pursuant to
Section 12, on January 15, 2015, the Lessee shall initiate the Appraisal
Procedure to determine the remaining Economic Useful Life of Unit 2 as
of July 15, 2015 and (ii) on the Rent Payment Date occurring one year
prior to the end of the Renewal Term, if any, the Lessee shall initiate
the Appraisal Procedure to determine the remaining Economic Useful Life
of Unit 2 as of the date six months prior to the end of the Renewal
Term. The Lessee and the Lessor agree to use their beet efforts to
ensure that such determination of remaining economic useful life is made
no later than July 15, 2015 (in the case of the first such
determination) and six months prior to the end of the Renewal Term (in
the case of the second such determination) "
(b) Section l5(iv) of the Facility Lease is hereby amended to
read in its entirety as follows:
(iv) (1) the Lessee shall fail to perform its agreements sat
forth in section 5(a) hereof or (2) the remaining Economic Useful Life
of Unit 2, as determined under Section 8(g) if required thereby to be so
determined, shall be (x) as of the date six months prior to the end of
the Basic Lease Term, less than five and one-half years or (y) as of the
date six months prior to the end of the Renewal Term, three and one-half
years or"
-2-
6091.CHASEU2.LEASE.203:1
(c) Section 16(a) (vii) of the Facility Lease is hereby
amended to read in its entirety as follows:
"(vii) in the case of an Event of Default specified in clause
(iv) of Section 15, the Lessor may demand, by written notice to the
Lessee specifying a payment date which shall be (A) in the case of an
Event of Default specified in subclause (1) of said clause (iv), not
earlier than the date 30 days after the last Basic Rent Payment Date of
the Lease Term, and (B), in the case of an Event of Default specified in
subclause (2) of said clause (iv), the last Basic Rent payment Date of
the Lease Term, that the Lessee pay to the Lessor, and the Lessee shall
pay to the Lessor, on such payment date, as liquidated damages for loss
of a bargain and not as a penalty, any unpaid Rent due through such last
Basic Rent Payment Date plus an amount (not less than zero) equal to the
Fair Market Sales Value (determined without regard to the obligation of
the Lessee under Section l0 (b) (3) (xi) of the Participation Agreement)
of the Undivided Interest and the Real Property Interest (determined on
the basis of the actual condition of Unit 2) determined as of such last
Basic Rent Payment Date (together with interest on such amount at the
interest rate specified in Section 3 (b) (iii) from such last Basic Rent
Payment Date to the date of actual payment) and upon receipt of such
payment the Lessor shall (or may prior to the receipt of such payment)
Transfer to the Lessee the Undivided interest and the Real Property
Interest); provided, however, that the Lessor may not exercise the
foregoing remedy if the Lessor shall have failed to Transfer the
Undivided interest and the Real Property interest to the bidder (which
shall not be the Lessee or an Affiliate of the Lessee) that shall have
submitted the highest cash bid on or before the date on which such Event
of Default arose excluding, however, any such cash bid which the Lessor
or the owner Participant determines was not submitted in good faith, or
-3-
6091.CHASEU2.LEASE.203:l
as to which the bidder fails to certify to the Lessor such information
as the Lessor or owner Participant may reasonably request in order to
determine whether or not such bid was submitted in good faith (and the
Lessor agrees that it will, if and to the extent so requested by the
Lessee on or after the date 90 days preceding such last Basic Rent
Payment Date, use reasonable efforts (at the expense of the Lessee) for
a period ending on the day 90 days after such last Basic Rent Payment
Date, to find a Person willing to submit such cash bid; provided,
however, that the failure of the Lessor to do so shall not relieve the
Lessee of its obligations under this clause (vii))."
(d) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
"Decommissioning shall mean the decommissioning and retirement
from service of Unit 2, and the related possession, maintenance and
disposal of radioactive material used in or produced incident to the
possession and operation of Unit 2, including, without limitation, (i)
placement and maintenance of Unit 2 in a state of protective storage,
(ii) in-place entombment and maintenance of Unit 2, (iii) dismantlement
of Unit 2, (iv) any other form of decommis5ioning and retirement from
service required by or acceptable to the NRC and (V) all activities
undertaken incident to the implementation thereof and to the obtain-in;
of NRC authority therefor, including, without limitation, maintenance,
storage, custody, removal, decontamination, and disposition of
materials, equipment and fixtures, razing of Unit 3, removal and
disposition of debris from the PVNGS Site, and restoration of the PVNGS
site related to Unit 2 for unrestricted use."
(e) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
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Decommissioning Costs shall mean all costs, liabilities and
expenses relating or allocable to, or incurred in connection with, the
Decommissioning of Unit 2, including, without limitation, (i) any and
all costs of activities undertaken to terminate NRC licensing authority
and requirements to own, operate and possess Unit 2 and to possess
radioactive material used in or produced incident to the possession and
operation of Unit 2r and (ii) any and all costs of activities
undertaken, prior to termination of all NRS licensing authority and
requirements with respect to Unit 2 and the radioactive material used in
or produced incident to the possession and operation of Unit 2, to
possess, maintain, and dispose of radioactive material used in or
produced incident to the possession and operation of Unit 2."
(f) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
Economic Useful Life shall mean that period (commencing on the
date as of which the determination of Economic Useful Life is to be made
as provided in Section 8(g) of the Facility Lease and ending on the date
upon which either of the states of affairs described in clauses (i) and
(ii) below ceases to apply, or can reasonably be expected to cease to
apply, to Unit 2) during which (i) Unit 2 will be useful to, and usable
by, any owner or lessee thereof as a facility for the generation of
electric power and (ii) Unit 2 is an economic and commercially practical
facility for the generation of electric power capable of producing
(after taking into account costs of capital) a reasonable economic
return to the owner thereof. For the purposes of determinations under
clauses (i) and (ii) above, the following factors, among others, shall
be taken into account (as such factors obtain on the date of
determination and as such factors are reasonably expected to obtain in
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the future): (a) provisions of the ANPP Project Agreements (including,
without limitation, the ANPP Participation Agreement and the Material
Project Agreements (or substitutes for such Material Project Agreements
in effect on the date of determination)); (b) the actual condition and
performance of Unit 2; (c) the actual condition and performance of such
other facilities constituting PVNGS (including, without limitation, the
Common Facilities) as are integral to the operation of Unit 2; (4) the
actual condition of, and access of the ANPP Participants to, the ANPP
Switchyard and such other transmission facilities 15 are available and
necessary to permit the transmission of the maximum amount of power
generated by PVNGS; (e) the cost of obtaining, handling, storing and
disposing of nuclear fuel for Unit 2; (f) the projected coat (including,
without limitation, costs attributable to obligations to fund any
reserve fund maintained (or funded) by licensed owners and/or lessees of
Unit 2 to the extent dedicated to (or attributable to and freely
available with respect to) Unit 2 (the Unit 2 Fund)) or the
Decommissioning or retirement from service of Unit 2 including, without
limitation, Decommissioning Costs (taking into account the balance (plus
projected investment earnings thereon) of the Unit 2 Fund); (g) the cost
of Capital Improvements to Unit 2 then planned to be made, or reasonably
expected to be made; (h) the cost of acquiring or leasing the Unit 2
Retained Assets; (i) the current status of all Governmental Action with
respect to Unit 2 (including, without limitation, the License) required
to permit licensed owners and/or lessees to possess and (in the case of
the Operating Agent) to operate Unit 2 and such other facilities
constituting PVNGS (including, without limitation, the Common
Facilities) as are integral to the operation of Unit 2; and (j) the
relative cost of producing an amount of electric power and energy
equivalent to the generating capacity of Unit 2 from other facilities
then available in the region serviced, or reasonably expected to be
serviced, by PVNGS."
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6091.CHASEU2.LEASE.203:1
(e) Paragraph (B) (a) of the definition of "Acceptable Change"
set forth in Appendix A to the Facility Lease is hereby amended to read in its
entirety as follows:
"(c) the amount payable by all licensees of a single nuclear
facility in respect of such facility in any one year and with respect to
any one "nuclear incident" under any deferred premium or similar plan
required by Applicable Law shall not exceed $36 million (subject to
adjustment as provided in subclause (y) of the preceding clause (b))."
SECTION 3. Miscellaneous.
(a) Effective Date of Amendments. The amendments set forth in
section 2 hereof shall be and become effective upon the execution hereof by the
parties hereto.
(b) Counterpart Execution. This Amendment No. 1 may be
executed in any number of counterpart and by each of the parties hereto on
separate counterparts; all such counterparts shall together constitute but one
and the same instrument.
(c) Governing Law. This Amendment No. 1 has been negotiated
and delivered in the State of New York and shall be governed by, and be
construed in accordance with, the laws of the State of New York, except to the
extent that pursuant to the law of the State of Arizona such law is mandatorily
applicable hereto.
(d) Disclosure. Pursuant to Arizona Revised Statutes Section
33-401, the beneficiary of the Trust Agreement is Chase Manhattan Realty Leasing
Corporation, a New York corporation. The address of the beneficiary is ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. A copy of the Trust Agreement is
available for inspection at the offices of the Owner Trustee at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Corporate Trust Division.
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6091.CHASEU2.LEASE.203:1
(e) Amendment No. 1. The single executed original of this
Amendment No. 1 marked THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and
containing the receipt of the Indenture Trustee thereon shall be the "Original"
of this Amendment No. 1. To the extent that this Amendment No. 1 constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Amendment
No. 1 may be created or continued through the transfer or possession of any
counterpart other than the "Original".
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6091.CHASEU2.LEASE.203:1
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to Facility raise to be duly executed by an officer thereunto
duly authorized.
THE FIRST NATIONAL BANK OF BOSTON, not in
its individual capacity, but solely as
Owner Trustee under a Trust Agreement,
dated as of December 15, 1986, with
Chase Manhattan Realty Leasing
Corporation
By
-------------------------------
Assistant Cashier
PUBLIC SERVICE COMPANY OF
NEW MEXICO
By
------------------------------
Vice President and
Corporate Controller
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6091.CHASEU2.LEASE.203:l
State of New Mexico )
) ss:
County of Bernalillo )
The foregoing instrument was acknowledged before me this 8th
day of April, 1987, by ▇. ▇. ▇▇▇▇▇▇ the Vice President and Corporate Controller
of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of
the corporation.
-------------------
Notary Public
Commonwealth of Massachusetts )
) ss:
County of Suffolk )
The foregoing instrument was acknowledged before me this 8th
day of April, 1987, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an Assistant Cashier of THE FIRST
NATIONAL BANK OF BOSTON, a national banking association, on behalf of the
banking association as Owner Trustee under the Trust Agreement dated as of
December 15, 1985 with Chase Manhattan Realty Leasing Corporation.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Notary Public
▇▇▇▇▇ ▇▇▇▇▇▇
Notary Public
My commission Expires January 28,1994
609l.CHASEU2.LEASE.203:l