[Conformed]1
[Confirms]1
October 25, 1994
October 25, 1994
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COLLATERAL TRUST INDENTURE
dated as of December 16, 1985
Among
FIRST PV FUNDING CORPORATION,
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
CHEMICAL BANK,
as Trustee
Providing for the Issuance from Time to Time of
Securities To Be Issued in
One or More Series
================================================================================
PALO VERDE NUCLEAR GENERATING STATION
----------
1 Exhibits B through F are not part of the Collateral Trust Indenture as
originally executed.
#30122041.1
FIRST PV FUNDING CORPORATION
PUBLIC SERVICE COMPANY OF NEW MEXICO
Reconciliation and tie between Indenture
dated as of December 16, 1985
and
Trust Indenture Act of 1939
Section of
Section of Act Indenture
-------------- ---------
310 (a) (1) 9.09
(2) 9.09
(3) Inapplicable
(4) Inapplicable
(b) 9.08, 9.10(a),
9.10(d),
9.10(e), 9.11
(c) Inapplicable
311(a)(b) 9.13
(c) Inapplicable
312 (a) 10.01
10.02(a)
(b) 10.02(b)
(c) 10.02(c)
313 (a) 10.03(a)
313 (b) (1) 10.03(b)(1)
(2) 10.03(b)
(c) 10.03(a) & (b)
(d) 10.03(c)
314 (a) 10.04
(b) 5.06
(c) (1) 1.02
(2) 1.02
(3) Inapplicable
(d) (1) Inapplicable
(2) Inapplicable
(3) Inapplicable
(e) 1.02
315 (a) (1) 9.01(a)(1)
(2) 9.01(a)(2)
#30122041.1
Section of
Section of Act Indenture
-------------- ---------
315 (a) (last clause) 9.01(a)(2)
(b) 9.02
(c) 9.01(b)
(d) (1) 9.01(c)(1)
(2) 9.01(c)(2)
(3) 9.01(c)(3)
(e) 8.10
316 (a) (1) (A) 8.07
(B) 8.08
(2) Inapplicable
(a) (last sentence) 1.01
("Outstanding")
(b) 8.11
317 (a) (1) 8.05(a)
(2) 8.05(d)
(b) 5.03
9.14(c)(2)
318 (a) 1.07
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
constitute a part of the Indenture.
#30122041.1
COLLATERAL TRUST INDENTURE, dated as of December 16, 1985,
among FIRST PV FUNDING CORPORATION, a Delaware corporation (hereinafter called
the Company), having its principal office and mailing address at Corporation
Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, PUBLIC SERVICE
COMPANY OF NEW MEXICO, a New Mexico corporation, having its principal office and
mailing address at ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
called PNM), and CHEMICAL BANK, a New York banking corporation, as Trustee
(hereinafter called the Trustee), having its corporate trust office at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trustee Administration.
RECITALS
WHEREAS, the Company has duly authorized the creation of an
issue of its debentures, notes or other evidences of indebtedness to be issued
in one or more series (the Securities) up to such principal amount or amounts as
may from time to time be authorized in accordance with the terms of this
Indenture; and to secure the Securities and to provide for the authentication
and delivery thereof by the Trustee, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all acts necessary to make this Indenture a valid
instrument for the security of the Securities, in accordance with its and their
terms, have been done;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, to secure the
payment of theprincipal of, premium (if any) and interest on all the Securities
authenticated and delivered hereunder and issued by the Company and outstanding,
and the performance of the covenants therein and herein contained, and in
consideration of the premises and of the covenants herein contained and of the
purchase of the Securities by the holders thereof, and of the sum of one dollar
($1.00) paid to the Company by the Trustee at or before the delivery hereof, the
receipt whereof is hereby acknowledged, the Company by these presents does
grant, bargain, sell, release, convey, assign, pledge, transfer, mortgage,
hypothecate, and confirm unto the Trustee all and singular the following (which
collectively are hereinafter called the Pledged Property), excluding, in any
event, any moneys which are specifically stated herein not to constitute part of
the Pledged Property, to wit:
CLAUSE FIRST
All Pledged Lessor Notes (as hereinafter defined) as shall be
actually pledged and assigned by the Company to the Trustee, together with the
interest of the Company (if any) in the Lease Indentures (as hereinafter
defined) securing said Lessor Notes, pursuant to the Series Supplemental
Indentures or other supplemental indentures to be executed and delivered as
provided in this Indenture.
CLAUSE SECOND
All right, title and interest of the Company in, to and under
any agreements with respect to commitment fees or other amounts payable by PNM
entered into between PNM and the Company in connection with the issuance and
sale of any series of Securities, if actually assigned by the Company to the
Trustee pursuant to a Series Supplemental Indenture or other supplemental
indentures to be executed and delivered as provided in this Indenture.
CLAUSE THIRD
All the proceeds received by the Company from the sale of the
Securities, all the tolls, rents, issues, profits, products, revenues and other
income of the property subjected or required to be subjected to the lien of this
Indenture, and all the estate, right, title and interest of every nature
whatsoever of the Company in and to the same and every part thereof.
#30122041.1
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CLAUSE FOURTH
Any property, including cash, that may, from time to time
hereafter be subjected to the lien and/or pledge hereof by the Company or which
pursuant to any provision of this Indenture or any Series Supplemental Indenture
or other supplemental indentures to be executed and delivered as provided in
this Indenture may become subjected to the lien and/or pledge hereof; and the
Trustee is hereby authorized to receive the same at any time as additional
security hereunder. Such subjection to the lien hereof of any such property as
additional security may be made subject to any reservations, limitations or
conditions which shall be set forth in a written instrument executed by the
Company and/or by the Trustee respecting the scope or priority of such lien
and/or pledge or the use and disposition of such property or the proceeds
thereof.
TO HAVE AND TO HOLD the Pledged Property unto the Trustee and
its successors and assigns forever subject to the terms of this Indenture,
including, without limitation, Section 12.01.
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate
benefit and security of the holders from time to time of all the Securities
authenticated and delivered hereunder and issued by the Company and outstanding,
without any priority of any one Security over any other.
AND UPON THE TRUSTS and subject to the covenants and
conditions hereinafter set forth.
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
SECTION 1.011. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(4) all reference in this Indenture to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Nine, are defined
in that Article.
"Act" when used with respect to any Holder has the meaning
specified in Section 1.04.
#30122041.1
2
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authorized Agent"means any Paying Agent or Security Registrar.
"Board of Directors" means the board of directors of the
Company, when used with respect to the Company, and either the board of
directors, or any committee of that board duly authorized to act for it
hereunder, when used with respect to PNM.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company or PNM, as the case may
be, to have been duly adopted by the Board of Directors of such entity and to be
in full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The City of New
York, New York, the City of Boston, Massachusetts or the City of Albuquerque,
New Mexico are authorized by law to remain closed.
"Change" with respect to any instrument means any consent,
amendment, waiver, approval, notice or direction or the execution, grant or
giving of any thereof.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by its President or
one of its Vice Presidents, and by its Treasurer, Secretary, or one of its
Assistant Treasurers or Assistant Secretaries, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time corporate trust business of the Trustee
shall be administered, which at the date of this Indenture is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, N.Y. 10041, Attention: Corporate Trustee Administration.
"Equity Investor" means any Equity Investor identified in a
Schedule to a Series Supplemental Indenture, until a successor or assignees
thereof shall have become such pursuant to the applicable provisions of the
Participation Agreement to which such Equity Investor is a party, and thereafter
"Equity Investor" means such successor or assignees; "Equity Investors" means
each and every Equity Investor.
"Event of Default" has the meaning specified in Section 8.01.
"Extension Letter" means the Extension Letter, to be dated the
date of issue of a Pledged Lessor Note and addressed to the Trustee by the
parties to the Participation Agreement, extending to the Trustee the
representations, warranties and covenants of such parties set forth in the
Participation Agreement.
#30122041.1
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"Holder" or "Securityholder" means a Person in whose name a
Security is registered in the Security Register.
"Indenture" means this instrument as originally executed and
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Initial Interest Date" with respect to any series of
Securities means the date of the Stated Maturity for the initial installment of
interest on Securities of such series.
"Lease Indenture" means any Lease Indenture and any Lease
Indenture Supplement identified in a Schedule to a Series Supplemental
Indenture, as such Lease Indenture and Lease Indenture Supplement may be amended
or supplemented from time to time pursuant to the applicable provisions thereof
and of this Indenture; "Lease Indentures" means each and every Lease Indenture.
"Leases" means any Lease and any Lease Supplement identified
in a Schedule to a Series Supplemental Indenture, as such Lease and Lease
Supplement may be amended from time to time pursuant to the applicable
provisions thereof and of this Indenture; "Leases" means each and every Lease.
"Lease Indenture Trustee" means the Lease Indenture Trustee
identified in Schedule 1 to a Series Supplemental Indenture, until a successor
Lease Indenture Trustee shall have become such pursuant to the applicable
provisions of the Lease Indenture to which such Lease Indenture Trustee is a
party, and thereafter "Lease Indenture Trustee" means the successor Lease
Indenture Trustee; "Lease Indenture Trustees" means each and every Lease
Indenture Trustee.
"Lease Payments" with respect to any Lease shall mean amounts
payable by PNM under such lease in respect of (i) interim rent (if any), (ii)
basic rent, (iii) casualty value, (iv) special casualty value, (v) termination
value or (vi) any other amounts payable in connection with termination of the
Lease, in each case as more fully described in and assigned pursuant to the
related Lease Indenture; "Lease Payments" with respect to all Leases means the
aggregate of Lease Payments under any and all Leases.
"Lessee Request" and "Lessee Order" mean, respectively, a
written request and a written order signed in the name of PNM by its President
or one of its Vice Presidents or Assistant Vice Presidents and by its Treasurer
or Secretary or one of its Assistant Treasurers or Assistant Secretaries, or by
any authorized agent of PNM, and delivered to the Trustee.
"Lessor" or "Owner Trustee" means any Lessor or Owner Trustee
identified in a Schedule to a Series Supplemental Indenture, until a successor
shall have become such pursuant to the applicable provisions of the related
Trust Agreement identified in said Schedule, and thereafter "Lessor" or "Owner
Trustee" means such successor; "Lessors" or "Owner Trustees" means each and
every Lessor or Owner Trustee.
"Lien of this Indenture" or "lien hereof" means the lien
created by these presents, or created by any concurrent or subsequent conveyance
to the Trustee (whether made by the Company or any other Person and whether
pursuant to a Series Supplemental Indenture or otherwise), or otherwise created,
constituting any property a part of the Pledged Property held by the Trustee for
the benefit of the Securities Outstanding hereunder.
"Obligor", when used with reference to the Securities or this
Indenture, means PNM and any successor to the obligations of PNM under a Lease,
and does not include the Trustee, the Lease Indenture Trustee, an Owner Trustee
or an Equity Investor so long as they have not assumed such obligations;
provided, however, that no reference to PNM as an Obligor herein shall be
construed as implying any guaranty by PNM of the Securities.
#30122041.1
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"Officers' Certificate" means a certificate signed by the
President or a Vice President, and by the Treasurer, the Secretary, or one of
the Assistant Treasurers or Assistant Secretaries, of PNM, any Lessor or the
Company, as the case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel for
any Person either expressly referred to herein or otherwise satisfactory to the
Trustee which may include, without limitation, counsel to the Company, any
Lessor, the Lease Indenture Trustee, any Equity Investor or PNM, whether or not
such counsel is an employee of any of them.
"Outstanding" when used with respect to Securities means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with
the Trustee in trust for the Holders of such Securities as
provided in Section 12.01, provided that, if such Securities
are to be redeemed (otherwise than through the operation of
the Sinking Fund), notice of such redemption has been duly
given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities paid in full or in exchange for or
in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture unless held by a Holder
in whose hands such Securities constitute valid obligations of
the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Securities Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or owned by PNM, any Lessor or any Equity Investor, or any
Affiliate of PNM, of any Lessor or of any Equity Investor, shall be disregarded
and deemed not to be Outstanding, unless such Persons own 100% of the Securities
owned by all Persons, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or PNM, any Lessor or any
Equity Investor or any Affiliate of the Company, of PNM, of any Lessor or of any
Equity Investor.
"Participation Agreement" means any Participation Agreement or
other similar Lessor Note purchase document to which the Company is a party
identified in a Schedule to a Series Supplemental Indenture, as such
Participation Agreement or other purchase document may be amended from time to
time pursuant to the applicable provisions thereof and of this Indenture;
"Participation Agreements" means each and every Participation Agreement.
"Paying Agent" means any Person acting as Paying Agent
hereunder pursuant to Section 9.14.
"Permitted Investment" means (i) direct obligations of the
United States of America, or (ii) obligations fully guaranteed by the United
States of America, or (iii) certificates of deposit issued by, or bankers'
acceptances of, or time deposits with, any bank, trust company or national
banking association incorporated or doing business under the laws of the United
States of America or one of the States thereof (but not exceeding $15,000,000 in
principal amount of all certificates of deposit and time deposits at any given
time for any one bank, trust company or national banking association) having a
combined capital and surplus of at least $300,000,000 (including the Trustee,
any Lease Indenture Trustee, any Lessor and any Paying Agent if such conditions
are met), or (iv) commercial paper of companies incorporated or doing business
under the laws of the United States of America or one of the States thereof (but
#30122041.1
5
not exceeding $15,000,000 in principal amount at any given time for any one
company) and in each case having a rating assigned to such commercial paper by
Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. (or, if neither
such organization shall rate such commercial paper at any time, by any
nationally recognized rating organization in the United States of America) equal
to the highest rating assigned by such organization, or (v) repurchase
agreements fully collateralized by an obligation of the type described in clause
(i) or (iv) above, pursuant to which a bank, trust company or national banking
association referred to in clause (iii) above or another financial institution
having a net worth of at least $200,000,000 is obligated to repurchase any such
obligation not later than 90 days after the purchase of any such obligation.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the corporate trust office of the Trustee and such other
place or places, if any, where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified in the Series
Supplemental Indenture setting forth the terms of the Securities of such series.
"Pledged Lessor Note" means any Lessor Note identified in a
Schedule to a Series Supplemental Indenture, as such Lessor Note may be amended
or supplemented from time to time pursuant to the applicable provisions thereof,
of the related Lease Indenture and of this Indenture; "Pledged Lessor Notes"
means each and every Pledged Lessor Note.
"Pledged Property" has the meaning set forth in the Granting
Clauses.
"PNM" means Public Service Company of New Mexico, a New Mexico
corporation, and, subject to the provisions hereof, its successors and assigns.
"Predecessor Securities" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.09 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Principal Instruments" means the Pledged Lessor Notes, the
Lease Indentures, the Participation Agreements and the Leases.
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" when used with respect to any Security to
be redeemed means the price (inclusive of accrued interest) at which it is to be
redeemed pursuant to this Indenture and the terms of such Security.
"Regular Record Date" for the Stated Maturity of any
installment of interest means the 15th day (whether or not a Business Day) next
preceding such Stated Maturity.
"Responsible Officer" when used with respect to the Trustee
means any officer of the Trustee customarily performing corporate trust
functions.
"Security Register" has the meaning specified in Section 2.08.
"Security Registrar" means any Person acting as Security
Registrar hereunder pursuant to Section 9.14.
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"Series Supplemental Indenture" means an indenture
supplemental to this Indenture, for the purpose of specifying, in accordance
with Article Two hereof, the form of the Securities of any series, and/or for
the purpose of subjecting to the Lien of this Indenture the Pledged Lessor Notes
related to such series; "Series Supplemental Indentures" means each and every
Series Supplemental Indenture.
"Sinking Fund" has the meaning specified in Section 7.01.
"Special Record Date" for the payment of any defaulted
interest means a date fixed by the Trustee pursuant to Section 2.10.
"Stated Maturity" when used with respect to any Security or
any installment of interest thereon means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force at the date as of which this instrument was executed, except
as provided in Section 11.06.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
SECTION 1.012. Compliance Certificates and Opinions.
Upon any application or request by the Company, any Lessor or
PNM to the Trustee to take any action under any provision of this Indenture, the
Company, such Lessor or PNM, as the case may be, shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished; provided that any action which may be taken under any provision of
this Indenture by a Lessor may be taken by PNM on behalf of such Lessor pursuant
to the agency granted to PNM pursuant to the Participation Agreement unless and
until the Trustee has been notified of the revocation of such agency.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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SECTION 1.013. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, of
any Lessor or of PNM may be based, in so far as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, in so far as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company, of any Lessor or of PNM, as the case may be,
stating that the information with respect to such factual matters is in the
possession of the Company, such Lessor or PNM, respectively, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous.
Any Opinion of Counsel stated to be based on the opinion of
other counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.014. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and to
PNM. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 9.01) conclusive in favor of
the Trustee, the Company and PNM, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of any notary public
or other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer oaths that the Person executing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or other such officer and where such execution
is by an officer of a corporation or association or a member of a partnership,
on behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind the
Holder of every Security issued upon the transfer thereof or in exchange
therefor or in lieu thereof, whether or not notation of such action is made upon
such Security.
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SECTION 1.015. Notices, etc., to Trustee, PNM and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, by the Company, by PNM or by an
Authorized Agent shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the Trustee at
its Corporate Trust Office, or
(2) the Company by the Trustee, by any Holder, by PNM or by an
Authorized Agent shall be sufficient for every purpose hereunder if in
writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee and PNM by the Company for such
purpose, or
(3) PNM by the Trustee, by any Holder, by the Company or by an
Authorized Agent shall be sufficient for every purpose hereunder if in
writing and mailed, first-class postage prepaid, to PNM addressed to it
at the address of its principal office specified in the first paragraph
of this instrument or at any other address previously furnished in
writing to the Trustee and the Company by PNM for such purpose.
SECTION 1.016. Notices to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders, and any notice which
is mailed in the manner herein provided shall be conclusively presumed to have
been duly given.
SECTION 1.017. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
Notwithstanding the foregoing, the provisions of the TIA contained in Sections
9.08, 9.13 and 10.03 shall not become operative under this Indenture until this
Indenture shall have been qualified under the TIA.
SECTION 1.018. Effect of Heading and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 1.019. Successors and Assigns.
All covenants, agreements, representations and warranties in
this Indenture by the Trustee, PNM and the Company shall bind and, to the extent
permitted hereby, shall inure to the benefit of and be enforceable by their
respective successors and assigns, whether so expressed or not.
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SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the Holders of Securities, and the Lessors and the Equity
Investors as expressly provided herein, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
This Indenture and each Security are being executed and
delivered in the State of New York, shall be deemed to be contracts made in such
State and for all purposes shall be construed in accordance with and governed by
the laws of the State of New York.
SECTION 1.13. Legal Holidays.
In any case where the Redemption Date or the Stated Maturity
of any Security or of any installment of interest, or any date on which any
defaulted interest is proposed to be paid, shall not be a Business Day, then
(notwithstanding any other provision of this Indenture) payment of interest
and/or principal (and premium, if any) need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the Redemption Date or at the Stated Maturity, or on the date on which
the defaulted interest is proposed to be paid, and no interest shall accrue for
the period from and after such Redemption Date or Stated Maturity, or date for
the payment of defaulted interest, as the case may be.
ARTICLE II.
THE SECURITIES
SECTION 1.001. Forms Generally.
The Securities of each series shall be in the form (not
inconsistent with this Indenture) as shall be established in one or more Series
Supplemental Indentures, in each case with such appropriate insertions,
omissions, substitutions and other variations in and to such form as are
required or permitted by this Indenture and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with any rules of any securities exchange or
to conform to general usage, all as may be determined by the officers executing
such Securities, as evidenced by their execution thereof.
SECTION 1.002. Form of Trustee's Authentication.
The Trustee's certificate of authentication on all Securities
shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
CHEMICAL BANK
as Trustee
By
------------------
Authorized Officer
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SECTION 1.003. Amount Unlimited; Issuable in Series;
Limitations on Issuance.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. Securities may be
issued hereunder up to the aggregate principal amount which may be authorized
from time to time by the Board of Directors of the Company.
The terms of any series of Securities relative to payment of
principal thereof, and premium (if any) and interest thereon, need not
correspond exactly to the schedule for such payments under the related Pledged
Lessor Notes.
The Securities may be issued in one or more series. There
shall be established in one or more Series Supplemental Indentures, prior to the
issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities) and
the form or forms of Securities of such series;
(2) any limit upon the aggregate principal amount of the
Securities of such series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other
Securities of such series pursuant to Section 2.07, 2.08, 2.09, 6.06 or
11.07);
(3) the date or dates on which the principal of the Securities
of such series is payable;
(4) the rate or rates at which the Securities of such series
shall bear interest, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue,
the interest payment dates on which such interest shall be payable and
the record dates for the determination of Holders to whom interest is
payable;
(5) the place or places where the principal and interest
on Securities of such series shall be payable (if other than as
provided in Section 5.02);
(6) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of such series
may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase
or repay Securities of such series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the price
or prices at which and the period or periods within which and the terms
and conditions upon which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any multiple
thereof, the denominations in which Securities of such series shall be
issuable;
(9) any other terms of such series (which terms shall not be
inconsistent with the provisions of this Indenture); and
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(10) any trustees, authenticating or paying agents, warrant
agents, transfer agents or registrars with respect to the Securities of
such series;
provided, however, that, after giving effect to the issuance of a new series of
the Securities and the subjection to the Lien of this Indenture of the related
Pledged Lessor Notes, the average of the daily balance of Excess Funds for each
fiscal year of the Company shall not exceed 10% of the average of the aggregate
principal amount of Securities Outstanding on each day in such fiscal year. For
purposes of the foregoing proviso, "Excess Funds" shall mean, for any day,
amounts actually paid to the Trustee under the Pledged Lessor Notes in excess of
amounts then due and payable in respect of Securities.
SECTION 1.004. Authentication and Delivery of Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee shall thereupon authenticate and deliver such Securities in accordance
with such Company Order, without any further action by the Company. In
authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities the Trustee shall be
entitled to receive, and (subject to Section 9.01) shall be fully protected in
relying upon:
(1) an executed Series Supplemental Indenture;
(2) an Officers' Certificate of the Company (a) certifying as
to resolutions of the Board of Directors of the Company by or pursuant
to which the terms of the Securities of such series were established,
(b) certifying that all conditions precedent under this Indenture to
the Trustee's authentication and delivery of such Securities have been
complied with and (c) certifying that (x) the terms of the documents
referred to in clauses (3) and (4) below are not inconsistent with the
terms of this Indenture as then and theretofore supplemented and (y)
such documents comply with Exhibit A hereto (if applicable);
(3) fully executed counterparts (but not the original thereof)
of (a) the Lease Indentures under which were issued the Pledged Lessor
Notes relating to such series of Securities and (b) the Leases relating
to such Pledged Lessor Notes;
(4) the original of the Pledged Lessor Notes relating to such
series of Securities;
(5) signed copies, either addressed to the Trustee or
accompanied by statements that the Trustee may rely on such documents,
of all certificates and opinions of counsel delivered to the Company in
connection with its purchase pursuant to the applicable participation
Agreements of the Pledged Lessor Notes relating to such series of
Securities and, to the extent not covered by such opinions, Opinions of
Counsel (x) to the effect that: (a) the form or forms and the terms of
such Securities have been established by a Series Supplemental
Indenture as permitted by Sections 2.01 and 2.03 in conformity with the
provisions of this Indenture; (b) such Securities, when authenticated
and delivered by the Trustee and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and binding obligations of the Company; and (c)
all laws and requirements in respect of the execution and delivery by
the Company of the Securities have been complied with; and (y) covering
such other matters as the Trustee may reasonably request; and
(6) duly executed Extension Letters relating to the Pledged
Lessor Notes;
provided, however, that if a series of Securities is to be authenticated by the
Trustee in advance of the actual delivery to the Trustee of the Pledged Lessor
Notes relating thereto, (X) the documents described in the foregoing clauses
(2)(c), (3), (4), (5) (other than the opinion described in subclauses (x) and
(y)) and (6) need not be delivered in connection with
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such authentication, but shall be delivered in connection with the release of
the proceeds of the sale of such series of Securities in accordance with
Sections 2.15 and 13.01 hereof and (Y) the form of the Series Supplemental
Indenture shall be appropriately modified to reflect the later delivery and
pledge of the related Pledged Lessor Notes.
Receipt by the Trustee of the Officer's Certificate referred
to in clause (2) above shall be conclusively presumed for all purposes of this
Indenture to establish that the Lease Indentures, the Leases and the Pledged
Lessor Notes referred to in such certification comply with the requirements of
Exhibit A hereto.
The Trustee shall have the right to decline to authenticate
and deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Company or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees and/or
responsible officers shall determine that such action would expose the Trustee
to personal liability.
SECTION 1.005. Form and Denominations.
The Securities of each series shall be in registered form and
may have such letters, numbers or other marks of identification and such legends
or endorsements printed, lithographed or engraved thereon, as may be required to
comply with the rules of any securities exchange or to conform to any usage in
respect thereof, or as may, consistently herewith, be prescribed by the Board of
Directors of the Company or by the officers executing such Securities, such
determination by said officers to be evidenced by their signing the Securities.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
All Securities of any one series shall be substantially
identical except as to denomination and Stated Maturity and except as may
otherwise be provided herein or in the Series Supplemental Indenture setting
forth the terms of the Securities of such series.
SECTION 1.006. Execution of Securities.
The Securities shall be executed on behalf of the Company by
its President or one of its Vice Presidents under its corporate seal reproduced
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any such officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time such signatures were affixed the proper
officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.
SECTION 1.007. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities of such series which are printed,
lithographed, typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
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series at the office or agency of the Company, for such purpose, in the Place of
Payment, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like aggregate
principal amount of definitive Securities of such series of authorized
denominations. Until so exchanged such temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 1.008. Registration, Transfer and Exchange.
The Trustee shall cause to be kept at the Corporate Trust
Office a register in which, subject to such reasonable regulations as the
Company may prescribe, the Company shall provide for the registration of
Securities and of registration of transfers and exchanges of Securities. This
register and, if there shall be more than one Security Registrar, the combined
registers maintained by all such Security Registrars, are herein sometimes
referred to as the "Security Register".
Upon surrender for registration of transfer of any Security of
any series at the Corporate Trust Office, or at any office or agency maintained
for such purpose pursuant to Section 9.14(a), the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series and of the same
Stated Maturity for principal and interest and of a like aggregate principal
amount.
At the option of the Holders, Securities of any series may be
exchanged for an equal aggregate principal amount of Securities of the same
series and of the same Stated Maturity for principal and interest and of any
authorized denominations, upon surrender of the Securities to be exchanged at
the Corporate Trust Office, or at any office or agency maintained for such
purpose pursuant to Section 9.14(a). Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee or any other
Authenticating Agent shall authenticate and deliver, the Securities which the
Securityholder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same security and benefits under this Indenture, as
the Securities surrendered upon such transfer or exchange.
Every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be required of any Securityholders
participating in any transfer or exchange of Securities in respect of such
transfer or exchange, but the Security Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Securities, other than exchanges
pursuant to Sections 2.07, 6.06 or 11.07 not involving any transfer.
The Security Registrar shall not be required (i) to issue,
transfer or exchange any Security of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption under Section
6.02 or 7.02 and ending at the close of business on the day of such mailing, or
(ii) to transfer or exchange any Security so selected for redemption in whole or
in part except the unredeemed portion of any Security selected for redemption in
part.
SECTION 1.009. Mutilated, Destroyed, Lost and Stolen
Securities.
If (i) any mutilated Security is surrendered to the Trustee,
or the Company, the Security Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and (ii) there
is delivered to the Company, to the Security Registrar and to the Trustee
evidence to their satisfaction of the ownership and authenticity thereof, and
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company, to the Security
Registrar or to the Trustee that such Security has been acquired by a bona fide
#30122041.1
14
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company may, upon
satisfaction of the conditions set forth in clauses (i) and (ii) of the
preceding paragraph, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Security Registrar may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the security and benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 1.10. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually
paid or duly provided for, at any Stated Maturity of an installment of interest
shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. At the option of the Company, payment of interest
on any Security may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, at any Stated Maturity of an
installment of interest shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder; and such
defaulted interest may be paid by the Company, at its election in each case, as
provided in paragraph (1) or paragraph (2) below:
(1) The Company may elect, which election shall be at the
direction of any Lessor whose Pledged Lessor Note is in default in
respect of the payment of interest and who is proposing to make payment
of all or part of such defaulted interest, to make payment of any
defaulted interest to the Persons in whose names the Securities of such
series in respect of which interest is in default (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such defaulted interest, which
shall be fixed in the following manner. Such Lessor shall notify the
Trustee and the Paying Agent in writing of the amount of defaulted
interest proposed to be paid on each such Security and the date of the
proposed payment, and at the same time there shall be deposited with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such defaulted interest or there shall be made
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such defaulted
interest as in this paragraph provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such defaulted interest which
shall be not more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company and the Security Registrar of such Special
Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such defaulted interest and the
Special Record Date therefor to be mailed, first class postage prepaid,
to each holder of a Security of such series at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such defaulted
interest and the
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Special Record Date therefor having been mailed as aforesaid, such
defaulted interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities)
are registered on such Special Record Date and shall no longer be
payable pursuant to the following paragraph (2).
(2) The Company may make, or cause to be made, payment of any
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities in
respect of which interest is in default may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
paragraph, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security, and each such
Security shall bear interest from whatever date shall be necessary so that
neither gain nor loss in interest shall result from such transfer, exchange or
replacement.
SECTION 1.11. Persons Deemed Owners.
Prior to due presentment for registration of transfer, the
Person in whose name any Security is registered shall be deemed to be the owner
of such Security for the purpose of receiving payment of principal of (and
premium, if any), and (subject to Section 2.10) interest on, such Security and
for all other purposes whatsoever, whether or not such Security be overdue,
regardless of any notice to anyone to the contrary.
SECTION 1.12. Cancellation.
All Securities surrendered for payment, redemption, credit
against any Sinking Fund payment or redemption payment, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee for cancellation. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be destroyed and certification of their
destruction delivered to the Company unless, by Company Request, the Company
otherwise directs.
SECTION 1.13. Dating of Securities; Authentication.
Each Security of any series shall be dated the date of the
original issuance of the Securities of such series by the Company, which date
shall be specified by the Company in the Company Order delivered to the Trustee
pursuant to Section 2.04 in connection with the original authentication and
delivery of the Securities of such series. No Security shall be secured by or
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security a certificate of authentication,
in the form provided for herein, executed by the Trustee by the manual signature
of one of its Responsible Officers, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
SECTION 1.14. Source of Payments; Rights and Liabilities of
Lessors and Equity Investors.
All payments of principal and premium (if any) and interest to
be made under the Securities and this Indenture (other than payments made in
connection with an optional redemption by a Lessor) shall be made only from
assets subject to the lien of this Indenture or the income and proceeds received
by the Trustee therefrom. Each Holder, by its acceptance of a Security, agrees
that (x) it will look solely to the assets subject to the lien of this Indenture
or the income and proceeds received by the Trustee therefrom to the extent
available for distribution to such Holder as herein provided and (y) none of any
Equity Investor, any Lessor, any Lease Indenture Trustee or the Trustee is
liable to any Holder or, in the case of any Equity Investor, Lessor and Lease
Indenture Trustee, to the Trustee for any amounts payable under any Security or,
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except as provided herein with respect to the Trustee, for any liability under
this Indenture. An Equity Investor, Lessor or Lease Indenture Trustee shall not
have any duty or responsibility under this Indenture or the Securities to any
Holder or to the Trustee.
SECTION 1.15. Sale of Securities; and Application of Proceeds
from the Sale of Securities.
(a) Promptly upon receipt by the Company of the proceeds from
any sale of a series of the Securities, the Company shall deposit such proceeds
with the Trustee. The funds so deposited shall be held by the Trustee in a
separate account as part of the Pledged Property and shall be invested, applied
and distributed by the Trustee as provided herein.
(b) Subject to the provisions of Section 13.01, upon the
issuance of the Pledged Lessor Notes related to any series of Securities and the
delivery thereof to the Trustee to be subjected to the Lien of this Indenture
pursuant to a Series Supplemental Indenture, the Trustee shall pay to the Lessor
obligated in respect of any such Pledged Lessor Note, out of funds held by the
Trustee in such separate account as Pledged Property, an amount equal to the
principal amount of such Pledged Lessor Note in respect of which such Lessor is
obligated. All payments to be made by the Trustee to any Lessor shall be made in
immediately available funds at the respective offices designated by such Lessor.
ARTICLE II.
PROVISIONS AS TO PLEDGED PROPERTY
SECTION 1.001. Holding of Pledged Securities.
The Trustee is authorized in its discretion to cause to be
registered in its name, as Trustee, or in the name of its nominee, any and all
coupon bonds which it may receive as part of the Pledged Property, or it may
cause the same to be exchanged for registered bonds without coupons of any
denomination. The Trustee may cause to be transferred into its name, as Trustee,
or into the name of its nominee, any and all registered bonds which it may
receive as part of the Pledged Property, or may cause such registered bonds to
be exchanged for coupon bonds. All Pledged Lessor Notes assigned to and pledged
with the Trustee pursuant to any provision of this Indenture or any Series
Supplemental Indenture shall be endorsed in blank for transfer or be accompanied
by proper instruments of assignment satisfactory to the Trustee, duly executed
by the Company. The Company will deliver promptly to the Trustee such documents,
certificates and opinions as the Trustee may reasonably request in connection
with subjection of any securities to the Lien of this Indenture to the extent
contemplated hereby.
SECTION 1.002. Disposition of Payments on Pledged Property.
Unless and until all Outstanding Securities have been paid in
full or provision for the payment of such Securities has been made in accordance
with this Indenture, the Trustee shall be entitled to receive all principal,
premium (if any) and interest paid in respect of any Pledged Lessor Notes and
interest paid on bonds or other obligations or indebtedness which may be subject
to the lien of this Indenture and shall apply the same to the payment of the
principal of, and premium (if any) and interest on, the Securities when and as
they become due and payable pursuant to, and in accordance with, this Indenture.
The Trustee shall duly note on the Schedules attached to the Pledged Lessor
Notes or by other appropriate means all payments of principal, premium, if any,
and interest made on the Pledged Lessor Notes.
SECTION 1.003. Exercise of Rights and Powers Under Pledged
Lessor Notes and Lease Indentures.
The Trustee shall not take any action as the holder of the
Pledged Lessor Notes to direct any Lease Indenture Trustee in any respect or to
vote any Pledged Lessor Note or any portion thereof except as specified in this
Section. The Trustee shall give notice to the Securityholders of the occurrence
of any Indenture Event of Default or Indenture Default under any Lease Indenture
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(as defined therein), and of every Event of Loss, Deemed Loss Event, or Special
Loss Event occurring under a Lease, but only to the extent the same shall
actually be known by an officer in the corporate trustee administration
department of the Trustee. The Trustee may, at any time, and shall, upon the
request of any Lease Indenture Trustee made to the Trustee to give any direction
or to vote its interest in the Pledged Lessor Notes, request from
Securityholders directions as to (i) whether or not to direct such Lease
Indenture Trustee to take or refrain from taking any action which holders of a
Pledged Lessor Note have the option to direct and (ii) how to vote any Pledged
Lessor Note if a vote has been called for with respect thereto. In addition, any
Securityholder may at any time request the Trustee to direct, or to participate
in the direction of, any action under any Lease Indenture to the extent that the
Trustee may do so under such Lease Indenture. In directing any action or casting
any vote as the holder of a Pledged Lessor Note, the Trustee shall specify to
the Lease Indenture Trustee the principal amount of the Pledged Lessor Note
which is in favor of the action or vote, the principal amount of the Pledged
Lessor Note which is opposed to the action or vote, and the principal amount of
the Pledged Lessor Note which is not taking any position for the action or vote.
Such principal amounts shall be determined by allocating the total principal
amount of the Pledged Lessor Note with respect to which direction was requested
in accordance with the principal amount of Securities taking corresponding
positions or not taking any position. In addition, the Trustee shall certify to
the Lease Indenture Trustee that the principal amounts of Securities taking such
corresponding positions or not taking any position was determined in accordance
with the provisions of this Indenture.
SECTION 1.004.Certain Actions in Case of Judicial Proceedings.
In case all or any part of the property of any Lessor or any
other Person which may be deemed an obligor in respect of the Pledged Lessor
Notes shall be sold at any judicial or other involuntary sale, the Trustee shall
receive any portion of the proceeds of such sale accruing on the Pledged
Property held hereunder, and such proceeds shall be held as provided in Section
3.05.
SECTION 1.005. Cash Held by Trustee Treated as a Deposit.
Any and all cash held by the Trustee under any provision of
this Indenture may be treated by the Trustee, until required to be paid out
hereunder, as a deposit, in trust, without any liability for interest.
ARTICLE I.
WITHDRAWAL OF COLLATERAL.
SECTION 1.011. Withdrawal of Collateral.
Except as provided in Section 4.02 and Article Thirteen, none
of the Pledged Property shall be subject to withdrawal unless and until all
Outstanding Securities have been paid in full or provision for such payment has
been made in accordance with the terms of this Indenture and the Trustee shall
have received the documents and opinions required by Article Twelve.
SECTION 1.012. Reassignment of Pledged Lessor Notes upon
Payment.
Upon receipt of payment in full of the principal of, and
premium (if any) and interest on, any Pledged Lessor Note held by the Trustee,
the Trustee shall deliver to the Company said Pledged Lessor Note and any
instrument of transfer or assignment necessary to reassign to the Company said
Pledged Lessor Note and the interest of the Company (if any) in the Lease
Indenture relating thereto; provided that nothing herein contained shall prevent
the Trustee from presenting any Pledged Lessor Note to a Lease Indenture Trustee
for final payment in accordance with the applicable provisions of the related
Lease Indenture.
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ARTICLE II.
COVENANTS
SECTION 1.021. Payment of Principal, Premium (if any) and
Interest.
The Company will duly and punctually pay, or cause to be paid,
the principal of, and premium, if any, and interest on, the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 1.022. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for transfer or
exchange and where notices and demands to or upon the Company in respect of
Securities and this Indenture may be served. PNM will give prompt written notice
to the Trustee of the location, and of any change in the location, of each such
office or agency. If at any time the Company shall fail to maintain any such
office or agency or the Company or PNM shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
SECTION 1.023. Money for Security Payments to be Held in
Trust.
All moneys deposited with the Trustee or with any Paying Agent
for the purpose of paying the principal of or premium, if any, or interest on
Securities shall be deposited and held in trust for the benefit of the Holders
of the Securities entitled to such principal, premium, if any, or interest,
subject to the provisions of this Section. Moneys so deposited and held in trust
shall not be a part of the Pledged Property but shall constitute a separate
trust fund for the benefit of the Holders of the relevant Securities.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in
trust for the payment of the principal of or premium, if any, or interest on any
Security and remaining unclaimed for three years (or such lesser period as may
be required by law to give effect to this provision) after such principal,
premium or interest has become due and payable shall be paid to the Company on
Company Request (to the extent such monies shall have been deposited by the
Company) or to any other Person on its request (to the extent such monies shall
have been deposited by such other Person); and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company or such
other Person, to the extent such monies shall have been paid to the Company or
such other Person, as the case may be, for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company or, to the extent such monies are to be paid to another Person, such
other Person cause to be mailed to each such Holder notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing, any unclaimed balance of such
money then remaining will be repaid to the Company or such other Person.
SECTION 1.024. Maintenance of Corporate Existence.
The Company, at its own cost and expense, will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence, rights and franchises, except as otherwise specifically
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permitted in this Indenture; provided, however, that the Company shall not be
required to preserve any right or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Securityholders.
SECTION 1.025. Protection of Pledged Property.
The Company and PNM will from time to time execute and deliver
all such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance, and other instruments
necessary to
(i) grant more effectively all or any portion of the
Pledged Property,
(ii) maintain or preserve the lien of this Indenture
or carry out more effectively the purposes hereof,
(iii) perfect, publish notice of, or protect the
validity of, any grant made or to be made by this Indenture,
(iv) enforce any of the Securities, or
(v) preserve and defend title to any Securities or
other instrument included in the Pledged Property and the
rights of the Trustee, and of the Securityholders, in such
Securities or other instrument against the claims of all
persons and parties.
The Company hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required pursuant to this Section.
SECTION 1.026. Opinions as to Pledged Property.
Promptly after the execution and delivery of this Indenture
and of each Series Supplemental Indenture or other supplemental indenture or
other instrument of further assurance, the Company shall furnish to the Trustee
an Opinion of Counsel stating that, in the opinion of such Counsel, this
Indenture and all such Series Supplemental Indentures, other supplemental
indentures and other instruments of further assurance have been properly
recorded, registered and filed to the extent necessary to make effective the
lien intended to be created by this Indenture, and reciting the details of such
action or referring to prior Opinions of Counsel in which such details are
given, and stating that all financing statements and continuation statements
have been executed and filed that are necessary fully to preserve and protect
the rights of the Securityholders and the Trustee, or stating that, in the
opinion of such Counsel, no such action is necessary to make such lien
effective.
On or before May 1, in each calendar year, beginning with the
first calendar year commencing more than three months after the date of
authentication and delivery of any Securities, the Company shall furnish to the
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
re-recording and re-filing of this Indenture, any Series Supplemental Indenture
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is necessary to
maintain the lien and security interest created by this Indenture with respect
to the Pledged Property and reciting the details of such action or stating that
in the opinion of such counsel no such action is necessary to maintain such lien
and security interest. Such Opinion of Counsel shall also describe the
recording, filing, re-recording and re-filing of this Indenture, any Series
Supplemental Indenture and any other requisite documents and the execution and
filing of any financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the lien and security interest
of this Indenture with respect to the Pledged Property until May 1 in the
following calendar year.
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SECTION 1.027. Performance of Obligations
(a) Neither the Company nor PNM will take any action or permit
any action to be taken by others which would release any Person from any of such
Person's covenants or obligations under any instrument included in the Pledged
Property, or which would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of, any
such instrument, except as expressly provided in this Indenture.
(b) PNM will fully perform all of its obligations under the
Leases.
SECTION 1.028. Negative Covenants
During such time as any Security issued hereunder is
Outstanding, the Company will not:
(i) sell, transfer, exchange or otherwise dispose of
any portion of the Pledged Property except as expressly
permitted by this Indenture;
(ii) engage in any business or activity other than in
connection with, or relating to, the issuance of Securities
pursuant to this Indenture or amend Article Third, Fourth or
Sixth of its Certificate of Incorporation as in effect on the
date of execution and delivery of this Indenture, without, in
each case, the consent of the Holders of not less than 66 2/3%
of the aggregate principal amount of the Securities then
Outstanding; notwithstanding the foregoing, however, the
Company may, with respect to one or more series of Securities
(or one or more Stated Maturities within any series), enter
into credit or liquidity support facilities (including, but
without limitation, bank letters of credit, bank lines of
credit and bonds of insurance) and may engage in interest rate
swaps;
(iii) issue bonds, notes or other evidences of
indebtedness other than (i) Securities issued hereunder or
(ii) bonds, notes or other evidences of indebtedness secured
by a pledge of Securities issued hereunder or evidencing
indebtedness permitted by clause (ii) above;
(iv) incur, assume or guaranty any indebtedness of
any Person;
(v) dissolve or liquidate in whole or in part;
(vi) take any action which would (1) permit the
validity or effectiveness of this Indenture or any grant of
any of the Pledged Property to be impaired, or permit the Lien
of this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released
from any covenant or obligation under this Indenture, (2)
permit any Lien, charge, security, mortgage or other
encumbrance (other than the lien of this Indenture) to be
created on or extend to or otherwise arise upon or burden the
Pledged Property or any part thereof or any interest therein
or the proceeds thereof, or (3) permit the Lien of this
Indenture not to constitute a valid first priority security
interest in the Pledged Property; or
(vii) institute any proceedings to be adjudicated a
bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a
petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Act or any other applicable
Federal or state law or law of the District of Columbia, or
consent to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or any
substantial part of its property, or make an assignment for
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the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or
take any corporate action in furtherance of the foregoing.
SECTION 1.029. Administration of Principal Instruments.
(a) Without the consent of the Holders of a majority in
principal amount of Outstanding Securities (or, in the case of Changes to a
Support Facility, the series (or the Stated Maturity Dates within a series) of
outstanding Securities benefiting from such Support Facility), the Trustee shall
not consent to any Change in any Principal Instrument; provided, however, that
the Trustee may consent to any Change in any Principal Instrument if such Change
is permitted by subsection (b) of this Section 5.09.
(b) Subject to the provisions of subsection (c) of this
Section 5.09, the Trustee may consent to any Change in any Principal Instrument
if such Change is:
(1) to cure any ambiguity, to correct or supplement any
provision in such Principal Instrument which may be defective or
inconsistent with any other provision in such Principal Instrument or
any related Principal Instrument, or to make any other provisions with
respect to matters arising under any such Principal Instrument,
provided, in each instance, that such action shall not materially
adversely affect the interests of Holders of Securities; or
(2) to add to the covenants and agreements of the parties to
such Principal Instrument other covenants and agreements hereafter to
be observed by any such party, or to surrender any right or power
therein reserved to or conferred upon the Company; or
(3) to amend or supplement such Principal Instrument, or to
give any consent or grant any waiver thereunder, so long as thereafter
such Principal Instrument will comply with the requirements (if any) of
Exhibit A hereto; provided that such action does not materially
adversely affect the interests of Holders of Securities; or
(4) in any other manner not inconsistent with Exhibit A
hereto; provided that such action does not materially adversely affect
the interests of Holders of Securities; or
(5) Change in the Lease permitted by applicable provisions of
the related Lease Indenture; or
(6) to describe more fully and to amplify or correct the
description of any property or rights assigned or pledged by such
Principal Instrument or intended so to be, or to assign, pledge,
mortgage or grant a security interest in any additional property,
rights and interests, subject to such liens, restrictions or other
encumbrances, if any, as shall be therein specifically described; or
(7) in the case of a Lease Indenture, to enable the Lease
Indenture Trustee thereunder to confer upon holders of Pledged Lessor
Notes any additional rights, remedies, powers or authorities that may
lawfully be granted or conferred upon such holders; or
(8) to evidence the appointment of a separate or co-Lease
Indenture Trustee or the succession of a new Lease Indenture Trustee;
or
(9) to evidence the succession of or assumption by a successor
or assignee Lessee under the Leases and the Participation Agreements or
to evidence the succession of a new Lessor or Owner Trustee under any
Principal Document to which it is a party; or
#30122041.1
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(10) permitted by the terms of such Principal Instrument to be
made without the consent of or notice to the holders of the related
Pledged Lessor Notes; or
(11) to provide for the issuance of Lessor Notes in addition
to the Pledged Lessor Notes relating to such Principal Instruments in
accordance with the applicable provisions of the related Principal
Instruments.
(c) No Change with respect to a Principal Instrument, whether
effected pursuant to subsection (a) or pursuant to subsection (b) of this
Section 5.09, and anything in such subsections or elsewhere in this Indenture to
the contrary notwithstanding, shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) except as provided in any Lease, change such Lease in such
a way as to change the timing or reduce the amount of any Lease
Payment, or otherwise to release, except as provided in such Lease, PNM
from its obligation under such Lease in respect of payment of Lease
Payments; or
(2) modify, amend or supplement the Participation Agreements
in such a way as to, or give any consent, waiver, authorization or
approval which would, release any Equity Investor from its payment
obligations contained in said Participation Agreements.
(d) Except during the continuance of an Event of Default
hereunder, upon request of the Company or PNM, the Trustee shall consent to any
Change described in this Section 5.09, and shall execute any instrument
requested by the Company or PNM, as the case may be, for the purpose of
confirming such consent, but only upon receipt by the Trustee of an Officers'
Certificate and an Opinion of Counsel of the Company or PNM, as the case may be,
each stating that such Change is authorized by this Indenture and that execution
of such instrument is appropriate to confirm such consent, unless such Change
adversely affects the Trustee's rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may, in its discretion, but
shall not be obligated to, give such consent and the Trustee shall be fully
protected in relying on such Officers' Certificate and Opinion of Counsel.
SECTION 1.10. Annual Statement as to Compliance.
(a) PNM and the Company each will deliver to the Trustee, on
or before 120 days after the end of each of its fiscal years, a written
statement (which need not comply with Section 1.02) signed by its President or
one of its Vice Presidents and by its Treasurer or one of its Assistance
Treasurers or its Comptroller or one of its Assistant Comptrollers, stating, as
to each signer thereof, that
(1) a review of the activities of PNM or the Company, as the
case may be, required during such year of PNM or the Company, as the
case may be, under this Indenture has been made under his supervision;
and
(2) to the best of his knowledge, based on such review, PNM or
the Company, as the case may be, has fulfilled all its obligations
under this Indenture throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
(b) PNM and the Company each will deliver to the Trustee,
promptly after having obtained knowledge thereof, but in no event later than
five days thereafter, written notice of any event which with the giving of
notice or lapse of time, or both, would become an Event of Default under Section
8.01.
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23
ARTICLE II.
REDEMPTION OF SECURITIES
The provisions of this Article Six shall be applicable to the
Securities of any series which are redeemable before their Stated Maturity of
principal except as otherwise provided in such Securities or the Series
Supplemental Indenture with respect thereto as contemplated by Section 2.03.
SECTION 1.001. Notice to Trustee of Redemption.
In case of any redemption of any Securities of any series
otherwise than through the operation of an applicable Sinking Fund, the Company
shall, at least 45 days prior to the scheduled Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee in writing of
such Redemption Date and of the principal amount of Securities of such series to
be redeemed.
SECTION 1.002. Selection by Trustee of Securities to be
Redeemed.
If fewer than all the Securities of any series are to be
redeemed, other than through the operation of an applicable Sinking Fund, the
particular Securities of such series to be redeemed shall be selected following
receipt by the Trustee of the notice required by Section 6.01, but not more than
60 days prior to the Redemption Date, by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions of the principal of Securities of any
denomination larger than $1,000; provided, however, that for purposes of
selecting Securities of any series for redemption pursuant to this Section,
Securities of such series shall be redeemed from each Stated Maturity of
principal of Securities of such series as nearly as practicable in the
proportion that the aggregate principal amount of Securities of such series of
such Stated Maturity of principal Outstanding immediately prior to the
Redemption Date shall bear to the aggregate principal amount of Securities of
such series of all Stated Maturities of principal then Outstanding, in each case
taking into account in the determination of Securities Outstanding the
Securities of such series subject to such redemption; provided further, however,
that when Securities are being redeemed pursuant to any applicable optional
(rather than mandatory) redemption provisions, the Securities to be redeemed
shall be selected solely from the Securities of the series and of the Stated
Maturity of principal in respect of which a Company Order has been received. If
Securities are to be selected for any redemption pursuant to this Section, the
Trustee may make such adjustments as it shall deem necessary so that the
principal amount of Securities redeemed shall be $1,000 or an integral multiple
thereof, such adjustments to be made by the Trustee in such manner as the
Trustee in its sole discretion deems appropriate.
The Trustee shall promptly notify the Company, PNM, the
Security Registrar and the Paying Agent in writing of the Securities selected
for redemption and, in the case of any Security selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal of such Security which has been or is to
be redeemed.
SECTION 1.003. Notice of Redemption.
Notice of redemption (including redemption through the
operation of any applicable Sinking Fund) shall be given by first-class mail,
postage prepaid, mailed not less than 20 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register. All notices of redemption shall state:
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(1) the Redemption Date,
(2) the Redemption Price,
(3) if fewer than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the particular
Securities, including the series and the Stated Maturity of principal
of such Securities, to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, and that interest
thereon shall cease to accrue from and after said date,
(5) the place where such Securities are to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is through the operation of a Sinking
Fund, if such is the case.
Notice of redemption of Securities to be redeemed shall be
given by the Trustee in the name of the Company.
SECTION 1.004. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit, or
cause to be deposited, with the Paying Agent an amount of money sufficient to
pay the Redemption Price of all the Securities which are to be redeemed on that
date.
SECTION 1.005. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the corporate trust office of the Paying Agent (or, if such office is
not in the Borough of Manhattan, the City of New York, at either such office or
an office to be maintained in such Borough) at the Redemption Price therein
specified and from and after such date (unless there shall be a default in the
payment of the Redemption Price) such Securities shall cease to bear interest.
Upon surrender of such Securities for redemption in accordance with said notice,
such Securities shall be paid at the Redemption Price, exclusive, however, of
installments of interest maturing on or prior to the Redemption Date, payment of
which shall have been made or duly provided for to the Holders of such
Securities registered as such on the relevant Record Dates, or otherwise,
according to their terms and the provisions of Section 2.10.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, continue to bear interest from the Redemption Date at the
rate borne by the Security in respect of overdue payments.
SECTION 1.006. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at the corporate trust office of the Paying Agent (or, if such
office is not in the Borough of Manhattan, the City of New York, at either such
office or an office to be maintained in such Borough) (with due endorsement by,
or a written instrument of transfer in form satisfactory to the Security
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Paying Agent for delivery to the Holder of such Security a new
Security or Securities of the same series and the same Stated Maturity of
principal, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
#30122041.1
25
ARTICLE I.
SINKING FUNDS
SECTION 1.011. Sinking Funds for Securities.
[(a)] The amount of any sinking fund payment provided for by
the terms of Securities of any series (and any Stated Maturity of principal
within a series) is herein referred to as a "Sinking Fund", and the date on
which a Sinking Fund payment is to be made is herein referred to as a "Sinking
Fund Date." Each such Sinking Fund payment shall be applied to the redemption of
Securities of the appropriate series and the appropriate Stated Maturity of
principal on the appropriate Sinking Fund Date.
[(b)] In the event that there shall have been any partial
redemption of a series of Securities (other than pursuant to an applicable
Sinking Fund), the amount of each applicable Sinking Fund payment of a
particular Stated Maturity of principal within such series subsequent to such
redemption shall be reduced by an amount equal to the amount obtained by (i)
multiplying the amount of such Sinking Fund payment with respect to such Stated
Maturity of principal as in effect prior to such redemption by a fraction of
which the numerator shall be the aggregate principal amount of Securities of
such Stated Maturity of such series redeemed pursuant to such partial
redemption, and the denominator shall be the aggregate principal amount of
Securities of such Stated Maturity of such series Outstanding immediately prior
to such redemption, and (ii) rounding the amount indicated in (i) to the nearest
$1,000, subject to necessary adjustment so that the total amount of such
reduction is equal to the total principal amount of Securities redeemed pursuant
to such partial redemption, such adjustment to be made by the Trustee in such
manner as the Trustee in its sole discretion deems appropriate.
[(c)] Pursuant to the Series 1986A Series Supplemental
Indenture dated as of July 15, 1986 (the Series 1986A Supplement), the Company
issued a series of Securities designated "Lease Obligation Bonds Series 1986A"
(the Series A Bonds), of which, on June 1, 1994 two Stated Maturities of
principal remain outstanding: July 15, 1996 and January 15, 2014. Paragraph (b)
of Section 7.01 of the Original Indenture to the contrary notwithstanding, in
the event that there shall have been any partial redemption of Series A Bonds of
a particular Stated Maturity of principal (other than pursuant to the Sinking
Fund), the Sinking Fund payments thereafter to be made with respect to such
Series A Bonds shall be adjusted as follows. The Company shall first identify
all related Pledged Lessor Notes (as defined in Article II of Series 1986A
Supplement and identified in Schedule 2 thereto) having the same maturity as the
Series A Bonds of such particular Stated Maturity of principal redeemed, if any,
which are outstanding following such redemption; provided, however, that for
purposes of this Section 7.01(c), any such Pledged Lessor Notes with a maturity
subsequent to January 15, 2010 shall be deemed to have a maturity of January 15,
2014. Having identified all such outstanding Pledged Lessor Notes (the
Outstanding Notes), the Company shall determine the dates on which the principal
of such Outstanding Notes is to be amortized (the Scheduled Amortization Dates).
The amount of the Sinking Fund payment scheduled to be made on each Sinking Fund
Date subsequent to the date of such partial redemption shall then be adjusted to
equal the aggregate principal amount of all Outstanding Notes scheduled to be
amortized on the Scheduled Amortization Date corresponding to such Sinking Fund
Date. All such adjustments in respect of Sinking Fund payments on a Sinking Fund
Date shall be rounded to the nearest $1,000, and shall be subject to necessary
further adjustment so that the total amount of such reduction is at least equal
to the total principal amount of Series A Bonds redeemed pursuant to such
partial redemption. Having made the calculations required by the preceding two
sentences, the Company shall deliver to the Trustee a Company Request not later
than 30 days following any partial redemption of Series A Bonds (other than
pursuant to the Sinking Fund), setting forth (x) the schedules of principal
amortization of all related Outstanding Notes having the same maturity as the
Stated Maturity of principal of the Series A Bonds redeemed and (y) a revised
schedule of Sinking Fund payments applicable to Series A Bonds having the same
Stated Maturity of principal as the Series A Bonds redeemed. The Trustee may
rely on such Company Request and shall have no duty with respect to the
adjustments set forth therein other than to make them available for inspection
by a Holder of Series A Bonds at the Corporate Trust Office uponreasonable
notice.]2
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SECTION 1.012. Selection by Trustee of Securities to be
Redeemed Through Operation of Sinking Fund.
In the case of Securities to be redeemed through operation of
the Sinking Fund, the particular Securities to be redeemed shall be selected no
more than 60 days nor less than 30 days prior to the Redemption Date by the
Trustee from the outstanding Securities of the same series and of the same
Stated Maturity of principal not previously called for redemption by prorating,
as nearly as may be, the principal amount of Securities to be redeemed among the
Holders of Securities of the same series and of the same Stated Maturity of
principal registered in their respective names. In any proration pursuant to
this Section, the Trustee shall make such adjustments, reallocations and
eliminations as it shall deem proper so that the principal amount of Securities
so prorated shall be $1,000 or an integral multiple thereof, by increasing or
decreasing or eliminating the amount which would be allocable to any Holder on
the basis of exact proportion by an amount not exceeding $1,000. The Trustee in
its discretion may determine the particular Securities of a Stated Maturity of
principal registered in the name of any Holder which are to be redeemed, in
whole or in part.
Notwithstanding the provisions of the preceding paragraph, if,
at the time of any such selection, there shall be any Holders of less than
$1,000,000 aggregate principal amount of Outstanding Securities of the series
and of the Stated Maturity of principal to be so redeemed, the selection of the
particular Securities to be so redeemed shall be made in the following manner:
(a) the Trustee shall first prorate the principal amount of
Securities of such series and of such Stated Maturity to be so redeemed between
(i) Holders of Securities in aggregate principal amounts of $1,000,000 or more
and (ii) Holders of Securities in aggregate principal amounts of less than
$1,000,000; such proration to be effected in accordance with the respective
aggregate principal amounts of such Securities held by the Holders referred to
in the foregoing items (i) and (ii), respectively;
(b) the Trustee shall then select for redemption in the manner
hereinabove in the first paragraph of this Section 7.02 provided, from the
Securities of such series and Stated Maturity held by the Holders referred to in
item (i) of clause (a) above, particular Securities (or portions thereof) in the
principal amount prorated to such Holders pursuant to said clause (a); and
(c) the Trustee shall then select for redemption in the manner
provided in Section 6.02 hereof, from the Securities of such series and Stated
Maturity held by the Holders referred to in item (ii) of said clause (a),
particular Securities (or portions thereof) in the principal amount prorated to
such Holders pursuant to said clause (a);
provided, however, in any such prorating pursuant to this paragraph the Trustee
may, according to such method as it shall deem proper in its discretion, make
such adjustments by increasing or decreasing by not more than $1,000 the amount
which would be allocable on the basis of an exact proportion, as may be
necessary to the end that the principal amount so prorated shall be in each
instance an integral multiple of $1,000.
--------
2 Bracketed language added by 1994 Supplemental Indenture. See Exhibit F.
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ARTICLE II.
EVENTS OF DEFAULT; REMEDIES
SECTION 1.021. Events of Default.
"Events of Default", wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to a judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of ten (10) days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security at its Stated Maturity, or upon call for
redemption or otherwise, and continuance of such default for a period
of ten (10) days; or
(3) default in the making of any Sinking Fund payment, and
continuance of such default for a period of ten (10) days; or
(4) default in the performance, or breach, of any covenant of
PNM or the Company contained herein and continuance of such default or
breach for a period of 30 days after there has been given, by
registered or certified mail, to PNM and the Company by the Trustee, or
to PNM, the Company and the Trustee by the Holders of at least 25% in
principal amount of Outstanding Securities, a written notice specifying
such failure and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) the occurrence of an "Indenture Event of Default" under
any Lease Indenture and the declaration as a result thereof that any
Pledged Lessor Note is due and payable; or
(6) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Company under the Federal Bankruptcy Act or any other applicable
federal or state law or law of the District of Columbia, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 consecutive days; or
(7) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Act or any other applicable
Federal or state law or law of the District of Columbia, or the consent
by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company in
furtherance of any such action.
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SECTION 1.022. Acceleration of Maturity; Rescission and
Annulment.
Upon the occurrence of an Event of Default, (i) if such Event
of Default is one referred to in clause (1), (2), (3), (4), (6) or (7) of
Section 8.01, the Trustee may, and upon the direction of the Holders of not less
than 25% in principal amount of the Securities Outstanding shall, and (ii) if
such Event of Default is the one referred to in clause (5) of Section 8.01
(including without limitation an event of default under any Lease which has
resulted in an Event of Default referred to in clause (1), (2), or (3) of
Section 8.01), the Trustee shall, declare the principal of all the Securities to
be due and payable immediately, by a notice in writing to PNM and the Company,
and upon any such declaration such principal shall become immediately due and
payable; provided that no such declaration shall be made (and no action under
Section 8.03 or 8.05 shall be taken) in cases in which the Event of Default is
one referred to in clause (1), (2), or (3) of Section 8.01 which resulted
directly from a failure of PNM to make any payment of rent under any Lease until
such time as the Lessor under such Lease has been given the opportunity to
exercise its rights, if any, under provisions of the related Lease Indenture
analogous to Section 6.8 of the Lease Indentures dated as of December 16, 1985.
At any time after such a declaration of acceleration has been
made and before any sale of the Pledged Property, or any part thereof, shall
have been made pursuant to any power of sale as hereinafter in this Article;
provided, the Holders of a majority in principal amount of the Securities
Outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if
(1) there shall have been paid to or deposited with the
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all
Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the
respective rates provided in the Securities for late payments
of principal or premium,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest at the
respective rates provided in the Securities for late payments
of interest, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
acceleration, have been cured or waived as provided in Section 8.08.
No such rescission shall affect any subsequent default or impair any right
consequent thereon. [and no such annulment shall take place unless all
declarations of acceleration of all Pledged Lessor Notes theretofore given have
also been annulled in accordance with the terms of the applicable Lease
Indentures.]3
[Notwithstanding anything in this Section to the contrary, the
Trustee shall rescind any acceleration of maturity of the principal of and
interest on the Securities as a consequence of an Event of Default which
resulted from an event of default under any Lease and which resulted in a
declaration of acceleration of the Pledged Lessor Notes issued under the related
Lease Indenture, if the declaration of acceleration of such Pledged Lessor Notes
has been rescinded in accordance with the terms of such Lease Indenture and the
conditions set forth in paragraphs (1) and (2) of this Section have been met.]4
--------
3 This language was deleted by paragraph (b)(ii) of Article III of the
1986A Bond Supplemental Indenture. See Exhibit B.
4 This paragraph was deleted in its entirety by paragraph (b)(i) of
Artcile III to the 1986A Bond Supplemental Indenture. See Exhibit B.
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SECTION 1.023. Trustee's Power of Sale of Pledged Property;
Notice Required; Power to Bring Suit.
If an Event of Default shall have occurred and be continuing,
subject to the provisions of Sections 8.06 and 8.07 and the proviso to the first
paragraph of Section 8.02, the Trustee, by such officer or agent as it may
appoint, may:
(1) sell, to the extent permitted by law, without recourse,
for cash, or credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as the Trustee
in its discretion may determine, the Pledged Property as an entirety,
or in any such portions as the Holders of a majority in aggregate
principal amount of the Securities then Outstanding shall request by an
Act of Securityholders, or, in the absence of such request, as the
Trustee in its discretion shall deem expedient in the interest of the
Securityholders, at public or private sale; and/or
(2) proceed by one or more suits, actions or proceedings at
law or in equity or otherwise or by any other appropriate remedy, to
enforce payment of the Securities or Pledged Lessor Notes, or to
foreclose this Indenture or to sell the Pledged Property under a
judgment or decree of a court or courts of competent jurisdiction, or
by the enforcement of any such other appropriate legal or equitable
remedy, as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of its rights or powers or any of
the rights or powers of the Securityholders.
In the event that the Trustee shall deem it advisable to sell
any of or all the Pledged Property in accordance with the provisions of this
Section, PNM and the Company agree that if registration of any such Pledged
Property shall be required, in the opinion of counsel for the Trustee, under the
Securities Act of 1933 or other applicable law, and regulations promulgated
thereunder, and if PNM shall not effect, or cause to be effected, such
registration promptly, the Trustee may sell any such Pledged Property at a
private sale, and no Person shall attempt to maintain that the prices at which
such Pledged Property is sold are inadequate by reason of the failure to sell at
public sale, or hold the Trustee liable therefor.
SECTION 1.024. Incidents of Sale of Pledged Property.
Upon any sale of all or any part of the Pledged Property made
either under the power of sale given under this Indenture or under judgment or
decree in any judicial proceedings for foreclosure or otherwise for the
enforcement of this Indenture, the following shall be applicable:
(1) Securities Due and Payable. The principal of, and premium,
if any, and accrued interest on, the Securities, if not previously due,
shall immediately become and be due and payable.
(2) Trustee Appointed Attorney of Company to Make Conveyances.
The Trustee is hereby irrevocably appointed the true and lawful
attorney of the Company, in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment, transfer or
conveyance of the property thus sold; and for that purpose the Trustee
may execute all such documents and instruments and may substitute one
or more persons with like power; and the Company hereby ratifies and
confirms all that its said attorneys, or such substitute or
substitutes, shall lawfully do by virtue hereof.
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(3) Company to Confirm Sales and Conveyances. If so requested
by the Trustee or by any purchaser, the Company shall ratify and
confirm any such sale or transfer by executing and delivering to the
Trustee or to such purchaser or purchasers all proper deeds, bills of
sale, instruments of assignment, conveyance or transfer and releases as
may be designated in any such request.
(4) Securityholders and Trustee May Purchase Pledged Property.
Any Securityholder or the Trustee may bid for and purchase any of the
Pledged Property, and upon compliance with the terms of sale, may hold,
retain, possess and dispose of such Pledged Property in his or its own
absolute right without further accountability.
(5) Purchaser at Sale May Apply Securities to Purchase Price.
Any purchaser at any such sale may, in paying the purchase price,
deliver any of the Securities then Outstanding in lieu of cash and
apply to the purchase price the amount which shall, upon distribution
of the net proceeds of such sale, after application to the costs of the
action and any other sums which the Trustee is authorized to deduct
under this Indenture, be payable on such Securities so delivered in
respect of principal, premium, if any, and interest. In case the amount
so payable on such Securities shall be less than the amount due
thereon, duly executed and authenticated Securities shall be delivered
in exchange therefor to the Holder thereof for the balance of the
amount due on such Securities so delivered by such Holder.
(6) Receipt of Trustee Shall Discharge Purchaser. The receipt
of the Trustee or of the officer making such sale under judicial
proceedings shall be a sufficient discharge to any purchaser for his
purchase money, and, after paying such Purchase money and receiving
such receipt, such purchaser or his personal representative or assigns
shall not be obliged to see to the application of such purchase money,
or be in any way answerable or any loss, misapplication or
non-application thereof.
(7) Sale To Divest Rights of Company in Property Sold. Any
such sale shall operate to divest the Company of all right, title,
interest, claim and demand whatsoever, either at law or in equity
otherwise, in and to the Pledged Property so sold, and shall be a
perpetual bar both at law and in equity or otherwise against the
Company, and its successors and assigns, and any and all persons
claiming or who may claim the Pledged Property sold or any part hereof
from, through or under the Company, or its successors and assigns.
(8) Application of Moneys Received upon Sale. Any moneys
collected by the Trustee upon any sale made either under the power of
sale given by this Indenture or under judgment or decree in any
judicial proceedings for foreclosure or otherwise for the enforcement
of this Indenture, shall be applied as provided in Section 8.12.
SECTION 1.025. Judicial Proceedings Instituted by Trustee
[ (a) Trustee May Bring Suit. If there shall be a failure to
make payment of the principal of any Security at its Stated Maturity or upon
declaration of acceleration, call for redemption or otherwise, or of any Sinking
Fund payment when due and payable by the terms hereof or of such Security, or if
there shall be a failure to pay the premium, if any, or interest on any Security
when the same becomes due and payable, then the Trustee, if any such failure
shall continue for 15 days, in its own name, and as trustee of an express trust,
shall be entitled, and empowered subject to the proviso to the first paragraph
of Section 8.02 to institute any suits, actions or proceedings at law, in equity
or otherwise, for the collection of the sums so due and unpaid on the
Securities, and may prosecute any such claim or proceeding to judgment or final
decree, and may enforce any such judgment or final decree and collect the moneys
adjudged or decreed to be payable in any manner provided by law, whether before
or after or during the pendency of any proceedings for the enforcement of the
Lien of this Indenture, or of any of the Trustee's rights or the rights of the
Securityholders under this Indenture, and such power of the Trustee shall not be
affected by any sale hereunder or by the exercise of any other right, power or
remedy for the enforcement of the provisions of this Indenture or for the
foreclosure of the lien hereof.
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(b) Trustee May Recover Unpaid Indebtedness after Sale of
Pledged Property. In the case of a sale of the Pledged Property and of the
application of the proceeds of such sale to the payment of the indebtedness
secured by this Indenture, the Trustee in its own name, and as trustee of an
express trust, shall be entitled and empowered, by any appropriate means, legal,
equitable or otherwise, to enforce payment of, and to receive all amounts then
remaining due and unpaid upon, all or any of the Securities, for the benefit of
the Holders thereof, and upon any other portion of the indebtedness remaining
unpaid, with interest at the rates specified in the respective Securities on the
overdue principal of and premium, if any, and (to the extent that payment of
such interest is legally enforceable) on the overdue installments of interest.
(c) Recovery of Judgment Does Not Affect Lien of this
Indenture or Other Rights. No recovery of any such judgment or final decree by
the Trustee and no levy of any execution under any such judgment upon any of the
Pledged Property, or upon any other property, shall in any manner or to any
extent affect the Lien of this Indenture upon any of the Pledged Property, or
any rights, powers or remedies of the Trustee, or any liens, rights, powers or
remedies of the Securityholders, but all such liens, rights, powers and remedies
shall continue unimpaired as before.
(d) Trustee May File Proofs of Claim; Appointment of Trustee
as Attorney-in-Fact in Judicial Proceedings. The Trustee in its own name, or as
trustee of an express trust, or as attorney-in-fact for the Securityholders, or
in any one or more of such capacities (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand for the payment of overdue principal, premium (if any) or interest),
shall be entitled and empowered to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders (whether such claims be based upon the
provisions of the Securities or of this Indenture) allowed in any equity,
receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization
or any other judicial proceedings relative to the Company or any obligor on the
Securities (within the meaning of the TIA), the creditors of the Company or any
such obligor, the Pledged Property or any other property of the Company or any
such obligor and any receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Securityholder to make such payments to the Trustee and in the event that
the Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel. The Trustee is hereby irrevocably appointed (and the successive
respective Holders of the Securities, by taking and holding the same, shall be
conclusively deemed to have so appointed the Trustee) the true and lawful
attorney-in-fact of the respective Securityholders, with authority to (i) make
and file in the respective names of the Securityholders (subject to deduction
from any such claims of the amounts of any claims filed by any of the
Securityholders themselves), any claim, proof of claim or amendment thereof,
debt, proof of debt or amendment thereof, petition or other document in any such
proceedings and to receive payment of any amounts distributable on account
thereof, (ii) execute any such other papers and documents and to do and perform
any and all such acts and things for and on behalf of such Securityholders, as
may be necessary or advisable in order to have the respective claims of the
Trustee and of the Securityholders against the Company or any such obligor, the
Pledged Property or any other property of the Company or any such obligor
allowed in any such proceeding and (iii) receive payment of or on account of
such claims and debt; provided, however, that nothing contained in this
Indenture shall be deemed to give to the Trustee any right to accept or consent
to any plan of reorganization or otherwise by action of any character in any
such proceeding to waive or change in any way any right of any Securityholder.
Any moneys collected by the Trustee under this Section shall be applied as
provided in Section 8.12.
(e) Trustee Need Not Have Possession of Securities. All rights
of action and of asserting claims under this Indenture or under any of the
Securities enforceable by the Trustee may be enforced by the Trustee without
possession of any of such Securities or the production thereof at the trial or
other proceedings relative thereto.
(f) Suit To Be Brought for Ratable Benefit of Securityholders.
Any suit, action or other proceeding at law, in equity or otherwise which shall
be instituted by the Trustee under any of the provisions of this Indenture shall
be for the equal, ratable and common benefit of all the Securityholders, subject
to the provisions of this Indenture.
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(g) Trustee May Be Restored to Former Position and Rights in
Certain Circumstances. In case the Trustee shall have proceeded to enforce any
right under this Indenture by suit, foreclosure or otherwise and such
proceedings shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to the Trustee, then in every such case, PNM, the
Company and the Trustee shall be restored without further act to their
respective former positions and rights hereunder, and all rights, remedies and
powers of the Trustee shall continue as though no such proceedings had been
taken.
SECTION 1.026. Securityholders May Demand Enforcement of
Rights by Trustee.
If an Event of Default shall have occurred and shall be
continuing, the Trustee shall, upon the written request of the Holders of a
majority in aggregate principal amount of the Securities then Outstanding and
upon the offering of indemnity as provided in Section 9.03(e), but subject in
all cases to the provisions of Section 3.03 and the proviso to the first
paragraph of Section 8.02, proceed to institute one or more suits, actions or
proceedings at law, in equity or otherwise, or take any other appropriate
remedy, to enforce payment of the principal of, or premium, if any, or interest
on, the Securities or Pledged Lessor Notes or to foreclose this Indenture or to
sell the Pledged Property under a judgment or decree of a court or courts of
competent jurisdiction or under the power of sale herein granted, or take such
other appropriate legal, equitable or other remedy, as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights or powers of the Trustee or the Securityholders, or, in case such
Securityholders shall have requested a specific method of enforcement permitted
hereunder, in the manner requested, provided that such action shall not be
otherwise than in accordance with law and the provisions of this Indenture, and
the Trustee, subject to such indemnity provisions, shall have the right to
decline to follow any such request if the Trustee in good faith shall determine
that the suit, proceeding or exercise of the remedy so requested would involve
the Trustee in personal liability or expense.
SECTION 1.027. Control by Securityholders.
The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 1.028. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past default hereunder and its consequences, except that only the
Holders of all Securities affected thereby may waive a default
(1) in the payment of the principal of (or premium, if any) or
interest on such Securities,
or
(2) in respect of a covenant or provision hereof which under
Article Eleven cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
#30122041.1
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SECTION 1.029. Securityholder May Not Bring Suit Except under
Certain Conditions.
A Securityholder shall not have the right to institute any
suit, action or proceeding at law or in equity or otherwise for the foreclosure
of this Indenture, for the appointment of a receiver or for the enforcement of
any other remedy under or upon this Indenture, unless:
(1) such Securityholder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Securities then Outstanding shall have requested the Trustee in
writing to institute such action, suit or proceeding and shall have
offered to the Trustee indemnity as provided in Section 9.03(e);
(3) the Trustee shall have refused or neglected to institute
any such action, suit or proceeding for 60 days after receipt of such
notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of outstanding Securities.
It is understood and intended that no one or more of the
Securityholders shall have any right in any manner whatever hereunder or under
the Securities to (i) surrender, impair, waive, affect, disturb or prejudice the
Lien of this Indenture on any property subject thereto or the rights of the
Holders of any other Securities, (ii) obtain or seek to obtain priority or
preference over any other such Holder or (iii) enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all the Securityholders subject to the provisions of this
Indenture.
SECTION 1.10. Undertaking To Pay Court Costs.
All parties to this Indenture, and each Securityholder by his
acceptance of a Security, shall be deemed to have agreed that any court may in
its discretion require, in any suit, action or proceeding for the enforcement of
any right or remedy under this Indenture, or in any suit, action or proceeding
against the Trustee for any action taken or omitted by it as Trustee hereunder,
the filing by any party litigant in such suit, action or proceeding of an
undertaking to pay the costs of such suit, action or proceeding, and that such
court may, in its discretion, assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, action or proceeding,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided, however, that the provisions of this Section
shall not apply to (a) any suit, action or proceeding instituted by the Trustee,
(b) any suit, action or proceeding instituted by any Securityholder or group of
Securityholders holding in the aggregate more than 10% in aggregate principal
amount of the Securities then Outstanding or (c) any suit, action or proceeding
instituted by any Securityholder for the enforcement of the payment of the
principal of, or premium, if any, or interest on, any of the Securities, on or
after the respective due dates expressed therein.
SECTION 1.11. Right of Securityholders To Receive Payment Not
To Be Impaired.
Anything in this Indenture to the contrary notwithstanding,
the right of any Holder of any Security to receive payment of the principal of,
and premium, if any, and interest on, such Security, on or after the respective
due dates expressed in such Security (or, in case of redemption, on the
Redemption Date fixed for such Security), or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 1.12. Application of Moneys Collected by Trustee.
Any moneys collected or to be applied by the Trustee pursuant
to this Article, together with any other moneys which may then be held by the
Trustee under any of the provisions of this Indenture as security for the
Securities
#30122041.1
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(other than moneys at the time required to be held for the payment of specific
Securities at their Stated Maturities or at a time fixed for the redemption
thereof) shall be applied in the following order from time to time, on the date
or dates fixed by the Trustee and, in the case of a distribution of such moneys
on account of principal, premium, if any, or interest, upon presentation of the
several Outstanding Securities, and stamping thereon of payment, if only
partially paid, and upon surrender thereof, if fully paid:
FIRST: to the payment of all taxes, assessments or liens prior
to the Lien of this Indenture, except those subject to which any sale
shall have been made, all reasonable costs and expenses of collection,
including the reasonable costs and expenses of handling the Pledged
Property and of any sale thereof pursuant to the provisions of this
Article and of the enforcement of any remedies hereunder or under any
Lease Indenture, and to the payment of all amounts due the Trustee or
any predecessor Trustee under Section 9.07, or through the Trustee by
any Securityholder or Securityholders;
SECOND: in case the principal of the Securities or any of them
shall not have become due, to the payment of any interest in default,
in the order of the maturity of the installments of such interest, with
interest at the rates specified in the respective Securities in respect
of overdue payments (to the extent that payment of such interest shall
be legally enforceable) on the overdue installments thereof;
THIRD: in case the principal of any of but not all the
Securities shall have become due at their Stated Maturities, upon
redemption or otherwise, first to the payment of accrued interest in
the order of the maturity of the installments thereof with interest at
the respective rates specified in the Securities in respect of payments
on overdue principal, premium, if any, and (to the extent that payment
of such interest shall be legally enforceable) on overdue installments
of interest, and next to the payment of the principal of all Securities
then due;
FOURTH: in case the principal of all the Securities shall have
become due at their Stated Maturities, by declaration, upon redemption
or otherwise, to the payment of the whole amount then due and unpaid
upon the Securities then Outstanding for principal, premium, if any,
and interest, together with interest at the respective rates specified
in the Securities in respect of overdue payments on principal, premium,
if any, and (to the extent that payment of such interest shall be
legally enforceable) on overdue installments of interest, and, in case
such proceeds shall be insufficient to pay in full the whole amount so
due and unpaid, then to the payment of such principal, premium, if any,
and interest ratably, without discrimination or preference; and
FIFTH: in case the principal of all the Securities shall have
become due at their Stated Maturities, by declaration, upon redemption
or otherwise, and all of such Securities shall have been fully paid,
together with all interest (including any interest on overdue payments)
and premium, if any, thereon, any surplus then remaining shall be paid
to the Company, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct;
provided, however, that all payments to be made pursuant to this Section shall
be made ratably to the persons entitled thereto, without discrimination or
preference.
SECTION 1.13. Securities Held by Certain Persons Not To Share
in Distribution.
Any Securities known to the Trustee to be owned or held by, or
for the account or benefit of, PNM, the Company or any Affiliate of any thereof
shall not be entitled to share in any payment or distribution provided for in
this Article until all Securities held by other Persons have been paid in full.
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SECTION 1.14. Waiver of Appraisement, Valuation, Stay, Right
to Marshalling.
To the extent it may lawfully do so, each of PNM and the
Company, for itself and for any Person who may claim through or under it,
hereby:
(1) agrees that neither it nor any such Person will set up,
plead, claim or in any manner whatsoever take advantage of, any
appraisement, valuation, stay, extension or redemption laws, now or
hereafter in force in any jurisdiction, which may delay, prevent or
otherwise hinder (i) the performance or enforcement or foreclosure of
this Indenture, (ii) the sale of any of the Pledged Property, or (iii)
the putting of the purchaser or purchasers thereof into possession of
such property immediately after the sale thereof;
(2) waives all benefit or advantage of any such laws;
(3) waives and releases all rights to have the Pledged
Property marshalled upon any foreclosure, sale or other enforcement of
this Indenture; and
(4) consents and agrees that all the Pledged Property may at
any such sale be sold by the Trustee as an entirety.
SECTION 1.15.Remedies Cumulative; Delay or Omission Not a Waiver.
Every remedy given hereunder to the Trustee or to any of the
Securityholders shall not be exclusive of any other remedy or remedies, and
every such remedy shall be cumulative and in addition to every other remedy
given hereunder or now or hereafter given by statute, law, equity or otherwise.
The Trustee may exercise all or any of the powers, rights or remedies given to
it hereunder or which may now or hereafter be given by statute, law or equity or
otherwise, in its absolute discretion. No course of dealing between PNM or the
Company and the Trustee or the Securityholders or any delay or omission of the
Trustee or of any Securityholder to exercise any right, remedy or power accruing
upon any Event of Default shall impair any such right, remedy or power or shall
be construed to be a waiver of any such Event of Default or of any right of the
Trustee or of the Securityholders or acquiescence therein, and, subject to the
provisions of Section 8.07, every right, remedy and power given by this Article
to the Trustee or to the Securityholders may be exercised from time to time and
as often as may be deemed expedient by the Trustee or by the Securityholders.
ARTICLE II.
THE TRUSTEE
SECTION 1.001. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture.
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(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not herein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 1.002. Notice of Defaults.
In addition to its obligation to give notice to
Securityholders as provided in Section 3.03, as promptly as practicable after,
and in any event within 90 days after, the occurrence of any default hereunder,
the Trustee shall transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security or in the payment
of any Sinking Fund installment, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interests of
the Securityholders; and provided, further, that in the case of any default of
the character specified in Section 8.01(4) no such notice to Securityholders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default.
SECTION 1.003. Certain Rights of Trustee.
Except as otherwise provided in Section 9.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of PNM or the Company mentioned
herein shall be sufficiently evidenced by a PNM or Company Request or Order,
#30122041.1
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in the case of a request or direction of PNM, the Company, as the case may be
and any resolution of the Board of Directors of PNM or the Company may be
sufficiently evidenced by a Board Resolution of PNM or the Company, as the case
may be;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate of PNM or the Company;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of PNM or the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 1.004. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except
the certificates of authentication, shall not be taken as the statements of the
Trustee, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture, the Pledged Property or the Securities, except that the Trustee
hereby represents and warrants that this Indenture has been executed and
delivered by one of its officers who is duly authorized to execute and deliver
such document on its behalf. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 1.005. May Hold Securities.
The Trustee, any Paying Agent, Security Registrar or any other
agent of PNM or the Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections 9.08 and 9.13, may
otherwise deal with PNM and the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar or such other agent.
SECTION 1.006. Funds May Be Held by Trustee or Paying Agent;
Investments.
(a) Subject to Subsection (b) of this Section 9.06, any monies
held by the Trustee or the Paying Agent hereunder as part of the Pledged
Property may, until paid out by the Trustee or the Paying Agent as herein
provided, be carried by the Trustee or the Paying Agent on deposit with itself,
and neither the Trustee nor the Paying Agent shall have any liability for
interest upon any such monies.
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38
[(b) At any time and from time to time prior to payment in
full of any amounts to be paid by the Trustee pursuant to Section 2.15(b) in
respect of any series of Securities (or prior to payment in full of any amount
required to be paid by the Trustee in respect of such series of Securities
pursuant to Section 6.07), if at the time no Event of Default has occurred and
is continuing, the Trustee shall, on Company Request, invest and reinvest in
Permitted Investments as specified in such Company Request any monies from the
sale of the Securities of such series at the time on deposit with the Trustee as
part of the Pledged Property, together with any income and gains from the
investment and reinvestment thereof, and sell any Permitted Investments, in
either case, at such prices, including accrued interest, as are set forth in
such Company Request, and such Permitted Investments shall be held by the
Trustee until so sold in trust as part of the Pledged Property. The Trustee
shall, on Company Request, sell such Permitted Investments as may be specified
therein, and the Trustee shall, without Company Request, in the event monies are
required for payment of any amounts to be paid by the Trustee pursuant to
Section 2.15(b) in respect of any series of Securities and for any Stated
Maturity of any installment of interest on any series of Securities becoming due
and payable prior to the thirtieth day following the Termination Date applicable
to such series, sell such Permitted Investments as are required to restore to
cash as part of the Pledged Property such amounts as are needed for any such
payment. The Trustee shall not be responsible for any losses on any investments
or sales of Permitted Investments made pursuant to the procedure specified in
this subsection (b).]5
SECTION 1.007. Compensation and Reimbursement.
The Company agrees
(1) to pay, or cause to be paid, to each of the Trustee and
any Authorized Agent from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) to reimburse, or cause to be reimbursed, each of the
Trustee and any Authorized Agent upon its request for all expenses,
disbursements and advances incurred or made by it in accordance with
any provision of this Indenture (including the compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its own
negligence, willful misconduct or bad faith; and
(3) to indemnify, or cause to be indemnified, each of the
Trustee, any predecessor Trustee and any Authorized Agent for, and to
hold it harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration
of this trust or the performance of its duties hereunder, including the
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities
SECTION 1.008. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section, it shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign in the manner and with the effect hereinafter
specified in this Article.
--------
5 This paragraph was replaced in its entirety pursuant to Section 3.01 of
the 1986B Bond Supplemental Indenture. See p. 9 of Exhibit C for the replacement
text.
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39
(b) In the event that the Trustee shall fail to comply with
the provisions of Subsection (a) of this Section the Trustee shall, within 10
days after the expiration of such 90-day period, transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register,
notice of such failure.
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest if
(1) the Trustee is trustee under another Indenture under which
any other securities, or certificates of interest or participation in
any other securities, of any obligor on the Securities are outstanding,
unless (A) the Securities are collateral trust bonds under which the
only Collateral consists of securities issued under such other
indenture, or (B) such other indenture is a collateral trust indenture
under which the only collateral consists of Securities issued under
this Indenture, provided that there shall be excluded from the
operation of this paragraph any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of such obligor are outstanding, if such obligor shall have
sustained the burden of proving, on application to the Commission and
after opportunity for hearing thereon, that trusteeship under this
Indenture and such other indenture or indentures is not so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under one of such indentures;
(2) the Trustee or any of its directors or executive officers
is an obligor upon the Securities or an underwriter for such obligor;
(3) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with any obligor on the Securities or an underwriter for such
obligor;
(4) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative
of any obligor on the Securities, or of an underwriter (other than the
Trustee itself) for such obligor who is currently engaged in the
business of underwriting, except that (i) one individual may be a
director or an executive officer, or both, of the Trustee and a
director or an executive officer, or both, of an obligor on the
Securities but may not be at the same time an executive officer of both
the Trustee and such obligor; (ii) if and so long as the number of
directors of the Trustee in office is more than nine, one additional
individual may be director or an executive officer, or both, of the
Trustee and a director of an obligor on the Securities; and (iii) the
Trustee may be designated by an obligor on the Securities or by any
underwriter for such obligor to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent, or
depositary, or in any other similar capacity, or, subject to the
provisions of paragraph (1) of this Subsection, to act as trustee,
whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by any director, partner, or executive
officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons;
or 10% or more of the voting securities of the Trustee is beneficially
owned either by an underwriter for any obligor on the Securities or by
any director, partner or executive officer thereof, or is beneficially
owned collectively by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), (i) 5% or more of the voting
securities, or 10% or more of any other class of security, of any
obligor on the Securities not including the Securities issued under
this Indenture and securities issued under any other indenture under
which the Trustee is also trustee, or (ii) 10% or more of any class of
security of an underwriter for any obligor on the Securities;
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(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns 10%
or more of the voting securities of, or controls directly or indirectly
or is under direct or indirect common control with, any obligor on the
Securities;
(8) the Trustee is the beneficial owner of, or holds
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 10% or more of any class of
security of any person who, to the knowledge of the Trustee, owns 50%
or more of the voting securities of any obligor on the Securities; or
(9) the Trustee owns, on May 15 in any calendar year, in the
capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of
any class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting
interest under paragraphs (6), (7) or (8) of this Subsection. As to any
such securities of which the Trustee acquired ownership through
becoming executor, administrator, or testamentary trustee of an estate
which included them, the provisions of the preceding sentence shall not
apply, for a period of two years from the date of such acquisition to
the extent that such securities included in such estate do not exceed
25% of such voting securities or 25% of any such class of security.
Promptly after May 15 in each calendar year, the Trustee shall make a
check of its holdings of such securities in any of the above mentioned
capacities as of such May 15. If any obligor upon the Securities fails
to make payment in full of the principal of, or the premium, if any, or
interest on, any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of
the above mentioned capacities as of the date of the expiration of such
30 day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this Subsection.
The specification of percentages in paragraphs (5) to (9)
inclusive, of this Subsection, shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys loaned to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence or indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent, or depositary, or in any similar representative capacity.
Except as provided in the next preceding paragraph, the word
"security" or "securities" as used in this Indenture shall mean any note, stock,
treasury stock, bond, debenture, evidence of indebtedness, certificate of
interest or participation in any profit sharing agreement, collateral trust
certificate, preorganization certificate or subscription, transferable share,
investment contract, voting trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other mineral rights,
or, in general, any interest or instrument commonly known as a "security", or
any certificate of interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrantor right to subscribe to
purchase, any of the foregoing.
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41
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to any
obligor on the Securities means every person who, within three years
prior to the time as of which the determination is made, has purchased
from such obligor with a view to, or has offered or sold for such
obligor in connection with, the distribution of any security of such
obligor outstanding at such time, or has participated or has had a
direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter
or dealer not in excess of the usual and customary distributors' or
sellers' commission.
(2) The term "director" means any director of a corporation,
or any individual performing similar functions with respect to any
organization whether incorporated or incorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only
a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person.
(5) The term "obligor" means any obligor upon the Securities
within the meaning of TIA.
(6) The term "executive officer" means the president, every
vice president, every trust officer, the cashier, the secretary, and
the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(e) The percentages of the voting securities and other
securities specified in this Section shall be calculated in accordance
with the following provisions:
(1) A specified percentage of the voting securities of the
Trustee, any obligor or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares and the number of
units if relating to any other kind of Security.
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(4) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
substantially the same rights and privileges; provided, however, that
in the case of secured evidences of indebtedness, all of which are
issued under a single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed sufficient
to constitute such series different classes; and provided, further,
that, in the case of unsecured evidences of indebtedness, differences
in the interest rates or maturity dates thereof shall not be deemed
sufficient to constitute them securities of different classes, whether
or not they are issued under a single indenture.
SECTION 1.009. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
a corporation organized and doing business under the laws of the United States
of America or of any State, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 1.10. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 9.11.
(b) The Trustee may resign at any time by giving written
notice thereof to PNM and the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to PNM, the Company and the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee, PNM and to the Company.
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(d) If at any time:
(i) the Trustee shall fail to comply with Section
9.08(a) after written request therefor by any Lessor or by any
Securityholder who has been a bona fide Holder of a Security
for at least 6 months, or
(ii) the Trustee shall cease to be eligible under
Section 9.09 and shall fail to resign after written request
therefor by any Lessor or by any such Securityholder, or
(iii) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) PNM, acting after consultation with the Company, may
remove the Trustee by Board Resolution or (ii) subject to Section 8.10, any
Securityholder who has been a bona fide Holder of a Security for at least 6
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, PNM, acting after consultation with the Company, shall promptly
appoint by Board Resolution a successor Trustee. If, within 1 year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to PNM, the Company and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor Trustee and supersede
the successor Trustee appointed by PNM. If no successor Trustee shall have been
so appointed by PNM, acting after consultation with the Company, or by the
Securityholders, and accepted appointment in the manner hereinafter provided,
any Securityholder who has been a bona fide Holder of a Security for at least 6
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 1.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to PNM, the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
any Lessor, the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 9.07. Upon request of
any such successor Trustee, PNM and the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
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SECTION 1.12. Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 1.13. Preferential Collection of Claims against any
Obligor.
[(a) Subject to Subsection (b) of this Section, if the
Trustee shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of any obligor on the Securities (as defined in Subsection (c) of
this Section) within 4 months prior to a default, as defined in Subsection (c)
of this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):
(i) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the beginning
of such 4 month period and valid as against any obligor on the
Securities and its other creditors, except any such reduction
resulting from the receipt or disposition of any property
described in paragraph (ii) of this Subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or
against any such obligor upon the date of such default; and
(ii) all property received by the Trustee in respect
of any claim as such creditor, either as security therefor, or
in satisfaction or composition thereof, or otherwise, after
the beginning of such 4 month period, or an amount equal to
the proceeds of any such property, if disposed of, subject,
however, to the rights, if any, of any obligor on the
Securities and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made
on account of any such claim by any Person (other than an
obligor on the Securities) who is liable thereon, and (ii) the
proceeds of the bona fide sale of any such claim by the
Trustee to a third person, and (iii) distributions made in
cash, securities or other property in respect of claims filed
against such obligor in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such 4 month
period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such 4 month period and such
property was received as security therefor simultaneously with
the creation thereof,
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and if the Trustee shall sustain the burden of proving that at
the time such property was so received the Trustee had no
reasonable cause to believe that a default as defined in
Subsection (c) of this Section would occur within 4 months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held
as security for such claim as provided in paragraph (B) or
(C), as the case may be, to the extent of the fair value of
such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after the
beginning of such 4 month period for property held as security at the time of
such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the holders of other
indenture securities in such manner that the Trustee, the Securityholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
obligor on the Securities in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
the same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from such obligor
of the funds and property in such special account and before crediting to the
respective claims of the Trustee and the Securityholders and the holders of
other indenture securities dividends on claims filed against such obligor in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal Bankruptcy Act or applicable State law, whether such distribution
is made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and the
Securityholders and the holders of other indenture securities, in accordance
with the provisions of this paragraph, the funds and property held in such
special account and proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due consideration
in determining the fairness of the distributions to be made to the Trustee and
the Securityholders and the holders of other indenture securities with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such 4 month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such 4 month
period, it shall be subject to the provisions of this Subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account if such Trustee had
continued as Trustee, occurred after the beginning of such 4 month
period; and
(ii) such receipt of property or reduction of claim occurred
within 4 months after such resignation or removal.
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(b) There shall be excluded from the operation of Subsection
(a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of PNM; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.
(2) The term "other indenture securities" means securities
upon which the Person obligated thereunder is an obligor (as defined in
the Trust Indenture Act) outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii)
under which a default exists at the time of the apportionment of the
funds and property held in a special account as provided in Subsection
(a) of this Section.
(3) The term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within 7 days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, ▇▇▇▇ of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by any obligor on the Securities for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or sale of
goods, wares or merchandise and which is secured by documents
evidencing title to, possession of or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with such obligor arising
from the making, drawing, negotiating or incurring of the draft, ▇▇▇▇
of exchange, acceptance or obligation.
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(5) The term "obligor" means any obligor upon the Securities
within the meaning of the TIA.
SECTION 1.14. Maintenance of Agencies.
(a) There shall at all times be maintained in the Borough of
Manhattan, the City of New York, an office or agency where Securities may be
presented or surrendered for transfer or exchange or for the registration
thereof, and for payment of principal, premium (if any) and interest and where
notices and demands to or upon the Trustee in respect of the Securities or of
this Indenture may be served. Such office or agency shall be initially at the
Corporate Trust Office of Chemical Bank. Written notice of the location of each
such other office or agency and of any change of location thereof shall be given
to the Company and to the Trustee. In the event that no such office or agency
shall be maintained or no such notice of location or of change of location shall
be given, presentations and demands may be made and notices may be served at the
Corporate Trust Office.
(b) There shall at all times be a Security Registrar and a
Paying Agent hereunder. Each such Authorized Agent shall be a bank or trust
company, shall be a corporation organized and doing business under the laws of
the United States or any State thereof, with a combined capital and surplus of
at least $50,000,000, and shall be authorized under such laws to exercise
corporate trust powers, subject to supervision by Federal or State authorities.
Chemical Bank is hereby appointed as Paying Agent and Security Registrar
hereunder. Each Security Registrar (other than the Trustee) shall furnish to the
Trustee, at stated intervals of not more than 6 months, and at such other times
as the Trustee may request in writing, a copy of the Security Register.
(c) Any Paying Agent (other than the Trustee) from time to
time appointed hereunder shall execute and deliver to the Trustee an instrument
in which said Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of,
and premium (if any) and interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee within five days thereafter notice of any
default by any obligor upon the Securities in the making of any such
payment of principal, premium (if any) or interest; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
Notwithstanding any other provision of this Indenture, any payment required to
be made to or received or held by the Trustee may, to the extent authorized by
written instructions of the Trustee, be made to or received or held by a Paying
Agent in the Borough of Manhattan, the City of New York, for the account of the
Trustee.
(d) Any corporation into which any Authorized Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any Authorized
Agent shall be a party, or any corporation succeeding to the corporate trust
business of any Authorized Agent, shall be the successor of such Authorized
Agent hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authorized Agent or such successor
corporation.
(e) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee, PNM and the Company. The Company
may, and at the request of the Trustee or any Lessor shall, at any time,
terminate the agency of any Authorized Agent by giving written notice of
termination to such Authorized Agent and to the Trustee. Upon the resignation or
termination of an Authorized Agent or in case at any time any such Authorized
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Agent shall cease to be eligible under this Section (when, in either case, no
other Authorized Agent performing the functions of such Authorized Agent shall
have been appointed), the Company shall promptly appoint one or more qualified
successor Authorized Agents approved by the Trustee and each Lessor to perform
the functions of the Authorized Agent which has resigned or whose agency has
been terminated or who shall have ceased to be eligible under this Section. The
Company shall give written notice of any such appointment to all Holders as
their names and addresses appear on the Security Register.
ARTICLE II.
SECURITYHOLDERS' LISTS AND REPORTS BY TRUSTEE AND PNM
SECTION 1.001. PNM to Furnish Trustee Names and Addresses of
Securityholders.
PNM will furnish or cause to be furnished to the Trustee
semiannually, between January 15 and January 30, inclusive, and between July 15
and July 30, inclusive, in each year, and at such other times as the Trustee may
request in writing, within 30 days after receipt by PNM of any such request, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities, in each case as of a date not more than
15 days prior to the time such list is furnished; provided, however, that so
long as the Trustee is the sole Security Registrar, no such list need be
furnished for so long as a copy of the Security Register is being furnished to
the Trustee pursuant to Section 9.14(b).
SECTION 1.002. Preservation of Information; Communications to
Securityholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 9.14(b) or Section 10.01, as the case may be, and the names and
addresses of Holders of Securities received by the Trustee in its capacity as
Security Registrar, if so acting. The Trustee may destroy any list furnished to
it as provided in Section 9.14(b) or Section 10.01, as the case may be, upon
receipt of a new list so furnished.
(b) If three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Securities with respect to their rights under this Indenture or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within 5 Business Days after the receipt of such application, at its election,
either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 10.02(a), or
(ii) inform such applicants as to the approximate
number of Holders of Securities whose names and addresses
appear in the information preserved at the time by the Trustee
in accordance with Section 10.02(a), and as to the approximate
cost of mailing to such Securityholders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with Section
10.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities or would be in violation of applicable
law. Such written statement shall specify the basis of such opinions.
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If the Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with PNM and the Trustee that neither PNM nor the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with Section
10.02(b), regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 10.02(b).
SECTION 1.003. Reports by Trustee.
(a) Within 60 days after May 15 in each year, commencing with
1986, the Trustee shall transmit by mail to all Securityholders, as their names
and addresses appear in the Security Register, a brief report dated as of such
May 15 with respect to:
(1) it eligibility under Section 9.09 and its qualifications
under Section 9.08, or in lieu thereof, if to the best of its knowledge
it has continued to be eligible and qualified under said Sections, a
written statement to such effect;
(2) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on any
property or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such advances
if such advances so remaining unpaid aggregate not more than 1/2 of 1%
of the principal amount of the Securities Outstanding on the date of
such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by an obligor on the Securities within the meaning
of the TIA to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a
creditor relationship arising in any manner described in Section
9.13(b)(2), (3), (4) or (6);
(4) the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(5) any release, or release and substitution, of property
subject to the lien of this Indenture (and the consideration therefor,
if any) which the Trustee has not previously reported;
(6) any additional issue of Securities which the Trustee has
not previously reported; and
(7) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of
a default, notice of which has been or is to be withheld by the Trustee
in accordance with Section 9.02.
(b) The Trustee shall transmit by mail to all Securityholders,
as their names and addresses appear in the Security Register, a brief report
with respect to:
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(1) the release, or release and substitution, of property
subject to the Lien of this Indenture (and the consideration therefor,
if any), such report to be transmitted within 90 days of such time; and
(2) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) since the date of the last
report transmitted pursuant to Subsection (a) of this Section (or if no
such report has yet been so transmitted, since the date of execution of
this instrument) for the reimbursement of which it claims or may claim
a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee, and which it has not previously
reported pursuant to this Subsection, except that the Trustee shall not
be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal
amount of the Securities Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, and also with the Commission. PNM
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 1.004. Reports by PNM.
PNM will
(1) file with the Trustee, within 15 days after PNM is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which PNM may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934: or, if PNM is not
required to file information, documents or reports pursuant to either
of said Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by PNM with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Securityholders, as their names
and addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by PNM pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
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ARTICLE I.
SUPPLEMENTAL INDENTURES
SECTION 1.011. Supplemental Indentures Without Consent of
Securityholders.
Without the consent of the Holders of any Securities, PNM,
when authorized by a Board Resolution, the Company and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental hereto
(a "Series Supplemental Indenture" in the case of item 1 below), in form
satisfactory to the Trustee, for any of the following purposes:
(1) to establish the form and terms of Securities of any
series of Securities permitted by Sections 2.01 and 2.03; or
(2) to evidence the succession of another corporation to PNM,
and the assumption by any such successor of the covenants of PNM herein
contained, or to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained; or
(3) to add to the covenants of PNM or the Company, for the
benefit of the Holders of the Securities, or to surrender any right or
power herein conferred upon PNM or the Company; or
(4) to convey, transfer and assign to the Trustee, and to
subject to the Lien of this Indenture, with the same force and effect
as though included in the Granting Clauses hereof, additional Pledged
Lessor Notes or additional properties or assets, and to correct or
amplify the description of any property at any time subject to the Lien
of this Indenture or to assure, convey and confirm unto the Trustee any
property subject or required to be subject to the Lien of this
Indenture; or
(5) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to continue the
qualification of this Indenture (including any supplemental indenture)
under the TIA, or under any similar federal statute hereafter enacted,
and to add to this Indenture such other provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to in
Section 316(a)(2) of the TIA as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar
federal statute hereafter enacted; or
(6) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such action
shall not adversely affect the interest of the Holders of the
Securities.
SECTION 1.012. Supplemental Indenture With Consent of
Securityholders.
With the consent of (i) the Holders of not less than a
majority in principal amount of the Outstanding Securities, by Act of said
Holders delivered to the Company and the Trustee, and (ii) PNM, when authorized
by a Board Resolution, and the Company may and the Trustee, subject to Section
11.03 shall, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner the rights and
obligations of the Holders of the Securities and of PNM and the Company under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, or the dates or circumstances of payment of
premium (if any) on, any Security, or reduce the principal amount
thereof or the interest thereon or any premium payable upon the
redemption thereof, or change
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the place of payment where, or the coin or currency in which, any
Security or the premium (if any) or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment of principal or interest on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date) or such payment of premium (if any) on or after the date such
premium becomes due and payable or change the dates or the amounts of
payments to be made through the operation of the Sinking Fund in
respect of such Securities; or
(2) except with respect to additional series of Securities
issued in accordance with the terms of this Indenture, permit the
creation of any lien prior to or pari passu with the Lien of this
Indenture with respect to any of the Pledged Property, or terminate the
Lien of this Indenture on any Pledged Property (except in each case as
permitted by, and pursuant to, Article Four) or deprive any
Securityholder of the security afforded by the Lien of this Indenture;
or
(3) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture; or
(4) modify any of the provisions of this Section or Section
8.08[9]6, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Security affected thereby.
Upon receipt by the Trustee of Board Resolutions of PNM and
the Company and such other documentation as the Trustee may reasonably require
and upon the filing with the Trustee of evidence of the Act of said Holders, the
Trustee shall join in the execution of such supplemental indenture or other
instrument, as the case may be, subject to the provisions of Sections 11.03 and
11.04.
It shall not be necessary for any Act of Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 1.013. Documents Affecting Immunity or Indemnity.
If in the opinion of the Company or the Trustee any document
required to be executed by it pursuant to the terms of Section 11.02 affects any
interest, right, duty, immunity or indemnity in favor of the Company or the
Trustee under this Indenture or any of the Participation Agreements, the Company
or the Trustee, as the case may be, may in its discretion decline to execute
such document.
SECTION 1.014. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 9.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture.
SECTION 1.015. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
--------
6 Paragraph (b) of Article III to the Series 1986A Bond Supplemental
Indenture corrected the defective reference to Section 8.09. See Exhibit B.
#30122041.1
53
SECTION 1.016. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the TIA as then in effect.
SECTION 1.017. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by any Lessor or the Company, bear a notation in form approved by such Lessor,
the Company and the Trustee as to any matter provided for in such supplemental
indenture; and, in such case, suitable notation may be made upon Outstanding
Securities after proper presentation and demand. If any Lessor or the Company
shall so determine, new Securities so modified as to conform, in the opinion of
such Lessor, the Company and the Trustee, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
ARTICLE II.
DEFEASANCE
SECTION 1.021. Payment of Indebtedness; Satisfaction and
Discharge of this Indenture.
This Indenture shall cease to be of further effect (except as
to any rights of registration of transfer or exchange of Securities herein
expressly provided for and the rights of the Trustee, any predecessor Trustee
and any Authorized Agent under Section 9.07), and the Trustee, on demand and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or redeemed as provided in Section
2.09 and (ii) Securities for the payment of which money held in trust
hereunder has been paid to the Company and discharged from such trust,
as provided in Section 5.03) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable; or
(ii) will become due and payable at their Stated
Maturity of principal within one year; or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name and at the
expense of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee in trust
(subject to Section 9.06 hereof) for the purpose of paying and
discharging the entire indebtedness on such Securities not
theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation, an amount sufficient to discharge
such indebtedness, including principal, premium (if any) and
interest to the date of such deposit (in the case of
Securities which have become due and payable), or to the
Stated Maturity of principal or Redemption Date, as the case
may be;
#30122041.1
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(2) All other sums then due and payable hereunder have been
paid; and
(3) PNM or the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
SECTION 1.022. Application of Deposited Money.
All money deposited with the Trustee pursuant to Section 12.01
shall be held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment to the Persons entitled
thereto of the principal, premium (if any), and interest for the payment of
which such money has been deposited with the Trustee.
ARTICLE III.
RELEASE OF FUNDS BY THE TRUSTEE
FOR PAYMENT OF THE PLEDGED LESSOR
NOTES AND RELEASE AND SUBSTITUTION OF PLEDGED PROPERTY
SECTION 1.031. Conditions Precedent to Release of Funds by the
Trustee for Payment of the Pledged Lessor Notes.
The obligation of the Trustee to make payments to the Lessors
pursuant to Section 2.15(b) hereof is subject to the receipt by the Trustee of
the following:
(a) an executed counterpart of a supplemental indenture
appropriate to subject to the Lien of this Indenture the related Pledged Lessor
Notes;
(b) the documents, opinions and certificates specified in the
provision to Section 2.04;
(c) a written notice of the Company, dated as of the closing
date under the applicable Participation Agreements (the Closing Date), of the
Closing Date;
(d) a certificate of each Lessor dated as of the Closing Date
under the related Participation Agreement (i) specifying the principal amount of
the Pledged Lessor Note to be issued thereby and (ii) stating that (A) such
Lessor has received the amount of the Equity Investor's investment pursuant to
applicable provisions of such Participation Agreement and that such amount is
available for use by such Lessor pursuant to applicable provisions of such
Participation Agreement upon receipt of the amount to be paid by the Trustee
with respect to such Pledged Lessor Note pursuant to Section 2.15(b) hereof; (B)
to the best knowledge of such Lessor no event has occurred and is continuing
which constitutes an Indenture Event of Default, or would constitute an
Indenture Event of Default after notice or lapse of time or both under the
related Lease Indenture and (C) the Pledged Lessor Note of such Lessor has been
duly authorized, executed and delivered by such Lessor and is a valid and
binding obligation of such Lessor; and
(e) such other documents and evidence with respect to the
Lessors and the Company as the Trustee may reasonably request.
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ARTICLE IV.
SUNDRY PROVISIONS
SECTION 1.041. Execution in Counterparts.
This instrument may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
#30122041.1
56
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
FIRST PV FUNDING CORPORATION
By
------------------------
President
Attest:
---------------------------------
Assistant Secretary
PUBLIC SERVICE COMPANY OF NEW MEXICO
By
--------------------------------
Senior Vice President
and Chief Financial Officer
Attest:
--------------------------------
Assistant Secretary
CHEMICAL BANK
By
-------------------------------
Vice President
Attest:
--------------------------------
Assistant Secretary
#30122041.1
EXHIBIT A
TO
COLLATERAL TRUST
INDENTURE
REQUIREMENTS FOR PLEDGED LESSOR
NOTES AND LEASE INDENTURES
The Pledged Lessor Notes and the Lease Indentures relating
to any series of Securities shall contain the provisions summarized below or
other provisions substantially as protective or more protective of the interests
of Holders of Outstanding Securities. Notwithstanding the foregoing, (i) the
Principal Instruments in connection with the initial series of Securities issued
under this Indenture shall be deemed to satisfy all criteria set forth in this
Exhibit A and (ii) the Principal Instruments in connection with any subsequent
series of Securities, if substantially similar in form and substance to the
Principal Instruments in connection with such initial series of Securities,
shall also be deemed to satisfy all criteria set forth in this Exhibit A.
I. Each Pledged Lessor Note will:
(i) be duly issued pursuant to, and be secured by,
the related Lease Indenture;
(ii) provide for the payment to the registered holder
thereof, not later than when due, of amounts at least equal to
that portion of all principal of and premium, if any, and
interest on the series of Securities issued in connection with
and relating to the pledge thereof under the Indenture, such
payment to be without defenses or set-offs and otherwise
unconditional;
(iii) if such Pledged Lessor Note is the initial
series issued under the related Lease Indenture, the principal
amount thereof shall not exceed an amount equal to 90% of sum
of the aggregate purchase price of the property being
purchased with the proceeds of the issuance and sale of such
Lessor Note; and (B) if such Pledged Lessor Note is of an
additional series issued under the related Lease Indenture,
the sum of the principal amount thereof and the principal
amount of Pledged Lessor Notes theretofore issued under such
Lease Indenture shall not exceed an amount equal to 90% of the
sum of (1) the aggregate purchase price of property being
purchased with the proceeds of the issuance and sale of such
Lessor Note and (2) the aggregate purchase price of the
property purchased with the proceeds of the issuance and sale
of each Pledged Lessor Note theretofore issued; and
(iv) provide that no Change to the Pledged Lessor
Note may be made without the consent of the holder thereof.
II. Each Lease Indenture will:
(i) assign to the Lease Indenture Trustee obligations
under the related Lease to which the Owner Trustee then or
thereafter is entitled at least sufficient to pay the
principal of, premium, if any, and interest on the related
Pledged Lessor
#30122041.1
1
Note; and
(ii) contain provisions no less protective of the
interests of Holders of Securities than the following
provisions of the Lease Indentures in connection with the
initial series of Securities: Article II, Sections 3.4, 3.5,
3.6, 3.8, 3.11, Article V, Article VI and Article VII.
#30122041.1
2
TABLE OF CONTENTS
Page
RECITALS..................................................................... 1
GRANTING CLAUSES............................................................ 1
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........ 2
SECTION 1.01. Definitions.................................................... 2
SECTION 1.02. Compliance Certificates and Opinions......................... 7
SECTION 1.03. Form of Documents Delivered to Trustee....................... 8
SECTION 1.04. Acts of Holders.............................................. 8
SECTION 1.05. Notices, etc., to Trustee, PNM and Company................... 9
SECTION 1.06. Notices to Holders; Waiver................................... 9
SECTION 1.07. Conflict with Trust Indenture Act............................ 10
SECTION 1.08. Effect of Heading and Table of Contents...................... 10
SECTION 1.09. Successors and Assigns....................................... 10
SECTION 1.10. Separability Clause.......................................... 10
SECTION 1.11. Benefits of Indenture........................................ 10
SECTION 1.12. Governing Law................................................ 10
SECTION 1.13. Legal Holidays............................................... 10
ARTICLE II.
THE SECURITIES............................................... 11
SECTION 2.01. Forms Generally.............................................. 11
SECTION 2.02. Form of Trustee's Authentication............................. 11
SECTION 2.03. Amount Unlimited; Issuable in Series; Limitations
on Issuance................................................ 11
SECTION 2.04. Authentication and Delivery of Securities.................... 12
SECTION 2.05. Form and Denominations....................................... 13
SECTION 2.06. Execution of Securities...................................... 14
SECTION 2.07. Temporary Securities......................................... 14
SECTION 2.08. Registration, Transfer and Exchange.......................... 14
SECTION 2.09. Mutilated, Destroyed, Lost and Stolen Securities............. 15
SECTION 2.10. Payment of Interest; Interest Rights Preserved............... 16
SECTION 2.11. Persons Deemed Owners........................................ 17
SECTION 2.12. Cancellation................................................. 17
SECTION 2.13. Dating of Securities; Authentication......................... 17
SECTION 2.14. Source of Payments; Rights and Liabilities of Lessors
and Equity Investors....................................... 17
SECTION 2.15. Sale of Securities; and Application of Proceeds from
the Sale of Securities..................................... 17
ARTICLE III.
PROVISIONS AS TO PLEDGED PROPERTY............................ 18
SECTION 3.01. Holding of Pledged Securities................................ 18
SECTION 3.02. Disposition of Payments on Pledged Property.................. 18
SECTION 3.03. Exercise of Rights and Powers Under Pledged Lessor
Notes and Lease Indentures................................. 18
SECTION 3.04. Certain Actions in Case of Judicial Proceedings.............. 19
SECTION 3.05. Cash Held by Trustee Treated as a Deposit.................... 19
#30122041.1
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TABLE OF CONTENTS, Continued
Page
ARTICLE IV.
WITHDRAWAL OF COLLATERAL..................................... 19
SECTION 4.01. Withdrawal of Collateral..................................... 19
SECTION 4.02. Reassignment of Pledged Lessor Notes upon Payment............ 19
ARTICLE V.
COVENANTS ................................................... 20
SECTION 5.01. Payment of Principal, Premium (if any) and Interest.......... 20
SECTION 5.02. Maintenance of Office or Agency.............................. 20
SECTION 5.03. Money for Security Payments to be Held in Trust.............. 20
SECTION 5.04. Maintenance of Corporate Existence........................... 21
SECTION 5.05. Protection of Pledged Property............................... 21
SECTION 5.06. Opinions as to Pledged Property.............................. 21
SECTION 5.07. Performance of Obligations................................... 22
SECTION 5.08. Negative Covenants........................................... 22
SECTION 5.09. Administration of Principal Instruments...................... 23
SECTION 5.10. Annual Statement as to Compliance............................ 24
ARTICLE VI.
REDEMPTION OF SECURITIES..................................... 25
SECTION 6.01. Notice to Trustee of Redemption.............................. 25
SECTION 6.02. Selection by Trustee of Securities to be Redeemed............ 25
SECTION 6.03. Notice of Redemption......................................... 26
SECTION 6.04. Deposit of Redemption Price.................................. 26
SECTION 6.05. Securities Payable on Redemption Date........................ 26
SECTION 6.06. Securities Redeemed in Part.................................. 27
ARTICLE VII.
SINKING FUNDS ............................................... 27
SECTION 7.01. Sinking Funds for Securities................................. 27
SECTION 7.02. Selection by Trustee of Securities to be Redeemed
Through Operation of Sinking Fund.......................... 28
ARTICLE VIII.
EVENTS OF DEFAULT; REMEDIES.................................. 29
SECTION 8.01. Events of Default. .......................................... 29
SECTION 8.02. Acceleration of Maturity; Rescission and Annulment........... 30
SECTION 8.03. Trustee's Power of Sale of Pledged Property; Notice
Required; Power to Bring Suit.............................. 31
SECTION 8.04. Incidents of Sale of Pledged Property........................ 32
SECTION 8.05. Judicial Proceedings Instituted by Trustee................... 33
#30122041.1
ii
TABLE OF CONTENTS, Continued
Page
SECTION 8.06. Securityholders May Demand Enforcement of Rights
by Trustee................................................. 34
SECTION 8.07. Control by Securityholders................................... 35
SECTION 8.08. Waiver of Past Defaults...................................... 35
SECTION 8.09. Securityholder May Not Bring Suit Except under
Certain Conditions......................................... 35
SECTION 8.10. Undertaking To Pay Court Costs............................... 36
SECTION 8.11. Right of Securityholders To Receive Payment Not
To Be Impaired............................................. 36
SECTION 8.12. Application of Moneys Collected by Trustee................... 36
SECTION 8.13. Securities Held by Certain Persons Not To Share
in Distribution............................................ 37
SECTION 8.14. Waiver of Appraisement, Valuation, Stay, Right
to Marshalling............................................. 37
SECTION 8.15. Remedies Cumulative; Delay or Omission Not a Waiver.......... 38
ARTICLE IX.
THE TRUSTEE ................................................. 38
SECTION 9.01. Certain Duties and Responsibilities. ........................ 38
SECTION 9.02. Notice of Defaults........................................... 39
SECTION 9.03. Certain Rights of Trustee.................................... 39
SECTION 9.04. Not Responsible for Recitals or Issuance of Securities....... 40
SECTION 9.05. May Hold Securities.......................................... 40
SECTION 9.06. Funds May Be Held by Trustee or Paying Agent; Investments.... 40
SECTION 9.07. Compensation and Reimbursement............................... 41
SECTION 9.08. Disqualification; Conflicting Interests...................... 41
SECTION 9.09. Corporate Trustee Required; Eligibility...................... 45
SECTION 9.10. Resignation and Removal; Appointment of Successor............ 46
SECTION 9.11. Acceptance of Appointment by Successor....................... 47
SECTION 9.12. Merger, Conversion, Consolidation or Succession to
Business................................................... 47
SECTION 9.13. Preferential Collection of Claims against any Obligor........ 47
SECTION 9.14. Maintenance of Agencies...................................... 50
ARTICLE X.
SECURITYHOLDERS' LISTS AND REPORTS BY TRUSTEE AND PNM....... 51
SECTION 10.01. PNM to Furnish Trustee Names and Addresses of
Securityholders........................................... 51
SECTION 10.02. Preservation of Information; Communications to
Securityholders........................................... 52
SECTION 10.03. Reports by Trustee.......................................... 53
SECTION 10.04. Reports by PNM.............................................. 54
ARTICLE XI.
SUPPLEMENTAL INDENTURES..................................... 54
SECTION 11.01. Supplemental Indentures Without Consent of
Securityholders........................................... 54
SECTION 11.02. Supplemental Indenture With Consent of
Securityholders........................................... 55
SECTION 11.03. Documents Affecting Immunity or Indemnity................... 56
SECTION 11.04. Execution of Supplemental Indentures........................ 56
SECTION 11.05. Effect of Supplemental Indentures........................... 56
SECTION 11.06. Conformity with Trust Indenture Act......................... 57
SECTION 11.07. Reference in Securities to Supplemental Indentures.......... 57
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iii
Page
----
ARTICLE XII.
DEFEASANCE ................................................. 57
SECTION 12.01. Payment of Indebtedness; Satisfaction and Discharge
of this Indenture......................................... 57
SECTION 12.02. Application of Deposited Money.............................. 58
ARTICLE XIII.
RELEASE OF FUNDS BY THE TRUSTEE
FOR PAYMENT OF THE PLEDGED LESSOR
NOTES AND RELEASE AND SUBSTITUTION OF PLEDGED PROPERTY ..... 58
SECTION 13.01. Conditions Precedent to Release of Funds by the Trustee
for Payment of the Pledged Lessor Notes................... 58
ARTICLE XIV.
SUNDRY PROVISIONS........................................... 59
SECTION 14.01. Execution in Counterparts................................... 59
PARTIES
EXHIBIT A Requirements for Pledged Lessor Notes, Lease Indentures, Leases
and Participation Agreements
EXHIBIT B 1986A Bond Supplemental Indenture
EXHIBIT C 1986B Bond Supplemental Indenture
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ of Pledge
EXHIBIT E Unit 2 Supplemental Indenture of Pledge
EXHIBIT F 1994 Supplemental Indenture (adding to Section 7.01)
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iv
EXHIBIT B to
Conformed Collateral
Trust Indenture
=============================================
FIRST PV FUNDING CORPORATION,
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
CHEMICAL BANK,
as Trustee
SERIES 1986A BOND SUPPLEMENTAL INDENTURE
Dated as of July 15, 1986
to
COLLATERAL TRUST INDENTURE
dated as of December 16, 1985
Providing for the Issuance of
$253,677,000 Aggregate Amount
of Lease Obligation Bonds Series 1986A
with the Interest Rates and Stated Maturities
Set Forth Herein
=============================================
PALO VERDE NUCLEAR GENERATING STATION
#30122043.1
v
SERIES 1986A BOND SUPPLEMENTAL INDENTURE, dated as of July 15,
1986 among FIRST PV FUNDING CORPORATION (the Company), Public Service Company of
New Mexico (PNM) and Chemical Bank, as trustee (the Trustee).
WHEREAS, the Company and PNM have heretofore executed and
delivered to the Trustee an indenture dated as of December 16, 1985 (the
Original Indenture) to provide for the issue from time to time of the Company's
debentures, notes or other evidences of indebtedness to be issued in one or more
series (the Securities);
WHEREAS, Section 2.03 of the Original Indenture provides,
among other things, that PNM, the Company and the Trustee may enter into
indentures supplemental to the Original Indenture for, among other things, the
purpose of establishing the form and terms of Securities of any series as
permitted by Section 2.03 of the Original Indenture;
WHEREAS, PNM and the Company heretofore executed and delivered
a Term Note Supplemental Indenture, dated as of December 31, 1985 (the Series
1985 Term Note Supplemental Indenture), to the Trustee, and the Company issued
thereunder a series of Securities designated "Term Lease Obligation Notes,
Series 1985" in the aggregate principal amount of $250,250,000;
WHEREAS, Section 1.03 of the Series 1985 Term Note
Supplemental Indenture provides, among other things, that the Term Lease
Obligation Notes, Series 1985, shall be redeemed in connection with the issuance
of a series of Securities to effect a refunding of the same;
WHEREAS, PNM and the Company (i) desire the issuance by the
Company of a new series of Securities, to be designated as hereinafter provided,
to effect a refunding of the Term Lease Obligation Notes, Series 1985, and for
other purposes and (ii) have requested the Trustee to enter into this Series
1986A Bond Supplemental Indenture for the purpose, among others, of establishing
the form and terms of the Securities of such series;
WHEREAS, all action on the part of the Company necessary to
authorize the issuance of $253,677,000 principal amount of its Lease Obligation
Bonds Series 1986A (the Bonds) under the Original Indenture and this Series
1986A Bond Supplemental Indenture (said Original Indenture, as supplemented and
amended by the Series 1985 Term Note Supplemental Indenture, and this Series
1986A Bond Supplemental Indenture, being hereinafter called the Indenture) has
been duly taken;
WHEREAS, the Bonds to be issued hereunder are to be
substantially in the form annexed as Schedule 1 hereto;
WHEREAS, Section 11.02 of the Original Indenture provides
that, with the consent of Holders of not less than a majority in principal
amount of the Outstanding Securities and PNM, the Company and the Trustee may
enter into an indenture supplemental to the Original Indenture for the purpose
of changing the rights and obligations of the Holders of Securities and of PNM
and the Company under the Original Indenture;
WHEREAS, the Company desires to make the amendment to Section
8.02 of the Original Indenture set forth in clause (a) of Article Three of this
Series 1986A Bond Supplemental Indenture and the Holders of not less than a
majority in principal amount of the Outstanding Securities, by Act of said
holders, and PNM have given their consent to such amendment;
WHEREAS, Section 11.01 of the Original Indenture provides that
the Company and the Trustee may, without consent of the Holders of any
Securities, enter into an indenture supplemental to the Original Indenture to
cure a defective provision in the Original Indenture provided such action does
not adversely affect the interest of the Holders of the Securities;
#30122043.1
i
WHEREAS, the Company desires to make the amendment to Section
11.02(4) of the Original Indenture set forth in clause (b) of Article Three of
this Series 1986A Bond Supplemental Indenture; and
WHEREAS, all acts and things necessary to make the Securities
to be issued hereunder, when executed by the Company and authenticated and
delivered by the Trustee as provided in the Original Indenture, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid and binding supplemental indenture and agreement according to its terms,
have been done and performed, and the execution of this Series 1986A Bond
Supplemental Indenture and the creation and issuance under the Indenture of
$253,677,000 aggregate principal amount of the Bonds have in all respects been
duly authorized, and the Company, in the exercise of legal right and power in it
vested, executes this Series 1986A Bond Supplemental Indenture and proposes to
create, execute, issue and deliver the Bonds:
NOW, THEREFORE, THIS SERIES 1986A BOND SUPPLEMENTAL INDENTURE
WITNESSETH:
That in order to establish the form and terms of and to
authorize the authentication and delivery of the Securities to be issued
hereunder, and in consideration of the acceptance of such Securities by the
holders thereof and of the sum of one dollar duly paid to the Company by the
Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company and PNM each covenant and agree with the Trustee, for
the equal and proportionate benefit of the respective holders from time to time
of the Securities, as follows:
ARTICLE III.
THE BONDS
SECTION 1.031. Terms of the Bonds.
There is hereby created a series of Securities designated
"Lease Obligation Bonds Series 1986A". Subject to the exceptions referred to in
the Original Indenture, the aggregate principal amount of the Bonds that may be
authenticated and delivered under the Indenture is limited to $253,677,000.
Bonds in the aggregate principal amount of $253,677,000 may forthwith be
executed by the Company and delivered to the Trustee for authentication and
delivery by the Trustee in accordance with the provisions of Section 2.04 of the
Original Indenture in the following amounts for the Stated Maturities of
principal and at the interest rates indicated:
Stated Maturity Interest Principal
of Principal Rate Amount
------------ ---- ------
July 15, 1991 8.300% $25,332,000
July 15, 1996 9.125% $40,532,000
January 15, 2014 10.300% $187,813,000
------------
$253,677,000
The Bonds shall be payable, bear interest and have and be
subject to such other terms as provided in the form of Bond attached as Schedule
1 hereto.
SECTION 1.032. Mandatory Redemption of the Bonds.
(a) Termination of Lease. In the event that there shall occur
under Section 14 of any Lease identified in Schedule 2 hereto a termination of
such Lease, Bonds with a Stated Maturity of principal of January 15, 2014 shall
be redeemed, in part, in proportion to the principal amount of the Pledged
Lessor Notes related to such Lease (the Prepaid Lessor Notes), prepaid in
accordance with their terms and Section 5.2 of the Lease Indenture under which
#30122043.1
ii
such Pledged Lessor Notes are issued. Any such redemption shall be on the same
date on which, and shall be made to the extent that, the Prepaid Lessor Notes
are so prepaid.
(b) Selection. In the event of a redemption of Bonds with a
Stated Maturity of principal of January 15, 2014 pursuant to Section 1.02(a) of
this Series 1986A Bond Supplemental Indenture, the Bonds so to be redeemed shall
be selected in accordance with Section 6.02 of the Indenture, but without giving
effect to the first proviso contained in such Section.
(c) Redemption Price. The Redemption Price for any Bond to be
redeemed pursuant to this Section 1.02 shall be 100% of the principal amount
thereof, together with accrued interest to the Redemption Date.
SECTION 1.033. Optional Redemption of Bonds.
The Bonds shall be redeemable prior to maturity at the option
of the Company at the times and redemption prices set forth in the form of Bond
attached as Schedule 1 hereto.
SECTION 1.034. Sinking Fund.
(a) Amounts and Dates. The Bonds shall be redeemed through
operation of a sinking fund. The amount of each Sinking Fund payment (subject to
adjustment as provided in Section 7.01 of the Indenture and paragraph (c) below)
and each Sinking Fund Date applicable to a Stated Maturity of principal of the
Bonds are as set forth below:
Stated Maturity
---------------
Sinking Fund July 15, July 15, January 15,
Date 1991 1996 2014
---------------- -------- -------- ---------
January 15, 1987 $1,515,000
July 15, 1987 1,809,000
January 15, 1988 2,375,000
July 15, 1988 2,475,000
January 15, 1989 2,577,000
July 15, 1989 2,684,000
January 15, 1990 2,795,000
July 15, 1990 2,912,000
January 15, 1991 3,032,000
July 15, 1991 3,158,000
January 15, 1992 $3,289,000
July 15, 1992 3,439,000
January 15, 1993 3,596,000
July 15, 1993 3,759,000
January 15, 1994 3,931,000
July 15, 1994 4,111,000
January 15, 1995 4,298,000
July 15, 1995 4,495,000
January 15, 1996 4,700,000
July 15, 1996 4,914,000
January 15, 1997 $5,138,000
July 15, 1997 5,403,000
January 15, 1998 5,680,000
#30122043.1
iii
July 15, 1998 4,078,000
January 15, 1999 4,193,000
July 15, 1999 2,584,000
January 15, 2000 4,417,000
Stated Maturity
---------------
Sinking Fund July 15, July 15, January 15,
Date 1991 1996 2014
---------------- -------- -------- ---------
July 15, 2000 $2,726,000
January 15, 2000 4,664,000
July 15, 2001 2,877,000
January 15, 2002 4,924,000
July 15, 2002 3,035,000
January 15, 2003 5,199,000
July 15, 2003 3,203,000
January 15, 2004 5,866,000
July 15, 2004 3,886,000
January 15, 2005 5,287,000
July 15, 2005 4,666,000
January 15, 2006 5,251,000
July 15, 2006 4,666,000
January 15, 2007 5,542,000
July 15, 2007 4,924,000
January 15, 2008 5,849,000
July 15, 2008 5,196,000
January 15, 2009 6,468,000
July 15, 2009 8,450,000
January 15, 2010 9,127,000
July 15, 2010 9,233,000
January 15, 2011 11,495,000
July 15, 2011 12,060,000
January 15, 2012 8,653,000
July 15, 2012 5,827,000
January 15, 2013 3,646,000
July 15, 2013 2,507,000
January 15, 2014 1,093,000
(b) Selection of Bonds. The provisions of Section 7.02 of the
Original Indenture to the contrary notwithstanding, the Trustee shall first
select for redemption on any Sinking Fund Date on which Bonds of a particular
Stated Maturity of principal (other than Bonds with a Stated Maturity of
principal of July 15, 1991) are to be redeemed in accordance with the Sinking
Fund relating thereto, such Bonds, if any, of such Stated Maturity of principal
as the Company shall specify (by Bond number) are held by PNM or an Affiliate of
PNM in a Company Request delivered to the Trustee at least 40 (but not more than
90) days prior to such Sinking Fund Date and upon which the Trustee may rely.
(c) Certain Adjustments to Sinking Funds. The principal amount
of Bonds of a particular Stated Maturity of principal to be redeemed through
operation of the Sinking Fund for the Bonds of such Stated Maturity of principal
may be adjusted (upward or downward) at the discretion of the Company at one
time (contemporaneously with similar adjustments for all Stated Maturities of
principal) prior to July 15, 1988; provided, however, that no such adjustment
#30122043.1
iv
shall be made by the Company which will increase or reduce the average life of
the Bonds of such Stated Maturity of principal (calculated in accordance with
generally accepted financial practice from the date of initial issuance) by more
than 6 months; provided further, however, such adjustment may only be made in
connection with an adjustment to basic rent pursuant to Section 3(d) of one or
more of the Leases identified in Schedule 2 hereto. If the Company shall elect
to make the foregoing adjustment, the Company shall deliver to the Trustee and
PNM at least 60 days prior to the first Sinking Fund Date proposed to be
affected by such adjustment, a Company Request (w) stating that the Company has
elected to make such adjustment in connection with adjustments to basic rent
under one or more of such Leases, (x) setting forth a revised schedule of
principal amounts of the Sinking Fund applicable to Bonds of the affected Stated
Maturity of principal, (y) attaching a copy of the revised schedules of
principal amortization for the related Pledged Lessor Notes identified in
Schedule 2 hereto and (z) attaching calculations showing that (i) the average
life of the Bonds of the affected Stated Maturity of principal will not be
reduced or increased except as permitted by this paragraph (c), (ii) the
aggregate principal amount of the Pledged Lessor Notes identified on Schedule 2
hereto equals the aggregate principal amount of the Bonds and (iii) the
aggregate amortization of the principal amount of such Pledged Lessor Notes is
sufficient to repay in full, as and when due, the principal amount of the Bonds
as and when due, whether upon redemption through operation of the applicable
Sinking Funds or at maturity. The Trustee may rely on such Company Request and
shall have no duty with respect to the calculations referred to in the foregoing
clause (z), other than to make them available for inspection by any Holder of
Bonds at the Corporate Trust Office upon reasonable notice. The Trustee shall,
at the expense of PNM, send to each Holder of Bonds of the affected Stated
Maturity of principal at least 20 days before the first Sinking Fund Date to be
affected thereby, by first class mail, a copy of such revised schedule of
principal amounts of Sinking Fund payments applicable to such Bonds.
(d) Redemption Price. The Redemption Price for any Bond to be
redeemed pursuant to paragraph (a) of this Section 1.04 shall be 100% of the
principal amount thereof, together with accrued interest to the Redemption Date.
ARTICLE IV.
PLEDGE OF LESSOR NOTES
To secure the payment of the principal of and premium (if any)
and interest on all the Securities from time to time Outstanding under the
Indenture, and the performance of the covenants therein and herein contained,
the Company by these presents does grant, bargain, sell, release, convey,
assign, transfer, mortgage, hypothecate, pledge, confirm and create a security
interest in, unto the Trustee, the Lessor Notes identified on Schedule 2 hereto
(herein referred to as the Pledged Lessor Notes).
TO HAVE AND TO HOLD the aforesaid Pledged Lessor Notes unto
the Trustee and its successors and assigns forever, in trust and for the uses
and purposes and subject to the covenants and conditions set forth in the
Indenture.
ARTICLE V.
AMENDMENTS TO ORIGINAL INDENTURE
(a) Amendment to Section 8.02. Section 8.02 of the Original
Indenture is hereby amended to delete (i) in its entirety the third paragraph
thereof and (ii) the words following the phrase "or impair any right consequent
thereon" in the concluding sentence of the second paragraph thereof and insert
in lieu thereof a ".".
(b) Amendment to Section 11.02. Clause (4) of Section 11.02 of
the Original Indenture is hereby amended to change the reference to "Section
8.09" therein to "Section 8.08".
#30122043.1
v
ARTICLE VI.
MISCELLANEOUS
SECTION 1.061. Execution as Supplemental Indenture.
This Series 1986A Bond Supplemental Indenture is executed and
shall be construed as an indenture supplemental to the Original Indenture and,
as provided in the Original Indenture, this Series 1986A Bond Supplemental
Indenture forms a part thereof. Except as herein expressly otherwise defined,
the use of the terms herein is in accordance with the definitions contained in
the Original Indenture.
SECTION 1.062. Responsibility for Recitals, Etc.
The recitals contained herein and in the Bonds, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company and PNM, and the Trustee assumes no responsibility for the correctness
of the same. The Trustee makes no representation as to the validity or
sufficiency of this Series 1986A Bond Supplemental Indenture or the Bonds.
SECTION 1.063. Provisions Binding on Successors.
All the covenants, stipulations, promises and agreements in
this Series 1986A Bond Supplemental Indenture contained by or on behalf of the
Company shall bind its successors and assigns, whether so expressed or not.
SECTION 1.064. New York Contract.
This Series 1986A Bond Supplemental Indenture and each Bond
shall be deemed to be a contract under the laws of the State of New York, and
for all purposes shall be governed by and construed in accordance with the laws
of said state.
SECTION 1.065. Counterparts.
This Series 1986A Bond Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the Company, PNM and the Trustee have
caused this Series 1986A Bond Supplemental Indenture to be duly executed by
their respective officers thereunto duly authorized, as of the date and year
first above written.
FIRST PV FUNDING CORPORATION
[CORPORATE SEAL]
By /s/ ▇.▇. ▇▇▇▇▇▇▇
----------------------------
President
Attest:
/s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Assistant Secretary
#30122043.1
vi
PUBLIC SERVICE COMPANY
OF NEW MEXICO
[CORPORATE SEAL]
By /s/ ▇.▇. ▇▇▇▇▇▇
-------------------------
Senior Vice President and
Chief Financial Officer
Attest:
/s/ ▇.▇. ▇▇▇▇▇▇
----------------------
Assistant Secretary
CHEMICAL BANK,
as Trustee
[CORPORATE SEAL]
By /s/ ▇.▇. ▇▇▇▇▇
------------------------
Vice President
Attest:
/s/ ▇. ▇▇ ▇▇▇▇▇▇▇
-------------------------
Trust Officer
#30122043.1
vii
Schedule 1
to
SERIES 1986A BOND
SUPPLEMENTAL INDENTURE
[FORM OF FACE OF BOND]
No. R- $
-----
FIRST PV FUNDING CORPORATION
LEASE OBLIGATION BOND SERIES 1986A
INTEREST RATE STATED MATURITY
REGISTERED HOLDER:
PRINCIPAL AMOUNT: DOLLARS
FIRST PV FUNDING CORPORATION, a Delaware corporation
(hereinafter called the "Company", which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to the Registered Holder (named above) hereof, or
registered assigns, the Principal Amount (stated above) on the Stated Maturity
(stated above) and to pay interest thereon from the date hereof, or from the
most recent interest payment date to which interest has been paid or duly
provided for, semiannually on July 15 and January 15, in each year, commencing
January 15, 1987, at the Interest Rate (stated above) per annum, until the
principal hereof is paid in full or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any interest payment date
will, as provided in such Indenture, be paid to the person in whose name this
Bond (or one or more Predecessor Securities, as defined in such Indenture) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the June 30 or December 31, as the case may be (whether
or not a Business Day, as defined in such Indenture), next preceding such
interest payment date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Registered Holder on such Regular
Record Date, and may be paid to the person in whose name this Bond (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice of which shall be given to the Bondholders not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Bonds may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in such Indenture. Payment of the
principal of (and premium, if any) and interest on this Bond will be made at the
corporate trust office of the Paying Agent, Chemical Bank (or if such office is
not in the Borough of Manhattan, The City of New York, at either such office or
an office to be maintained in such Borough), in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of interest or may be made at the option of the Company by check mailed to the
address of the Holder entitled thereto as such address shall appear on the
Security Register.
Interest on any overdue principal and premium, if any, and (to
the extent permitted by applicable law) any overdue interest shall be paid, on
demand, from the due date thereof at the rate of interest per annum (computed on
the basis of a 360-day year of twelve 30-day months) equal to 1% above the
Interest Rate (stated above) on this Bond for the period during which any such
principal, premium or interest shall be overdue.
#30122043.1
1
Reference is hereby made to the further provisions of this
Bond set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under such Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: July 17, 1986
FIRST PV FUNDING CORPORATION
By
-------------------------
President
Attest:
---------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
CHEMICAL BANK
as Trustee
By
-------------------------
Authorized Officer
#30122043.1
2
[FORM OF REVERSE OF BOND]
FIRST PV FUNDING CORPORATION
LEASE OBLIGATION BOND SERIES 1986A
This Bond is one of an authorized issue of Securities of the
Company known as its "Lease Obligation Bonds Series 1986A" (the "Bonds") issued
under, and all equally and ratably secured by, a Collateral Trust Indenture
dated as of December 16, 1985 among the Company, Public Service Company of New
Mexico, a New Mexico corporation (herein called "PNM"), and Chemical Bank, as
Trustee (herein called the "Trustee", which term includes any successor Trustee
under the Indenture), as heretofore supplemented and as further supplemented and
amended by the Series 1986A Bond Supplemental Indenture dated as of July 15,
1986 among such parties (collectively, the "Indenture") to which Indenture
reference is hereby made for a description of the nature and extent of the
securities and other property assigned, pledged and transferred thereunder, the
respective rights of the holders of the Bonds and of the Trustee and the Company
in respect of such security, and the terms upon which the Bonds are and are to
be authenticated and delivered.
The principal of, and premium, if any, and interest on, this
Bond are payable from, and secured by, the assets subject to the lien of the
Indenture or the income and proceeds received by the Trustee therefrom, and all
payments of principal, premium (if any) and interest shall be made in accordance
with the terms of the Indenture.
The Indenture and each of the Participation Agreements among
an Equity Investor (as hereinafter defined), a Lessor (as hereinafter defined),
the Company, the Lease Indenture Trustee (as hereinafter defined) and certain
other parties (each a "Participation Agreement") provide that, as and when
issued, certain Nonrecourse Promissory Notes (the "Pledged Lessor Notes"), in
aggregate principal amount of $253,677,000, to be issued by The First National
Bank of Boston, as owner trustee under one or more separate Trust Agreements,
with the respective institutional investors named in such Trust Agreements (The
First National Bank of Boston in each of such capacities as owner trustee being
herein called a "Lessor" and each such institutional investor being herein
called an "Equity Investor"), will be included within the assets subject to the
lien of the Indenture pursuant to indenture supplements. Such Pledged Lessor
Notes are to be issued under separate documents entitled Trust Indenture,
Mortgage, Security Agreement and Assignment of Rents, each between a Lessor and
Chemical Bank, as trustee (the "Lease Indenture Trustee") (each of such Trust
Indentures, as it is executed and delivered and as thereafter amended in
accordance with its terms, being herein called a "Lease Indenture"). Reference
is made to each Lease Indenture for a description of the nature and extent of
property to be assigned, pledged, transferred and mortgaged thereunder and the
rights of the holders of notes issued thereunder, including the Pledged Lessor
Notes. Except as expressly provided in a Lease Indenture, all payments of
principal, premium, if any, and interest to be made on a Pledged Lessor Note and
under such Lease Indenture will be made only from the assets subject to the lien
of such Lease Indenture or the income and proceeds received by the Lease
Indenture Trustee therefrom, including, in the case of each Lease Indenture, the
rights of the Lessor which is a party thereto to receive basic rentals and
certain other payments under a Lease with PNM relating to an undivided interest
in certain assets constituting part of the Palo Verde Nuclear Generating Station
(also known as the Arizona Nuclear Power Project) (each of such Leases, as it is
executed and delivered and as to be hereafter amended in accordance with its
terms being herein called a "Lease"), which basic rentals and other payments
will be at least sufficient to provide for the payment of the principal of and
premium, if any, and interest on each Pledged Lessor Note issued under such
Lease Indenture. Each Holder hereof, by its acceptance of this Bond, agrees (x)
that except as expressly provided above, it will look solely to the assets
subject to the lien of the Indenture or the income and proceeds received by the
Trustee therefrom, to the extent available for distribution to the Holder hereof
as provided in the Indenture and (y) that none of an Equity Investor, a Lessor,
a Lease Indenture Trustee or the Trustee is liable to the Holder hereof or, in
the case of an Equity Investor, a Lessor and a Lease Indenture Trustee, to the
Trustee for any amounts payable under this Bond or, except as provided in the
Indenture with respect to the Trustee, for any liability under the Indenture. An
Equity Investor shall not have any duty or responsibility under the Indenture or
the Bonds to any Holder or to the Trustee.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of PNM and the Company and the rights of the Holders of the
Securities under the Indenture at any time by PNM and the Company with the
consent of the Holders of not less than a majority in aggregate principal amount
#30122043.1
3
of the Securities at the time Outstanding, as defined in the Indenture. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by PNM and the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Bond shall be conclusive and binding upon such Holder and
upon all future Holders of this Bond and of any Security issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Bond.
As provided in the Indenture, the aggregate principal amount
of Securities which may be issued thereunder is unlimited. The Bonds are limited
in aggregate principal amount to $253,677,000, consisting of:
Stated Maturity Interest Principal
of Principal Rate Amount
------------ ---- ------
July 15, 1991 8.3% $25,332,000
July 15, 1996 9.125% $40,532,000
January 15, 2014 10.3% $187,813,000
------------
$253,677,000
In the event that one or more Leases are terminated under
Section 14 thereof, the Bonds with Stated Maturity of principal of January 15,
2014 are subject to mandatory redemption in part from time to time on not less
than 20 nor more than 60 days' prior notice given as provided in the Indenture
at a redemption price equal to the principal amount of the Bonds to be redeemed
plus accrued interest to the date fixed for redemption, on the same date on
which, and to the same extent that, the Pledged Lessor Notes relating to the
Bonds are prepaid as provided in Section 5.2 of the Lease Indenture under which
they were issued.
The Bonds of each Stated Maturity of principal are also
subject to mandatory redemption pursuant to sinking fund installments, as more
fully provided in the Indenture, at the principal amount thereof, together with
interest accrued to the date fixed for redemption, on the dates and in the
respective principal amounts set forth in the Indenture.
The sinking fund installments for the Bonds of a particular
Stated Maturity of principal set forth in the Indenture may be adjusted once at
the discretion of the Company prior to July 15, 1988, in connection with certain
adjustments in basic rent pursuant to any of the Leases; provided, however, that
no such adjustments shall be made by the Company which will increase or reduce
the average life of such Bonds (calculated in accordance with generally accepted
financial practice from the date of initial issuance thereof) by more than 6
months.
As provided in the Indenture, in connection with any mandatory
sinking fund redemption of Bonds of a particular Stated Maturity or principal
(other than Bonds of a Stated Maturity of principal of July 15, 1991), the
Company may cause the Trustee first to select for such redemption Bonds of such
Stated Maturity of principal held by PNM or any Affiliate of PNM.
In the event of any partial redemption of Bonds of a
particular Stated Maturity of principal (other than pursuant to the
aforementioned sinking fund), the principal amount of Bonds of such Stated
Maturity of principal to be redeemed thereafter pursuant to the sinking fund
schedule indicated in the Indenture shall be adjusted proportionately as nearly
as practicable in accordance with Section 7.01 of the Indenture.
In addition, the Bonds (other than Bonds with a Stated
Maturity of principal of July 15, 1991) are subject to redemption, in whole or
in part, at any time, at the option of the Company, with monies deposited with
the Trustee, on not less than 20 nor more than 60 days' notice given as provided
in the Indenture, at the following redemption prices (expressed as a percentage
of principal amount), together with interest accrued to the date fixed for
redemption as follows:
#30122043.1
4
Bonds with a Stated Maturity of principal of July 15, 1996 may
be redeemed at a price of 109.125% of the principal amount thereof,
such percentage to decline by 1.304 on July 15, 1987 and each second
anniversary thereof and by 1.303 on July 15, 1988 and each second
anniversary thereof, until such date as such percentage shall be 100%,
and thereafter 100%; and
Bonds with a Stated Maturity of principal of January 15, 2014
may be redeemed at a price of 110.3% of the principal amount thereof,
such percentage to decline by .412 on July 15, 1987 and each
anniversary thereof, until such date as such percentage shall be 100%,
and thereafter 100%;
provided, however, that no such redemption shall be made prior to July 15, 1991,
directly or indirectly, as a part of, or in anticipation of any refunding
operation involving the incurrence of indebtedness by the Company, any Lessor,
PNM or any Affiliate of any thereof if such indebtedness has an effective
interest cost to the Company, such Lessor, PNM or such Affiliate, as the case
may be (computed in accordance with generally accepted financial practice), of
less than 9.125% per annum in the case of Bonds with a Stated Maturity of
principal of July 15, 1996, and 10.3% per annum in the case of Bonds with a
Stated Maturity of principal of January 15, 2014.
In the case of any redemption of Bonds, unpaid interest
installments whose Stated Maturity, as defined in the Indenture, is on or prior
to the date fixed for redemption will be payable to the Holders of such Bonds or
one or more Predecessor Securities of record at the close of business on the
relevant Regular or Special Record Date referred to on the face hereof.
The Indenture provides that Bonds of a denomination larger
than $1,000 may be redeemed in part ($1,000 or an integral multiple thereof) and
that upon any partial redemption of any such Bond the same shall be surrendered
at the corporate trust office of the Paying Agent in exchange for one or more
new Bonds for the unredeemed portion thereof.
Bonds (or portions thereof as aforesaid) for whose redemption
and payment provision is made in accordance with the Indenture shall thereupon
cease to be entitled to the lien of the Indenture and shall cease to bear
interest from and after the date fixed for redemption.
If an Event of Default, as defined in the Indenture, shall
occur, the principal of this Bond may become or be declared due and payable, in
the manner and with the effect provided in the Indenture.
This Bond is transferable by the registered owner hereof in
person or by attorney authorized in writing, at the corporate trust office of
the Bond Registrar, Chemical Bank (or if such office is not in the Borough of
Manhattan, The City of New York, at either such office or an office to be
maintained in such Borough), upon surrender of this Bond, and upon any such
transfer a new Bond of the same Stated Maturity of principal, for the same
aggregate principal amount, will be issued to the transferee in exchange
herefor.
The Bonds are issuable only as registered Bonds without
coupons in denominations of $1,000 and/or any integral multiple thereof. As
provided in, and subject to the provisions of, the Indenture, Bonds of a
particular Stated Maturity of principal are exchangeable for other Bonds of such
Stated Maturity, but of a different authorized denomination or denominations, as
requested by the Holder surrendering the same.
No service charge will be made to any Holder of Bonds for any
such transfer or exchange, but the Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment for registration of transfer, the
person in whose name this Bond is registered shall be deemed to be the owner
hereof for the purpose of receiving payment as herein provided and for all other
purposes whether or not this Bond be overdue, regardless of any notice to anyone
to the contrary.
#30122043.1
5
As provided in the Indenture, the Indenture and the Bonds
shall be construed in accordance with and governed by the laws of the State of
New York.
Schedule 2
to
SERIES 1986A BOND
SUPPLEMENTAL INDENTURE
A. As used in this Series 1986A Bond Supplemental Indenture, the following terms
have the following meanings:
(1) Lease Indenture means each of:
(i) the Trust Indenture, Mortgage, Security Agreement
and Assignment of Rents, dated as of December 16, 1985,
between the Indenture Trustee and Owner Trustee No. 1, as
amended by Supplemental Indenture No. 1 thereto, dated as of
July 15, 1986;
(ii) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of December 16,
1985, between the Indenture Trustee and Owner Trustee No. 2,
as amended by Supplemental Indenture No. 1 thereto, dated as
of July 15, 1986; and
(iii) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of December 16,
1985, between the Indenture Trustee and Owner Trustee No. 3,
as amended by Supplemental Indenture No. 1 thereto, dated as
of July 15, 1986.
(2) Lessor Note means each of:
(i) the Non-Recourse Promissory Note, Fixed Rate
Series (Due July 15, 1991) in the amount of $13,622,000 dated
July 17, 1986, payable by Owner Trustee No. 1 to the Company.
(ii) the Non-Recourse Promissory Note, Fixed Rate
Series (Due July 15, 1996) in the amount of $20,851,000 dated
July 17, 1986, payable by Owner Trustee No. 1 to the Company;
(iii) the Non-Recourse Promissory Note, Fixed Rate
Series (Due January 15, 2012) in the amount of $95,177,000
dated July 17, 1986, payable by Owner Trustee No. 1;
(iv) the Non-Recourse Promissory Note, Fixed Rate
Series (Due July 15, 1991) in the amount of $7,017,000 dated
July 17, 1986, payable by Owner Trustee No. 2 to the Company;
(v) the Non-Recourse Promissory Note, Fixed Rate
Series (Due July 15, 1996) in the amount of $12,496,000 dated
July 17, 1986, payable by Owner Trustee No. 2 to the Company;
(vi) the Non-Recourse Promissory Note, Fixed Rate
Series (Due January 15, 2013) in the amount of $58,031,000
dated July 17, 1986, payable by Owner Trustee No. 2 to the
Company;
#30122043.1
1
(vii) the Non-Recourse Promissory Note, Fixed Rate
Series (Due July 15, 1991) in the amount of $4,693,000 dated
July 17, 1986, payable by Owner Trustee No. 3; and
(viii) the Non-Recourse Promissory Note, Fixed Rate
Series (Due July 15, 1996) in the amount of $7,185,000 dated
July 17, 1986, payable by Owner Trustee No. 3 to the Company;
and
(ix) the Non-Recourse Promissory Note, Fixed Rate
Series (Due January 15, 2014) in the amount of $34,605,000
dated July 17, 1986, payable by Owner Trustee No. 3 to the
Company.
(3) Lessor or Owner Trustee means The First National Bank of
Boston, a national banking association (FNB), in its capacity as owner trustee
under three separate Trust Agreements, each dated as of December 16, 1985, with
the equity investor named therein, in such capacity Owner Trustee ▇▇. ▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇. ▇ and Owner Trustee No. 3, respectively.
(4) Indenture Trustee means Chemical Bank, a New York banking
corporation, as Trustee.
(5) Lease means each of:
(i) the Facility Lease, dated as of December 16,
1985, between PNM, as lessee, and Owner Trustee No. 1, as
lessor, as amended by Amendment No. 1 thereto, dated as of
July 15, 1986;
(ii) the Facility Lease, dated as of December 16,
1985, between PNM, as lessee, and Owner Trustee No. 2, as
lessor, as amended by Amendment No. 1 thereto, dated as of
July 15, 1986; and
(iii) the Facility Lease, dated as of December 16,
1985, between PNM, as lessee, and Owner Trustee No. 3, as
lessor, as amended by Amendment No. 1 thereto, dated as of
July 15, 1986.
(6) Participation Agreement means each of:
(i) the Participation Agreement, dated as of December
16, 1985, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 1, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of July 15, 1986;
(ii) the Participation Agreement, dated as of
December 16, 1985, among the Owner Participant designated
therein, the Company, FNB, in its individual capacity and as
Owner Trustee No. 2, Chemical Bank, in its individual capacity
and as Indenture Trustee, and PNM, as amended by Amendment No.
1 thereto, dated as of July 15, 1986; and
(iii) the Participation Agreement, dated as of
December 16, 1985, among the Owner Participant designated
therein, the Company, FNB, in its individual capacity and as
Owner Trustee No. 3, Chemical Bank, in its individual capacity
and as Indenture Trustee, and PNM, as amended by Amendment No.
1 thereto, dated as of July 15, 1986.
#30122043.1
2
EXHIBIT C to
Conformed Collateral
Trust Indenture
================================================================================
FIRST PV FUNDING CORPORATION,
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
CHEMICAL BANK,
as Trustee
----------
SERIES 1986B BOND SUPPLEMENTAL INDENTURE
dated as of November 18, 1986
to
COLLATERAL TRUST INDENTURE
dated as of December 16, 1985
----------
Providing for the Issuance of
$460,000,000 Aggregate Amount
of Lease Obligation Bonds, Series 1986B
with the Interest Rates and Stated Maturities
Set Forth Herein
================================================================================
PALO VERDE NUCLEAR GENERATING STATION
SERIES 1986B BOND SUPPLEMENTAL INDENTURE, dated as of November
18, 1986 among FIRST PV FUNDING CORPORATION, a Delaware corporation (the
Company), PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (PNM),
and CHEMICAL BANK, a New York banking corporation, as trustee (the Trustee).
#30122046.1
3
WHEREAS, the Company and PNM have heretofore executed and
delivered to the Trustee an indenture dated as of December 16, 1985 (the
Original Indenture) to provide for the issue from time to time of the Company's
debentures, notes or other evidences of indebtedness to be issued in one or more
series (the Securities);
WHEREAS, Section 2.03 of the Original Indenture provides,
among other things, that PNM, the Company and the Trustee may enter into
indentures supplemental to the Original Indenture for, among other things, the
purpose of establishing the form and terms of Securities of any series as
permitted by Section 2.03 of the Original Indenture;
WHEREAS, PNM and the Company heretofore executed and delivered
the Series 1986A Term Note Supplemental Indenture, dated as of July 31, 1986
(the Series 1986A Term Note Supplemental Indenture), to the Trustee, and the
Company issued thereunder a series of Securities designated "Term Lease
Obligation Notes Series 1986A" in the aggregate principal amount of $40,000,000;
WHEREAS, Section 1.03 of the Series 1986A Term Note
Supplemental Indenture provides, among other things, that the Term Lease
Obligation Notes Series 1986A shall be redeemed in connection with the issuance
of a series of Securities to effect a refunding of the same;
WHEREAS, PNM and the Company heretofore executed and delivered
the Series 1986B Term Note Supplemental Indenture, dated as of August 12, 1986
(the Series 1986B Term Note Supplemental Indenture), to the Trustee, and the
Company issued thereunder a series of Securities designated "Term Lease
Obligation Notes Series 1986B" in the aggregate principal amount of
$325,960,123.15;
WHEREAS, Section 1.03 of the Series 1986B Term Note
Supplemental Indenture provides, among other things, that the Term Lease
Obligation Notes Series 1986B shall be redeemed in connection with the issuance
of a series of Securities to effect a refunding of the same;
WHEREAS, PNM and the Company (i) desire the issuance by the
Company of a new series of Securities to be designated as hereinafter provided
to effect a refunding of the Term Lease Obligation Notes Series 1986A and the
Term Lease Obligation Notes Series 1986B, and for certain other purposes, and
(ii) have requested the Trustee to enter into this Series 1986B Bond
Supplemental Indenture (the Series 1986B Bond Supplemental Indenture) for the
purpose of establishing the form and terms of the Securities of such series;
WHEREAS, all action on the part of the Company necessary to
authorize the issuance of $460,000,000 principal amount of its Lease Obligation
Bonds, Series 1986B (the Bonds) under the Original Indenture and this Series
1986B Bond Supplemental Indenture (said Original Indenture, as heretofore
supplemented and amended and as supplemented by this Series 1986B Bond
Supplemental Indenture, being hereinafter called the Indenture) has been duly
taken;
WHEREAS, the Bonds to be issued hereunder are to be
substantially in the form annexed as Schedule 1 hereto;
WHEREAS, to the extent not released on the date of initial
issuance of the Bonds, the Company intends, in accordance with Sections 2.15(b)
and 13.01 of the Original Indenture, to obtain the release of all or a portion
of the remaining proceeds of sale of the Bonds by subjecting to the Lien of the
Original Indenture, pursuant to one or more Supplemental Indentures of Pledge
(each a Supplemental Indenture of Pledge, a form of which is attached as Exhibit
A to this Series 1986B Bond Supplemental Indenture), all or some of the Lessor
Notes described in Schedule 3 hereto;
WHEREAS, Section 11.01 of the Original Indenture provides that
the Company and the Trustee may, without consent of the Holders of any
Securities, enter into an indenture supplemental to the Original Indenture to
cure a defective provision in the Original Indenture provided such action does
not adversely affect the interest of the Holders of the Securities;
#30122046.1
4
WHEREAS, the Company desires to make the amendment to Section
9.06(b) of the Original Indenture set forth in Article Three of this Series
1986B Bond Supplemental Indenture; and
WHEREAS, all acts and things necessary to make the Bonds, when
executed by the Company and authenticated and delivered by the Trustee as
provided in the Original Indenture, the valid, binding and legal obligations of
the Company, and to constitute these presents a valid and binding supplemental
indenture and agreement according to its terms, have been done and performed,
and the execution of this Series 1986B Bond Supplemental Indenture and the
creation and issuance under the Indenture of $460,000,000 aggregate principal
amount of the Bonds have in all respects been duly authorized, and the Company,
in the exercise of legal right and power in it vested, executes this Series
1986B Bond Supplemental Indenture and proposes to create, execute, issue and
deliver the Bonds:
NOW, THEREFORE, THIS SERIES 1986B BOND SUPPLEMENTAL INDENTURE
WITNESSETH:
That in order to establish the form and terms of and to
authorize the authentication and delivery of the Bonds, and in consideration of
the acceptance of the Bonds by the holders thereof and of the sum of one dollar
duly paid to the Company by the Trustee at the execution of these presents, the
receipt whereof is hereby acknowledged, the Company and PNM each covenant and
agree with the Trustee, for the equal and proportionate benefit of the
respective holders from time to time of the Bonds, as follows:
ARTICLE I.
THE BONDS
SECTION 1.011. Terms of the Bonds.
There is hereby created a series of Securities designated
"Lease Obligation Bonds, Series 1986B". Subject to the exceptions referred to in
the Original Indenture, the aggregate principal amount of the Bonds that may be
authenticated and delivered under this Series 1986B Bond Supplemental Indenture
is limited to $460,000,000. Bonds in the aggregate principal amount of
$460,000,000 may forthwith be executed by the Company and delivered to the
Trustee for authentication and delivery by the Trustee in accordance with the
provisions of Section 2.04 of the Original Indenture in the following amounts
for the Stated Maturities of principal and at the interest rates indicated:
Stated Maturity Interest Principal
of Principal Rate Amount
------------ ---- ------
January 15, 1992 8.05% $ 13,988,000
January 15, 1997 8.95 60,347,000
January 15, 2016 10.15 385,665,000
-------------
$460,000,000
The Bonds shall be payable, bear interest and have and be subject to such other
terms as provided in the form of Bond attached as Schedule 1 hereto.
SECTION 1.012. Mandatory Redemption of the Bonds.
(a) Failure to Pledge Lessor Notes. If the Company shall (i)
fail, on or before January 25, 1987, duly to subject to the Lien of the
Indenture Lessor Notes (in addition to the Lessor Notes identified in Schedule 2
hereto) in the principal amount of $88,000,000 and with the amortizations of
principal and bearing the interest rates set forth in Schedule 3 hereto or (ii)
deliver to the Trustee, on or before January 25, 1987, irrevocable written
notice that it shall not so subject such Lessor Notes, then, in either such
event, on the Redemption Date established in accordance with Section 1.02(d) of
#30122046.1
5
this Series 1986B Bond Supplemental Indenture, Bonds of the Stated Maturities of
principal and in the aggregate principal amounts set forth in Section 1.02(c)(i)
of this Series 1986B Bond Supplemental Indenture shall be redeemed from funds
held by the Trustee pursuant to Section 2.15(a) of the Indenture and, to the
extent the aforesaid funds shall not be sufficient to redeem such Bonds, funds
provided by the Company.
(b) Termination of Lease. In the event that there shall occur
under Section 14 of any Lease identified in Schedule 2 hereto or related to the
Lessor Notes described in Schedule 3 hereto a termination of such Lease, Bonds
with a Stated Maturity of principal of January 15, 2016 shall be redeemed, in
part, in proportion to the principal amount of the Pledged Lessor Notes (as
defined in Article II of this Series 1986B Bond Supplemental Indenture and
identified in Schedules 2 and 3 hereto) related to such Lease (the Prepaid
Lessor Notes) prepaid in accordance with their terms and Section 5.2 of the
Lease Indenture under which such Pledged Lessor Notes are issued. Any such
redemption shall be on the same date on which, and shall be made to the extent
that, the Prepaid Lessor Notes are so prepaid.
(c) Selection of Bonds to be Redeemed. (i) Attached as
Schedule 3 hereto is a description of six Lessor Notes, three of which relate to
a Lease with respect to an undivided interest in Palo Verde Nuclear Generating
Station (PVNGS) Unit 1 and certain related common facilities (the Unit 1 Lessor
Notes) and three of which relate to an undivided interest in PVNGS Unit 2 and
certain related common facilities (the Unit 2 Lessor Notes). In the event of a
redemption pursuant to Section 1.02(a) of this Series 1986B Bond Supplemental
Indenture arising from a failure to pledge the Unit 1 Lessor Notes, the Bonds so
to be redeemed shall (notwithstanding the first proviso to the first sentence of
Section 6.02 of the Original Indenture) be selected from among the Stated
Maturities of principal of the Bonds as follows: Bonds of a Stated Maturity of
principal of January 15, 1992, $3,300,000; Bonds of a Stated Maturity of
principal of January 15, 1997, $8,060,000; and Bonds of a Stated Maturity of
principal of January 15, 2016, $48,640,000. In the event of a redemption
pursuant to Section 1.02(a) of this Series 1986B Bond Supplemental Indenture
arising from a failure to pledge the Unit 2 Lessor Notes, the Bonds so to be
redeemed shall (notwithstanding the first proviso to the first sentence of
Section 6.02 of the Original Indenture) be selected from among the Stated
Maturities of principal of the Bonds as follows: Bonds of a Stated Maturity of
principal of January 15, 1992, $1,270,000; Bonds of a Stated Maturity of
principal of January 15, 1997, $3,501,000; and Bonds of a Stated Maturity of
principal of January 15, 2016, $23,229,000.
(ii) In the event of a redemption of Bonds with a Stated
Maturity of principal of January 15, 2016 pursuant to Section 1.02(b) of this
Series 1986B Bond Supplemental Indenture, the Bonds so to be redeemed shall be
selected in accordance with Section 6.02 of the Indenture, but without giving
effect to the first proviso to the first sentence of such Section.
(d) Redemption Dates. (i) The Redemption Date for any Bond to
be redeemed pursuant to Section 1.02(a) of this Series 1986B Bond Supplemental
Indenture shall be a Business Day selected by the Company occurring at least 30
days after notice of such selection has been given by the Company to the
Trustee; provided, however, that such Redemption Date shall in no event be later
than April 25, 1987; provided further, however, that such Redemption Date shall
be April 25, 1987 if the Company has not at least 35 days prior thereto given
written notice of such selection of a Redemption Date to the Trustee.
(ii) The Redemption Date for any Bond to be redeemed pursuant
to Section 1.02(b) of this Series 1986B Bond Supplemental Indenture shall be
determined in accordance with such Section 1.02(b).
(e) Redemption Price. (i) The Redemption Price for any Bond to
be redeemed pursuant to Section 1.02(a) of this Series 1986B Bond Supplemental
Indenture shall be 101% of the principal amount thereof, together with accrued
interest to the Redemption Date.
(ii) The Redemption Price for any Bond to be redeemed pursuant
to Section 1.02(b) of this Series 1986B Bond Supplemental Indenture shall be
100% of the principal amount thereof, together with accrued interest to the
Redemption Date.
#30122046.1
6
SECTION 1.013. Optional Redemption of Bonds.
The Bonds may not be redeemed at the option of the Company
prior to January 15, 1992. On and after January 15, 1992, Bonds with a Stated
Maturity of principal of January 15, 1997 and Bonds with a Stated Maturity of
principal of January 15, 2016 may be redeemed at the option of the Company, in
whole or in part with monies deposited with the Trustee by the Company, as
follows:
(a) Bonds with a Stated Maturity of principal of January 15,
1997 may be redeemed at the following redemption prices (expressed as a
percentage of principal amount), together with interest accrued to the
redemption date:
Twelve Month Redemption
Period Beginning Price
---------------- -----
January 15, 1992 102.557%
January 15, 1993 101.279
and thereafter at the principal amount thereof, together with interest accrued
to the Redemption Date.
(b) Bonds with a Stated Maturity of principal of January 15,
2016 may be redeemed at the following redemption prices (expressed as a
percentage of principal amount), together with interest accrued to the
Redemption Date:
Twelve Month Redemption
Period Beginning Price
---------------- -----
January 15, 1992 108.120%
January 15, 1993 107.714
January 15, 1994 107.308
January 15, 1995 106.902
January 15, 1996 106.496
January 15, 1997 106.090
January 15, 1998 105.684
January 15, 1999 105.278
January 15, 2000 104.872
January 15, 2001 104.466
January 15, 2002 104.060
January 15, 2003 103.654
January 15, 2004 103.248
January 15, 2005 102.842
January 15, 2006 102.436
January 15, 2007 102.030
January 15, 2008 101.624
January 15, 2009 101.218
January 15, 2010 100.812
January 15, 2011 100.406
and thereafter at the principal amount thereof, together with interest accrued
to the Redemption Date.
#30122046.1
7
SECTION 1.014. Sinking Fund.
(a) Amounts and Dates. The Bonds shall be redeemed through
operation of a sinking fund. The amount of each Sinking Fund payment (subject to
adjustment as provided in paragraphs (c) and (d) below) and each Sinking Fund
Date applicable to a Stated Maturity of principal of the Bonds are as set forth
below:
Stated Maturity of Principal
----------------------------
Sinking Fund January 15, January 15, January 15,
Date 1992 1997 2016
---------------- -------- -------- --------
July 15, 1989 $ 379,000
January 15, 1990 773,000
July 15, 1990 1,344,000
January 15, 1991 2,221,000
July 15, 1991 4,545,000
January 15, 1992 4,726,000
July 15, 1992 $ 4,916,000
January 15, 1993 5,137,000
July 15, 1993 5,366,000
January 15, 1994 5,607,000
July 15, 1994 5,857,000
January 15, 1995 6,118,000
July 15, 1995 6,395,000
January 15, 1996 6,680,000
July 15, 1996 6,980,000
January 15, 1997 7,291,000
July 15, 1997 $ 7,618,000
January 15, 1998 8,005,000
July 15, 1998 8,211,000
January 15, 1999 7,383,000
July 15, 1999 6,891,000
January 15, 2000 6,921,000
July 15, 2000 7,004,000
January 15, 2001 6,739,000
July 15, 2001 7,065,000
January 15, 2002 7,116,000
July 15, 2002 7,414,000
January 15, 2003 7,439,000
July 15, 2003 7,783,000
January 15, 2004 7,839,000
July 15, 2004 8,289,000
January 15, 2005 8,352,000
July 15, 2005 8,830,000
January 15, 2006 9,063,000
July 15, 2006 9,635,000
January 15, 2007 9,250,000
July 15, 2007 10,262,000
January 15, 2008 9,892,000
July 15, 2008 12,043,000
January 15, 2009 11,501,000
#30122046.1
8
July 15, 2009 12,938,000
January 15, 2010 12,367,000
July 15, 2010 13,904,000
January 15, 2011 13,301,000
July 15, 2011 14,947,000
January 15, 2012 14,309,000
July 15, 2012 13,495,000
January 15, 2013 10,850,000
July 15, 2013 12,502,000
January 15, 2014 11,555,000
July 15, 2014 13,314,000
January 15, 2015 19,217,000
July 15, 2015 10,473,000
January 15, 2016 11,948,000
(b) Selection of Bonds. The provisions of Section 7.02 of the
Original Indenture to the contrary notwithstanding, the Trustee shall first
select for redemption on any Sinking Fund Date on which Bonds with a Stated
Maturity of principal of January 15, 2016 are to be redeemed in accordance with
the Sinking Fund relating thereto, such Bonds, if any, of such Stated Maturity
of principal, as the Company shall specify (by Bond number) are held by PNM or
an Affiliate of PNM in a Company Request delivered to the Trustee at least 40
(but not more than 90) days prior to such Sinking Fund Date and upon which the
Trustee may rely. Subject to the foregoing, particular Bonds to be redeemed on
any Sinking Fund Date shall be selected in accordance with Section 7.02 of the
Original Indenture.
(c) Optional Adjustment to Sinking Bond Fund for Bonds with a
Stated Maturity of principal of January 15, 2016. The principal amount of Bonds
with a Stated Maturity of principal of January 15, 2016 to be redeemed through
operation of the Sinking Fund for such Bonds may be adjusted (upward or
downward) at the discretion of the Company at one time prior to July 15, 1997;
provided, however, that no such adjustment shall be made by the Company which
will increase or reduce the average life of such Bonds (calculated in accordance
with generally accepted financial practice from the date of initial issuance) by
more than two years; provided further, however, such adjustment may only be made
in connection with an adjustment to basic rent pursuant to Section 3(d) of one
or more of the Leases identified in Schedule 2 hereto or related to the Lessor
Notes described in Schedule 3 hereto. If the Company shall elect to make the
foregoing adjustment, the Company shall deliver to the Trustee and PNM at least
60 days prior to the first Sinking Fund Date proposed to be affected by such
adjustment, a Company Request (w) stating that the Company has elected to make
such adjustment in connection with adjustments to basic rent under one or more
of such Leases, (x) setting forth a revised schedule of principal amounts of the
Sinking Fund applicable to such Bonds, (y) attaching a copy of the revised
schedules of principal amortization for the related Pledged Lessor Notes (as
defined in Article II of this Series 1986B Bond Supplemental Indenture and
identified in Schedules 2 and 3 hereto) and (z) attaching calculations showing
that (i) the average life of such Bonds will not be reduced or increased except
as permitted by this paragraph (c), (ii) the aggregate principal amount of the
Pledged Lessor Notes equals the aggregate principal amount of the Bonds and
(iii) the aggregate amortization of the principal amount of such Pledged Lessor
Notes is sufficient to repay in full, as and when due, the principal amount of
such Bonds as and when due, whether upon redemption through operation of the
applicable Sinking Fund or at maturity. The Trustee may rely on such Company
Request and shall have no duty with respect to the calculations referred to in
the foregoing clause (z) other than to make them available for inspection by any
Holder of such Bonds at the Corporate Trust Office upon reasonable notice. The
Trustee shall, at the expense of PNM, send to each Holder of such Bonds at least
20 days before the first Sinking Fund Date to be affected thereby, by first
class mail, a copy of such revised schedule of principal amounts of Sinking Fund
payments applicable to such Bonds.
(d) Mandatory Adjustment to Sinking Funds. The second
paragraph of Section 7.01 of the Original Indenture to the contrary
notwithstanding, in the event that there shall have been any partial redemption
of Bonds of a particular Stated Maturity of principal (other than pursuant to
the Sinking Fund), the Sinking Fund payments thereafter to be made with respect
to such Bonds shall be adjusted as follows. The Company shall first identify all
related Pledged Lessor Notes (as defined in Article II of this Series 1986B Bond
Supplemental Indenture and identified in Schedules 2 and 3 hereto) having the
same maturity as the Bonds of such particular Stated Maturity of principal
redeemed,
#30122046.1
9
if any, which are outstanding following such redemption provided, however, that
for purposes of this Section 1.04(d), any such Pledged Lessor Notes with a
maturity subsequent to January 15, 2010 shall be deemed to have a maturity of
January 15, 2016. Having identified all such outstanding Pledged Lessor Notes
(the Outstanding Notes), the Company shall determine the dates on which the
principal of such Outstanding Notes is to be amortized (the Scheduled
Amortization Dates). The amount of the Sinking Fund payment scheduled to be made
on each Sinking Fund Date subsequent to the date of such partial redemption
shall then be adjusted to equal the aggregate principal amount of all
Outstanding Notes scheduled to be amortized on the Scheduled Amortization Date
corresponding to such Sinking Fund Date. All such adjustments in respect of
Sinking Fund payments on a Sinking Fund Date shall be rounded to the nearest
$1,000, and shall be subject to necessary further adjustment so that the total
amount of such reduction is at least equal to the total principal amount of
Bonds redeemed pursuant to such partial redemption. Having made the calculations
required by the preceding two sentences, the Company shall deliver to the
Trustee a Company Request not later than 30 days following any partial
redemption of Bonds (other than pursuant to the Sinking Fund), setting forth (x)
the schedules of principal amortization of all related Outstanding Notes having
the same maturity as the Stated Maturity of principal of the Bonds redeemed and
(y) a revised schedule of Sinking Fund payments applicable to Bonds having the
same Stated Maturity of principal as the Bonds redeemed. The Trustee may rely on
such Company Request and shall have no duty with respect to the adjustments set
forth therein other than to make them available for inspection by a Holder of
Bonds at the Corporate Trust Office upon reasonable notice.
(e) Redemption Price. The Redemption Price for any Bond to be
redeemed pursuant to Section 1.04(a) of this Series 1986B Bond Supplemental
Indenture shall be 100% of the principal amount thereof, together with accrued
interest to the Redemption Date.
ARTICLE II.
PLEDGE OF LESSOR NOTES
SECTION 1.021. Pledge of Lessor Notes.
To secure the payment of the principal of and premium (if any)
and interest on all the Securities from time to time Outstanding under the
Indenture, and the performance of the covenants therein and herein contained,
the Company by these presents does grant, bargain, sell, release, convey,
assign, transfer, mortgage, hypothecate, pledge, confirm and create a security
interest in, unto the Trustee, the Lessor Notes identified on Schedule 2 hereto
(herein, together with each Unit 1 Lessor Note and each Unit 2 Lessor Note which
shall hereafter be subjected to the Lien of the Original Indenture by one or
more Supplemental Indentures of Pledge, in the form attached hereto as Exhibit
A, referred to as the Pledged Lessor Notes).
TO HAVE AND TO HOLD the aforesaid Pledged Lessor Notes
identified on Schedule 2 hereto unto the Trustee and its successors and assigns
forever, in trust and for the uses and purposes and subject to the covenants and
conditions set forth in the Indenture.
ARTICLE III.
AMENDMENT TO ORIGINAL INDENTURE
SECTION 1.031. Amendment to Original Indenture.
Section 9.06(b) of the Original Indenture is hereby amended,
to read in its entirety as follows:
"At any time and from time to time prior to payment in full of
any amounts to be paid by the Trustee pursuant to Section 2.15(b) in respect of
any series of Securities (or prior to payment in full of any amount required to
be paid by the Trustee in respect of such series of Securities pursuant to
Section 1.02(a) of the Series 1986B Bond Supplemental Indenture, dated
#30122046.1
10
as of November 18, 1986, or analogous provisions of any other Series
Supplemental Indenture), if at the time no Event of Default has occurred and is
continuing, the Trustee shall, on Company Request, invest and reinvest in
Permitted Investments as specified in such Company Request any monies from the
sale of the Securities of such series at the time on deposit with the Trustee as
part of the Pledged Property, together with any income and gains from the
investment and reinvestment thereof, and sell any Permitted Investments, in
either case, at such prices, including accrued interest, as are set forth in
such Company Request, and such Permitted Investments shall be held by the
Trustee until so sold in trust as part of the Pledged Property. The Trustee
shall, on Company Request, sell such Permitted Investments as may be specified
therein, and the Trustee shall, without Company Request, in the event monies are
required for payment of any amounts to be paid by the Trustee pursuant to
Section 2.15(b) in respect of any series of Securities and for any payment of
principal, premium, if any, or interest on any series of Securities, sell such
Permitted Investments as are required to restore to cash as part of the Pledged
Property such amounts as are needed for any such payments. The Trustee shall not
be responsible for any losses on any investments or sales of Permitted
Investments made pursuant to the procedure specified in this subsection (b)."
ARTICLE IV.
MISCELLANEOUS
SECTION 1.041. Execution as Supplemental Indenture.
This Series 1986B Bond Supplemental Indenture is executed and
shall be construed as an indenture supplemental to the Original Indenture and,
as provided in the Original Indenture, this Series 1986B Bond Supplemental
Indenture forms a part thereof. Except as herein expressly otherwise defined,
the use of the terms herein is in accordance with the definitions contained in
the Original Indenture.
SECTION 1.042. Responsibility for Recitals, Etc.
The recitals contained herein and in the Bonds, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company and PNM, and the Trustee assumes no responsibility for the correctness
of the same. The Trustee makes no representation as to the validity or
sufficiency of this Series 1986B Bond Supplemental Indenture or the Bonds.
SECTION 1.043. Provisions Binding on Successors.
All the covenants, stipulations, promises and agreements in
this Series 1986B Bond Supplemental Indenture contained by or on behalf of the
Company shall bind its successors and assigns, whether so expressed or not.
SECTION 1.044. New York Contract.
This Series 1986B Bond Supplemental Indenture and each
Bond shall be deemed to be a contract under the laws of the State of New York,
and for all purposes shall be governed by and construed in accordance with the
laws of said state.
SECTION 1.045. Counterparts.
This Series 1986B Bond Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
#30122046.1
11
IN WITNESS WHEREOF, the Company, PNM and the Trustee have
caused this Series 1986B Bond Supplemental Indenture to be duly executed by
their respective officers thereunto duly authorized, as of the date and year
first above written.
FIRST PV FUNDING CORPORATION
[CORPORATE SEAL]
By /s/ ▇.▇. ▇▇▇▇▇▇▇
-------------------------
President
Attest:
/s/ ▇. ▇▇▇▇▇▇▇
-----------------------
Assistant Secretary
PUBLIC SERVICE COMPANY
OF NEW MEXICO
[CORPORATE SEAL]
By /s/ ▇.▇. ▇▇▇▇▇▇
------------------------
Vice President and
Corporate Controller
Attest:
/s/ ▇.▇. ▇▇▇▇▇▇
-----------------------
Assistant Secretary
CHEMICAL BANK,
as Trustee
[CORPORATE SEAL]
By /s/ ▇.▇. ▇▇▇▇▇
------------------------
Vice President
Attest:
/s/ ▇.▇▇▇▇▇▇▇▇▇
----------------------
Trust Officer
#30122046.1
12
SCHEDULE 1
to
SERIES 1986B BOND
SUPPLEMENTAL INDENTURE
[FORM OF FACE OF BOND]
No. R- $
-----
FIRST PV FUNDING CORPORATION
LEASE OBLIGATION BOND, SERIES 1986B
INTEREST RATE STATED MATURITY
REGISTERED HOLDER:
PRINCIPAL AMOUNT: DOLLARS
FIRST PV FUNDING CORPORATION, a Delaware corporation
(hereinafter called the "Company", which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to the Registered Holder (named above) hereof, or
registered assigns, the Principal Amount (stated above) on the Stated Maturity
(stated above) and to pay interest thereon from the date hereof, or from the
most recent interest payment date to which interest has been paid or duly
provided for, semiannually on July 15 and January 15, in each year, commencing
January 15, 1987, at the Interest Rate (stated above) per annum, until the
principal hereof is paid in full or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any interest payment date
will, as provided in such Indenture, be paid to the person in whose name this
Bond (or one or more Predecessor Securities, as defined in such Indenture) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the June 30 or December 31, as the case may be (whether
or not a Business Day, as defined in such Indenture), next preceding such
interest payment date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Registered Holder on such Regular
Record Date, and may be paid to the person in whose name this Bond (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice of which shall be given to the Bondholders not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Bonds may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in such Indenture. Payment of the
principal of (and premium, if any) and interest on this Bond will be made at the
corporate trust office of the Paying Agent, Chemical Bank (or if such office is
not in the Borough of Manhattan, The City of New York, at either such office or
an office to be maintained in such Borough), in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public or private debts, provided that payment of interest may be made at the
option of the Company by check mailed to the address of the Holder entitled
thereto as such address shall appear on the Security Register.
Interest on any overdue principal and premium, if any, and (to
the extent permitted by applicable law) any overdue interest shall be paid, on
demand, from the due date thereof at the rate of interest per annum (computed on
the basis of a 360-day year of twelve 30-day months) equal to 1% above the
Interest Rate (stated above) on this Bond for the period during which any such
principal, premium or interest shall be overdue.
#30122046.1
1
Reference is hereby made to the further provisions of this
Bond set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under such Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: November 25, 1986
FIRST PV FUNDING CORPORATION
By
-------------------------
President
Attest:
----------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
CHEMICAL BANK
as Trustee
By
------------------------
Authorized Officer
#30122046.1
2
[FORM OF REVERSE OF BOND]
FIRST PV FUNDING CORPORATION
LEASE OBLIGATION BOND, SERIES 1986B
This Bond is one of an authorized issue of Securities of the
Company known as its "Lease Obligation Bonds, Series ▇▇▇▇▇" (▇▇▇ "▇▇▇▇▇") issued
under, and all equally and ratably secured by, a Collateral Trust Indenture
dated as of December 16, 1985 among the Company, Public Service Company of New
Mexico, a New Mexico corporation (herein called "PNM"), and Chemical Bank, as
Trustee (herein called the "Trustee", which term includes any successor Trustee
under the Indenture), as heretofore supplemented and amended and as further
supplemented and amended by the Series 1986B Bond Supplemental Indenture dated
as of November 18, 1986 among such parties (collectively, the "Indenture") to
which Indenture reference is hereby made for a description of the nature and
extent of the securities and other property assigned, pledged and transferred
thereunder, the respective rights of the holders of the Bonds and of the Trustee
and the Company in respect of such security, and the terms upon which the Bonds
are and are to be authenticated and delivered.
The principal of, and premium, if any, and interest on, this
Bond are payable from, and secured by, the assets subject to the lien of the
Indenture or the income and proceeds received by the Trustee therefrom, and all
payments of principal, premium (if any) and interest shall be made in accordance
with the terms of the Indenture.
The Indenture and each of the Participation Agreements among
an Equity Investor (as hereinafter defined), a Lessor (as hereinafter defined),
the Company, the Lease Indenture Trustee (as hereinafter defined) and certain
other parties (each a "Participation Agreement") provide (or, in the case of
each of two of such Participation Agreements to be hereafter entered into as
contemplated by the Indenture, will upon execution and delivery thereof provide)
that, as and when issued, certain Nonrecourse Promissory Notes (the "Pledged
Lessor Notes"), in the aggregate principal amount of $460,000,000, to be issued
by The First National Bank of Boston, as owner trustee under one or more
separate Trust Agreements, with the respective institutional investors named in
such Trust Agreements (The First National Bank of Boston in each of such
capacities as owner trustee being herein called a "Lessor" and each such
institutional investor being herein called an "Equity Investor"), will be
included within the assets subject to the lien of the Indenture pursuant to
indenture supplements. Such Pledged Lessor Notes are to be issued under separate
documents entitled Trust Indenture, Mortgage, Security Agreement and Assignment
of Rents, each between a Lessor and Chemical Bank, as trustee (the "Lease
Indenture Trustee") (each of such Trust Indentures, as and when it is executed
and delivered and as thereafter amended in accordance with its terms, being
herein called a "Lease Indenture"). Reference is made to each Lease Indenture
for a description of the nature and extent of property to be assigned, pledged,
transferred and mortgaged thereunder and the rights of the holders of notes
issued thereunder, including the Pledged Lessor Notes. Except as expressly
provided in a Lease Indenture, all payments of principal, premium, if any, and
interest to be made on a Pledged Lessor Note and under such Lease Indenture will
be made only from the assets subject to the lien of such Lease Indenture or the
income and proceeds received by the Lease Indenture Trustee therefrom,
including, in the case of each Lease Indenture, the rights of the Lessor which
is a party thereto to receive basic rentals and certain other payments under a
Lease with PNM relating to an undivided interest in certain assets constituting
part of the Palo Verde Nuclear Generating Station (also known as the Arizona
Nuclear Power Project) (each of such Leases, as and when it is executed and
delivered and as thereafter amended in accordance with its terms, being herein
called a "Lease"), which basic rentals and other payments will be at least
sufficient to provide for the payment of the principal of and premium, if any,
and interest on each Pledged Lessor Note issued under such Lease Indenture. Each
Holder hereof, by its acceptance of this Bond, agrees (x) that except as
expressly provided above, it will look solely to the assets subject to the lien
of the Indenture or the income and proceeds received by the Trustee therefrom,
to the extent available for distribution to the Holder hereof as provided in the
Indenture and (y) that none of an Equity Investor, a Lessor, a Lease Indenture
Trustee or the Trustee is liable to the Holder hereof or, in the case of an
Equity Investor, a Lessor and a Lease Indenture Trustee, to the Trustee for any
amounts payable under this Bond or, except as provided in the Indenture with
respect to the Trustee, for any liability under the Indenture. An Equity
Investor shall not have any duty or responsibility under the Indenture or the
Bonds to any Holder or to the Trustee.
#30122046.1
3
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of PNM and the Company and the rights of the Holders of the
Securities under the Indenture at any time by PNM and the Company with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding, as defined in the Indenture. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by PNM and the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Bond shall be conclusive and binding upon such Holder and
upon all future Holders of this Bond and of any Security issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Bond.
As provided in the Indenture, the aggregate principal amount
of Securities which may be issued thereunder is unlimited. The Bonds are limited
in aggregate principal amount to $460,000,000, consisting of:
Stated Maturity Interest Principal
of Principal Rate Amount
------------ ---- ------
January 15, 1992 8.05% $13,988,000
January 15, 1997 8.95 $60,347,000
January 15, 2016 10.15 $385,665,000
------------
$460,000,000
In the event that one or more Leases are terminated under
Section 14 thereof, Bonds with a Stated Maturity of principal of January 15,
2016 are subject to mandatory redemption in part from time to time on not less
than 20 nor more than 60 days' prior notice given as provided in the Indenture
at a redemption price equal to the principal amount of the Bonds to be redeemed
plus accrued interest to the date fixed for redemption, on the same date on
which, and to the same extent that, the Pledged Lessor Notes relating to the
Bonds are prepaid as provided in Section 5.2 of the Lease Indenture under which
they were issued.
The Bonds of each Stated Maturity of principal are also
subject to mandatory redemption pursuant to sinking fund installments, as more
fully provided in the Indenture, at the principal amount thereof, together with
interest accrued to the date fixed for redemption, on the dates and in the
respective principal amounts set forth in the Indenture.
The sinking fund installments for Bonds with a Stated Maturity
of principal of January 15, 2016 may be adjusted once at the discretion of the
Company prior to July 15, 1997, in connection with certain adjustments in basic
rent pursuant to any of the Leases; provided, however, that no such adjustments
shall be made by the Company which will increase or reduce the average life of
such Bonds (calculated in accordance with generally accepted financial practice
from the date of initial issuance thereof) by more than two years.
As provided in the Indenture, in connection with any mandatory
sinking fund redemption of Bonds with a Stated Maturity of principal of January
15, 2016, the Company may cause the Trustee first to select for such redemption
Bonds of such Stated Maturity of principal held by PNM or any Affiliate of PNM.
In the event of any partial redemption of Bonds of a
particular Stated Maturity of principal (other than pursuant to the
aforementioned sinking fund), the principal amounts of Bonds of such Stated
Maturity of principal to be redeemed thereafter pursuant to the sinking fund
schedule indicated in the Indenture shall be adjusted in accordance with the
Indenture.
As provided in the Indenture, in the event that the Company
shall fail to pledge certain Nonrecourse Promissory Notes included within the
term "Pledged Lessor Notes" (the "Lessor Notes") in the aggregate principal
amount of $88,000,000 (and otherwise as required by the Indenture), on or prior
to January 25, 1987, Bonds will be redeemed as provided in the Indenture
#30122046.1
4
(allocated among the Stated Maturities of principal of the Bonds as provided in
the Indenture) in the aggregate amount equal to the difference between
$88,000,000 and the principal amount of such Lessor Notes so pledged (if any),
at a redemption price equal to 101% of the principal amount thereof, plus
accrued interest thereon to the date fixed for redemption.
In addition, the Bonds (other than Bonds with a Stated
Maturity of principal of January 15, 1992) are subject to redemption, in whole
or in part, at any time on and after January 15, 1992, at the option of the
Company, with monies deposited with the Trustee, on not less than 20 nor more
than 60 days' notice given as provided in the Indenture, as follows:
(a) Bonds with a Stated Maturity of principal of January 15,
1997 may be redeemed at the following redemption prices (expressed as a
percentage of principal amount), together with interest accrued to the
redemption date:
Twelve Month Redemption
Period Beginning Price
---------------- -----
January 15, 1992 102.557%
January 15, 1993 101.279
and thereafter at the principal amount thereof, together with interest accrued
to the redemption date.
(b) Bonds with a Stated Maturity of principal of January 15,
2016 may be redeemed at the following redemption prices (expressed as a
percentage of principal amount), together with interest accrued to the
redemption date:
Twelve Month Redemption
Period Beginning Price
---------------- -----
January 15, 1992 108.120%
January 15, 1993 107.714
January 15, 1994 107.308
January 15, 1995 106.902
January 15, 1996 106.496
January 15, 1997 106.090
January 15, 1998 105.684
January 15, 1999 105.278
January 15, 2000 104.872
January 15, 2001 104.466
January 15, 2002 104.060
January 15, 2003 103.654
January 15, 2004 103.248
January 15, 2005 102.842
January 15, 2006 102.436
January 15, 2007 102.030
January 15, 2008 101.624
January 15, 2009 101.218
January 15, 2010 100.812
January 15, 2011 100.406
and thereafter at the principal amount thereof, together with interest accrued
to the redemption date.
#30122046.1
5
In the case of any redemption of Bonds, unpaid interest
installments whose Stated Maturity, as defined in the Indenture, is on or prior
to the date fixed for redemption will be payable to the Holders of such Bonds or
one or more Predecessor Securities of record at the close of business on the
relevant Regular or Special Record Date referred to on the face hereof.
The Indenture provides that Bonds of a denomination larger
than $1,000 may be redeemed in part ($1,000 or an integral multiple thereof) and
that upon any partial redemption of any such Bond the same shall be surrendered
at the corporate trust office of the Paying Agent in exchange for one or more
new Bonds for the unredeemed portion thereof.
Bonds (or portions thereof as aforesaid) for whose redemption
and payment provision is made in accordance with the Indenture shall thereupon
cease to be entitled to the lien of the Indenture and shall cease to bear
interest from and after the date fixed for redemption.
If an Event of Default, as defined in the Indenture, shall
occur, the principal of this Bond may become or be declared due and payable, in
the manner and with the effect provided in the Indenture.
This Bond is transferable by the registered owner hereof in
person or by attorney authorized in writing, at the corporate trust office of
the Bond Registrar, Chemical Bank (or if such office is not in the Borough of
Manhattan, The City of New York, at either such office or an office to be
maintained in such Borough), upon surrender of this Bond, and upon any such
transfer a new Bond of the same Stated Maturity of principal, for the same
aggregate principal amount, will be issued to the transferee in exchange
herefor.
The Bonds are issuable only as registered Bonds without
coupons in denominations of $1,000 and/or any integral multiple thereof. As
provided in, and subject to the provisions of, the Indenture, Bonds of a
particular Stated Maturity of principal are exchangeable for other Bonds of such
Stated Maturity, but of a different authorized denomination or denominations, as
requested by the Holder surrendering the same.
No service charge will be made to any Holder of Bonds for any
such transfer or exchange, but the Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment for registration of transfer, the
person in whose name this Bond is registered shall be deemed to be the owner
hereof for the purpose of receiving payment as herein provided and for all other
purposes whether or not this Bond be overdue, regardless of any notice to anyone
to the contrary.
As provided in the Indenture, the Indenture and the Bonds
shall be construed in accordance with and governed by the laws of the State of
New York.
#30122046.1
6
SCHEDULE 2
to
SERIES 1986B BOND
SUPPLEMENTAL INDENTURE
A. As used in this Series 1986B Bond Supplemental Indenture, the following
terms have the following meanings:
(1) Lease Indenture means each of:
(i) the Trust Indenture, Mortgage, Security Agreement
and Assignment of Rents, dated as of December 16, 1985,
between the Indenture Trustee and Owner Trustee No. 1, as
amended by Supplemental Indenture No. 1 thereto, dated as of
July 15, 1986, and Supplemental Indenture No. 2 thereto, dated
as of November 18, 1986
(ii) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of December 16,
1985, between the Indenture Trustee and Owner Trustee No. 2,
as amended by Supplemental Indenture No. 1 thereto, dated as
of July 15, 1986, and Supplemental Indenture No. 2 thereto,
dated as of November 18, 1986
(iii) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of December 16,
1985, between the Indenture Trustee and Owner Trustee No. 3,
as amended by Supplemental Indenture No. 1 thereto, dated as
of July 15, 1986, and Supplemental Indenture No. 2 thereto,
dated as of November 18, 1986
(iv) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of July 31, 1986,
between the Indenture Trustee and Owner Trustee No. 4, as
amended by Supplemental Indenture No. 1 thereto, dated as of
November 18, 1986;
(v) the Trust Indenture, Mortgage, Security Agreement
and Assignment of Rents, dated as of August 12, 1986, between
the Indenture Trustee and Owner Trustee No. 5, as amended by
Supplemental Indenture No. 1 thereto, dated as of November 18,
1986;
(vi) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of August 12,
1986, between the Indenture Trustee and Owner Trustee No. 6,
as amended by Supplemental Indenture No. 1 thereto, dated as
of November 18, 1986;
(vii) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of August 12,
1986, between the Indenture Trustee and Owner Trustee No. 7,
as amended by Supplemental Indenture No. 1 thereto, dated as
of November 18, 1986;
(viii) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of August 12,
1986, between the Indenture Trustee and Owner Trustee No. 8,
as amended by Supplemental Indenture No. 1 thereto, dated as
of November 18, 1986; and
#30122046.1
1
(ix) the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of August 12,
1986, between the Indenture Trustee and Owner Trustee No. 9,
as amended by Supplemental Indenture No. 1 thereto, dated as
of November 18, 1986.
(2) Lessor Note means each of:
(i) the Non-Recourse Promissory Note, Releveraging
Series (Due January 15, 2015) in the amount of $2,350,000,
dated November 25, 1986, payable by Owner Trustee No. 1 to the
Company;
(ii) the Nonrecourse Promissory Note, Releveraging
Series (Due January 15, 2015) in the amount of $2,456,000,
dated November 25, 1986, payable by Owner Trustee No. 2 to the
Company;
(iii) the Nonrecourse Promissory Note, Releveraging
Series (Due January 15, 2015) in the amount of $1,235,000,
dated November 25, 1986, payable by Owner Trustee No. 3 to the
Company;
(iv) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992) in the amount of $1,501,000
dated November 25, 1986, payable by Owner Trustee No. 4 to the
Company;
(v) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997) in the amount of $5,626,000
dated November 25, 1986, payable by Owner Trustee No. 4 to the
Company;
(vi) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2015) in the amount of $32,873,000
dated November 25, 1986, payable by Owner Trustee No. 4 to the
Company;
(vii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992) in the amount of $1,737,000
dated November 25, 1986, payable by Owner Trustee No. 5 to the
Company;
(viii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997) in the amount of $10,653,000
dated November 25, 1986, payable by Owner Trustee No. 5 to the
Company;
(ix) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2016) in the amount of $71,610,000
dated November 25, 1986, payable by Owner Trustee No. 5 to the
Company;
(x) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992) in the amount of $2,716,000
dated November 25, 1986, payable by Owner Trustee No. 6 to the
Company; and
(xi) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997) in the amount of $10,645,000
dated November 25, 1986, payable by Owner Trustee No. 6 to the
Company;
#30122046.1
2
(xii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due July 15, 2012) in the amount of $60,598,000 dated
November 25, 1986, payable by Owner Trustee No. 6 to the
Company.
(xiii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992) in the amount of $993,000 dated
November 25, 1986, payable by Owner Trustee No. 7 to the
Company.
(xiv) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997) in the amount of $6,087,000
dated November 25, 1986, payable by Owner Trustee No. 7 to the
Company;
(xv) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2016) in the amount of $40,920,000
dated November 25, 1986, payable by Owner Trustee No. 7 to the
Company;
(xvi) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992) in the amount of $827,000 dated
November 25, 1986, payable by Owner Trustee No. 8 to the
Company;
(xvii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997) in the amount of $5,072,000
dated November 25, 1986, payable by Owner Trustee No. 8 to the
Company;
(xviii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2016) in the amount of $34,101,000
dated November 25, 1986, payable by Owner Trustee No. 8 to the
Company;
(xix) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992) in the amount of $1,644,000
dated November 25, 1986, payable by Owner Trustee No. 9 to the
Company;
(xx) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997) in the amount of $10,703,000
dated November 25, 1986, payable by Owner Trustee No. 9 to the
Company; and
(xxi) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2016) in the amount of $67,653,000
dated November 25, 1986, payable by Owner Trustee No. 9 to the
Company.
(3) Lessor or Owner Trustee means The First National Bank of
Boston, a national banking association (FNB), in its capacity as owner trustee
under nine separate Trust Agreements, respectively dated as of December 16,
1985, July 31, 1986 or August 12, 1986, with the equity investor named therein;
in such capacity referred to as Owner Trustee ▇▇. ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇, Owner
Trustee No. 3, Owner Trustee No. 4, Owner Trustee No. 5, Owner Trustee No. 6,
Owner Trustee No. 7, Owner Trustee No. 8 and Owner Trustee No. 9, respectively.
(4) Indenture Trustee means Chemical Bank, a New York banking
corporation, as Trustee.
(5) Lease means each of:
(i) the Facility Lease, dated as of December 16,
1985, between PNM, as lessee, and Owner Trustee No. 1, as
lessor, as amended by Amendment No. 1
#30122046.1
3
thereto, dated as of July 15, 1986, and by Amendment No. 2
thereto, dated as of November 18, 1986
(ii) the Facility Lease, dated as of December 16,
1985, between PNM, as lessee, and Owner Trustee No. 2, as
lessor, as amended by Amendment No. 1 thereto, dated as of
July 15, 1986, and by Amendment No. 2 thereto, dated as of
November 18, 1986
(iii) the Facility Lease, dated as of December 16,
1985, between PNM, as lessee, and Owner Trustee No. 3, as
lessor, as amended by Amendment No. 1 thereto, dated as of
July 15, 1986, and by Amendment No. 2 thereto, dated as of
November 18, 1986
(iv) the Facility Lease, dated as of July 31, 1986,
between PNM, as lessee, and Owner Trustee No. 4, as lessor, as
amended by Amendment No. 1 thereto, dated as of November 18,
1986;
(v) the Facility Lease, dated as of August 12, 1986,
between PNM, as lessee, and Owner Trustee No. 5, as lessor, as
amended by Amendment No. 1 thereto, dated as of November 18,
1986;
(vi) the Facility Lease, dated as of August 12, 1986,
between PNM, as lessee, and Owner Trustee No. 6, as lessor, as
amended by Amendment No. 1 thereto, dated as of November 18,
1986;
(vii) the Facility Lease, dated as of August 12,
1986, between PNM, as lessee, and Owner Trustee No. 7, as
lessor, as amended by Amendment No. 1 thereto, dated as of
November 18, 1986;
(viii) the Facility Lease, dated as of August 12,
1986, between PNM, as lessee, and Owner Trustee No. 8, as
lessor, as amended by Amendment No. 1 thereto, dated as of
November 18, 1986; and
(ix) the Facility Lease, dated as of August 12, 1986,
between PNM, as lessee, and Owner Trustee No. 9, as lessor, as
amended by Amendment No. 1 thereto, dated as of November 18,
1986.
(6) Participation Agreement means each of:
(i) the Participation Agreement, dated as of December
16, 1985, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 1, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of July 15, 1986 and Amendment No. 2
thereto, dated as of November 18, 1986;
(ii) the Participation Agreement, dated as of
December 16, 1985, among the Owner Participant designated
therein, the Company, FNB, in its individual capacity and as
Owner Trustee No. 2, Chemical Bank, in its individual capacity
and as Indenture Trustee, and PNM, as amended by Amendment No.
1 thereto, dated as of July 15, 1986 and Amendment No. 2
thereto, dated as of November 18, 1986;
#30122046.1
4
(iii) the Participation Agreement, dated as of
December 16, 1985, among the Owner Participant designated
therein, the Company, FNB, in its individual capacity and as
Owner Trustee No. 3, Chemical Bank, in its individual capacity
and as Indenture Trustee, and PNM, as amended by Amendment No.
1 thereto, dated as of July 15, 1986 and Amendment No. 2
thereto, dated as of November 18, 1986;
(iv) the Participation Agreement, dated as of July
31, 1986, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 4, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of November 18, 1986;
(v) the Participation Agreement, dated as of August
12, 1986, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 5, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of November 18, 1986;
(vi) the Participation Agreement, dated as of August
12, 1986, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 6, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of November 18, 1986;
(vii) the Participation Agreement, dated as of August
12, 1986, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 7, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of November 18, 1986;
(viii) the Participation Agreement, dated as of
August 12, 1986, among the Owner Participant designated
therein, the Company, FNB, in its individual capacity and as
Owner Trustee No. 8, Chemical Bank, in its individual capacity
and as Indenture Trustee, and PNM, as amended by Amendment No.
1 thereto, dated as of November 18, 1986; and
(ix) the Participation Agreement, dated as of August
12, 1986, among the Owner Participant designated therein, the
Company, FNB, in its individual capacity and as Owner Trustee
No. 9, Chemical Bank, in its individual capacity and as
Indenture Trustee, and PNM, as amended by Amendment No. 1
thereto, dated as of November 18, 1986.
#30122046.1
5
SCHEDULE 3
to
SERIES 1986B BOND
SUPPLEMENTAL INDENTURE
DESCRIPTION OF CERTAIN LESSOR NOTES
(A) The following Lessor Notes relate to a Lease with respect
to an undivided interest in PVNGS Unit 1 and certain related common facilities:
(i) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992), in the amount of $3,300,000,
bearing interest at 8.05%, the principal amount of which
amortizes as follows:
Payment Principal
Date Amount Payable
---- --------------
July 15, 1989 $ 379,000
January 15, 1990 539,000
July 15, 1990 561,000
January 15, 1991 583,000
July 15, 1991 607,000
January 15, 1992 631,000
-----------
Principal Amount $3,300,000
===========
(ii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997), in the amount of $8,060,000,
bearing interest at 8.95%, the principal amount of which
amortizes as follows:
Payment Principal
Date Amount Payable
---- --------------
July 15, 1992 $ 657,000
January 15, 1993 686,000
July 15, 1993 717,000
January 15, 1994 749,000
July 15, 1994 782,000
January 15, 1995 817,000
July 15, 1995 854,000
January 15, 1996 892,000
July 15, 1996 932,000
January 15, 1997 974,000
----------
Principal Amount $8,060,000
==========
(iii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2015), in the amount of $48,640,000,
bearing interest at 10.15%, the principal amount of which
amortizes as follows:
#30122046.1
1
July 15, 1997 $1,017,000
January 15, 1998 1,069,000
July 15, 1998 1,123,000
January 15, 1999 1,180,000
July 15, 1999 1,240,000
January 15, 2000 1,303,000
July 15, 2000 1,217,000
January 15, 2001 939,000
July 15, 2001 1,053,000
January 15, 2002 967,000
July 15, 2002 1,065,000
January 15, 2003 960,000
July 15, 2003 1,077,000
January 15, 2004 979,000
July 15, 2004 1,143,000
January 15, 2005 1,039,000
July 15, 2005 1,214,000
January 15, 2006 1,103,000
July 15, 2006 1,288,000
January 15, 2007 1,171,000
July 15, 2007 1,368,000
January 15, 2008 1,243,000
July 15, 2008 1,452,000
January 15, 2009 1,319,000
July 15, 2009 1,541,000
January 15, 2010 1,400,000
July 15, 2010 1,636,000
January 15, 2011 1,486,000
July 15, 2011 1,737,000
January 15, 2012 1,577,000
July 15, 2012 1,844,000
January 15, 2013 1,674,000
July 15, 2013 1,957,000
January 15, 2014 1,777,000
July 15, 2014 2,077,000
January 15, 2015 2,405,000
-----------
Principal Amount $48,640,000
===========
(B) The following Lessor Notes relate to a Lease with respect
to an undivided interest in PVNGS Unit 2 and certain related common facilities:
(i) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1992), in the amount of $1,270,000,
bearing interest at 8.05%, the principal amount of which
amortizes as follows:
#30122046.1
2
Payment Principal
Date Amount Payable
---- --------------
January 15, 1990 $ 234,000
July 15, 1990 244,000
January 15, 1991 254,000
July 15, 1991 264,000
January 15, 1992 274,000
----------
Principal Amount $1,270,000
==========
(ii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 1997), in the amount of $3,501,000,
bearing interest at 8.95%, the principal amount of which
amortizes as follows:
Payment Principal
Date Amount Payable
---- --------------
July 15, 1992 $285,000
January 15, 1993 298,000
July 15, 1993 311,000
January 15, 1994 325,000
July 15, 1994 340,000
January 15, 1995 355,000
July 15, 1995 371,000
January 15, 1996 388,000
July 15, 1996 405,000
January 15, 1997 423,000
----------
Principal Amount $3,501,000
==========
(iii) the Nonrecourse Promissory Note, Fixed Rate
Series (Due January 15, 2016), in the amount of $23,229,000,
bearing interest at 10.15%, the principal amount of which
amortizes as follows:
Payment Principal
Date Amount Payable
July 15, 1997 $442,000
January 15, 1998 465,000
July 15, 1998 488,000
January 15, 1999 513,000
July 15, 1999 539,000
January 15, 2000 566,000
July 15, 2000 585,000
January 15, 2001 416,000
July 15, 2001 464,000
January 15, 2002 427,000
July 15, 2002 468,000
January 15, 2003 422,000
#30122046.1
3
Payment Principal
Date Amount Payable
---- --------------
July 15, 2003 372,000
January 15, 2004 430,000
July 15, 2004 501,000
January 15, 2005 456,000
July 15, 2005 532,000
January 15, 2006 484,000
July 15, 2006 565,000
January 15, 2007 514,000
July 15, 2007 600,000
January 15, 2008 545,000
July 15, 2008 637,000
January 15, 2009 579,000
July 15, 2009 676,000
January 15, 2010 614,000
July 15, 2010 717,000
January 15, 2011 652,000
July 15, 2011 762,000
January 15, 2012 692,000
July 15, 2012 808,000
January 15, 2013 734,000
July 15, 2013 858,000
January 15, 2014 780,000
July 15, 2014 911,000
January 15, 2015 827,000
July 15, 2015 968,000
January 15, 2016 1,120,000
-----------
Principal Amount $23,229,000
===========
#30122046.1
4
EXHIBIT A
to
Series 1986B Bond
Supplemental Indenture
================================================================================
FIRST PV FUNDING CORPORATION,
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
CHEMICAL BANK,
as Trustee
----------
UNIT SUPPLEMENTAL INDENTURE OF PLEDGE
--
(LEASE OBLIGATION BONDS SERIES 1986B)
dated December , 1986
to
COLLATERAL TRUST INDENTURE
dated as of December 16, 1985
----------
Providing for the Pledge of
the Lessor Notes Specified
on Schedule 1 hereto
================================================================================
PALO VERDE NUCLEAR GENERATING STATION
#30122046.1
1
UNIT SUPPLEMENTAL INDENTURE OF PLEDGE (LEASE OBLIGATION BONDS,
SERIES 1986B), dated December , 1986, among FIRST PV FUNDING CORPORATION, a
Delaware corporation (the Company), PUBLIC SERVICE COMPANY OF NEW MEXICO, a New
Mexico corporation (PNM), and CHEMICAL BANK, as trustee (the Trustee).
WHEREAS, the Company and PNM have heretofore executed and
delivered to the Trustee an indenture dated as of December 16, 1985 (as
heretofore amended and supplemented, the Original Indenture);
WHEREAS, Section 11.01(4) of the Original Indenture provides,
among other things, that the Company and the Trustee may, without the consent of
the Holders of any Securities, enter into an indenture supplemental to the
Original Indenture to convey, transfer and assign to the Trustee, and to subject
to the Lien of the Original Indenture additional Pledged Lessor Notes;
WHEREAS, PNM and the Company have heretofore executed and
delivered the Series 1986B Bond Supplemental Indenture, dated as of November 18,
1986 (the Series 1986B Bond Supplemental Indenture), to the Trustee, and the
Company issued thereunder a series of Securities designated "Lease Obligation
Bonds, Series 1986B" (the Series 1986B Securities) in the aggregate principal
amount of $460,000,000;
WHEREAS, the Company, in accordance with Section 2.15(a) of
the Original Indenture, deposited with the Trustee the proceeds of sale of the
Series 1986B Securities;
WHEREAS, the Company has heretofore obtained the release of
$ from such proceeds of sale;
----------
WHEREAS, the Company, (i) in accordance with Sections 2.15(b)
and 13.01 of the Original Indenture, desires to obtain the release of $ from
such proceeds of sale and to cause the application thereof in the manner
specified by such Section 2.15(b) and (ii) has requested the Trustee to enter
into this Supplemental Indenture of Pledge for the purpose, among others, of
meeting the condition to such release set forth in clause (a) of such Section
13.01; and
WHEREAS, all acts and things necessary to constitute these
presents a valid and binding supplemental indenture and agreement according to
its terms, have been done and performed, and the execution of this Supplemental
Indenture of Pledge has in all respects been duly authorized, and the Company,
in the exercise of legal right and power in it vested, executes this
Supplemental Indenture of Pledge;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF PLEDGE
WITNESSETH:
That in consideration of the premises and of the sum of one
dollar to it duly paid by the Trustee at the execution of these presents, the
receipt whereof is hereby acknowledged, the Company and PNM each covenants and
agrees with the Trustee, for the equal and proportionate benefit of the
respective Holders from time to time of the Securities, as follows:
ARTICLE I.
PLEDGE OF LESSOR NOTES
To secure the payment of the principal of, premium (if any)
and interest on all the Securities from time to time Outstanding under the
Original Indenture, and the performance of the covenants therein and herein
contained, the Company by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, hypothecate, pledge, confirm and create a
security interest in, unto the Trustee, the Lessor Notes identified on Schedule
1 hereto (herein referred to as the Pledged Lessor Notes).
#30122046.1
2
TO HAVE AND TO HOLD the aforesaid Pledged Lessor Notes unto
the Trustee and its successors and assigns forever, in trust and for the uses
and purposes and subject to the covenants and conditions set forth in the
Original Indenture.
ARTICLE II.
MISCELLANEOUS
SECTION 1.021. Execution as Supplemental Indenture.
This Supplemental Indenture of Pledge is executed and shall be
construed as an indenture supplemental to the Original Indenture and, as
provided in the Original Indenture, this Supplemental Indenture of Pledge forms
a part thereof. Except as herein or in Schedule 1 hereto expressly otherwise
defined, the use of the terms and expressions herein is in accordance with the
definitions, uses and constructions contained in the Original Indenture.
SECTION 1.022. Responsibility for Recitals, Etc.
The recitals contained herein shall be taken as the statements
of the Company and PNM, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
or sufficiency of this Supplemental Indenture of Pledge or the Series 1986B
Securities.
SECTION 1.023. Provisions Binding on Successors.
All the covenants, stipulations, promises and agreements in
this Supplemental Indenture of Pledge contained by or in behalf of the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.024. New York Contract.
This Supplemental Indenture of Pledge shall be deemed to be a
contract under the laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said state.
SECTION 1.025. Counterparts.
This Supplemental Indenture of Pledge may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
#30122046.1
3
IN WITNESS WHEREOF, the Company, PNM and the Trustee have
caused this Supplemental Indenture of Pledge to be duly executed by their
respective officers thereunto duly authorized, as of the date and year first
above written.
FIRST PV FUNDING CORPORATION
[CORPORATE SEAL]
By
-------------------------
Title:
Attest:
----------------------
Secretary
PUBLIC SERVICE COMPANY
OF NEW MEXICO
[CORPORATE SEAL]
By
------------------------
Title:
Attest:
----------------------
Secretary
CHEMICAL BANK,
as Trustee
[CORPORATE SEAL]
By
-----------------------
Vice President
Attest:
----------------------
Trust Officer
#30122046.1
4
SCHEDULE 1
to
SUPPLEMENTAL INDENTURE
OF PLEDGE
As used in this Supplemental Indenture of Pledge, the
following terms have the following meanings:
(1) Lease Indenture means the Trust Indenture, Mortgage,
Security Agreement and Assignment of Rents, dated as of December __, 1986,
between the Indenture Trustee and the Owner Trustee.
(2) Lessor Note means each of the Non-Recourse Promissory
Note, Fixed Rate Series (Due January 15, 1992), in the amount of $ , the
Non-Recourse Promissory Note, Fixed Rate Series (Due January 15, 1997), in the
amount of $ and the Non-Recourse Promissory Note, Fixed Rate Series (Due January
15, 201 ), in the amount of $ , each dated December , 1986, payable by the Owner
Trustee to the Company.
(3) Lessor or Owner Trustee means The First National Bank of
Boston, a national banking association (FNB), in its capacity as owner trustee
under the Trust Agreement, dated as of December , 1986, with the owner
participant named therein.
(4) Indenture Trustee means Chemical Bank, a New York banking
corporation, as Trustee.
(5) Lease means the Facility Lease, dated as of December __ ,
1986, between PNM, as lessee, and the Owner Trustee, as lessor.
(6) Participation Agreement means the Participation Agreement
dated as of December , 1986, among the Owner Participant party thereto, the
Company, FNB in its individual capacity and as Owner Trustee, Chemical Bank, in
its individual capacity and as Indenture Trustee, and PNM.
#30122046.1
1
TABLE OF CONTENTS
Page
ARTICLE I. THE BONDS....................................................... 2
SECTION 1.01. Terms of the Bonds................................ 2
SECTION 1.02. Mandatory Redemption of the Bonds................. 3
SECTION 1.03. Optional Redemption of Bonds...................... 4
SECTION 1.04. Sinking Fund...................................... 5
ARTICLE II. PLEDGE OF LESSOR NOTES......................................... 7
SECTION 2.01. Pledge of Lessor Notes............................ 7
ARTICLE III. AMENDMENT TO ORIGINAL INDENTURE................................ 8
SECTION 3.01. Amendment to Original Indenture................... 8
ARTICLE IV. MISCELLANEOUS.................................................. 8
SECTION 4.01. Execution as Supplemental Indenture............... 8
SECTION 4.02. Responsibility for Recitals, Etc.................. 9
SECTION 4.03. Provisions Binding on Successors.................. 9
SECTION 4.04. New York Contract................................. 9
SECTION 4.05. Counterparts...................................... 9
Schedule 1: FORM OF BOND
Schedule 2: CERTAIN DEFINITIONS
Schedule 3: CERTAIN LESSOR NOTES
Exhibit A: SUPPLEMENTAL INDENTURE OF PLEDGE
#30122046.1
-i-
EXHIBIT D to
Conformed Collateral
Trust Indenture
================================================================================
FIRST PV FUNDING CORPORATION,
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
CHEMICAL BANK,
as Trustee
----------
UNIT 1 SUPPLEMENTAL INDENTURE OF PLEDGE
(LEASE OBLIGATION BONDS, SERIES 1986B)
dated as of December 15, 1986
to
COLLATERAL TRUST INDENTURE
dated as of December 16, 1985
----------
Providing for the Pledge of
the Lessor Notes Specified
on Schedule 1 hereto
================================================================================
PALO VERDE NUCLEAR GENERATING STATION UNIT 1
#30122196.1
-ii-
UNIT 1 SUPPLEMENTAL INDENTURE OF PLEDGE (LEASE OBLIGATION
BONDS, SERIES 1986B), dated as of December 15, 1986, among FIRST PV FUNDING
CORPORATION, a Delaware corporation (the Company), PUBLIC SERVICE COMPANY OF NEW
MEXICO, a New Mexico corporation (PNM), and CHEMICAL BANK, as trustee (the
Trustee)
WHEREAS, the Company and PNM have heretofore executed and
delivered to the Trustee an indenture dated as of December 16, 1985 (as
heretofore amended and supplemented, the Original Indenture);
WHEREAS, Section 11.01(4) of the Original Indenture provides,
among other things, that the Company and the Trustee may, without the consent of
the Holders of any Securities, enter into an indenture supplemental to the
Original Indenture to convey, transfer and assign to the Trustee, and to subject
to the Lien of the Original Indenture, additional Pledged Lessor Notes;
WHEREAS, PNM and the Company have heretofore executed and
delivered the Series 1986B Bond Supplemental Indenture, dated as of November 18,
1986 (the Series 1986B Bond Supplemental Indenture), to the Trustee, and the
Company issued thereunder a series of Securities designated "Lease Obligation
Bonds, Series 1986B" (the Series 1986B Securities) in the aggregate principal
amount of $460,000,000;
WHEREAS, the Company, in accordance with Section 2.15(a) of
the Original Indenture, deposited with the Trustee the proceeds of sale of the
Series 1986B Securities;
WHEREAS, the Company has heretofore obtained the release of
$372,000,000 from such proceeds of sale;
WHEREAS, the Company, (i) in accordance with Sections 2.15(b)
and 13.01 of the Original Indenture, desires to obtain the release of
$60,000,000 from such proceeds of sale and to cause the application thereof in
the manner specified by such Section 2.15(b) and (ii) has requested the Trustee
to enter into this Supplemental Indenture of Pledge for the purpose, among
others, of meeting the condition to such release set forth in clause (a) of such
Section 13.01; and
WHEREAS, all acts and things necessary to constitute these
presents a valid and binding supplemental indenture and agreement according to
its terms, have been done and performed, and the execution of this Supplemental
Indenture of Pledge has in all respects been duly authorized, and the Company,
in the exercise of legal right and power in it vested, executes this
Supplemental Indenture of Pledge;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF PLEDGE
WITNESSETH:
That in consideration of the premises and of the sum of one
dollar to it duly paid by the Trustee at the execution of these presents, the
receipt whereof is hereby acknowledged, the Company and PNM each covenants and
agrees with the Trustee, for the equal and proportionate benefit of the
respective Holders from time to time of the Securities, as follows:
ARTICLE ONE
PLEDGE OF LESSOR NOTES
To secure the payment of the principal of, premium (if any)
and interest on all the Securities from time to time Outstanding under the
Original Indenture, and the performance of the covenants therein and herein
contained, the Company by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, hypothecate, pledge, confirm and create a
security interest in, unto the Trustee, the Lessor Notes identified on Schedule
1 hereto (herein referred to as the Pledged Lessor Notes).
#30122196.1
-i-
TO HAVE AND TO HOLD the aforesaid Pledged Lessor Notes unto
the Trustee and its successors and assigns forever, in trust and for the uses
and purposes and subject to the covenants and conditions set forth in the
Original Indenture.
ARTICLE TWO
MISCELLANEOUS
SECTION 1.026. Execution as Supplemental Indenture.
This Supplemental indenture of Pledge is executed and shall be
construed as an indenture supplemental to the Original Indenture and, as
provided in the Original Indenture, this Supplemental Indenture of Pledge forms
a part thereof. Except as herein or in Schedule l hereto expressly otherwise
defined, the use of the terms and expressions herein is in accordance with the
definitions, uses and constructions contained in the Original Indenture.
SECTION 1.027. Responsibility for Recitals, Etc.
The recitals contained herein shall be taken as the statements
of the Company and PNM, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
or sufficiency of this Supplemental Indenture of Pledge or the Series 1986B
Securities.
SECTION 1.028. Provisions Binding on Successors.
All the covenants, stipulations, promises and agreements in
this Supplemental Indenture of Pledge contained by or in behalf of the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.029. New York Contract.
This Supplemental Indenture of Pledge shall be deemed to be a
contract under the laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said state.
SECTION 1.0210. Counterparts.
This Supplemental Indenture of Pledge may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
#30122196.1
-ii-
IN WITNESS WHEREOF, the Company, PNM and the Trustee have
caused this Supplemental Indenture of Pledge to be duly executed by their
respective officers thereunto duly authorized, as of the date and year first
above written.
FIRST PV FUNDING CORPORATION
[CORPORATE SEAL]
By
-------------------------
Title:
Attest:
-----------------------
Assistant Secretary
PUBLIC SERVICE COMPANY OF NEW
MEXICO
[CORPORATE SEAL]
By
--------------------------
Title:
Attest:
-----------------------
Assistant Secretary
CHEMICAL BANK,
as Trustee
[CORPORATE SEAL]
By
--------------------------
Vice President
Attest:
-----------------------
Trust Officer
#30122196.1
-iii-
SCHEDULE 1
to
UNIT 1
SUPPLEMENTAL INDENTURE
OF PLEDGE
As used with reference to this Supplemental Indenture of
Pledge, the following terms have the following meanings:
(1) Lease Indenture means the Trust Indenture, Mortgage,
Security Agreement and Assignment of Rents, dated as of December 15, 1986,
between the Indenture Trustee and the Owner Trustee.
(2) Lessor Note means each of (i) the Non-Recourse Promissory
Note, Fixed Rate Series (Due January 15, 1992), in the amount of $3,300,000,
(ii) the Non-Recourse Promissory Note, Fixed Rate Series (Due January 15, 1997),
in the amount of $8,060,000 and (iii) the Non-Recourse Promissory Note, Fixed
Rate Series (Due January 15, 2015), in the amount of $48,640,000, each dated
December 17, 1986, payable by the Owner Trustee to the Company.
(3) Lessor or Owner Trustee means The First National Bank of
Boston, a national banking association (FNB), in its capacity as owner trustee
under the Trust Agreement, dated as of December 15, 1986, with the owner
participant named therein.
(4) Indenture Trustee means Chemical Bank, a New York banking
corporation, as Trustee.
(5) Lease means the Facility Lease, dated as of December 15,
1986, between PNM, as lessee, and the Owner Trustee, as lessor.
(6) Participation Agreement means the Participation Agreement
dated as of December 15, 1986, among the Owner Participant party thereto, the
Company, FNB in its individual capacity and as Owner Trustee, Chemical Bank, in
its individual capacity and as Indenture Trustee, and PNM.
#30122196.1
EXHIBIT E to
Conformed Collateral
Trust Indenture
FIRST PV FUNDING CORPORATION,
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
CHEMICAL BANK,
as Trustee
----------
UNIT 2 SUPPLEMENTAL INDENTURE OF PLEDGE
(LEASE OBLIGATION BONDS, SERIES 1986B)
dated as of December 15, 1986
to
COLLATERAL TRUST INDENTURE
dated as of December 16, 1985
----------
Providing for the Pledge of
the Lessor Notes Specified
on Schedule 1 hereto
================================================================================
PALO VERDE NUCLEAR GENERATING STATION UNIT 2
#30122195.1
-v-
UNIT 2 SUPPLEMENTAL INDENTURE OF PLEDGE (LEASE OBLIGATION
BONDS, SERIES 1986B), dated as of December 15, 1986, among FIRST PV FUNDING
CORPORATION, a Delaware corporation (the Company), PUBLIC SERVICE COMPANY OF NEW
MEXICO, a New Mexico corporation (PNM), and CHEMICAL BANK, as trustee (the
Trustee).
WHEREAS, the Company and PNM have heretofore executed and
delivered to the Trustee an indenture dated as of December 16, 1985 (as
heretofore amended and supplemented, the Original Indenture);
WHEREAS, Section 11.01(4) of the Original Indenture provides,
among other things, that the Company and the Trustee may, without the consent of
the Holders of any Securities, enter into an indenture supplemental to the
Original Indenture to convey, transfer and assign to the Trustee, and to subject
to the Lien of the Original Indenture, additional Pledged Lessor Notes;
WHEREAS, PNM and the Company have heretofore executed and
delivered the Series 1986B Bond Supplemental Indenture, dated as of November 18,
1986 (the Series 1986B Bond Supplemental Indenture), to the Trustee, and the
Company issued thereunder a series of Securities designated "Lease Obligation
Bonds, Series 1986B" (the Series 1986B Securities) in the aggregate principal
amount of $460,000,000;
WHEREAS, the Company, in accordance with Section 2.15(a) of
the Original Indenture, deposited with the Trustee the proceeds of sale of the
Series 1986B Securities;
WHEREAS, the Company has heretofore obtained the release of
$372,000,000 from such proceeds of sale;
WHEREAS, the Company, (i) in accordance with Sections 2.15(b)
and 13.01 of the Original Indenture, desires to obtain the release of
$28,000,000 from such proceeds of sale and to cause the application thereof in
the manner specified by such Section 2.15(b) and (ii) has requested the Trustee
to enter into this Supplemental Indenture of Pledge for the purpose, among
others, of meeting the condition to such release set forth in clause (a) of such
Section 13.01; and
WHEREAS, all acts and things necessary to constitute these
presents a valid binding supplemental indenture and agreement according to its
terms, have been done and performed, and the execution of this Supplemental
Indenture of Pledge has in all respects been duly authorized, and the Company,
in the exercise of legal right and power in it vested, executes this
Supplemental Indenture of Pledge;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF PLEDGE
WITNESSETH:
That in consideration of the premises and of the sum of one
dollar to it duly paid by the Trustee at the execution of these presents, the
receipt whereof is hereby acknowledged, the Company and PNM each covenants and
agrees with the Trustee, for the equal and proportionate benefit of the
respective Holders from time to time of the Securities, as follows:
ARTICLE ONE
PLEDGE OF LESSOR NOTES
To secure the payment of the principal of, premium (if any)
and interest on all the Securities from time to time Outstanding under the
Original Indenture, and the performance of the covenants therein and herein
contained, the Company by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, hypothecate, pledge, confirm and create a
security interest in, unto the Trustee, the Lessor Notes identified on Schedule
1 hereto (herein referred to as the Pledged Lessor Notes).
#30122195.1
-vi-
TO HAVE AND TO HOLD the aforesaid Pledged Lessor Notes unto
the Trustee and its successors and assigns forever, in trust and for the uses
and purposes and subject to the covenants and conditions set forth in the
Original Indenture.
ARTICLE TWO
MISCELLANEOUS
SECTION 1.0211. Execution as Supplemental Indenture.
This Supplemental Indenture of Pledge is executed and shall be
construed as an indenture supplemental to the Original Indenture and, as
provided in the Original Indenture, this Supplemental Indenture of Pledge forms
a part thereof. Except as herein or in Schedule 1 hereto expressly otherwise
defined, the use of the terms and expressions herein is in accordance with the
definitions, uses and constructions contained in the Original Indenture.
SECTION 1.0212. Responsibility for Recitals, Etc.
The recitals contained herein shall be taken as the statements
of the Company and PNM, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
or sufficiency of this Supplemental Indenture of Pledge or the Series 1986B
Securities.
SECTION 1.0213. Provisions Binding on Successors.
All the covenants, stipulations, promises and agreements in
this Supplemental Indenture of Pledge contained by or in behalf of the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.0214. New York Contract.
This Supplemental Indenture of Pledge shall be deemed to be a
contract under the laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said state.
SECTION 1.0215. Counterparts.
This Supplemental Indenture of Pledge may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Company, PNM and the Trustee have
caused this Supplemental Indenture of Pledge to be duly executed by their
respective officers thereunto duly authorized, as of the date and year first
above written.
FIRST PV FUNDING CORPORATION
[CORPORATE SEAL]
By
--------------------------
Title:
Attest:
----------------------
Assistant Secretary
PUBLIC SERVICE COMPANY
OF NEW MEXICO
[CORPORATE SEAL]
By
-------------------------
Title:
Attest:
----------------------
Assistant Secretary
CHEMICAL BANK,
as Trustee
[CORPORATE SEAL]
By
-------------------------
Vice President
Attest:
----------------------
Trust Officer
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SCHEDULE 1
TO
UNIT 2
SUPPLEMENTAL INDENTURE
OF PLEDGE
As used with reference to this Supplemental Indenture of
Pledge, the following terms have the following meanings:
(1) Lease Indenture means the Trust Indenture, Mortgage,
Security Agreement and Assignment of Rents, dated as of December 15, 1986,
between the Indenture Trustee and the Owner Trustee.
(2) Lessor Note means each of (1) the Non-Recourse Promissory
Note, Fixed Rate Series (Due January 15, 1992), in the amount of $1,270,000,
(ii) the Non-Recourse Promissory Note, Fixed Rate Series (Due January 15, 1997),
in the amount of $3,501,000 and (iii) the Non-Recourse Promissory Note, Fixed
Rate Series (Due January 15, 2016), in the amount of $23,229,000, each dated
December 17, 1986, payable by the Owner Trustee to the Company.
(3) Lessor or Owner Trustee means The First National Bank of
Boston, a national banking association (FNB), in its capacity as owner trustee
under the Trust Agreement, dated as of December 15, 1986, with the owner
participant named therein.
(4) Indenture Trustee means Chemical Bank, a New York banking
corporation, as Trustee.
(5) Lease means the Facility Lease, dated as of December 15,
1986, between PNM, as lessee, and the Owner Trustee, as lessor.
(6) Participation Agreement means the Participant Agreement
dated as of December 15, 1986, among the Owner Participant party thereto, the
Company, FNB in its individual capacity and as Owner Trustee, Chemical Bank, in
its individual capacity and as Indenture Trustee, and PNM.
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