ML17300A309

Forwards Util 860717 Transaction Documents Reflecting 860717 Closing of Sale & Leaseback Financing Transactions

ML17300A309
Person / Time
Site:	Palo Verde
Issue date:	08/04/1986
From:	Moore C KELEHAR & MCLEOD
To:	Miraglia F Office of Nuclear Reactor Regulation
References
NUDOCS 8608070197
Download: ML17300A309 (431)

Text

REQUL Y INFORMATION DISTRIBUTI SYSTEM (R IDS)

ACCESSION NBR: 8608070197'OC. DATE: 86/08/04 NOTARIZED: NO DOCKET FACIL: STN-50-528 Palo Verde Nuclear Stations Unit ii Arizona Pub AUTH. NAME AUTHOR AFFILIATION li 05000528 MOOREi C. L. Kelehar 8c McLeod REC IP. NAME RECIPIENT AFFILIATION MIRAQLIA>F. J. Division of Pv'essuv ized Water Reactov Licen sing 8 (post 8

SUBJECT:

For(cards util 860717 transaction documents v eflecting 860717 closing of s le leaseback i'inane ing transactions.

+]~

Cr DISTRIBUTION CODE: Y002D COP IEB REC I ED: LTR ENCL BI ZE:

TITLE: Distv ihution for Atypical 50 Dkt Matev ial NOTES: Standav di zed plant. 05000528 RECIPIENT COPIEB RECIPIENT COPIES ID CODE/NAME LTTR ENCL ID CODE/NAME LTTR ENCL PWR-8 ADTS 09 1 1 PWR-3 PD7 L* 08 1 1 PWR-8 PD7 PD 07 1 1 LIC ITR*> E 01 1 MIRAQLIA F. J. 06 1 INTERNAL ACRB 20 1 1 EG 8 1 ELD/HDB3 16 04 1 RCN5 1 1 RM/DDAMI MID 17 1 EXTERNAL: LPDR 0S NRC PDR 02 1 1 NSIC 05 TOTAL NURSER OP COPIES REQUIRED: LTTR PO ENCL Pf

nl

>>n I I IP>>), Il >> j II II n>>>>tI s>>

I,W I>>

ll

>>(< ln 'I li

'>> C ,)>> I I r n) .'I" ~ ).(.

~ " I nl ) I

>>>>>>I 'I )

,ll """ ~:)J>>

) j>>>> )

t $

'I t,'~

I

'>>>> <>>l

>>,l'>>t

~ .I. . l t J,n ~ "~

I, JJ p

KELEHER Gc McLEOD, P. A.

ATTORNEYS AND COUNSELORS AT LAW RUSSELL MOORC GARGARA ALGIN PUBLIc SERvIcc BUILDING W. A. KCLCHER WILLIAM G. KCLCHCR KATHRYN J. KUHLEN I 888 l9 72 MICHACI. L. KCLCHCR RANDOLPH L. HAM 6LIN P. O. DRAWER AA PATRICK W. HURLEY MARK STYLCS A, H, MPLCDD CHARLCS A. PHARRIS EVAN S. HDGGS ALBUOUEROUE NEW MEXICO BTIOS RICHARD 6. COLE P. SCOTT EATON IGO2-I GT 8 ARTHUR D GCACH MARGARET C. OAVIOSDN JOHN M KULIKOWSKI THOMAS C. GRICSS JOHN 6, TITTMANN THOMAS F. KCLEHER PAULA Z. HANSOM PETER H JOHNSTONC THOMAS C. GIRD OF EDUNSCL August 4, 1986

~

HCNRY F. NARVACZ THDMAS H. TOEVS CHARLES L. MOOR C WILLIAM M. CASEY ROGCRT H. CLARK GRIAN J. O'ROURKE RICHARD L ALVIDREZ

~

PATRICK V. APOOACA TcI.cI HONE 842-6262 RONALD F. HO R N KURT WIHL ARcA CDDc 505 PHIL KRCHGICL RIKKI L. QUINTANA CLYDE F. WORTHCN HCLCN D. HILLCGASS SPENCER RCIO CARDL LISA SMITH MICHAEL WILC JUDITH L. DURZD CLIZAGETH E. WHITCFICLD THOMAS J. ZIMGRICK ROGCRT C CONKLIN RCGECCA A. HOUSTON File 5 00431-108 Director of Nuclear Reactor Regulation Attention: Mr. Frank J. Miraglia, Director Division of Pressurized Water Reactor Licensing B U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: Sale and Leaseback Financing Transaction by Public Service Company of New Mexico-NRC Docket No. STN 50-528 Gentlemen:

In my letter dated July 14, 1986, addressed to you, I indicated that Public Servic'e Company of New Mexico planned to file executed documents (which were generally described in such letter) after the July 17, 1986 closing relating to the sale of public debt. Accordingly, enclosed herewith is a volume entitled "Transaction Documents" reflecting the July 17, 1986 closing. An index is attached to the volume, indicating the documents contained therein.

Again, we sincerely appreciate the responsiveness and cooperation of the NRC Staff.

Yours very truly, KELEHER 6 McLEOD, P.A.

CLM/mu Encl.

cc: Edward S. Christenbury, Esq.

PDR I

Edwin J. Reis, Esq.

Mr. George W. Knighton Arthur C. Gehr, Esq.

Timothy M.

Mr. A. J. Robison Bb08070197 8b0804

• DOCK 05000528 PDRg

~

'y Toy, Esq.

Charles L. Moore (w/encl.)

yIIg I)I Ay SP

/$ g /pl C

pygmy'g+8lq F PUBLIC SERVICE COMPANY OF NEW HEXICO

$ 253,677,000 LEASE OBLIGATION BONDS SERIES 1986A Refunding of Term Lease Obligation Notes, Series 1985 and the Three Initial Series Notes Pledged to Secure the Same July 17, 1986 TRANSACTION DOCUMENTS Document Document No.

Amendment No. 1 to Chrysler Participation Agreement (without exhibits)..

Amendment No. 1 to Burnham Participation Agreement (without exhibits).

Amendment No. 1 to MFS Participation Agreement (without exhibits).

Amendment No. 1 to Chrysler Facility Lease.

Amendment No. 1 to Burnham Facility Lease..

Amendment No. 1 to MFS Facility Lease.

Supplement No. 1 to Chrysler Lease Indenture.

Supplement No. 1 to Burnham Lease Indenture.

Supplement No. 1 to MFS Lease Indenture.

Series 1986A Bond Supplemental Indenture. 10 Commitment Agreement.

4' AMENDMENT NO. 1 Dated as of July 15, 1986 to PARTICIPATION AGREEMENT Dated as of December 16, 1985 among

'CHRYSLER FINANCIAL CORPORATION, as Owner Participant F IRST PV FUND ING CORPORAT ION I as Loan Participant-THE FIRST NATIONAL BANK OF .BOSTON, in its individual capacity and as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with the Owner Participant, as Owner Trustee CHEMICAL BANK, in its individual capacity and as Indenture Trustee under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 16, 1985, with the Owner Trustee, as Indenture Trustee and PUBLI C SERVI CE COMPANY OF NEW MEXICO I as Lessee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 1 and Certain Common Facilities I

~

6091.CHRYSLER.2898.17:1

l AMENDMENT NO. 1, dated as of July 15, 1986, to the Participation Agreement, dated as of December 16, 1985, among CHRYSLER FINANCIAL CORPORATION, a Michigan corporation (the Owner Participant), FIRST PV FUNDING CORPORATION, a Delaware corporation (the Loan Participant), THE FIRST NATIONAL BANK OF BOSTON, a national banking association, in its individual capacity (FNB) and as Owner Trustee (the Owner Trustee) under a Trust Agreement, dated as of December 16, 1985, with the Owner Participant, CHEMICAL BANK, a New York banking corporation, in its individual capacity (Chemical Bank) and as Indenture Trustee (the Indenture Trustee) under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 16, 1985, with the Owner Trustee, and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).

W I T N E S S ETH WHEREAS, the Owner Participant, the Loan Participant, the Owner Trustee, the Indenture Trustee and the Lessee have previously entered into a Participation Agreement dated as of December 16, 1985 (the Participation Agreement);

WHEREAS, the Initial Series Note was issued by the Owner Trustee in connection with the acquisition of the Undivided Interest and the Real Property Zntere'st; WHEREAS, Section 2(d) of the Participation Agreement provides for a refunding of the Initial Series Note upon the satisfaction of the conditions set forth in Sections 2(d) and 11(d) of the Part'icipation Agreement;

~ WHEREAS, the parties hereto wish to refund the Initial Series Note; WHEREAS, such refunding of the Initial Series Note necessitates this Amendment. No. 1 to Participation Agreement (Amendment No. 1);

WHEREAS, Section 10.1(viii) of the Indenture provides, among other things, that the Owner Trustee and Indenture Trustee may, without consent of the Holders of Notes Outstanding, execute a supplement to the Indenture in order to evidence the issuance of and to'rovide the terms of Additional Notes; WHEREAS, the Owner Trustee and the 1ndenture Trustee intend to execute Supplemental Indenture No. 1, dated as of July 15, 1986 (Supplemental Indenture 6091.CHRYSLER.2898; 17:1

No. 1), to the Indenture, pr. viding for the issuance under the Indenture of the Fixed Rate Notes (as. defined in Supplemental 1ndenture No. 1);

WHEREAS, Section 10.2(ii) of the Indenture provides, among other things, that, upon receipt of a written instruction from the Lessee and the Owner Trustee, the Indenture Trustee shall consent to certain amendments to the Facility Lease; WHEREAS, the Owner Trustee and the Lessee intend to execute Amendment =No. 1, dated as of 'July 15, 1986 (Lease Amendment No. 1), to the Facility Lease, to amend the schedules thereto and for certain other pur-poses; WHEREAS, Section 5.09(b) of the Collateral Trust 1ndenture authorizes the Collateral Trust Trustee, without the consent of the holders of a majority in principal amounts of Outstanding Securities, to consent to certain Changes in the Principal Instruments (as each.

such term is defined in the Collateral Trust Indenture);

WHEREAS, the parties hereto desire that the Collateral Trust Trustee give its consent, to the extent required, to this Amendment No. 1;

~

e NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Definitions.

Except as otherwise defined herein and in the recitals, capitalized terms used herein shall have the respective meanings set forth in Appendix A to the Participation Agreement; provided, however, that, for all purposes of the Participation Agreement, to the extent different from the definitions set forth in Appendix A thereto, the definitions of Deemed Loss Event, Event of Loss and Final Shutdown shall have the respective meanings for such terms as set forth in or appended to the Facility Lease as amended from time to time in accordance with its terms and the terms of the Indenture.

6091.CHRYSLER.2898.17:1

e

SECTION 2. Amendments.

(a) Clause (v) of paragraph (1) of Section 10(b) is hereby amended to read in its entirety as follows:

"(v) Opinion of Counsel: within 120 days after the end of each fiscal year of the Lessee, an opinion or opinions, satisfactory to the Owner Participant, the Owner Trustee, the Collateral Trust Trustee and the Indenture Trustee, of Keleher 6 McLeod, P.A., as general counsel for the Lessee, Snell S Wilmer, as special Arizona counsel for the Lessee, and/or other counsel acceptable to the Owner Participant (A) either to the'ffect that (1) all filings and recordations,(or refilings and rerecordations) required to (i) convey to the Owner Trustee, and establish, preserve,. pro-tect and perfect the title of the Owner Trustee to, the Undivided Interest, the related Generation Entitlement Share and the Real Property Interest and establish, preserve and protect the Owner Trustee's rights under this Agreement anh the other Transaction Documents, and, (ii) so long as any Note is Outstanding, grant, perfect and preserve the security interest of the Indenture Trustee in the Lease Indenture Estate have been duly made, or (2') no such additional f ilings, recordations, ref ilings or rerecordations are necessary, to (i) convey to the Owner Trustee, and establish, preserve, protect and perfect the title of the Owner Trustee to, the Undivided Interest, the related Generation Entitlement Share and the Real Property Interest and establish, preserve and protect the Owner Trustee's rights under this Agreement and the other Transaction Documents, and (ii) so long as any Note -is Outstanding, grant, perfect and 'preserve the security interest of the Indenture Trustee in the Lease Indenture Estate and (B) specifying the par-ticulars of all action required during the period from the date of such opinion through the last day of the next succeeding calendar year,. including, in the case of each UCC continuation statement required to be filed during such period, the office in which each 6091.CHRYSLER.2898.17:1

O.

such continuation statement is to be filed and the filing date and filing number of the orig-inal financing statement or fixture filing to be conti'nued, and the dates within which such continuation statement may be filed under Applicable Law;"

(b ) Clause (ix) of paragraph (3) of Section

,10(b) is hereby amended to read in its entirety as follows:

"(ix) Notes and Bonds. The Lessee will not, and will not permit any of its Affiliates to, acquire any of the Notes or, except in connection with the selection of, Bonds for redemption pursuant to the Collateral Trust.

Indenture (in strict accordance with the pro-,

visions of paragraph 3 of the commitment agreement dated the Refunding Date between PNM.

and the Loan Participant relating to the Lease Obligation Bonds Series 1986A or provisions (identical in all material respects) of other commitment letters relating to other series of Bonds), any oX the Bonds."

SECTION 3. Implementation.

~ (a) Forms. The forms of Supplemental Indenture No. 1 and Lease Amendment No. 1 are attached hereto as Exhibits A and B, respectively. All blanks in Supplemental Indenture No. 1 and Lease Amendment No. 1 shall be appropriately filled in or completed, all in a manner consistent with the Transaction Documents and the Financing Documents.

(b) Request by the Owner Participant. In accordance with Section 2.01 of the Trust Agreement, the Owner Participant hereby requests that the Owner Trustee (i) execute and deliver this Amendment No. 1, Supplemental Indenture No. 1 and Lease Amendment No. 1 (collectively, the Refunding Amendments), (ii) execute the Fixed Rate Notes and request the. Indenture Trustee to authenticate and deliver the Fixed Rate Notes pursu-ant to Section 3.5(2) of the Indenture and (iii) execute and deliver all other agreements, instruments and cer- ~

tificates contemplated by the Transaction Documents, the Financing Documents and the Refundin'g Amendments.

6091.CHRYSLER.2898.17:1

~ ~

~ i i

(c) Reoptimization of the Notes. If the Lessee, in a timely manner, provides the Owner Trustee and the Owner Participant with information sufficient for the Owner Trustee to direct the adjustments described in Section 2(b) of Supplemental Indenture No. 1, together with a certificate (in form and sub-stance reasonably satisfactory to the Owner Participant) to the effect that such adjustments minimize the aggre-gate increase in Basic Rent occurring as a result of the operation of Section 3(d) of the Facility Lease, the Owner Trustee shall deliver to the Indenture Trustee a certificate pursuant to such Section 2(b).

Notwithstanding the foregoing, the Owner Participant, the Indenture Trustee and the Owner Trustee may rely on such certificate and shall have no obligation to verify the same.

(d) Instruction and Consent. The Lessee and th'e Owner Trustee hereby, instruct the Indenture Trustee

( i), to consent to Lease Amendment No. 1, and the Indenture Trustee-so consents, and (ii) to execute Supplemental Indenture No. 1, all in accordance with Section 10.2 of the Indenture.

(e) Recordations and Filings. The Lessee rep-resents that it has caused to be made the recordations

~ and filings set forth in Schedule 1 hereto and that such filings and recordations are all the recordations and filings that are necessary in order to preserve, protect and perfect the Owner Trustee's rights and interests under the Facility Lease, as amended. by Lease Amendment No. 1, and the first and prior security interest of the Indenture Trustee in the Lease Indenture'state under the Indenture, as amended .by Supplemental Indenture No. 1.

(f) Partial Refund. For purposes of Section 3(b) of the Participation Agreement, the Loan Participant represents and warrants that the portion of the Refunding Loan equal to the Releveraging Amount used in calculating the amount of the Releveraging Loan is

$ 2,600,000 (the Refund Amount). The preceding represen-tation and warranty is in lieu of the officer's certifi-cate of the Loari Participant specified by Section 3(b) of the Participation Agreement.

i (g) Direction to the Indenture Trustee. The Refund Amount shall be paid directly to the Indenture Trustee at the Indenture Trustee's Office to be 0 6091.CHRYSLER.2898.17:1 disbursed to the Owner Trustee. The Indenture Trustee shall, as soon as- practicable, return (subject to para-graph (h) below) the Refund Amount to the Owner Participant as a partial refund of the Investment. The Owner'rustee's Investment shall, for all purposes of the Participation Agreement, be reduced by an amount equal to the excess of (1) the Refund Amount over (2) the amount (if any) of principal of the 1nitial Series Note paid on July 15, 1986.

(h) Direction by the Owner Participant. The Owner Participant hereby directs that $ 990,000 of the Refund Amount shall be paid to. the Owner Trustee to be disbursed by the Owner Trustee on account of Transaction Expenses as contemplated by Section 14 of the Participation Agreement.

(i) Refunding of Bonds. The Loan Participant agrees that, unless it obtains the written consent of the Owner Participant, (1) it will refund its Lease Obligation Bonds Series 1986A only in connection with the refunding of an equal principal amount of the Pledged Lessor Notes identified in Schedule 2 to the Series 1986A Bond Supplement'al Indenture, dated as of July 15, 1986, and (2) the principal amount of Pledged Lessor Notes bearing interest at the rates per annum of 8.3%, 9.125% and 10.3%, respectively, shall not be less than the principal amount of its Lease Obligation Bonds Series 1986A bearing interest at the rates per annum of 8.3%, 9.125~ and 10.3~, respectively.

SECTION 4. Miscellaneous.

( a ) Execution. This Amendment No. 1 may be executed in any number of counterparts and by the dif-ferent parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an orig-inal, but all such counterparts shall together consti-tute but one and the same instrument. Although this Amendment No. 1 is dated as of the date first above written for convenience, the actual dates of execution hereof by the parties hereto are respectively the dates set forth under the signatures hereto, and this Amendment No. 1 shall be effective on the latest of such dates.

(b) Governing Law. This Amendment No. 1 has been negotiated and delivered in the State of New York 6091.CHRYSLER.2898.17:1

(c) Responsibility For Recitals. The recitals contained herein shall be taken as the statements of the Lessee', and the other parties hereto assume no responsi-bility for the correctness of the same.

IN WITNESS WHEREOF, the parties hereto have each caused this Amendment No. 1 to the Participation Agreement to be duly executed by their respective offi-cers thereunto duly authorized as of the dates set forth below.

CHRYSLER FINANCIAL CORPORATION By itle:

Date: July 17, 1986 FIRST PV ING CORPORATION By President Date: July 17, 1986 PUBLIC SERVICE COMPANY OF NEW MEXICO By Vice President a orporate Control r Date: July 17, 1986

THE PIRST NATIONAL BANK OP BOSTON, in its individual capacity and as Owner Trustee By:

Authorized Officer Date: July -17, 1986 CHEMICAL BANK, in its indi-vidual capacity and as Indenture Trustee By ic Pres'nt Date July 17,'1986 0 6091.CHRYSLER.2898.17 1

Qo

~ U

Schedule 1 to Amendment No. 1 to Participation Agreement RECORDATIONS AND FILINGS Part I. Recordations.

County Recorder, Maricopa County, Arizona:

( i) Amendment No. 1 to the Facility Lease;'and J (ii) Supplemental Indenture.

Indenture No. 1 to the Part II. Filings.

(a) Separate financing statement amendments naming PNM as "Lessee" and the Owner Participant's Owner Trustee as "Lessor", and the Indenture Trustee, as Assignee of the Owner Trustee, with respect to the Facility Lease, as amended by Lease Amendment No. 1, were filed in the records of:

(1) the Secretary of State of the State of Arizona, on July 17,1986 (regular and public utility filings);

(2) the Clerk of Maricopa County, Arizona, on July 17, 1986; (3) the Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the Clerk of Bernalillo County, New Mexico, on July 17, 1986.

(b) Separate financing statement amendments naming the Owner Trustee as "Debtor" and the Indenture Trustee as "Secured Party", and listing, as collateral covered thereby, the. Lease Indenture Estate, were filed in the records of:

0 (1) the Secretary of State of the State of Arizona, on July 17, 1986;

'4 6091.CHRYSLER.2898.17:1

II (2) the Clerk of Maricopa County, Arizona, on July 17, 1986;

.0 (3) the Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the Clerk of Bernalillo County, New Mexico, on July 17, 1986..

( c ) A financing statement amendment naming the Owner Trustee as "Debtor" and the Indenture Trustee as "Secured Party", and listing,,as collateral covered thereby, the Lease Indenture Estate, was filed on July 17, 1986, with the Secretary of State of the Commonwealth of Massachusetts.

( d) Financing statement amendments naming Funding Corp as "Debtor" and the Collateral Trust Trustee as "Secured Party", and listing, as collateral covered thereby, the "Pledged Property" under the Collateral Trust Indenture, as amended and supplemented, were filed with:

(1) the Secretary of. State of the State of Arizona, on July 17, 1986; (2) the County Clerk of Maricopa County, Arizona, on July 17, 1986; (3) the Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the County Clerk of Bernalillo County, New Mexico, on July 17, 1986.

0 6091. CHRYSLER. 2898. 17: 1

.e AMENDMENT NO. 1 Dated as of July 15, 1986 to PARTICIPATION AGREEMENT Dated as of December 16, 1985 among

',BURNHAM LEASING CORPORATION, .

as Owner Participant F IRST PV FUNDING CORPORATION I as Loan Participant THE F IRST NATIONAL BANK OF BOSTON I in its individual capacity and as Owner Trustee under a Trust Agreement, dated as of December 16, 1985,

~ with the Owner Participant; as Owner Trustee CHEMICAL BANK, in its individual capacity and as Indenture Trustee under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 16, 1985, with the Owner Trustee, as Indenture Trustee and PUBLIC SERVICE COMPANY OF NEN MEXICO, as Lessee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 1 and Certain Common Facilities 0

6091.BURNHAM.2898.17:1

AMENDMENT NO. 1, dated as of July 15, 1986, to the Participation Agreement, dated as of December 16, 1985, among BURNHAM LEASING CORPORATION, a Delaware corporation (the Owner Participant), FIRST PV FUNDING CORPORATION, a Delaware corporation (the Loan Participant), THE FIRST NATIONAL BANK OF BOSTON, a national banking association, in its individual capacity (FNB) and as Owner Trustee (the Owner Trustee) under a Trust Agreement, dated as of December 16, 1985, with the Owner Participant, CHEMICAL BANK, a New York banking corporation, in its individual capacity (Chemical Bank) and as Indenture Trustee (the Indenture Trustee) under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 16, 1985, with the Owner Trustee, and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).

WITNESSETH WHEREAS, the Owner Participant, the Loan Participant, the Owner Trustee, the Indenture Trustee and the Lessee have previously entered into a Participation Agreement dated as of December 16, 1985 (the Participation Agreement);

WHEREAS, the Initial Series Note was issued by the Owner Trustee in connection with the acquisition of the Undivided Interest and the Real Property Interest; WHEREAS, Section 2(d) of the Participation Agreement provides for a refunding of the Initial Series Note upon the satisfaction of the conditions set forth in Sections 2(d) and 11(d) of the Participation Agreement; WHEREAS, the parties hereto wish to refund the Initial Series Note; WHEREAS, such refunding of the Initial Series Note necessitates this Amendment No. 1 to Participation Agreement (Amendment No. 1);

WHEREAS, Section 10.1(viii) of the Indenture provides, among other things, that the Owner Trustee and Indenture Trustee may, without consent of the Holders of Notes Outstanding, execute a supplement to the Indenture in order to evidence the issuance of and to provide the terms of Additional Notes; WHEREAS, the Owner Trustee and the Indenture Trustee intend to execute Supplemental Indenture No. 1, dated as of July 15, 1986 (Supplemental Indenture 6091.BURNHAM.2898.17:1

0, Oi

N o. 1), to the Indenture, providing for the issuance under the Indenture of the Fixed Rate Notes (as defined in Supplemental Indenture No. 1);

0 WHEREAS, Section 10.2(ii) of the Indenture provides, among other things, that, upon- receipt of a written instruction from the Lessee and the Owner Trustee, the Indenture Trustee shall consent to certain amendments to the Facility Lease; WHEREAS, the Owner Trustee and the Lessee intend to execute Amendment No. 1, dated as of July 15, 1986 (Lease Amendment No. 1), to the Facility Lease, to

~

amend the schedules thereto and for certain other pur-poses; WHEREAS, Section 5.09(b) of the Collateral Trust Indenture authorizes the Collateral Trust Trustee, without the consent of the holders of a majority in principal amounts of Outstanding Securities, to consent to certain Changes in the Principal Instruments (as each such term is defined in the Collateral Trust Indenture);

WHEREAS, the parties hereto desire that the Collateral Trust Trustee give, its consent, to the extent required, to this Amendment No. 1; NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Definitions.

Except as 'otherwise defined herein and in the recitals, capitalized terms used herein shall have the respective meanings set forth in Appendix A to the Participation Agreement; provided, however, that, for all purposes of the Participation Agreement, to the extent different from the definitions set for'th in Appendix A thereto, the definitions of Deemed Loss Event, Event of Loss and Final Shutdown shall have the respective meanings for such terms as set -forth in or appended to the Facility Lease as amended from time to time in accordance with its terms and the terms of the Indenture.

6091.IBURNHAt4. 2898. 17: 1

~ ~ ~

o

~ i

SECTION 2. Amendments.

(a) Clause (v) of paragraph (1) of Section 10(b) is hereby amended to read in its entirety as follows:

"(v) Opinion of Counsel: within 120 days after the end of each fiscal year of the Lessee, an opinion or opinions, satisfactory to the Owner Participant, the Owner Trustee, the Collateral Trust Trustee and the Indenture Trustee, of Keleher & McLeod, P.A., as general counsel for the Lessee, Snell a ttjtilmer, as special Arizona counsel for the Lessee, and/'or other counsel acceptable to the Owner Participant (A) either to the effect that (1) all filings and recordations (or refilings and rerecordations) required to (i) convey to the Owner Trustee, and establish, preserve, pro-tect and perfect the title of the Owner Trustee to, the Undivided Interest, the related Generation Entitlement Share and the Real Property Interest and establish, preserve and protect the Owner Trustee's rights under this Agreement and the other Transaction Documents, and, (ii) so long as any Note is Outstanding, grant, perfect and preserve the

~ security interest of the Indenture Trustee in the Lease Indenture Estate have been duly made, or (2) no such additional filings, recordations, refilings or rerecordations are necessary, to (i) convey to the Owner Trustee, and establish, preserve, protect and perfect the title of the Owner Trustee to, the Undivided Interest, the related Generation Entitlement Share and the Real Property Interest and establish, preserve and protect the Owner Trustee's rights under this Agreement and the other Transaction Documents, and (ii) so long as any Note is Outstanding, grant, perfect and preserve the security interest of the Indenture Trustee in the Lease Indenture Estate and (B) specifying the par-ticulars of all action required during the period from the date of such opinion through the last day of the next succeeding calendar year, including, in the case of each UCC continuation statement required to be filed during such period, the office in which each

~. 6091.BURNHAM.2898.17:1

~ ~ ~

such continuation statement is to be filed and the filing date and filing number. of the orig-inal financing statement or fixture filing to be continued, and the dates within which such continuation statement may be f i led under Applicable Law;"

(b ) Clause (ix) of paragraph (3) of Section 10(b) is hereby amended to read in its entirety as follows:

"(ix) Notes and Bonds. The Lessee will not, and will not permit any of its Affiliates to, acquire any of the Notes or, except in connection with the selection of Bonds for redemption pursuant to the Collateral Trust Indenture (in strict accordance with the pro-visions of paragraph 3 of the commitment agreement dated the Refunding Date between PNM and the Loan Participant relating to the. Lease Obligation Bonds Series 1986A or provisions (identical in all material respects) of other commitment letters relating to other series of Bonds), any of the Bonds."

SECTION 3. Implementation.

(a) Forms. The form's of Supplemental Indenture No. 1 and Lease Amendment No. 1 are attached hereto as Exhibits A and B, respectively. All blanks in Supplemental Indenture No. 1 and Lease Amendment No. 1 shall be appropriately filled in or completed, all in a manner consistent with the Transaction Documents and the Financing Documents.

(b) Request by the Owner Participant. In accordance with Section 2.01 of the Trust Agreement, the Owner Participant hereby requests that the Owner Trustee

( i )'xecute and deliver this Amendment No. 1, Supplemental Indenture No. 1 and Lease Amendment No. 1 (collectively, the Refunding Amendments), (ii) execute the Fixed Rate Notes and request the Indenture Trustee to authenticate and deliver the Fixed Rate "Notes pursu-ant to Section 3.5(2) of the Indenture and (iii) execute and deliver all other agreements, instruments and cer-tificates contemplated by the Transaction Documents, the Financing Documents and the Refunding Amendments.

0 6091.BURNHAM.2898.17:1

~ ~ ~

( c ) Reo'pt imi z at i on of the Notes; I f the Lessee, in a timely manner, provides the Owner Trustee and the Owner Participant with information sufficient for the Owner Trustee to direct the adjustments

~ described in Section 2(b) of Supplemental indenture No. 1, together with a certificate (in form and sub-stance reasonably satisfactory to the Owner Participant) to the effect that such adjustments minimize the aggre-gate increase in Basic Rent occurring as a result of the operation of Section 3(d) of .the Facility Lease, the Owner Trustee shall deliver to the Indenture Trustee a certificate pursuant to such Section 2(b).

Notwithstanding the foregoing, the Owner Participant, the Indenture Trustee and the Owner Trustee may rely on such certificate and shall have no obligation to verify the same.

(d) Instruction and Consent. The Lessee and the Owner Trustee hereby instruct the Indenture Trustee

( i) to consent to Lease Amendment No. 1, and the Indenture Trustee so consents, and (ii) to Indenture No. 1, all in accordance with execute'upplemental Section 10.2 of the Indenture.

(e) Recordations and Filings. The Lessee rep-resents that it has caused to be made the recordations and filings set forth in Schedule 1 hereto and that such

~ filings and recordations are all the recordations and filings that are necessary in order to preserve, protect and perfect the Owner Trustee's rights and interests under the Facility Lease, as amended by Lease Amendment No. 1, and the first and prior security interest of the Indenture Trustee in the Lease Indentu're Estate under the Indenture, as amended by Supplemental Indenture No. 1.

(f) Partial Refund. For purposes Section 3(b) of the Participation Agreement, the Loan of Participant represents and warrants that the portion of the Refunding Loan equal to the Releveraging Amount used in calculating the amount of the Releveraging Loan is

$ 544,000 (the Refund Amount). The preceding representa-tion and warranty is in lieu of the officer's certifi-cate of the Loan Participant specified by Section 3(b) of the Participation Agreement.

(g) Direction to the Indenture Trustee. The Refund Amount shall be paid directly to the Indenture Trustee at the Indenture Trustee's Office to be 6091.BURNHAM.2898.17:1

4, 4,

disbursed to the Owner Trustee. The Indenture Trustee

~

shall, as soon as practicable, return (subject to para-

~

graph (h) below) the Refund Amount to the Owner Participant as a partial refund of the Investment. The

~

Owner Trustee's Investment shall, for all purposes of the Participation Agreement, be reduced by an amount equal to the excess of (1) the Refund Amount over (2) the amount (if any) of principal of the Initial Series Note paid on July 15, 1986.

(h) Direction by the Owner Participant.'he Owner Participant hereby directs that $ 544,000 of the Refund Amount shall be paid to the Owner Trustee to be disbursed by the Owner Trustee on account of Transaction Expenses as contemplated'by Section 14 of the Par tie ipation Agreement.

(i) Refunding of Bonds. The Loan Participant agrees that, unless it the Owner Participant, (1) obtains the written consent of it will refund its Lease Obligation Bonds Series 1986A only in connection with the refunding of an equal principal amount of the Pledged Lessor Notes identif ied in Schedule 2 to the Series 1986A Bond Supplemental Indenture, dated as of July 15, 1986, and (2) the principal amount of Pledged Lessor Notes bearing interest at the rates per annum of 8.3%, 9.125': and 10.3%, respectively, shall not be less than the principal amount of its Lease Obligation Bonds Series 1986A bearing interest at the rates per annum of 8.3~, 9.125% and 10.3%, respectively.

SECTION 4; Miscellaneous.

(a) Execution. This Amendment No. 1 may be executed in any number of counterparts and by the dif-ferent parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an orig-inal, but all such counterparts shall together consti-tute but one and the same instrument. Although this Amendment No. 1 is dated as of the date first above written for convenience, the actual dates of execution hereof by the parties hereto are respectively the dates set forth under the signatures hereto, and this Amendment No. 1 shall, be effective on the latest of such dates.

(b) Governing Law. This Amendment No. 1 has been negotiated and delivered in the State of New York 6091.BURNHAM;2898.17:1

'Ol (c) Responsibility For Recitals. The recitals contained herein shall be taken as the statements of the L'essee, and the other parties hereto assume no responsi-bility for the correctness of the same.

IN WITNESS WHEREOF, the parties hereto have each caused this Amendment No. 1 to the Participation Agreement to be duly executed by their respective offi-cers thereunto duly authorized as of the dates set forth below.

BURNHAH LEAS ING CORPORATION By TI tl . cm< g/go~~

~

Date: July 17, 1986 FIRST PV FUNDING CORPORATION By

~ resident Date: July 17, 1986 PUBLIC SERVICE COHPANY OF NEW HEXICO By Vice President a Corporate Control r Date: July 17, 1986 6091.BURNHAM.2898.17:1

i THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee By:

Authorized Officer Date: July 17, 1986 CHEMICAL BANK, in its indi-vidual capacity and as Indenture Trustee By ic Pres'nt Date. July 17, e 1986 0

t 6091. BURNHAN. 2898. 17: 1

Cl.

4, Qo O,

Schedule 1 to Amendment No. 1 to Participation Agreement RECORDATIONS AND FILINGS Part I. Recordations.

County Recorder, Maricopa County, Arizona:

( i ) Amendment No. 1 to the Facility Lease; and (ii) Supplemental Indenture.

Indenture No. 1 to the Part II. Filings.

(a) Separate financing statement amendments naming PNM as "Lessee" and the Owner Participant's Owner Trustee as "Lessor", and the Indenture Trustee, as Assignee of the Owner Trustee, with respect to the Facility Lease, as amended by Lease Amendment No. 1, were filed in the records of:

(1) the Secretary of State of the State of Arizona, on July 17,1986 (regular =,

and public utility filings);

( 2 ) the C le r k of Mar icopa County, Arizona, on July 17, 1986; (3) the Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the Clerk of Bernalillo County, New Mexico, on July 17, 1986.

(b) Separate financing statement amendments naming the Owner Trustee as "Debtor" and the Indenture Trustee as "Secured Party", and listing, as collateral covered thereby, the Lease Indenture Estate, were filed in the records 'of:

(1) the Secretary of State of the State of Arizona, on July 17, 1986; 6091. BURNHAH. 2898. 17: 1

O.

(2) the Clerk of Maricopa County, Arizona, on July 17, 1986; (3) the Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the Clerk of Bernalillo County, New Mexico, on July 17, 1986.

(c) A financing statement amendment naming the Owner Trustee as "Debtor" and the Indenture Trustee as "Secured Party", and listing, as collateral covered thereby, the Lease Indenture Estate, was filed on July 17, 1986, with the Secretary of State of the Commonwealth of Massachusetts.

(d) Financing statement amendments naming Funding Corp as "Debtor" and the Collateral Trust Trustee as "Secured Party", and listing, as collateral covered thereby, the "Pledged Property" under the Collateral Trust Indenture, as amended and supplemented, were filed with:

(1) the Secretary of State of the State of Arizona, on July 17, 1986; (2) the County Clerk of Maricopa. County',

Arizona, on July 17, 1986; (3) the Secretary of State of the State, of New Mexico, on July 17, 1986; and t

(4) the County Clerk of Bernalillo County, New Mexico, on July 17, 1986.

0 6091.BURNHAM.2898.17:1

~ ~ ~ ~

N l

i

AMENDMENT NO. 1 Dated as of July 15, 1986 to PARTICIPATION AGREEMENT Dated as of December 16, 1985 among MFS LEASING CORP.,

as Owner Participant FIRST PV FUNDING CORPORAT I ON I as Loan Participant 1

I I THE F RST NAT ONAL BANK OF BOSTON I in its individual capacity and as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, w'th the Owner Participant, as Owner Trustee CHEMI CAL BANK I, in its individual capacity and as Indenture Trustee under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 16, 1985, with the Owner Trustee, as Indenture Trustee and PUBLIC SERVICE COMPANY OF NEW MEXICO, as Lessee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear'enerating Station Unit 1 and Certain Common Facilities 6091.MFS.2898.17:1

~ ~ ~ ~

II AMENDMENT NO. 1, dated as of July 15, 1986, to the Participation Agreement, dated as of December 16,

. 1985, am'ong MFS LEASING CORP.,

(the Owner Participant),

NATIONAL BANK OF BOSTON, a a Delaware corporation FIRST PV FUNDING CORPORATION, a Delaware corporation (the Loan Participant), THE FIRST national banking association, in its individual capacity (FNB) and as Owner Trustee (the Owner Trustee) under a "Trust Agreement, dated as of December 16, 1985, with the Owner Participant, CHEMICAL BANK, a New York banking corporation, in its individual capacity (Chemical Bank) and as Indenture Trustee (the Indenture Trustee) under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents, dated as of December 16, 1985, with the Owner Trustee, and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).

W I T N E S S E T H WHEREAS, the Owner Participant, the Loan Participant, the Owner Trustee, the Indenture Trustee and the Lessee have previously entered into a Participation Agreement dated as of December 16, 1985 (the Participation Agreement);

WHEREAS, the Initial Series Note was issued by e the Owner Trustee in connecti'on with the acquisition of the Undivided Inter'est and the Real Property Interest; WHEREAS, Section 2(d) of the Participation Agreement provides for a refunding of the Initial Series Note upon the satisfaction of the conditions set forth

in Sections 2(d) and 11(d) of the Participation Agreement; WHEREAS, the parties hereto wish to refund the Initial Series Note; WHEREAS, such refunding of the Initial Series Note necessitates this Amendment No. 1 to Participation Agreement (Amendment No. 1);

WHEREAS, Section 10.1(viii) of the Indenture provides, among other things, that the Owner Trustee and Indenture Trustee may, without consent of the Holders of Notes Outstanding, execute a supplement to the Indenture in order to evidence the issuance of and to provide the terms of Additional Notes; WHEREAS, the Owner Trustee and the Indenture Trustee intend to execute Supplemental Indenture No; 1; dated as of July 15, 1986 (Supplemental Indenture 6091.MFS.2898.17:1

o No. 1), to the Indenture, providing for the issuance under the Indenture of the Fixed Rate Notes (as defined in Supplemental Indenture No. 1);

0 WHEREAS, Section 10.2(ii) of the Indenture provides, among other things, that, upon receipt of a written instruction from the Lessee and the Owner Trustee, the Indenture Trustee shall consent to certain amendments to the Facility Lease; WHEREAS, the Owner. Trustee and the Lessee intend to execute Amendment No. 1, dated as of July 15, 1986 (Lease Amendment No. 1), to the Facility Lease, to amend the schedules thereto and for certain other pur-poses; WHEREAS, Section 5.09(b) of the Collateral Trust Indenture authorizes the Collateral Trust Trustee, without the consent of the holders of a majority in principal amounts of Outstanding Securities, to consent to certain Changes in the Principal Instruments (as each such term is defined in the Collateral Trust Indenture);

WHEREAS, the parties hereto desire that the Collateral Trust Trustee give its consent, to the extent.

required, to this Amendment No. 1; ~

NOW, THEREFORE, in consideration of the

~

premises and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Definitions.

Except as otherwise defined herein and in the recitals, capitalized terms used herein shall have the

.respective meanings set forth in Appendix A to the Participation Agreement; provided, however, that, for all purposes of the Participation Agreement, to different from the definitions set forth inthe'xtent Appendix A thereto, the definitions of Deemed Loss Event, Event of Loss and Final Shutdown shall have the respective meanings for such .terms as set forth in or appended to the Facility Lease as amended from time to time in accordance with its terms and the terms of the Indenture.

6091.MFS.2898.17:1

SECTION 2. Amendments.

(a) Clause (v) of paragraph (1) of Section 10(b) is hereby amended to read in its entirety as, follows:

"(v) Opiriion of Counsel: within 120 days after the end of each fiscal year of the Lessee, an opinion or opinions, satisfactory to the Owner Participant, the Owner Trustee, the Collateral Trust Trustee and the Indenture Trustee, of Keleher 6 McLeod, P.A., as general counsel for the Lessee, Snell s Wilmer, as special Arizona counsel for the Lessee, and/or other counsel acceptable to the Owner Participant (A) either to the effect that (1) all filings and recordations (or refilings and rerecordations) required to (i) convey to the Owner Trustee, and establish, preserve, pro-tect and perfect the title of the Owner Trustee to, the Undivided Interest, the related Generation Entitlement Share and the Real Property Interest and establish, preserve and protect the Owner Trustee's rights under this Agreement and the other Transaction Documents, and, (ii) so long as any Note is

~ Outstanding, grant, perfect and preserve the security interest of the Indenture Trustee in the Lease Indenture Estate have been duly made, or (2) no such additional filings, refilings or rerecordations are 'ecordations, necessary, to (i) convey to the Owner Trustee, and establish, preserve, protect and perfect the title of the Owner Trustee to, the Undivided Interest, the related Generation Entitlement Share and'he Real Property Interest and establish, preserve and protect the Owner Trustee's rights under this Agreement and the other Transaction Documents, and (ii) so long as any Note is Outstanding, grant, perfect and preserve the security interest of the Indenture Trustee in the Lease Indenture Estate and (B) specifying the par-ticulars of all action required during the period from the date of such opinion through the last day of the next succeeding calendar year, including, in the case of each UCC continuation statement required to be filed during such period, the office in which each 6091.MFS.2898.17:1

~ ~ ~ ~

a such continuation statement is to be filed and the filing date and filing number of the orig-inal financing statement or fixture filing to be continued, and the dates within which such continuation statement may be filed under Applicable Law;"

( b ) Clause (ix) of pa'ragraph (3) of Section 10(b) is hereby amended to read in its entirety as follows:

"(ix) Notes and Bonds. The Lessee will not, and will not permit any of its Affiliates to, acquire any of the Notes or, except in

~

connection with the selection of Bonds for redemption pursuant to the Collateral'rust Indenture (in strict accordance with the pro-visions of paragraph 3 of the commitment agreement dated the Refunding Date between PNM and the Loan Participant relating to the Lease Obligation Bonds Series 1986A or provisions (identical in all material respects) of other commitment letters relating to other series of Bonds), any of the Bonds."

SECTION 3. Implementation.

(a) Forms. The forms of Supplemental Zndenture No. 1 and Lease Amendment No. 1 are attached hereto as Exhibits A and B, respectively. All blanks in Supplemental Indenture No. 1 and Lease Amendment No. 1 shall be appropriately filled in or completed, all in a manner consistent with the Transaction Documents and the Financing Documents.

(b) Request by the Owner Participant. In accordance with Section 2.03 of the Trust Agreement, the Owner Participant hereby requests that the Owner Trustee (i) execute and deliver this Amendment No. 1, Supplemental Indenture No. 1 and Lease Amendment No. 1

( co 1 lee t i ve ly, the Ref unding Amendments ), ( i i ) execute the Fixed Rate Notes and request the Indenture Trustee to authenticate and deliver the Fixed Rate Notes pursu-ant to Section 3.5(2) of the Indenture and (iii) execute and deliver all other, agreements, instruments and cer-tificates contemplated by the Transaction Documents, the Financing Documents and the Refunding Amendments.

6091.MFS.2898.17:1

.0

(c) Reoptimization of the Notes. Zf the Lessee, in a timely manner, provides the Owner Trustee and the Owner Participant with information sufficient for the Owner Trustee to direct .the adjustments described in Section 2(b) of Supplemental 1ndenture No. 1, together with a certificate (in form and sub-stance reasonably satisfactory to the Owner Participant) to the effect that such adjustments minimize the aggre-gate increase in Basic Rent occurring as a result of the operation of Section 3(d) of the Facility Lease, the Owner Trustee shall deliver to the Indenture Trustee a certificate pursuant to such Section 2(b).

Notwithstanding the foregoing, the Owner Participant, the Indenture Trustee and the Owner Trustee may rely on such certificate and shall, have no obligati'on to verify the same.

(d) Instruction and Consent. The Lessee and the Owner Trustee hereby instruct the Inderiture Trustee

( i) to consent to Lease Amendment No. 1, and the Indenture Trustee so consents, and (ii) to execute Supplemental Indenture No. 1, all in accordance with Section 10.2 of the Indenture.

(e) Recordations and Filings. The Lessee rep-resents that 'it has caused to be made the. recordations and filings set forth in Schedule 1 hereto and that such filings and recordations are all the recordations and filings that are necessary. in order to preserve, protect and perfect the Owner Trustee's rights and. interests under the Facility Lease, as amended by Lease Amendment No. 1, and the first and prior security interest of the Indenture Trustee in the Lease Indenture Estate under the Indenture, as amended by Supplemental Indenture No. 1.

Section

.(f) Partial Refund.

3(b) of the Participation For purposes Agreement; the Loan of Participant represents and warrants that the portion of the Refunding Loan equal to th'e Releveraging Amount used in calculating the amount of the Releveraging Loan is

$ 662,205.60 (the Refund Amount). The preceding repre-sentation and warranty is in lieu of the officer's cer-tificate of the Loan Participant specified by Section 3(b) of the Participation Agreement.

(g) Direction to the Indenture Trustee. The Refund Amount shall be paid directly to the Indenture Trustee at the Indenture Trustee's Office to be 6091.MFS.2898.17:1

I s,

disbursed to the Owner Trustee. The, Indenture Trustee.

shall, as soon as practicable, return (subject to para-graph (h) below) the Refund Amount to the Owner Participant as a partial refund of the Investment. The Owner Trustee's Investment shall, for all purposes of the Participation Agreement, be reduced by an amount equal to the excess of (1) the Refund Amount over (2) the amount (if any) of principal of the Initial Series Note paid on July 15, 1986.

(h) Direction by the Owner Participant. The Owner Participant hereby directs that $ 360,000 of the Refund Amount shall be paid to the Owner Trustee to be disbursed by the Owner Trustee on account of Transaction Expenses as contemplated by Section 14 of the Participation Agreement.

(i) Refunding of Bonds. The Loan Participant agrees that, unless it obtains the written consent of the Owner Participant, .(1) it will refund its Lease Obligation Bonds Series 1986A only in connection with the refunding of an equal principal amount of the Pledged Lessor Notes identified in Schedule 2 to the Series 1986A Bond Supplemental Indenture, dated as of July 15, 1986, and (2) the principal amount of Pledged Lessor Notes bearing interest at the rates per annum of 8.3%, 9.125% and 10.3%, respectively, shall not be less than the principal amount of its Lease Obligation Bonds Series 1986A bearing interest at the rates per annum of 8.3%, 9.125~ and 10.3%, respectively.

SECTION 4. Miscellaneous.

(a) Execution. This Amendment No. 1 may be executed in any number of counterparts and by the. dif-ferent parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an orig-inal, but all such counterparts shall together consti-tute 'but one and the same instrument. Although this Amendment No. 1 is dated as of the date first above written for convenience, the actual dates of execution hereof by the parties hereto are respectively the dates set forth under the signatures hereto, and'this Amendment No. 1 shall be effective on the latest of such dates.

(b) Governing Law. This Amendment No. 1 has been negotiated and delivered in the State of New York 0 6091.MFS.2898.17:1

(

f t

f

, ~

and shall be governed by, and be construed in accordance with, the laws of the State of New York.

(c) Responsibility For Recitals. The recitals contained herein shall be taken as the statements of the Lessee, and the other parties hereto assume no responsi-bility for the correctness of the same.

IN WITNESS HEREOF, the parties hereto have each caused this Amendment No. 1 to the Participation Agreement to be duly executed by their respective offi-cers thereunto duly authorized as of the dates set forth below.

MFS LEASING CORP.

Title:

gg Pw~AJ' Date: July 17, 1986 FIRS PV F NG CORPORATION By ent Date: July 17, 1986 PUBLIC SERVICE COMPANY OF NEH MEXICO By Vice res dent a orporate Contro le Date: 'uly 17, 1986 0 7 6091.MFS.2898.17:1

~ ~ ~

THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee By:

Authorized Officer Date: July 17, 1986 CHEMICAL BANK, in its indi-vidual capacity and Trustee as'ndenture By ic Pres'nt Date: July 17, 1986

~

6091.MFS.2898.17:1

~ ~ ~

Schedule 1 to

. Amendment No.

to Participation 1

Agreement RECORDATIONS AND FILINGS Part I. Recordations.

County Recorder, Maricopa County, Arizona:

(i) Amendment No. 1 to the Facility Lease; and (ii) Supplemental In'denture.

Indenture No. 1 to the Part II. Filings.

(a) Separate financing statement amendments naming PNll as "Lessee" and the Owner Participant's Owner Trustee as "Lessor"', and the Indenture Trustee, as

~ Assignee of the Owner Trustee, with respect to the Facility Lease, as amended by Lease Amendment No. 1, were filed in the records of:

(1) the Secretary of State of the State of Arizona, on July 17,1986 (regular and public utility filings);

(2) the Clerk of Maricopa County, Arizona, on July 17, 1986;

,(3) the Secretary of State of the State of New Mexico, on July 17, 1986; and

.(4) the Clerk of Bernalillo County, New Mexico, on July 17, 1986.

(b) Separate financing statement amendments naming the Owner Trustee as "Debtor" and the Indenture Trustee as "Secured Party", and listing, as collateral covered thereby, the Lease Indenture Estate, were filed in the records of:

(1) the Secretary of State of the State of Arizona, on July 17, 1986; 6091.MFS.2898.17:1

(2) the Clerk of Maricopa County, Arizona, on July 17, 1986;

. (3) the Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the Clerk of Bernalillo County, New Mexico, on July 17, 1986.

( c ) A f inancing statement amendment naming the Owner Trustee as "Debtor" and the Indenture Trustee as "Secured Party", and listing, as collateral covered thereby, the Lease Indenture Estate, was filed on July 17, 1986, with the Secretary of State of the Commonwealth of Massachusetts.

(d) Financing statement amendments naming Funding Corp as "Debtor" and the Collateral Trust Trus'tee as "Secured Party", and listing, as collateral covered ther'eby, the "Pledged Property" under the Collateral Trust Indenture, as amended and supplemented, were filed with:

(1) the Secretary of State of the State of Arizona, on July 17, 1986;

~ (2) the County Clerk of Maricopa County, Arizona, on July 17, 1986; (3) the, Secretary of State of the State of New Mexico, on July 17, 1986; and (4) the County Clerk *of Bernalillo

.County, New Mexico, on July 17, 1986.

6091.MFS.2898.17:1

When Recorded, Return to: Gregg R. Neilsen Snell 6 Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 CERTAIN RIGHTS OP THE LESSOR UNDER THE PACILITY LEASE AS AHENDED BY THIS AMENDMENT NO. 1 THERETO HAVE BEEN ASSIGNED TOg AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OP, CHEMICAL BANK, AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OP RENTS DATED AS OP DECEHBER 16, 1985/ AS AMENDED. THIS AHZ26)MENT NO. 1 HAS BEEN EXECUTED IN SEV-ERAL COUNTERPARTS. SEE SECTION 3(f) OF THIS AHENDHENT NO. 1 FOR INFORHATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.

THIS COUNTERPART IS NOT THE ORIGINAL'OUNTERPART.

AHENDHENT NO. 1 Dated as of July 15, 1986 to FACILITY LEASE Dated as of December 16, 1985 between THE FIRST NATIONAL BANK OF BOSTON not in its'ndividual capacity,-

but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with Chrysler Financial Corporation

. Lessor and PUBLIC SERVICE COMPANY OP NEW MEXICO, Lessee Original Facility Lease recorded December 31, 1985, as Instrument No. 85-623282, in Maricopa County, Arizona Recorder's Office.

6091.CHRYSLER.2898.18:1

AMENDMENT NO. 1, dated as of July 15, 1986 (Amendment No. 1), to the Facility Lease dated as of December 16, 1985, between THE FIRST NATIONAL BANK OP BOSTON, a national "banking association, not in its indi-vidual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with.

Chrysler Financial Corporation (the Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New 5exico corporation (the Lessee).

W I T N E S S E T H WHEREAS, the Lessee and the Lessor have here-tofore entered into a Facility Lease dated as of December 16, 1985 (the Facility Lease), providing for the lease by the Lessor to the Lessee of the Undivided Interest and the Real Property Interest; WHEREAS, Section 3(e) of. the Facility Lease provides for an adjustment to Basic Rent and to the schedules of Casualty Values, Special Casualty Values and Termination Values in the event, among other things, that the Fixed Rate Note is issued; and WHEREAS, the Fixed Rate Notes are being issued pursuant to Supplemental Indenture No. 1, dated as of July 15, 1986, to the Indenture; NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowl-edged, the parties hereto agree as follows:

SECTION 1. Definitions.

For purposes hereof, capitalized terms used herein and not otherwise defined herein or in the recitals shall have the meanings assigned to such terms in Appendix A and Schedule 1 to the Facility Lease.

SECTION 2. Amendments.

(a) Section 3(a)(ii) of'he Facility Lease is amended to read in its entirety as follows:

"(ii) (1) on July 15, 1986 an amount equal to 4.3683233% of the Facility Cost and (2) on January 15, 1987 and on each Basic Rent 6091.CHRYSLER.2898.18:1

Payment Date thereafter to and including January 15, 2015, an amount equal to 4.57290%

of Facility Cost; and".

(b) Section 10(a) of the Facility Lease is amended to read in its entirety as follows:

"(a) Required Insurance. The Lessee will use its best efforts to cause the Operating Agent to carry and maintain insurance required under the ANPP Participation Agreement and will make all payments required of the Lessee

.under the ANPP Participation Agreement in respect of such insurance. The Lessee will at all times maintain, directly or through the Operating Agent, policies of casualty and liability insurance andwith respect to the Undivided Interest the Real Property Interest in such amounts and with such cover-age as shall be adequate in accordance with prudent utilit'y practice. Any policies of insurance in respect of destruction, damage, loss, theft or other casualty to the Undivided Interest, the Real Property Interest, Unit 1 or any part thereof shall name the Lessor (and, to the extent practicable, the Owner Participant) as additional insured, as its interest (or their interests) may appear, and any policies with respect to nuclear liability insurance with respect to the Undivided Interest, the Real Property Interest, Unit 1, or any part thereof, shall include all Indemnitees as insureds through an omnibus definition of "insured" or through endorse-ment; provided, however, that if the Operating Agent, as trustee, shall become the loss payee under any policy of insurance constituting Project Insurance, then the Lessor and the Owner Participant shall be and be made benefi-ciaries of the trust arrangement under which the Operating Agent acts as trustee. The Lessee shall, on or before March 1 of each 6091.CHRYSLER.2898.18:1

year,'ommencing March 1, 1987, furnish to the Lessor and the Owner- Participant (A) a report signed by the broker or brokers for the PVNGS insurance (or if insurance is placed directly by the Operating Agent, a certificate signed by the Operating Agent) (i) showing the insur-ance then maintained by the ANPP Participants with respect to PVNGS, (ii) stating that no premiums are then delinquent, and (iii) stat-ing that the insurance maintained by the ANPP Participants with respect to PVNGS is in

-accordance with the terms of (1) the ANPP Participation Agreement'nd (2) this Section 10, (B) a report signed by the broker or brokers for the Lessee's insurance (or if insurance is placed directly by the Lessee, a certificate signed by the Lessee) showing the

'separate insurance, if any, then maintained by the Lessee with respect to its interest in PVNGS and stating that no premiums under such insurance are delinquent; (C) a certificate signed by the Lessee stating that the insur-ance maintained by the ANPP Participants and by the Lessee, identified on the reports to be delivered pursuant to clauses (A) and (B), is in accordance with prudent utility practice within the nuclear industry, the ANPP Participation Agreement and this Section 10; and.(D) upon the request of the Lessor or the Owner Participant, copies (to the extent per-mitted by the issuers of such policies) of policies so maintained. Any report by an insurance broker with respect to clause (A)(iii)(1) may be made in reliance upon a schedule provided by the Lessee (a copy of which shall be attached) identifying the

'insurance (by coverage, limits, insureds and other pertinent details) required to be main-tained under the ANPP Participation Agreement. Any report with respect to clause (A)(iii)(2) may be made in, reliance upon a similar schedule provided by the Lessee (a copy of which shall be attached) identifying 3 0 6091.CHRYSLER.2898.18:1

the insurance required to be maintained under this Section 10. All insurance proceeds paid in respect of damage, destruction, loss, theft or other casualty to the Undivided Interest or the Real Property Interest shall be applied as provided in Section 9(g), (h) or (i), as the case may be, subject, however, to any priority allocations of such proceeds to decontamina-tion and debris removal set forth in the insurance policies or required under Applicable Law. In the event that either the Operating Agent or the Lessee delivers a cer-tificate pursuant to clause (A) or (B) of the foregoing, the Owner Participant shall be entitled to receive (if it so requests and if the insurer will issue the same) a report from any insurer listed in such certificate."

(c) Section 16(a)(v) of the Facility Lease is hereby amended to insert the words "may, if it shall so elect in its sole discretion," in lieu of the word "shall" in the parenthetical phrase first preceding clause A of Section 16(a) (v).

(d) Schedule 3 to the Facility Lease (Schedule of Casualty Values) is hereby replaced with Schedule 1 hereto.

(e) Schedule 4 to the Facility Lease (Schedule of Special Casualty Values) is'ereby replaced with Schedule 2 hereto.

( f ) Schedule 5 to the Facility Lease (Schedule of Termination Values) is hereby replaced with Schedule 3 hereto.

(g ) Schedule 2 to the Facility Lease (Basic Rent Percentage) is hereby deleted in its entirety.

6091. CHRYSLER. 2898. 18: 1

o SECTION 3. Miscellaneous.

(a) Partial Prepayment of Rent. In accordance with the last sentence of Section 3(a) of the Facility Lease, the Lessee shall pay an amount equal to

$ 69,616..44 on July 17, 1986, such amount (i) being equal to the interest payment due on the Initial Series Note on such date and (ii) to be credited against Basic Rent due on January 15, 1987.

(b) Effective Date of Amendments. The amend-ments set forth in Section 2 hereof shall be and become effective upon the execution hereof by the parties hereto.

( c) Counterpart Execution. This Amendment No. 1 may be executed in any number of counterparts and by each of the parties hereto on separate counterparts; all such counterparts shall together constitute but one and the s'arne instrument.

(d) Governing Law. This Amendment No. 1 has been negotiated and delivered in the State of New York and shall be governed by, and be construed in accordance with, the laws of the State of New York, except to the extent that pursuant to the law of the State of Arizona such law is mandatorily applicable hereto.

Disclosure. Pursuant to Arizona Revised

'e)

Statutes Section 33-401, the beneficiary of the Trust Agreement is Chrysler Financial Corporation, a Michigan corporation. The address of the beneficiary is Greenwich Office Park I, Greenwich, Connecticut 06836, Attention: Leveraged Leasing. A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.

(f) Amendment No. 1. The single executed orig-inal of this Amendment No. 1 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the 'receipt of the Indenture Trustee thereon shall be the "Original" of 6091.CHRYSLER.2898.18:1

l I

o

this Amendment No. 1. To the extent that this Amendment No. 1 constitutes chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security interest in this Amendment No. 1 may be created or continued through the transfer or possession of any counterpart other than the "Original".

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No. 1 to Facility Lease to be duly executed in New York, New York by an officer there-unto duly authorized.

THE FIRST .NATIONAL BANK OP in its individual BOSTON'ot capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with Chrysler Financial Corporation By Authorized Officer PUBLIC SERVICE COHPANY OF NEW MEXICO, By Vice President an C porate Control er 6091.CHRYSLER.2898.18:1

0 0

State of New York )

) ss:

County of New York )

The foregoing instrument was acknowledged before me this 16th day of July, by B.D. LACKEY, the Vice President and Corporate Controller of PUBLIC SERVICE COMPANY OF NEN HEXICO, a New Mexico corporation, on behalf of the corporation.

Notary Pub tGHTS pQER UH f yaw York N,o.'N,York county

'orrtrrtission State of New York )

) ss:

County of New York )

The foregoing instrument was acknowledged before me this 16th day of July, by tp ~

NATIONAL BANK OF an Authorized Officer of THE FIRST

'BOSTON, a national banking association, on behalf of the banking association as trustee under that certain Trust Agreement dated as of December 16, 1985 with Chrysler Financial Corporation.

Notary Public MARK R. RU~

State of NaW YOr ty public,244847012 gg No.

County Quatlf lsd ln Kings York Coun/

Cortlflcato filed ln Novs m C mission ~cplro March 1'091.CHRYSLER.2898.18:1

?age 1 o= 2 SCHEDULE OF CASUALTY VALUES Basic Rent Payment Percentage of Date Facility Cost 7/15/1986- 187e 6849555 1/15/1987 189. 1933837 7/15/1987 118.6884748 1/1S/1988- 111. 8224392 .

7/15/1988 112. 8567913 1/15/1989 113. 7244946 7/1S/1989- 114. 4248262 1/15/1998 114. 9418423 7/15/1998 115.2711835 1/15/1.~ 115. 3989188.

7/15/1991 115. 3318387 1/15/1992 115. 8666867 7/15/1992- 114. 5969818-1/15/1993 113. 9867827 7/15/1993 112. 9892918

'./l5/1994- 111. 9135112 7/15/1994 118. 7848614 1/15/1995 189. 6823294

?/15/1995- 188.3659127

/15/1996 187. 8722811

/15/1996 185.7187766 1/15/1997- 184.3826418.

/15/1997 182.8115819

'/l5/1998 181.2416599 7/15/1998- 99. 6889135" 1/15/1999 97. 91 8235 7/15/1999 96. 1948761 1/15/2888- 94. 4831822.

7/15/2888 92.5939862 1/15/2881 98. 787384S 7/1S/2881 88. 8824498 1/1S/2882 86. 8162199 7/15/2882 84. 8118345 1/15/2883 82.7281933-7/15/2883 88. 6896991 1/15/2884 78.4898883 7/15/2884 76.2883317-1/15/2885 73. 9268341 7/15/2885 71 6888789 1/15/2886- 69. 2882945.

7/15/2886 66+ 7548942 1/15/2887 64. 2328512 7/15/2887- . 61. 6616849 1/15/2888 59. 8899288 7/15/2888 56. 3885653 1/15/2889- 53. 5228168.

7/15/2889 58. 7liR9887

Pace 2 o= "-

SCHEDULE OF CASUALTY VALUES Basic Rent Payment Percentage of i'a te Facility Cost 0

1/15/2818 7/15/2818 47. 9742978 1/15/2811 45. 3238292

'/15/2811

42. 7762178 1/15/2812 48. 3483146 7/15/2812 38. 8698895 1/15/2813 35. 7138812 7/15/2813- 33.1258284 1/15/2814 38. 3311399 =

7/15/2814 27. 3222754 1/15/2815- 24. 8766811 28~0000000

<1 SCHEDULE OF Page l c-" 2 TERNI'AATlON VALUES Basic Rent Percentage of Payment Date Facility Cost 7 /15/1986- 186. 5743448 1/15/1987 188. 1288554 7/15/1987 189. 4923232 1/15/1988- 118.6688916.

7/15/1988 111+ 6488885 1/15/1989 112. 4665392 7/15/1989- 113. 1149863 1/iS/1998 113.5786771 7/15/1998 113. 8533273 1/15/1991- 113. 9234788-7/15/1991 113. 7955798 1/15/1992 113. 4687858

?/15/1992- 112. 9348884-1/15/1993 112. 1762559

?/15/1993 111. 1883793

! /15/1994- 118, 8393517-7/15/1994 ~

188. 8336749 1/15/1995 187. 57261S5

./15/1995- '.86.2S36458

'15/1996 184. 8741819

15/1996 183. 4311917

/15/1997 .

181. 9228149

" '1S/1997 188. 3341286

'/1998 98. 6634421

'15/1998- 96. 9178329

/15/1999 95. 1288149

//15/1999 93.2891811 1/15/2888- 91. 3792217-7/15/2888 89. 4469533 1/15/2881 87. 4323567 7/15/2881 85. 3943813 ~

1/15/2882 83. 2694531 7/15/2882 81. 1288114 1/15/2883- 78. 8798466 7/15/2883 76. 6123229 1/15/2884 74. 2491283 7/15/2884. 71. 8791752 1/15/2885 69. 4287995 7/15/2885 66. 9116845 1/15/2886- 64.3211276-7/1S/2886 61. 6772788 1/15/2887 58. 9479159 7/15/2887 56. 1625499 1/15/2888 53.2872121 7/15/2888 58.3538915 1/15/2889 47. 3243174 ~

7/15/2889 44. 2531335

i o

Page 2 o= 2 SCHEDULE OF TERifINATIO.'t UALUES Basic Rent Percentage of Payment Date .Facil'ity Cost

'/15/2818 41. 2621926 7/15/2818 38'387259 1/15/2811 35. 5878128 7/15/2811 32. 7834511 1/15/2812 38. 1973432 7/15/F812 27. 5283378 1/15/2813 24. 5998566 7/15/2813 21. 4584828 1/15/2814 18. 8886688 7/15/2814 14.4675112 1/15/2815 18 OOOOOOO

o Pace '-" 8 SCHEDUI.E OF SPECIAL CASUALTY VALUES Payment Date Percentage of Facility Cost IS JAN 1986 15 FEB 1986 184. 61753 IS NAR '986 185. 89892 15 APR 1986 I86.17877 15 NAY 1986 187. 24891 15 JUN 188. 26999 1986'5 JUL 1986 189. 33866 1S AUG 1986 118.94267 15 "1986 187. 54249 SEP 15 188. 59332 OCT 1986 189. S9493 15 NOV 1986 5

118. 62739 DEC 1986 15 JAN 1987 111. 66416 112. 6S156 15 FEB 1987 15'NAR -1987- 189.13416 15 APR.1987 118.

15165'11.14945 15 NAY 1987 15 JUN 1987 112.11763 15 JUL 1987 113.11223 IS AUG 1987 I14.86522 118.46662 15 SEP 1987 15 OCT 1987 Ill. 44478 15 NOV 1987 112. 38184 15 DEC 1987 113. 34349 15 JAN 1988 114. 36957 15 FEB 1988 115. 23379 IS NAR 1988 111.68594 15 APR 1988 112. 55449 15 NAY 1988 113. 48633 114. 39469 15 JUN 1988 JUL 1988

'5 115. 32468

'16.22898 15 AUG 1988 15 SEP-1988 112.56836 113. 47598 15 OCT 1988 15 NOV 1988 114.35773 115. 26885 15 DEC-1988 IS JAN 1989 116. 16786 15 FEB 1989 117. 83943 15 NAR 1989 113.35455 15 APR 1989 114.24553

'15.12318 15 MAY 1989 15 JUN 1989 115.97536 15 JUL 1989 116.84836 15 AUG 1989 117. 68788 IS'EP 1989 113. 9691S 15 OCT 1989 114..82684 115. 64926,

0 e

Pc(9 2 0 8 SCHEDULE i~E SPECIAL CASUALTY VALUES Payment Date Percentage of Fac11l.ty Cost 15 NOV 1989 116. 49294 15 DEC 1989 117. 33916 15 JAN 1998 118. 15157, 15 FEB 1998 114+ 48541 15 NAR 1998 115. 23454 15 APR 1998 116. 84995 15 NAY 1998 116. 83998 15 JUN 1998 IS JUL 1998 117.64986l IS AUG 1998 II8.42622)

SEP- 1998 114. 64311 ~

15 15 OCT 1998 I IS. 43494 116. 19312 15 NOV 1998 DEC. 1998 116. 97886 15 15 JAN 1991 117.758SI 118. 49637 15 FEB 1991

'5 NAR. 1991 114. 68222 115. 44273 15 APR 1991 116. 18916 15 NAY 1991 116. 91415 15 JUN 1991 117. 65683 15 JUL 1991 118. 36847 15 AUG 1991 114. 51795 15 SEP 1991 115. 24178 15 OCT 1991 115.93683 15 NOV 1991 116.64692 15 DEC 1991 117. 35911 15 JAN 1992 118. 84168 15 FEB 1992 114. 15989 IS NAR 1992 15 APR 1992 114.85224 115.53199 15 MAY 1992 '16.1894S 15 JUN 1992 116. 86281 15 JUL 1992 117. 58698 15 AUG 1992 113. 58569 15 SEP 1992-15 114.23819 OCT 1992 114. 86128 15 NOV 1992 115. 49998 15 DEC 1992 116. 13935 15 JAN 1993 116. 74915 15 FEB 1993 112.79298 15 NAR 1993'993 113. 41823 15 APR 114. 81455 15 NAY 1993 114. 59662 15 JUN 1993 115. 19348 15 JUL, 1993 115.76127 1S AUG 1993 111.76188 15 SEP 1993 112.33551 15 OCT 1993 112.98181 15 NOV 1993 113.47187

0

Page 3 of 8 SCHEDULE QF SPECIAL CASUALTY VALUES Payment Date Percenta e of Facility . est 15 DEC -1993 114. 84282 15 JAN 1994 114. 61225.

15 FEB 1994 118. 68834 15 MAR&994 111. 16142 l5 1994 'PR 111.72258 15 MAY 1994 112. 28383 15 JUN-1994 112.84515 l5 JUL 1994 113o48657 I

5 AUG 1994 189. 38543

)C SEP- 1994 189. 93727 15 C T 1994 118.48928 15 NOV 1994 111. 84121 15 DEC 1994-. 111.59332" 15 JAN 199S 112. 14551 15 1995

'EB

~

188. 11471 15- MAR-1!395 188"65689 15 APR 1995 189. 19917 15 MAY 1995 189. 74153 l5 JUN "1995 118.28399 15 JUL 1'995 118.82654 1 5 AUG 1995 186. 78563 15 SEP 1995'CT 187, 31772 15 1995 187.84989 15 NOV 1995 188. 38216 15 DEC 1995 188.914S3 15 JAN 1996 189. 44788 15 FEB 1996 185. 39552 15 MAR 1996 185. 91784 15 APR 1996 186. 43865 15 MAY 1996 186. 96836 15 JUN -1996 187.48217 15 1996 'UL 188. 88489 15 AUG 1996 183. 94155 15 SEP 1996 184. 45282 15 1996 'CT 184. 96259 15 NOV 1996 185. 47326 15 DEC-'1996 185. 98483 15 JAN 1997 186. 49491 15 FEB 1997 182. 41925 15 MAR 1997 182. 91659 15 APR 1997 183. 41484 15 MAY 1997 183. 91159 15 JUN 1997 184. 48925 15 JUL 1997'UG 184. 98782 15 1997 188. 81755 15 SEP 1997 181. 38189 15 OCT 1997 '81.78473 15 NOV 1997 182.26849 15 DEC 1997 182.7S236

0'I o

SCHEDULE Page 4 of 8 Ol'PECIAL CASUALTY VALUES Payment Date Percenta e of Facility Cost 15 JAN 1998 183. 23634 15 FEB 1998 99. 13234 15 MAR 1998 99. 68135

';5 APR 1998 188. 87847

'5 MAY 1998 188. 53971

.'5 JUN 1998 181.88987

'.5 JUL 1998 181. 49873

.'5 AUG 1998 97. 36999

!5 SEP-1998 97.82836 15 OCT 1998 98. 29256 15 AOV 1998 98. 75489 15 DEC 1998- 99. 21578 15 JAN 1999 99. 69371 15 FEB 1999 95. 55783 15 MAR-1999 96.88438 15 APR 1999 96. 45771 15 MAY 1999 96. 92548 15 JUN .1999'.=

97. 38582 JUL 1999 97'6288

-UG 1999 93. 71826

.5 CEP 1999'5

94. '95 CCT 1999 94. 9361

5 .'OV 1999 95. 84455

~

e '.5 DEC i5 JAN

'5 FEB 15 MAR'2888 1999 2888 2888

'5 95.48966

95. 95212

91. 79759

92. 22771

92. 66396 APR 2888

93. 11558

'515 MAY JUN 2888 93. 55849

'.5 JUL 2888 94. 81985

.'S AUG 2888 89. 84952 15 SEP 2888 98. 27378 15 OCT 2888 98. 78488 1S NOV 2888 91. 13151 15 DEC 2888 91 55921

~

15 JAN 2881 92. 83525 15 FEB 2881 87. 83281 15 MAR "2881- 88. 24399 15 APR 2881 88. 66225 1S MAY 2881 89. 89686 15 JUN 2881'5

89. 52228 JUL 2881 89. 96728 15 AUG 2881 . 85. 77728 15 SEP'2881 86. 18381 15 OCT 2881 86.59584 15 NOV 2881 87. 88421

'e 15 DEC 2881 15 JAN 2882

87. 41358

87. 84235

0,

Damp 5 G= 8 SCHEDULE OF SPECIAL CASt;ALTY VALVES Payment Dace Percentage of Facilicv Coze

83. 64939 15 FEB 2882

84. 84227 15 MAR 2882 84. 44159 1S APR 2882 1S NAY 2882 84'S838 JUN"2882 85.26529 15 8S. 69291 15 JUL 2882 81. 48237

.'5 AUG 2882 15 SEP 2882

'" 81. 86868

82. 26145 15 OCT 2882 82.65138 15 NOV 2882

83. 84137 15 DEC 2882 83.45194 15 JAN 2883

79. 23823 15 FEB 2883 79.61188 15 MA~83 79. 99837 1S APR 2883 88.38824 15 NAY 2883

88. 77583 15 JUN'2883 81 '8522 15 JUL 2883

76. 95297 15 AUG 2883 77.31883 15 SEP-2883 77. 69133 15 OCT 2883

78. 86885

5 NOV 2883 78.43859 15 DEC 2883 78.82282 15 JAN 2884 74. 59114 15 FEB 2884

74. 94416 15 MAR 2884

75. 38695 15 APR 2884

75. 68816 15 NAY 2884

76. 85848 15 JUN 2884'-, 76.45287 15 JUL 2884 72.19488 15 AUG 2M4 72. 53724 15 SEP-2884- 72 98356 15 OCT 2M4 73.25895 15 NOV 2884 73. 61471 15 DEC"2884" 73. 99369 15 JAN 2885 69. 72817 15 FEB 2885 78. 85913 15 NAR-2885'5

78. 48858 APR 2885 78. 76138 15 NAY 2885 71. 11868 15 JUN 2885 71. 48458 15 JUL 2885 67. 28223 15 AUG 2885 67.52292 15 SEP"2885 67. 86882 15 OCT 2885 68.28157 15 NOV 2885

68. 53552 15 DEC 2885 68. 89482 15 JAN 2886 64.68396 1S FEB 2886

o Page 6 o" 8 SCHEDl:LE EiF SPECIAL CASt:ALTY VALL'ES Payment Date Percenta e of Eacilitv Cost 15 NAR 2886

64. 91173 ',

15 APR 2886 1S'AY 2886 65. 23851  !

'.5 JUN" 2886 " 65. S6983 )

15 JUL 2M6

65. 89788 I

66. 25817 I 15 AUG 2886

61. 94249 15 SEP -2886

62. 23948 15 OCT 2886 56226

'2.

1S NOV 2886 15 DEC 2886- 62.87284 JAN 2887

63. 18385 15

63. 52881 15 FEB 2887 2887- 59. 28496 15 NAR S9. 48837 15 APR 2887 59. 78348 15 NAY 2887 2887- 68.18814 15 JUN

68. 48485 15 JUL 2887

68. 73544 15 AUG 2887 56.48185 1S SEP"2887'1S 2887 6.67311 OCT S6. 97244 15 NOV 2887 57.25888 15 DEC 2887 57.S4578 15 JAN 2388

'5 FEB 2388 57. 86811

53. 51715

~ 15 NAR 2888

53. 77493 15 APR 2'388

54. 84S88

/ 15 NAY 2888

54. 33881 iS JUN 2888

54. 61748 15 JUL 2888

54. 92599 1S AUG Z888 S8.56349 15 SEP 2888 S8.88936 15 OCT 2888 51 '8483 15 NOV 2M8 51. 34511 15 DEC 2888 Si. 68667 15 JAN 2889 51.89721 15 FEB 2889

47. 53171 15 NAR'2M9 47.76486 15 APR 2889 48.81185 15 NAY 2889 48. 28196 15 JUN 2889'5

48. 53841 JUL 2889 48.82683 iS AUG Z889 44. 49662 iS SEP-2889 44. 74894 15 OCT 2889 45. 81663 15 NOV 2889 45. 27824 15 DEC 2889 45.54888 15 JAN 2818 45. 83589 15 FEB 2818 41. 5111S 15 MAR 2919 41.76134

0 s '

SCHEDULE Page 7 of 8 OF'PECIAL CASUALTY VALUES Payment Date Percentage of Facility Cost 15 APR 2818 15 MAY 2818 42.82636 25 JUN 2818'5 42.31977 JUL 2818 42. 59883 15 AUG 2818 42. 91162 15 SEP'2818 38. 68439 15 OCT 2818 38.87185 15 NOV 2818 39.17489 15 DEC 2818- 39.46326 15 JAN 2811 39. 75366 1S FEB 2811 48. 87991 15 MAR"2822- 35. 78414 15 APR 2811 36.86358 15 MAY Z811 36. 36836 15 JUN-2811 36.68953 15 JUL 2811 37< 88289 15 AUG 2811 37. 35635 15 SEP'822 33.88489 1S OCT 2811 33.38932 15 NOV 2811 73414 '33.

15 DEC 2811'S

34. 86374 JAN 2812 34. 39663 iS FEB 2812 34. 77824 15 MAR'2812- 38. 43678 15 APR 2812 38. 7295S 15 MAY 2812 31. 84281 15 JUN 2822 31. 38888 15 JUL 2812 32. 71959 15 AUG 2812 32. 89323 15 SEP 2812 27. 68641 15 OCT 2812 27. 95885 15 NOV 2812 28. 25577 15 DEC 2822 28. 54S82 15 JAN 2813 28. 83729 15 FEB 2813 29. 17195 15 MAR 2823 24. 72571 15 APR 2813 24. 94946 15 MAY 2813 25. 19297 15 JUN 2813 25. 46961 15 JUL 2813 25. 72943 15 AUG 2813 26. 83138 25 SEP'2813 21. 55186 15 OCT 2813 21. 74283 1S NOV 2813 21. 97346 15 DEC 2813 22. 18755 1S JAN 2814 22.48377 15 FEB 2814 22. 66156 15 MAR 2824 18. 13751 15 APR 2814 18.Z8257

18. 44648

4, i

0

Page 8 of 8 SCHEnt:LE OF SPECIAL CASUALTY VALUES Payment Date Percentage of Facility Cost 2814 18.64258 15 NAY JUN 2814-- 18.82894 15 JUL 2814

19. 84841 15 2814 14. 47768 15 AUG SEP.2814 14. 58344 15 2814 14. 72956 15 OCT

.2814 14. 85734 15 NOV 15 DEC 2814 '- 14. 98627 1C.OOCOO 15 JAN 2815

0

\

~

When Recorded, Return to: Gregg R. Neilsen Snell a Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS AMENDED BY THIS AMENDMENT NO. 1 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN PAVOR OF, CHEMICAL BANK, AS INDENTURE& TRUSTEE UNDER A TRUST INDENTURE, MORTGAGEi SECURITY AGREEMENT AND ASSIGNMENT OP RENTS DATED AS OP DECEMBER 16i 1985i AS AMENDED. THIS AMENDMENT NO. 1 HAS BEEN EXECUTED IN SEV-ERAL COUNTERPARTS. SEE SECTION 3(f) OF THIS AMENDMENT NO. 1 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.

THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.

AMENDMENT NO. 1 Dated as of July 15, 1986 e to FACILITY LEASE Dated as of December 16, 1985 between THE PIRST NATIONAL BANK OF BOSTON not in its individual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with Burnham Leasing Corporation Lessor and PUBLIC SERVICE COMPANY OF NEW MEXICO, Lessee Original Facility Lease recorded December 31, 1985, as Instrument No. 85-623268, re-recorded April 17, 1986, as Instrument No. 86-187558 and confirmed by document recorded April 25, 1986, as Instrument No. 86-203239, in Maricopa County, Arizona Recorder's Office.

6091.BURNHAM.2898.18:1

AMENDMENT NO. 1, dated as of July 15, 1986 (Amendment No. 1), to the Facility Lease dated as of December 16, 1985, between THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not in its indi-vidual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with Burnham Leasing Corporation (the Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).

W I T N E S S E T H WHEREAS, the Lessee and the Lessor have here-tofore entered into a Facility Lease dated as of December 16, 1985 (the Facility Lease); providing for the lease by the Lessor to the Lessee of the Undivide'd Interest and the Real Property Interest; WHEREAS, Section 3(e) of the Facility Lease provides. for an adjustment to Basic Rent and to the schedules of Casualty Values, Special Casualty Values and Termination Values in the event, among other things, that the Fixed Rate Note is issued; and WHEREAS, the Fixed Rate Notes are being issued pursuant to Supplemental Indenture No. 1, dated as of July 15, 1986, to the Indenture; S NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the. receipt and sufficiency of which are hereby acknowl-edged, the parties hereto agree as follows:

SECTION 1. Definitions.

For purposes hereof, capitalized terms used herein and not otherwise defined herein or in the recitals shall have the meanings assigned to such terms in Appendix A and Schedule 1 to the Facility Lease.

SECTION 2. Amendments.

(a) Section 3(a)(ii) "of the Facility Lease is amended to read in its entirety as follows:

"(ii) (1) on July 15, 1986 an amount equal to 4.3683233% of the Facility Cost and (2) on January 15, 1987= and on each Basic Rent

~,

i

Payment Date thereafter to and including January 15, 2015, an amount equal to 4.57322%

of Facility Cost and".

(b) Section 10(a) of the Facil'ity Lease is amended to read in its entirety as follows:

"(a) Required Insurance. The Lessee will use its best efforts, to cause the Operating Agent to carry and maintain insurance required under the ANPP Participation Agreement and will make all payments required of the Lessee under the ANPP Participation Agreement in respect of such insurance. The Lessee will at all times maintain, directly or through the Operating Agent, policies of casualty and liability insurance with respect to the Undivided Interest and the Real Property Interest in such amounts and with such cover-age as shall be adequate in accordance with prudent utility practice. Any policies of insurance in respect of destruction, damage, loss, theft or other casualty to the Undivided

~ Interest, the Real Property Interest, Unit 1 or any part thereof shall name the L'essor (and, to the extent practicable, the Owner Participant) as additional insured, as its interest (or their interests) may appear, and any policies with respect to nuclear liability insurance with respect to the Undivided Interest, the Real Property Interest, Unit 1, or any part thereof, shall include,all

~ Indemnitees as insureds through an omnibus definition of "insured" or through endorse-ment; provided, however,, that if the Operating Agent, as trustee, shall become the loss payee under any policy of insurance constituting Project Insurance, then the Lessor and the Owner Participant shall be and be made benefi-ciaries of the trust arrangement under which the Operating Agent acts as trustee. The Lessee shall, on or before March 1 of each f

f E

I

year, commencing March 1, 1987, furnish to the Lessor and the Owner Participant (A) a report signed by the broker or brokers for the PVNGS insurance (or if insurance is placed directly by the Operating Agent, a certificate signed by the Operating Agent) (i) showing the insur-ance .then maintained by the ANPP Participants with respect to PVNGS, (ii) stating that no premiums are then delinquent, and (iii) stat-ing that the insurance maintained by the ANPP Participants with respect to PVNGS is in accordance with the terms of (1) the ANPP Participation Agreement and (2) this Section 10, (B) a report signed by the broker or brokers for the Lessee's insurance (or if insurance is placed directly by the Lessee, a certificate signed by the Lessee) showing the separate insurance, if any,, then maintained by the Lessee with respect to its interest in PVNGS and stating that no premiums under such insurance are delinquent; (C) a certificate signed by the Lessee stating that the insur-maintained by the ANPP Participants and 'nce by the Lessee, identified on the reports to be delivered pursuant to clauses (A) and (B), is in accordance with prudent utility practice wi thin the nuclear industry, the ANPP Participation Agreement and this Section 10; and (D) upon the request of the Lessor or the Owner Participant, copies (to the extent per-mitted by the issuers of such policies) of policies so maintained. Any report by an insurance broker with respect to clause (A)(iii)'(1) may be made in reliance upon a schedule provided by the Lessee (a copy of which shall be at'tached) identifying the insurance (by coverage, limits, insureds and other pertinent details) required to be main-tained under the ANPP Participa'tion Agreement. Any report with respect to clause (A)(iii)(2) may be made in reliance upon a similar schedule provided by the Lessee (a copy of which shall be attached) identifying 0 6091.BURNHAM.2898.18:1 .

the insurance required to be maintained under this Section 10. All insurance proceeds paid in respect of damage, destruction, loss, theft or other casualty to the Undivided Interest or the Real Property Interest shall be applied as provided in Section 9(g), (h) or (i), as the case may be, subject, however, to any priority allocations of such proceeds to decontamina-tion and debris removal set forth in the insurance policies or required under Applicable Law. In the event that either the Operating Agent or the Lessee delivers a cer-tificate pursuant to clause (A) or (B) of the foregoing, the Owner Participant shall be entitled to receive (if it so requests and if the insurer will issue the same) a report from any insurer listed in such certificate."

(c) Section 16(a)(v) of the Facility Lease is hereby amended to insert the ~ords "may, if it shall so elect in its sole discretion," in lieu of the word "shall" in the parenthetical phrase first preceding clause A of Section 16(a)(v).

(d) Schedule 3 to the Facility Lease (Schedule of Casualty Values) is hereby replaced with Schedule 1 hereto.

(e) Schedule 4 to the Facility Lease (Schedule of Special Casualty Values) is hereby replaced with Schedule 2 hereto.

( f ) Schedule 5 to the Facility Lease (Schedule of Termination Values) is hereby replaced with.

Schedule 3 hereto.

( g) Schedule 2 to the Facility Lease (Basic Rent Pere'entage) is hereby deleted in its entirety.

~ I SECTION 3. Miscellaneous.

. (a) Partial Prepayment of Rent. 1n accordance with the last sentence of Section 3(a) of the Facility Lease, the Lessee shall pay an amount equal to

$ 42,191.78 on July 17, 1986, such amount (i) being equal to the interest payment due on the Initial Series Note on such date and (ii) to be credited against Basic Rent due on January 15, 1987.

(b) Effective Date of Amendments. The amend-ments set forth in Section 2 hereof shall be and upon the execution hereof by the parties become'ffective hereto.

(c) Counterpart Execution. This Amendment No. 1 may be executed in any number of counterparts and by each of the parties hereto on separate counterparts; all such counterparts shall together constitute but one and the same instrument.

(d) Governing Law. This Amendment No. 1 has been negotiated and delivered in the State of New York and shall be governed by, and be construed in accordance e with, the laws of the State of New York, except to the extent that pursuant to the law of the State of Arizona such law is mandatorily applicable hereto.

(e) Disclosure. Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is Burnham Leasing Corporation, a Delaware corporation. The address of the beneficiary is 60 Broad Street, New York, New York 10004, Attention: Chief Financial Officer. A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.

(f) Amendment No. 1. The single executed orig-inal of this Amendment No. 1 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the receipt of the Indenture Trustee thereon shall be the "Original" of this Amendment No. 1. To the extent that this Amendment 6091.BURNHAM.2898.18:1

1 No. 1 constitutes chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security interest in this Amendment No. 1 may be created or continued through the transfer or possession of any counterpart other than the "Original".

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No. 1 to Facility Lease to be duly executed in New York, New York by an officer there-unto duly authorized.

THE FIRST NATIONAL BANK OF in its individual BOSTON'ot capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with Burnham Leasing Corporation By Authorized Of seer e PUBLIC SERVICE COMPANY OF MEXICO p NEW By Vice President nd Corporate Contro r

'e 6091. BURNHAM. 2898. 18: 1

State of New York )

) ss:

County of New York )

The foregoing instrument was acknowledged before me this 16th day of Duly, by B.D. LACKEY, the Vice President and Corporate Controller of PUBLIC SERVICE COMPANY OP NEW MEXICO, a New Mexico corporation, on behalf of the corporation.

Notary Pu ic PETER UN BRIGHTBILL NOTARY PUBLIC, State of New York NO. 31-4852758 Qualified in New York County Commission Expires Janua y 21, l988 State of New York )

) ss:

County of New York )

The foregoing instrument was acknowledged bef ore me this 16th day of July, by an Authorized Officer of THE PIRST NATIONAL BANK OP BOSTON, a national banking association, o'n behalf of the banking association as trustee under that certain Trust Agreement dated as of December 16,'.

1985 with Burnham Leasing Corporation.

Notary Public MARK R. HUNT Notary Public, State of New Yo~

No. 2<<94TOt2 Qualified ln Kings County Ill cato filed ln Now York County Coalelssion Expires March 3Q $ 9

Ol

SCHEDULE 1 to AMENDMENT NO. 1 SCHEDULE OP CASUALTY VALUES Basic Basic Rent Percentage Rent Percentage Payment of Pacility Payment of Pacility Date Cost Date Cost 7/15/2005 72.4819062 7/15/1986 106.6269350 1/15/2006 70.1272653

'/15/1987 108.4620154 7/15/2006 67.7223143 7/15/1987 110 0191648 1/15/2007 65.2424137 1/15/1988 111.3308106 7/15/2007 62.7159973 7/15/1988 112.4699820 1/15/2008 60.1110508 1/15/1989 113.4394230 7/15/2008 57.4576292 7/15/1989 114.2371946 1/15/2009 54.7218716 1/15/1990 114.8476467 7/15/2009 51.9355999 7/15/1990 115.2657844 1/15/2010 49.0630858 1/15/1991 115.4747706 7/15/2010 46.1380045 7/15/1991 115.4811581 1/15/2011 43.1255891 1/15/1992 115.2837367 7/15/2011 40.2351879 7/15/1992 114.8727613 1/15/1993 114.2315094 7/15/1993 113.3518165 1/15/2012 37.4545358 1/15/1994 114.2544464 7/15/2012 34.8021269 7/15/1994 116.2447321 1/15/2013 32.3125759 1/15/1995 117.5625418 7/15/2013 29.6407060

~ 7/15/1995 116.1352724 1/15/2014 26.7123360 1/15/1996 113.7700741 7/15/2014 23.5329689 7/15/1996 111.0905234 1/15/2015 20.00Q00000 1/15/1997 108.5017094 7/15/1997 105.5182863 1/15/1998 102.6512304 0 7/15/1998 100.7617481 1/15/1999 98.6890884 7/15/1999 97.4270097 1/15/2000 95.2439805 7/15/2000 93.9169144 1/15/2001 91.6175245 7/15/2001 90.2230831 1/15/2002 87.8022117 7/15/2002 86.3380175 1/15/2003 83.7888657 7/15/2003 82.2508222 1/15/2004 79.5667924 7/15/2004 77.9527950 e 1/15/2005 75.1293462 6091.BURNHAM. 2898.18:1

~ )

e

SCHEDULE 2 to

. AMENDMENT NO. 1 SCHEDULE OF SPECIAL CASUALTY VALUES Basic Basic Rent Percentage Rent Percentage Payment of Facility Payment of Facility Date Cost Date Cost 12/30/1985 103.0588289 5/30/1989 116.4477567 1/30/1986 103.7923344 6/30/1989 117.3018730 2/30/1986 104.8971263 7/30/1989 113.6020990 3/30/1986 105.9917542 8/30/1989 114.,4759270 4/30/1986 107.0426922 9/30/1989 115.3137944 5/30/1986 108.1278120 10/30/1989 116.1738092 6/30/1986 109.1610390 11/30/1989 117.0367257 7/30/1986 106.4046445 12/30/1989 117.8635975 8/30/1986 107.4943009 1/30/1990 114.1360496 9/30/1986 108.5322101 2/30/1990 114.9817059' 10/30/1986 109.6035084 11/30/1986 110.6800137 12/30/1986 111.7037517 1/30/1987 108.1973982 2/30/1987 109.2430627 3/30/1987 110.2680052 4/30/1987 111.2613874 5/30/1987 112.2835284 6/30/1987 113.2612975 7/30/1987 109.6713452 8/30/1987 110.6691026 9/30/1987 111.6223008 10/30/1987 112.6037248 11/30/1987 113.5892757 12/30/1987 114.5301317 1/30/1988 110.9230965 2/30/1988 111.8909093 3/30/1988 112.8409945 4/30/1988 113.7658191 5/30/1988 114.7141103 6/30/1988 115.6262660 7/30/1988 111.9856774 8/30/1988 112.9194747 9/30/1988 113.8172844 10/30/1988 114.7381525 ll/30/1988 115.6625315 12/30/1988 116.5508531 1/30/1989 112.8859043 2/30/1989 113.7950233 3/30/1989 114.6898951 4/30/1989 115.5575279

~l'R'. >C NERVY(:E CONPANY OF NEW MEXICv UNIT 1 Basic Basic IF Rent Percentage Rent Percentage Payment of Facility Payment of Pacility Basic Date Cost DRte Cost Rent Percentage 84.1549965 60.8010191

-Payment of Pacility, 12/30/2002 3/30/2007 Date Cost I/30/2003 80.2852074 4/30/2007 61.1255136 2/30/2003 80.6651963 5/30/2007 61 '365804 3/30/2003 80.7182764 6/30/2007 61.7764532 4/30/2003 81.1219511 7/30/2007 57.4524084 6/30/2011 37.2438571 5/30/2003 81.5148273 8/30/2007 57.7307275 7/30/2011 32.9061843 6/30/2003 81.9306252 9/30/2007 58.0382460 8/30/2011 33.1276222 7/30/2003 78.5870581 10/30/2007 58.3319272 9/30/2011 33.3880555 8/30/2003 78.9602796 11/30/2007 58.6260648 10/30/2011 33.6315938 9/30/2003 78.4586946 12/30/2007 58.9497026 11/30/2011 33.8768170 10/30/2003 78.8331087 I/30/2008 54.6183102 12/30/2011 34.1616107 11/30/2003 79.2077209 2/30/2008 54.8827187 I/30/2012 29.8377510 12/30/2003 79.6055938 3/30/2008 55.1601300 2/30/2012 30.0727675 I/30/2004 75.7324981 4/30/2008 55.4614318 3/30/2012 30.3261358 2/30/2004 76.0917968 5/30/2008 55.7485590 4/30/2012 30.6131522 3/30/2004 76.1066169 6/30/2008 56.0661201 5/30/2012 30.8829984 4/30/2004 76.4909708 7/30/2008 51.7146639 6/30/2012 31.1950184 5/30/2004 76.8639177 8/30/2008 51.9672357 7/30/2012 26.8972285 6/30/2004 77.261094B 9/30/2008 52.2506558 8/30/2012 27.1582177 7/30/2004 73.9447211 10/30/2008 52.5194695 9/30/2012 27.4635357 8/30/2004 74.2969169 11/30/2008 52.7887736 10/30/2012 27.7513591 9/30/2004 73.7250314 12/30/2008 53.0892439 11/30/2012 28.0422598 10/30/2004 74.0785035 I/30/2009 48.7301015 ~ 12/30/2012 28 '781693 11/30/2004 74.4321905 2/30/2009 48.9680452 I/30/2013 23.9710573 12/30/2004 74.8104651 3/30/2009 49.2197313 2/30/2013. 24.2071394

~ 49. 4966581 3/30/2013 24.4638829 I/30/2005 70.9362855 4/30/2009 4/30/2013 24.7568327 2/30/2005 71.2738234 5/30/2009 49.7586230 3/30/2005 71.2459504 6/30/2009 50.0527397 5/30/2013 25 '318253 4/30/2005 71.6099603 7/30/2009 45.6724792 6/30/2013 25.3523356 5/30/2005 71.9619216 8/30/2009 45.8979902 7/30/2013 20.8753173 6/30/2005 72.3394936 9/30/2009 46.1560906 8/30/2013 21.0756993 7/30/2005 68.0730056 10/30/2009 46.3987735 9/30/2013 21.3207056 8/30/2005 68.3991238 11/30/2009 46. 6419836 10/30/2013 21.5471233 9/30/2005 68.7513806 12/30/2009 46.9181187 11/30/2013 21.7759750 10/30/2005 69.0912309 I/30/2010 42.5298259 12/30/2013 22.0497917 ll/30/2005 69.4314766 2/30/2010 42.7399638 I/30/2014 17.5254847 12/30/2005 69.7981485 3/30/2010 42.9646252 2/30/2014 17.6779874 I/30/2006 65.5182775 4/30/2010 43.2159533 3/30/2014 17 '508931 2/30/2006 65.8318202 5/30/2010 43.4514896 4/30/2014 18.0586319 66.1569719 43.7209919 5/30/2014 18.2473113 3/30/2006 6/30/2010 6/30/2014 18.4804514 4/30/2006 66.5035386 7/30/2010 39.3115246 '7/30/2014 13.9149576 5/30/2006 66.8373860 8/30/2010 39.5089879 14.0257567 6/30/2006 67.1984976 9/30/2010 39.7408968 8/30/2014 62.9005129 39.9565359 9/30/2014 14.1800593 7/30/2006 10/30/2010 10/30/2014 14.3146384 8/30/2006 63.2033238 11/30/2010 40.1727495 14.4505026 9/30/2006 63.5337717 12/30/2010 40.4237658 11/30/2014 36.0685335 1/ 15/2015 10.00000000 10/30/2006 63.8511120 I/30/2011 ll/30/2006 64.1688770 2/30/2011 36.2725758 12/30/2006 64.5145639 3/30/2011 36.4924178 0 I/30/2007 60.2095553 4/30/2011 36.7415607 2/30/2007 60.4991358 5/30/2011 36.9741664

0 0 PUBLIC SER'PIC COi~ZAi"Y OF NEW NEXICO UNIT I Basic Basic Rent Percentage Rent Percentage Basic Payment of Facility Payment . of Facility Rent Percentage Date Cost Date Cost Payment of Facility Date Cost 0 3/30/1990 115.8127529 6/30/1994 118.7185007 4/30/1990 116.6164370 7/30/1994 114.7053342 9/30/1998 .98.7191253 5/30/1990 117.4417493 8/30/1994 115.2593247 10/30/1998 99.1836346 6/30/1990 118.2309505 9/30/1994 117.0587606 11/30/1998 99.6482756 7/30/1990 114.4650598 10/30/1994 117.6129279 12/30/1998 100.1305252 8/30/1990 115.2718567 11/30/1994 118.1671845 0 9/30/1990 116.0426987 12/30/1994 119.9634413 1/30/1999 96.2683714 10/30/1990 116.8346756 1/30/1995 115.9405816 2/30/1999 96.7212981 11/30/1990 117.6288686 2/30/1995 116.4850345 3/30/1999 96.9133184 12/30/1990 118.3870062 3/30/1995 117.5872129 4/30/1999 97.3851756 1/30/1991 114.5894174 4/30/1995 117.7524901 5/30/1999 97.8483679 2/30/1991 5/30/1995 118.2972203 6/30/1999 98.3299062 7/30/1999 94.8909132

'15.3640914

~ 3/30/1991 116 '237373 6/30/1995 118.4608819 8/30/1999 95 '382772 4/30/1991 116.8602001 7/30/1995 114.4272433 9/30/1999 5/30/1991 117.6150972 8/30/1995 114.9617173 95.0840806 6/30/1991 118.3382255 9/30/1995 114.9557537 10/30/1999 95.5323608 7/30/1991 114.5027974 10/30/1995 115.4904197 11/30/1999 95.9807840 8/30/1991 115.2391186 11/30/1995 116.0251828 12/30/1999 96. 4478272 9/30/1991 115.9438590 12/30/1995 116.0157395 1/30/2000 92.5846993 10/30/1991 116'6665461 1/30/1996 111.9723237 2/30/2000 93.0207655 11/30/1991 117.3907609 2/30/1996 112,4963634 3/30/2000 93.1798883 12/30/1991 118.0833047 3/30/1996 112.8154630 4/30/2000 93.6359865 1/30/1992 114.2162646 4/30/1996 112.7730131 5/30/2000 94.0829283 2/30/1992 114.9202294 . 5/30/1996 113.2973541 6/30/2000 94.5492687 3/30/1992 115.6107262 6/30/1996 113.2531361 7/30/2000 91.1324130 4/30/1992 116.2770454 7/30/1996 109.1992437 8/30/2000 91.5626405 5/30/1992 116.9607136 8/30/1996 109.7123720 9/30/2000 91.2511704 6/30/1992 117.6127239 9/30/1996 109.6335828 10/30/2000 91.6823733 7/30/1992 113.7043410 10/30/1996 110.1469197 11/30/2000 92.1137312 8/30/1992 114.3663954 11/30/1996 110.6603621 12I 30 I2000 92.5647764 9/30/1992 114.9970243 12/30/1996 110.5777674 1/30/2001 88.6994113

~ 10/30/1992 115.6444469 1/30/1997 106.5121035 2I 30/2001 89.1177331 11/30/1992 116.2926665 2/30/1997 107.0122704 3/30/2001 89.2434354 12/30/1992 116.9093610 3/30/1997 107.2543773 4/30 I2001 89.6829422 1/30/1993 112.9649228 4/'30/1997 107.1309959 5/30/2001 90.1127742 2/30/1993 113.5903921 5/30/1997 . 107.6314901 6I 30I2001 90.5631159 3/30/1993 114.2020066 6/30/1997 107.5058970 7/30/2001 87.1690624 4/30/1993 114.7894113 7/30/1997 '03.4261335 8/30/2001 87.5812494

~ 9/30/2001- 87.2100140 5/30/1993 115 '929380 8/30/1997 103.9126619 10/30/2001 87.6232475 6/30/1993 115.9649496 9/30/1997 103.7441158 11/30/2001 88.0366492 7/30/1993 111.9749265 10/30/1997 104.2308709 12/30/2001 88.4708653 8/30/1993 112.5541938 11/30/1997 104.7177404 1/30/2002 84.6032660 9/30/1993 113.7975464 12/30/1997 104.5444217 2I 30/2002 85 0029110

~ 10/30/1993 114.3695393 1/30/1998 100.4521334 3/30/2002

~

85.0933045 ll/30/1993 114.9416143 2/30/1998 100.9243217 4/30/2002 85.5153514 12/30/1993 116.7990391 3/30/1998 101.1115772 5/30/2002 85.9271766 1/30/1994 112.7942485 4/30/1998 .100.9416046 6/30I2002 86.3606848 2/30/1994 113.3573574 5/30/1998 101.4147395 7/30/2002 82.9915632 3/30/1994 114 '4969708 6/30'/1998 .101.9049255 8/30/2002 83.3847667 4/30/1994 116.3267919 7/30/1998 98.4546107, 9/30/2002 82.9496808 5/30/1994 116.8901562 8/30/1998 98.9182646 10/30/2002 83.3439963 11/30/2002 83.7384943

I SCHEDULE 3 to AMENDMENT NO. 1 SCHEDULE OF TERHZNATION VALUES Basic, Basic Rent Percentage Rent Percentage Payment of Facility Payment of Facility Date Cost Date Cost 7/15/2005 67.9242911 7/15/1986 105.6802338 1/15/2006 65.3772083 1/15/1987 107.4753404 7/15/2006 62.7716897 7/15/1987 108.9908282 1/15/2007 60.0827526 1/15/1988 110.2590532 7/15/2007 57.3384734 7/15/1988 111.3529705 1/15/2008 54.5064650 1/15/1989 112.2752465 7/15/2008 51.6163938 7/15/1989 113.0238617 1/15/2009 48.6339944 1/15/1990 113.5830816 7/15/2009 45.5906667 7/15/1990 113.947.8241 1/15/2010 42.4502425 1/15/1991 114.1011603 7/15/2010 39.2459388 7/15/1991 114.0495482 1/15/2011 35.9425111 1/15/1992 113.7916781 e 7/15/1992 1/15/1993 7/15/1993 1/15/1994 113.3177017 112.6107885 111.6626619 112.4939685 7/15/2011 1/15/2012 7/15/2012 32.7488097 29.6520508 26.6701878 7/15/1994 114.4099193 1/15/2013 23.8372717 1/15/1995 115.6502554 7/15/2013 20.8075384 7/as/199s 114.1422412 1/15/2014 17.5061945 1/as/1996 111.6928886 7/15/2014 13.9381049 7/15/1996 108.9256303 1/15/2015 10.00000000 1/15/1997 106.2'454052 7/15/1997 103.1667114 i/is/a998 100.2003619 7/15/1998 98.2073936 1/as/1999 96.0268782 7/15/1999 94.6523896 1/15/2000 92.3522041 7/15/2000 90.9030350 1/15/2001 88.4763863 7/15/2001 86.9493125 1/15/2002 84.3902087 7/15/2002 82.7819452 1/15/2003 80.0826409 7/15/2003 78.3881048 1/15/2004 75.5409746 7/15/2004 73.7569900 1/15/2005 70.7563765 6091.BURNHAM.

When Recorded, Return to: Gregg R. Neilsen Snell a Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 CERTAIN RIGHTS OF THE LESSOR UNDER THE PACILZTY LEASE AS AMENDED BY THIS AMENDMENT NO. 1 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN -FAVOR OP, CHEHICAL BANKi AS INDENTURE& TRUSTEE UNDER A TRUST ZNDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNHENT OP RENTS DATED AS OP DECEHBER 16, 1985+ AS AHENDED. THIS AH22iDHENT NO. 1 HAS BEEN EXECUTED IN SEV-ERAL COUNTERPARTS. SEE SECTION 3(f) OP THIS AHENDHENT NO. 1 POR INFORHATION CONCERNING THE RIGHTS OF HOLDERS OP VARIOUS COUNTERPARTS HEREOF.

THIS COUNTERPART ZS NOT THE ORIGINAL COUNTERPART.

AHENDHENT NO. 1 Dated as of July 15, 1986 to FACILITY LEASE Dated as .of December 16, 1985 between'HE FIRST NATIONAL BANK OF BOSTON not in its individual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with MFS Leasing Corp.

Lessor and PUBLIC SERVICE COMPANY OF NEW MEXICO, Lessee Original Pacility Lease recorded December 31, 1985, as Instrument No. 85-623275, re-recorded April 17, 1986, as Instrument No. 86-187561 and confirmed by document recorded April 25, 1986, as Instrument No. 86-203238, in Haricopa County, Arizona Recorder's Office.

6091.MFS.2898.18:1

P, AMENDMENT NO. 1, dated as of July 15, 1986 (Amendment No. 1), to the Facility Lease dated as of December 16, 1985, between THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not in its indi-vidual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with MFS Leasing Corp. (the Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).

W I TNESSETH WHEREAS, the Lessee and the Lessor have here-tofore entered into a Facility Lease dated as of December 16, 1985 (the Facility Lease), providing for the lease by the Lessor to the Lessee of the Undivided Interest and the Real Property Interest; WHEREAS, Section 3(e) of the Facility Lease provides for an adjustment to Basic Rent and to the schedules'f Casualty Values, Special Casualty Values

- and Termination Values in the event, among other things, that the Fixed Rate Note is issued; and WHEREAS, the Fixed 'Rate Notes are being issued pursuant to Supplemental Indenture No. 1, dated as of July 15, 1986, to the Indenture; NOW, THEREFORE, in consideration of the premises and of other good and va'luable consideration, the receipt and sufficiency of which are hereby acknowl-edged, the parties hereto agree as follows:

SECTION 1. Definitions.

For purposes'ereof, capitalized terms used herein and not otherwise defined herein or in the recitals shall have the meanings assigned to such terms in Appendix A and Schedule 1 to the Facility Lease.

SECTION 2. Amendments.

(a) Section 3(a)(ii) of the Facility Lease is amended to read in its entirety as follows:

"(ii) (1) on July 15, 1986 an amount equal to 4.28951% of the Facility Cost and (2) on January 15, 1987 and on each Basic Rent P aym ent Date thereafter to and including 6091.MFS.2898.18:1

~ ~ ~

January 15, 2015, an amount equal to 4.49093%

of Facility Cost; and".

(b) Section 10(a) of the Facility Lease is amended to read in its entirety as follows:

~

"(a) Required Insurance. The Lessee will use its best efforts to cause the Operating Agent to carry and maintain insurance required under the ANPP Participation Agreement and will make all payments required of the Lessee under the ANPP Participation Agreement in respect of such insurance. The Lessee will at all times maintain, directly or through the Operating Agent, policies of casualty and liability insurance with respect to the Undivided Interest and the Real Property Interest in such amounts and with such cover-age as shall be adequate in accordance with prudent utility practice. Any policies of insurance in respect of destruction, damage, loss, theft or other casualty to the Undivided Interest, the Real Property Interest, Unit 1 or any part thereof shall name the Lessor (and, to the extent practicable, .the Owner Participant) as additional insured, as its interest (or their interests) may appear, and any policies with respect to nuclear liability insurance with respect to the Undivided Interest, the Real Property Interest, Unit 1, or any part thereof, shall include all Indemnitees as insureds through an omnibus definition of "insured" or through endorse-ment; provided, however, that if the Operating Agent, as trustee, shall become the loss payee under. any policy of insurance constituting Project Insurance, then the Lessor and the Owner Participant shall be and be made benefi-ciaries of the trust arrangement under which the Operating Agent acts as trustee. The Lessee shall, on or before March 1 of each year, commencing March 1, 1987, furnish to the 6091.MFS.2898.18:1

o, Lessor and the Owner Participant (A) a report signed by the broker or brokers for the PVNGS insurance (or if insurance is placed directly by the Operating Agent, a certificate signed by the Operating Agent) (i) showing the insur-ance then maintained by the ANPP Participants with respect to PVNGS, (ii) stating that no premiums are then delinquent, and (iii) stat-ing that the insurance maintained by the ANPP Par'ticipants with respect to PVNGS is in accordance with the terms of ( 1) the ANPP Participation Agreement and (2) this Section 10, (B) a report signed by the broker or brokers for the Lessee's insurance (or if insurance is placed directly by the Lessee, a certificate signed by the Lessee) showing the separate insurance, if any, then maintained by the Lessee with respect to its interest in PVNGS and stating that no premiums under such insurance are delinquent; (C) a certificate signed by the Lessee stating that the insur-ance maintained by the ANPP Participants and by the Lessee, identified on the reports to be delivered pursuant to clauses (A) and (B), is in accordance with prudent utility practice within the nuclear industry, the ANPP Participation Agreement and this Section 10; and (D) upon the request of the Lessor or the Owner Participant, copies (to the extent per-mitted 'by the issuers of such policies) of policies so maintained. Any report by an insurance broker with respect to clause (A)(iii)(1) may be made in reliance upon a schedule provided by the Lessee (a copy of which shall be attached) identifying the insurance (by coverage, limits, insureds and other pertinent details) required to be main-tained under the ANPP Participation Agreement. Any report with respect to clause (A) (iii) (2) may be made in reliance upon a similar schedule provided by the Lessee (a copy of which shall be attached) ident'ifying the insurance required to be maintained under 0'

this. Section 10. All insurance proceeds paid in respect of damage, destruction, loss, theft or other casualty to the Undivided Interest or the Real Property Interest shall be applied as provided in Section 9(g), (h) or (i), as the case may be, subject, however, to any priority allocations of such proceeds to decontamina-tion and debris removal set forth in the insurance policies or required under Applicable Law. In the event that either the Operating Agent or the Lessee delivers a cer-tificate pursuant to clause (A) or (B) of the foregoing, the Owner Participant shall be entitled to receive (if it.so requests and if the insurer will issue the same) a report from any insurer listed in such certificate."

( c) Section 16(a)(v) of the Facility Lease is hereby amended to insert the words "may, if it shall so elect in its .sole discretion," in lieu of the word "shall" in the parenthetical phrase first preceding clause A of Section 16(a)(v)

(d ) Schedule 3 to the Facility Lease (Schedule of Casualty Values) is hereby replaced with Schedule 1 hereto.

j 1

(e) Schedule 4 to the Facility Lease (Schedule of Special Casualty Values), is hereby replac'ed with Schedule 2 hereto.

( f) Schedule 5 to the Facility Lease (Schedule of Termination Values) is hereby replaced with Schedule 3 hereto.

( g ) Schedule 2 to the Facility Lease (Basic Rent Percentage) is hereby deleted in its entirety.

o 0,

SECTION 3. Miscellaneous.

(a) Partial Prepayment of Rent. In accordance

~ with the last sentence of Section 3(a) of the Facility Lease, the Lessee shall pay an amount equal to

$ 25,107.28 on July 17, 1986, such amount (i). being equal to the interest payment due on the Initial Series Note on such date and (ii) to be credited against Basic Rent 0 due on January 15, 1987.

(b) Effective Date of Amendments. The amend-ments set forth in Section 2 hereof shall be and become effective upon the execution hereof by the parties hereto.

(c) 'Counterpart Execution. This Amendment No. 1 may be executed in any number of counterparts and by each of the parties hereto on separate counter'parts; all such counterparts shall together constitute but one and the same instrument.

(d) Governing Law. This Amendment No. 1 has been negotiated and delivered in the State of New York and shall be governed by, and be construed in accordance with, the laws of the State of New York, except to the extent that pursuant to the law of the State of Arizona such law is mandatorily applicable hereto.

(e) Disclosure. Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is MFS Leasing Corp., a Delaware corporation.

The address of the. beneficiary is One Mellon Bank Center, Suite 3030, Pittsburgh, Pennsylvania 15258, Attention: President. A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.

(f) Amendment No. 1. The single executed orig-inal of this Amendment No. 1 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the receipt of the Indenture Trustee thereon shall be the "Original" of this Amendment No. 1. To the extent that this Amendment

~ I Cl'

No. 1 constitutes chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security interest in this Amendment No. 1 may be created or continued through the transfer or possession of any counterpart other than the "Original".

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No. 1 to Facility Lease to be duly executed in New York, New York by an officer there-unto duly authorized.

THE FIRST NATIONAL BANK OP in its individual BOSTON'ot capacity, but solely as Owner Trustee under a Trust Agreement, dated as of December 16, 1985, with MFS Leasing Corp.

By Authorized Officer PUBLIC SERVICE COMPANY OF NEW MEXICO, By Vice President n Corporate Contr .1 r 6091.MFS.2898.18:1

State of New York )

) ss:

County of New York )

0 The foregoing instrument was acknowledged before me this 16th day of July, by B.D. LACKEY, the Vice President and Corporate Controller of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of the corporation.

Notary Pub c PETER LIN BRIGHTBILL New York NOTARY PUBLIC, State of NO. 31M52758 Qualified in New York County l988 Commission Expires Janus y 21, State of New York )

) ss0

'e County of New York )

The foregoing instrument was acknowledged before me this 16th day of July, by

-8 . (JuCtfOQ , an Authorized Officer of THE BANK OF BOSTON, a national banking association, FIRST'ATIONAL on behalf of the banking association as trustee under that certain Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp..

Notary ublic MARK R. HUNT IotNY public, State of New Yak No. 2M847012 Cu&llfled In Kings County Certificate flied In Now York County Commission Expires March 30, 1

e 0,

0,

~ I 0

0 I

SCHEDULE 1 to AHENDHENT NO. 1 SCHEDULE OP CASUALTX VALUES Basic Basic Rent Percentage Rent Percentage Payment of Pacility Payment of Pacility Date Cost Date Cost 7/15/1986 L04 o2266355 1/15/199$ 90o4605278 105.9359024 7/15/199$ 'td o$ 16hlct 1/15/1987 7/LS/1907 107o4246044 1/15/1999 95o1540768 1/LS/1903 103e721 1$ 11 7/15/1999 93e4S3105t 7/15/1980 109.0282415 1/LS/2000 91e7103910 1/LS/1989. 110.7771349 7/15/2000 89e92PA44 7/LS/1989 lllo5594214 1/LS/2001 03e1020110 1/15/1990 L12eL662044 7/15/2001 04o2342041 7/15/1990 112e5079697 1/15/2002 $ 4e3233M 1/15/1991 112.0140296 7/LSPc002 82e3609519

'e 7/15/1991 1/LS/1992 7/15/1992 1/15/1993 7/15/1993 112o0430290 112e60297$ 2 112e3208980 ill o 7464043 110o94$ 3905 1/15/2003 7/15/2003 1/LS/2004 7/15/2004 1/1S/2005

$0o 3704352 78o 3273459 7de2391906 74 o1055736 71o9260710 1/15/1991 109e9152529 7/15/2005 d9e7003412 7/LS/1994 103.6901463 1/15/2006 67o 4232322 1/15/1995 107.4256053 7/15/2004 45o 1094549 7/15/1995 104o0951206 1/15/2007 62e7439243, 1/15/199 d L04e704Nb 7/LS/2007 60o331447d 7/15/1996 L03e2495979 1!LS/cOCI 57o0726403 1/15/1997 10le~. 7/15/2003 55o 3470511 52o0LSLbX 7/15/1997 100o %4739 1/LS/2009 7/15/2009 50e2LMLL 1/15/2010 47.5739142 7/15/2010 44eC3MSS 1/15/2011 42o 1532692 7/15/2011 3t.3776763 1/15/2012 34e5600422 7/15/2012 33e70LbXO 1/15/2013 30o$ 4NN5 7/15/2013 2$ e09$ 4420 1/15/2014 25e 4$ 91903 7/15/2014 22oRSQ4 1/LS/2015 Lte 9999999 6091.MFSo2898o18:1

~,

o

SCHEDULE 2 to AHENDHENT NO. 1 SCHEDULE OF SPECIAL CASUALTY Basic Basic Rent Percentage Rent Percentage Payment of Facility Payment of Facility Date Cost Date Cost 12/30/1985 101.4945161 1/30/1989 110ed270940 1/30/1984 $ 02.3454933 2/30/$ 989 111 e4917636 2/30/1984 103.3984&98 3/30/$ 989 112.3591392 3/30/1984 104.4340954 I/30/t989 113.2095996 I/30/1986 105.4494156 5/30/1989 114.062d 133 5/30/1986 104.447$ A~4 4/30/$ 969 114e 91&i0&3 6/30/$ 986 $ 07e489Ã33 7/30/$ 989 1tle24~

7/30/$ 984 104.7409797 8/30/1989 112.0983487

&/30/$984 105e783265$ 9/30/$ 989 112.9342639 9/30/$ 986 $ 0/30/$ 989 113e 7571544 104e C097097 10/30/1984 101e81ld740 11/30/1989 114e 5803344 11/30/1986 103.8175742 12/30/1989 115.405&347 12/30/1984 109e&274592 1/30/1990 lit e720155d 1/30/1987 106e3401154 2/30/1990 t$ 2.5248950 2/30/1987 101,3447165 3/30/1990 $ 13.3318120 3/30/1987 $ 0&e332M7 I/30/1990 114.$ 21811

<<30/1981 109.2995993 5/30/$ 990 114e91331dl 5/30/1987 110.2702948 6/30/$ 990 $ 15e 707N29 4/30/1987 111.2446407 7/30/$ 990 $ $ $ .9894142 7/30/$ 987 107e7047101 8/30/1990 112e7620474 8/30/$ 987 $ 05.bQ9924 9/30/1990 $ $ 3e5343111 9/30/1987 $ 09ed$ 277$ 2 10/30/1990 114e 2034272 10/30/1987 1$ 0e5477095 t t/30/$ 990 115e 0522044 tt/30/Nll 12/30/1987 ille48595A $ 2/W $ 990 115e 8127279 112 e4275454 1/30/1991 112e0415590 1/30/1988 10&eN4%77 2/30/199$ 112el999995 2/30/1988 109e7734429 3/30/$ 99$ 113e540023$

3/30/$ 110.6954855 I/30/1991 988'/30/1988 111.600%90 114.264'14.9910221 5/30/1991 5/30/1988 112e SN704 6/30/1991 it5ell&6937 6/30/1988 113el204035 7/30/1991 111.9365910 7/30/1'988 109.0215532 8/30/1991 112eh43704$

8/30/1988 110.7140000 9/30/1991 113e352$ %5 9/30/$ 988 111.4093947 10/30/1991 114e 0452246 10/30/1988 112.4879762 it/30/$ 991 $ $ 4e7391752 11/30/$ 988 $ 13.3693599 2/30/$ 99$

$ 115e 4349030 12/30/1988 114e2535762

SCHEDULE 2 to AHENDHENT NO. 1 SCHEDULE OF SPECIAL CASUALTY Basic Basic Rent Percentage Rent Percentage Payment of Facility Payment of Facility Date Cost Date Cost 111 ebltt496 di/30/1991 10t e16999$ 8 1/30/1992 112.2934968 12/30/1994 109e7063936 2/30/1992 112e9680762 105.7447133 3/30/1992 1/30/199$

113 ed272227 I/30/1992 2/30/1995 10de2734$ 38 114.2872448 5/30/1992 3/30/1995 106e8001942 114e9401$ 19 6/30/1992 107e 3269347 111e09O4189 I/30/199$

7/30/1992 5/30/1995 107e8$ 34751 8/30/1992 llie7367X4 4/30/1995 105e38041$ 4 112e 3757752 /30/1995 104 e4108414 9/30/1992 112.9992t78 10/30/1992 F/30/1995 104.9274810 113e 6233923 P/30/1995 105e4441204 11/30/19t2 12/30/1992 llle24C06$ 0 10/30/1995 105.9407602 110e3617919 11/30/199$ 10d.4773998 1/30/1993 110e9630922 g/30/1995 104.9940393 2/30/1993 111.5648104 tf/30/1996 103.0141210 3/30/1993 112e1509112 103e $ 202035 I/30/1993 2/30/199d 112e737264$ 104e02428$ 9 5/30/1993 3/30/199 d 113 e 3238730 4/30/1993 I/30/1996 104e 5323684 109e3t923$ 7 7/30/1993 5/30/1996 105e 0304509 10te94ld727 8/30/1993 6/30/1996 105.5445333 110e5241944 9/30/1993 7/X/1996 ,101e553C010 10/30/1993 ille0704447 102.0488440 8/30/1994 11/30/1993 llle4331370 9/30/1994 102e5~

112e 1016073 103.0389323 12/30/1993 10/30/1996 108.2444390 11/30/19td 103e5339760 1/30/199l 2/30/1994 itNe79207Q 12/30/1994 10le0290198 10te3377124 1/30/1997 100e0261855 3/30/1994 4/30/1994 109.C833494 100eSN1969 2/30/1997 5/30/1994 110.489M 3/30/1997 100e9902083 d/30/1994 110.974420 .

101el722197 I/30/1997 101e0244048 7/30/1994 5/30/1997 101e9542311 107e560802d 8/30/1994 6/30/lt97 102e4362424 108.0972003 9/30/1994 7/30/1997 98e4200172 108eb33$ 981 10/30/1994 8/30/1997 98e8883239 9/30/1997 tte354430$

10/30/1997 99.8249372 11/30/1997 100e2932439 ~

12/30/1997 100e7415505 6091.MFS.2898.18:1

~ ~ ~

SCHEC JLE 2 ta AHENDHENT NO. 1 SCHEDULE OF SPECIAL CASUALTY VALUES Basic Basic Rent Percentage Rent Percentage Payment of Facility Payment of Facility Date Cost Date Cost 1/30/2001 85.34%075 1/30/1998 94e7312447 2/30/2001 85.7633489 2/30/1998 97+1051477 3/30/2001 86 1403944 3/30/1998 97m d390487 I/g/2001 84eQN396 4/30/1998 98e0933705 5f30/2001 86o9752933 5/30/1998 98o5474969 4/30/2001 87.3326569 6/30/1998 tto00202X WX/2001 83.284N2 7/30/1998 94 o 9591318 8/30/2001 83,471@%

8/30/l998 95.40ld997 84.0596210 9/30/2001 9/30/1998 95.8442717 84. 4572755 10/30/2001 10/30/1998 96.2951814 84,N50407 11/30/1998 9he7461861 11/A/2001 12/30/2001 85.2529186 12/30/1998 97a1972868 81.1444220 1/30/2002 1/30/1999 93o 1443708 2/30/2002 01 e5221770 2/30/1999 93'784075 81,8tt93h0 3/30/1999 94o0124482 3/30/2002 4/30/2002 82.2870428 I/30/1999 94e4550777 82,67SW2 5/30/1999 94.8978048 5/30/2002 6/30/2002 83.0440013 4/3D/1999 95.3404306 7/30/2002 78.9453265 7/30/1999 tl.27%MQ 8/30/2002 79.3127764 8/30/1999 91e704342t 9/30/2002 79,4802304 9/30/1999 92e 1296260 10/30/2002 80.0511173 10/30/1999 92'437404 il/30/1999 11/30/2002 80,4341219 t2o91?9%0 12/30f2002 80,8142454 12/30/1999 93'322710 1/30/2003 74.6851201 1/30/2000 89.~418231 2f30/2003 77.0419840 2/30/2000 89.7781077 77.&QSO 3/30/2000 90.1943963 3/30/2003 77,7464523 90ahl97655 4/30/2003 I/30/2000 78.1341694 91 o0452377 5/30/2003 5/30/2000 78,5020056

'tie4708140 4/30/2003 d/30/2000 74o36213Q 87+3912328, 7/30/2003 7/30/2000 74.7081207 8/30/2003 8/30/2000 87.7982704 75.0541095 9/30/2003 9/30/2000 88<2053120 75.410257 10/30/2003 10/30/2000 88ed214901 75.7682659 11/30/2003 ll/30/2000 8te0381740 12/30/2003 7bo1255315 12/30/2000 89.4547648 71.9746211 1/30f2004, 2/30/2004 72.3094290 3/30/2004 72,44423$

I/30/2004 72,NN45 5/30/2004 73,3344415 4/30/2004 73.4803 7/30/2004 4't.5234011 8/30/2004 69,8441140 9/30/2004 70.1d74305 10/30/2004 70,5024015

o 1

l

SCHEDULE 2 to AHENDHENT NQ. 1 SCHEDULE OF SPECIAL CASUALTY VALUES Basic Basic Rent Percentage Rent Percentage Payment of Facility Payment of Facility Date Cost Date Cost 11/30/2004 70e 837%30 1/30/2008 50.326985 12/30/2004 71 e 172736$ 2/A~/2008 50e5604792 1/30/2005 46.9988083 3/30/2008 50.7940t04 2/30/200$ 67.3i03099 I/30/2008 51e041d787 3/30/2005 47.6218149 5/30/2008 Sle@NN 67e94FA07 d/30/20C3 51e5374860 I/30/200$ .

68e2639203 7/30/2008 47.2724747 5/30/2005 48e S26752 8/30/2008 47.4917373 6/30/2005 7/30/2005 44e 4047712 47e7110022 9/30/2008 8/30/200$ 44.70d1433 47.9447994 10/30/2008 9/30/2005 45.0055187 1t/30/2008 48 1787571 10/30/2005 Ne3172104 12/30/2008 48.4128772 ti/30/2005 ,

65e 6290394 1/30/2009 iie t3%005 12/30/2005 N.941C073 iie 3379772 2/30/2009 1/30/2006 6t.7427886 3/30/2009 44.5425762 d2.029d924 44.7621130 2/30/2006 I/30/2009 3/30/2006 42e316S91 5/30/2009 44e981814d I/30/200d d2.bld1464 6/30/2009 45 20t4827 5/30/2006 d2e91N7N 7/30/2009 40.9073013 6/30/2006 63e 2157259 8/A~ /2009 41.09682b2 7/30/2006 S.COI8578 9/30/2009 ile28435 8/30/2006 Se 2789517 10/A/2009 41.4912343 Se5FOCN 1t/30/2009 Iied962847 9/30/2004 10/30Pc006 Se0401S9 12/~A/2009 41.901 Aht 11/30/2004 40e1274140 t/30/2010 37.S18337 12/30/2006 60.4t43101 2/30/2010 37.7658738 Sbe 1909632 37.9399155, 1/30/2007 3/30/2010 2/30/2007 Sbe4519032 38e1297400

, I/30/2010 3/30/2007 54.7128459 38e3197NO 5/30/2010 I/30/2007 Sde9871d77 6/30/2010 38.5%1 14 5/30/2007 57e2616378 7/30/2010 34.1845345 6/30/2007 Sl e5342579 8/30/20ta 34.342669d 7/30/2007 53e 2990497 34eMC062 9/30/2010 53e5464495 34ed751657 8/30/2007 10/30/2010 53.7933917 34e8497034 9/30/2007 il/30/2010 10/30/2007 54 eOSSj469 35,0244213 12/30/2010 11/30/2007 54e3t63944 X.6828923 1/30/2011 12/30/2007 Sie$ 7787Q 30e8244749 2/30/2011 3/30/2011 30e96645$ 4 I/30/2011 3tet249171

,5/30/2011 'le203RQ 6091.MFS.2898e18:1

~ ~ ~

4/30/2011 31e442%45 7/30/2011 27.0842793 8/30/2011 27e 2092710 9/30/2011 27e3342N4 10/30/2011 27e4743985 11/30/2011 27.d107194

SCHEDULE 2 to AHENDHENT NQ. 1 SCHEDULE OP SPECIAL CASUALTY VALUES Basic Basic Rent Percentage Rent Percentage

-Payment of Pacility Payment of Pacility Date Cost Date Cost 1/30/2012 23e386082d 2/30/2012 23e492191 3/30/2012 23e6015Q5 4/30/2012 23e 7269108 5/30/2012 23e 8524578 4/30/2012 23e978199d 7/30/2012 19.SFP321 S/30/2012 19e 6893224 9/30/2012 19e7053PA 10/30/2012 19.8997491 11/30/2012 20e 0144363

'e 12/30/2012 20e 1294399 1/30/2013 15.75~$ 78 2/30/2013 15.9%3333 3/30/2013 15.9543965 4/30/2013 ide07454S1 5/30/2013 ide1954470 4/30/2013 ide 3171012 7/30/2013 11 e 9486442 8/30/2013 12.055I9 9/30/2013 12eidWA'2 10/30/2013 2918682 11/30/2013 12e 4219033 12/30/2013 12e 5531837 1/30/2014 8e1547900 2/30/2014 8e 2409549 3/30/2014 le 32C0577 4/30/2014 Se4367240 5/30/2014 Se54N773 4/30/2014 Se4576243 7/30/2014 4,2091087 8/30/2014 4e 2519822 9/30/2014 4e 2953224 10/30/2014 4e 3598195 11/30/2014 4e 4250186 12/30/2014 4.4909274 I/ Py~

>/ao/o?OW 4 ~Ka7O u.eeeeeeee

SCHEDULE 3 to ANENDHENT NO. 1 SCHEDULE OF TERMINATION VALUES Basic Basic Rent Percentage Rent. Percentage Payment of Facility Payment of Facility Date Cost Date Cost'/15/198d 104e2244355 7/15/2009 50.2173011 1/15/1987 105.9359324 1/15/2010 47.5739142 7/15/1987 107.4244844 44eCÃV5 1/15/2010 l/15/1988 103e7211811 42e1532492 1/15/2011 7/15/1988 109 e 8232415 7/lS/2011 39.3774743 1/15/1989 110e777134'9 7/15/1989 ill e 5594214 1/15/2012 7/15/2012 34e 5400422

'3.701b3Q 1/15/1990 112e 14Q044 1/15/2013 30eS45725 7/15/1990 112 Q9N97 7/15/2013 28e 0984420 1/15/1991 112.8148294 1/15/2014 25e 4891983 7/15/1991 112e8430298 22.CNlQh 7/15/2014

~

1/15/1992 112eb829702 19e9999999 1/15/2015 7/15/1992 112e32MFA 1/15/1993 111.7444043 7/15/1993 110e94QN5 1/15/1994 109e9152529 1/15/1994 103.4981443 1/15/1995 107.4254053 7/15/1995 104e0951Ma 1/15/199d 104.704004 7/15/1994 103e2495979 1/15/1997 101e~

7/15/1997 100ei300M~

1/15/1998 98e48i580 7/15/1998 9be8144129 1/15/1999 95e1543748 7/15/1999 93e 4531'1 1/15/2000 e7105918 7/15/2000 89e92PA44 .

1/15/2001 88e1020110 1/15/2001 84.2342041 1/15/2002 84.383$ 9 1/15/2002 82e 3489519 1/15/2003 80e 3704352 1/iS/2003 18e 3273459 1/15/2004 74.2391904 7/15/2004 14e10557A 1/15/2005 11e9240710 7/15/2005 49e7003412 1/15/2004 47e 4282322 7/15/2004 45.1094549 1/15/2007 42e7439248 7/15/2007 40e 3314474 1/15/2008 57.8724408 7/15/2000 55e3470511 1/15/2009 '2ell51488

When Recorded, Return to: Greg R. Nielson SNELL & WILMER 3100 Valley Bank Center Phoenix, Arizona 85073 SUPPLEHENTAL INDENTURE NO. 1 dated as of July 15, 1986 To TRUST INDENTURE g HORTGAGE g SECURITY AGREEHENT AND ASSIGNHENT OF RENTS Dated as of December 16, 1985 between THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with Chrysler Financial Corporation and CHEHICAL BANKS as Indenture Trustee Original Indenture recorded December 31, 1985, as Instrument No. 85-623284, re-recorded April 17, 1986, as Instrument No. 86-187564, and confirmed by docu-ment recorded April 25, 1986, as Instrument No.

86-203242, all in Maricopa County, Arizona Recorder's Office.

6091.CHRYSLER.2898.10:1

s SUPPLEMENTAL INDENTURE No. 1 dated as of July 15, 1986 to Trust Indenture, Mortgage, Security Agreement and Assignment Of Rents dated as of December 16, 1985, between THE FIRST NATIONAL BANK OF BOSTON, a national banking association (FNB), not in its individual capacity, but solely as trustee (the Owner Trustee)'nder a Trust Agreement dated as of December 16, 1985 between FNB, whose address is 100 Federal Street, Boston, Massachusetts 02110, with Chrysler Financial Corporation, and CHEMICAL BANK, a New York banking corporation (the Indenture Trustee), whose address is 55 Water Street, New York, New York 10041.

W I TNESSETH:

WHEREAS, the Owner Trustee and the Indenture Trustee have entered into a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985 (the Indenture) pursuant to which the Owner Trustee has issued the Initial Series Note; WHEREAS, Section 3.5(1) of the Indenture pro-vides, among other things,'hat the Initial Series Note may be refunded with Additional Notes; WHEREAS, Section 3. 5(4) of the Indenture pro-vides, among other things, that the Owner Trustee and the Indenture Trustee may enter into indentures supple-mental to the Indenture for, among other things, the purpose of establishing the terms, conditions and desig-nations of Additional Notes; WHEREAS, the Owner Trustee desires to issue Additional Notes to effect a refunding of the Initial

.Series Note and to enter into this Supplemental Indenture No. 1 to establish the terms, conditions and designations of such Additional Notes; WHEREAS, Section 10.1 of the Indenture pro-vides that, without the consent of Holders of the Notes Outstanding, the Indenture Trustee may, with the written consent of the Owner Trustee, from time to time and at any time execute a supplement to the Indenture for the purposes set forth in said Section 10.1; and 6091.CHRYSLER.2898.10:1

Oi

~,

WHEREAS, the Owner Trustee desires to make the amendments to the Indenture set forth in Section 3 of this Supplemental Indenture No. 1;

~

NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt and sufficiency of which are hereby acknowl-edged, the parties hereto agree as follows:

SECTION 1. Definitions.

For purposes hereof, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in Appendix A to the Indenture; provided, however, that, for all purposes of the Indenture, to the extent different from Appendix A thereto, the definitions of Deemed Loss Event, Event of Loss and Final Shutdown shall have the respective mean-ings set forth in or appended to the Facility Lease as amended from time to time in accordance with its terms and the terms of the Indenture.

SECTION 2. Terms, Conditions and Designations of the Additional Notes.

(a) The Fixed Rate Notes.

There is hereby created and established a sep-arate series of Notes of the Owner Trustee designated "Nonr ecour se Promissory Notes, Fixed Rate Series" herein referred to as the Fixed Rate Notes. The Fixed Rate Notes shall 'be payable as to principal and bear interest on the principal amount thereof as follows:

Fixed Rate Note Interest Principal Due Rate Amount July 15, 1991 8.300% $ 13,622,000 July 15, 1996 9.125% $ 20,851,000 January 15, 2012 10.300% $ 95,177,000

$ 129 p 650 000 g

6091. CHRYSLER. 2898. 10: 1

0 Each Fixed Rate Note shall bear interest on the principal amount thereof from time to time Outstanding from the date thereof until paid at the rate of interest set forth therein. The principal amount of each Fixed Rate Note shall be payable as set forth in Schedule 1 attached thereto. Installments of interest on and prin-cipal of (and premium, if any; on) each Fixed Rate Note shall be due and payable on the payment dates specified in Schedule 1 attached thereto. The Fixed Rate Note due July 15, 1991 shall be substantially in the form of Exhibit A-1 to this Supplemental Indenture No. 1. The Fixed Rate Note due July 15, 1996 shall be substantially in the form of Exhibit A-2 to this Supplemental Indenture No. 1. The Fixed Rate Note due January 15, 2012 shall be substantially in the form of Exhibit A-3 to, this Supplemental Indenture No. 1.

(b) Certain Adjustments to Amortization Schedules.

The schedule of principal amortization attached to each Fixed Rate Note may be adjusted at the discretion of the Owner Trustee at one time prior to July 15,'988; provided, however, that no such adjust-ment shall be made by the Owner Trustee which will increase or reduce the average life of such Fixed Rate Note (calculated in accordance with generally accepted financial practice from the date of initial issuance) by more than six months; provided, however, such adjustment may be made only in connection with an adjustment to Basic Rent pursuant to Section 3(d) of the Facility Lease. If the Owner Trustee shall elect to make the foregoing adjustment, the Owner Trustee shall deliver to the Trustee and to the Lessee at least 60 days prior to the first payment date (specified on the schedule to such Fixed Rate Note) proposed to be affected by such adjustment, a certificate of the Owner Trustee (x).stat-ing that the Owner Trustee has elected to make such

.adjustment, (y) setting forth the revised schedule of principal amortization for such Fixed Rate Note and (z) attaching calculations showing that the average life of such Fixed Rate Note will not be reduced or increased except as permitted by this paragraph (b). The Trustee may rely on such Owner Trustee certificate and shall 6091.CHRYSLER.2898.10:1

o have no duty with respect to the calculations referred to in the foregoing clause (z). ~

SECTION 3. ~ Amendments. ~

(a) 'Amendment to Section 3.5(1) .

The proviso to paragraph (1) of Section 3.5 of the Indenture is hereby amended to insert "(if applicable)" immediately following the reference to the "Participation Agreement" appearing in such proviso.

(b) Amendment to Section 3.5(2).

I The first sentence of paragraph (2) of Section 3.5 of the Indenture-is hereby amended to insert the phrase "not less than 2 Business Days nor more than 30 Business Days" in lieu of the phrase "not less than 10 nor more than 30 days."

(c) Amendment to Section 10.2.

Section 10.2 is hereby amended to insert at the end thereof the following sentence:

"Notwithstanding the foregoing, the Indenture Trustee shall, upon receipt, of a written instruction from the Lessee: and the Owner Trustee, consent to an amendment of the definitions of "Deemed Loss Event",

"Event of Loss"= and "Final Shutdown" contained in or appended to the .Facility Lease."

SECTION 4. Miscellaneous.

(a) Dating of Supplemental Indenture.

Although this Supplemental Indenture No. 1 is dated for convenience and for 'the purpose of reference as of the date mentioned, the actual date or dates of execution by the Owner Trustee and the Indenture Trustee are as indicated by their respective acknowledgements hereto annexed.

o (b) Counterpart Execution.

This Supplemental Indenture No. 1 may be exe-cuted in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall'ogether constitute but one and the same instrument.

i

~

(c) Execution as Supplemental Indenture.

This Supplemental Indenture No. 1 is executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Indenture, this Supplemental Indenture No. 1 forms a part'hereof.

(d) Disclosure.

.Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is Chrysler Financial Corporation, a Michigan corporation.

. The address of the beneficiary is Greenwich Office Park I, Greenwich, Connecticut 06836, Attention: Leveraged

'e Leasing. A copy of the Trust Agreement is available for.

inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.

6091.CHRYSLER.2898.10:1

o Cl

IN WITNESS WHEREOF, the Owner Trustee and the Indenture Trustee have each caused this Supplemental Indenture No. 1 to be duly executed by their respective officers thereunto duly authorized, all as of the date first set forth above.

THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee under the Trust Ag r e ement dated as of December 16,'985, with Chrysler Financial Corporation By Authorized Officer CHEMI CAL BANK, By ice P esident

/ 6091. CHRYSLER. 2898. 10: 1

~,

0,

STATE OP NEW YORK )

) ss.:

COUNTY OP NEW YORK )

On the 16th day of July, before me personally came i 'tO,= LVo to me known, who, being by me duly sworn, did acknowledge, depose and say that he resides at Boston, Massachusetts; that he is an Authorized Officer of THE FIRST NATIONAL BANK OP BOSTON, a national banking association, described in and which executed the foregoing instrument; that he knows the seal of said association; that the seal affixed to said instrument is such seal; that it was so affixed by authority of the by-laws of said association; and that he signed his name thereto on behalf of said association by like order.

Not lic SEAL],'erm

'e [NOTARIAT Expires:

PETER LIN BRIGHTBILL NOTARY PUBLIC, State of New York NO. 31 4852758 Qualified in New York County Commission Expires Janua y 21, l988 6091.CHRYSLER.2898.10:1

o STATE OF NEW YORK )

) ss.:

COUNTY OF NEW YORK )

On the 16th day of July, before me personally came T.J. FOLEY, to me known, who, being by me duly sworn, did acknowledge, depose and say that. he resides at Bethpage, New York; that he is a Vice President of CHEMICAL BANK, a New York banking corporation, described in and which executed the foregoing instrument; that he knows the seal of'aid corporation; that the seal affixed to said instrument is such seal; tha't it was so affixed by authority of the board of directors of said corporation; and .that he signed his name thereto of said corporation by like order. on'ehalf

~

Not ic

[NOTARIAL SEAL] Term

'E Expires: BR<GHTBILL

-'it tN NOTAftY PUBLIC, State of New.Yo!k t'f 0. 3 l.4852758 Qualified in New York County Commission Expires Janua y 2L l988 6091.CHRYSLER.2898.10:1

o EXHIBIT A-1 TO AMENDMENT NO. 1 FORM OF FIXED RATE NOTE (DUE JULY 15, 1991)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT 1

NONRECOURSE PROMI SSORY NOTE i F IZED RATE SERIES (DUE JULY 15, 1991)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16, 1985 with Chrysler Financi'al Corporation (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the prin-cipal sum of Thirteen Million Six Hundred and Twenty-Two "thousand Dollars ($ 13,622,000) on July 15, 1991,

,together with interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 8.3% per annum.

Payments of principal installments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto.

Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as hereinafter defined).

6091.CHRYSLER.2898.10:1

Cl Interest on any overdue principal and premi-um, 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 per annum equal to 9.3<

(computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such princi-pal, premium or. interest shall be overdue.

In the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.

All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security

~

Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof (the Indenture), between the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee

. shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Zndenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Section 3.9(b) of the Indenture, then all the payments 6091.CHRYSLER.2898.10:1

0 to be made under this Note shall be made only from payments made by the Lessee under this Note in accor-dance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

shall Principal, premium, in the if any, and interest be payable, manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture.

In the manner and to .the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by hereunder shall be applied in'he manner set forth in it Section 3.11 of the Indenture." The Holder of this Fixed

'e Rate Note agrees, by its acceptance hereof, that or interest made hereon and that ~

it it duly note by appropriate means all payments of principal will will not in any event transfer or otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to .in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5.of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issu'ed and outstanding from time to time under the

.Zndenture. Reference is hereby made to the Indenture 6091.CHRYSLER.2898.10:1

for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note is not subject to pre-payment in whole or in part.

In case an Indenture Event of Default and be continuing, the unpaid balance of the prin-.

shall'ccur

'cipal of this Fixed Rate Note and any other Notes, togethe'r with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. Upon such declaration there shall also be due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

a The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro--

vided in the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of.

transfer duly accompanied by a written instrument of .

6091.CHRYSLER.2898.10:1

o, transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transf er taxes. Prior to due presentment for reg-

~ istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

'e 6091. CHRYSLER. 2898. 10: 1

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note,to. be duly executed as of the date hereof.

THE FIRST NATIONAL BANK OP BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with Chrysler Financial Corporation By Authorized Officer This Note is

'e referred to therein Indenture.

-one of the series of Notes and in the within-mentioned I

CHEN CAL BANK, as Indenture Trustee By Authorized Officer 6091.CHRYSLER.2898.10:1.

SCHEDULE 1 TO THE FIXED RATE NOTE

( DUE JULY 15, 1991)

Schedule of Principal Amortization

$ 13,622,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1987 $ 1,127,000 July 15, 1987 1,173,000 January 15, 1988 - 1,222,000 July 15, 1988 1,273,000 January 15, 1989 1,326,000 July 15, 1989 1,381,000 January 15, 1990 1,438,000 July 15, 1990 1,498,000 January 15, 1991 1,560,000 July 15, 1991 1,624,000 Principal Amount $ 13,622,000

'e Page 1 of 1 6091.CHRYSLER.2898.10:1

o ASSIGNMENT

~ Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING CORPORATION By President

EXHIBIT A-2 TO AMENDMENT

. NO. 1

~

FORM OF FIXED RATE NOTE (DUE JULY 15, 1996)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFME&D, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT f

NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES (DUE JULY 15, 1996)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as, of December 16, 1985 with Chrysler Financial Corporation (the Owner Participant)," hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the prin-cipal sum of Twenty Million Eight Hundred and Fifty-One Thousand Doll'ars ($ 20,851,000) on July 15, 1996, togeth'er with'nterest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in. arrears, at the rate of 9.125% per annum. Payments of principal installments of this Fixed Rate Note shall'. be made in -the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto; Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.,

Capitalized terms used in this Fixed Rate Note which. are not otherwise defined herein, shall have the meanings ascribed thereto in the Indenture (as here-inafter defined)..

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 per annum equal to 10.125% (computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any date on which. a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as on the date on which such payment was due.

if made All payments of principal, interest to premium, if any, and be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof (the Indenture), between the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the, payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Q

Section 3.9(b) of the Indenture, then all the payments to be made under this Note shall be made only from pay-ments made by the Lessee under this Note in accordance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

shall Principal, premium, in the if any, and interest be payable, manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture.

In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Fixed Rate Note. unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security fo'r the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the 6091.CHRYSLER.2898.10:1

l Indenture. Reference is hereby made to the Indenture for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate

~ Note and of the rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the 1ndenture, to all of which'terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note may be prepaid in whole or in part at any time by the Owner Trustee as follows:

upon the giving of not less than 30 days'otice as pro-vided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid princi-pal amount hereof), together with interest accrued to the date fixed for prepayment: 109.125't of its pr'inci-pal amount, such percentage to decline by 1.304 on July 15, 1987 and on each second anniversary thereof and by 1.303 on July 15, 1988 and on each second anniversary thereof until such date as such percentage shall be 100%, and 100% thereafter; provided, however, that no

'e such prepayment 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 Owner Trustee, the Lessee or any Affiliate of either thereof if such indebtedness has an effective interest cost to the Owner Trustee, the Lessee or such Aff iliate, as the case may be (computed in accordance with generally accepted. accounting practice) of less than 9.125t per annum. This Fixed Rate Note is not otherwise subject to prepayment in whole or in part.

In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. Upon such declaration there shall also be

-4.

6091.CHRYSLER.2898.10:1

I h

l l

due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust

~ Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior .to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of -the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of refister-ing transfers and exchanges of Notes in the manner pro-vided in the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed. Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

6091.CHRYSLER.2898.10:1

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly executed as of the date hereof.

0 THE FIRST NATIONAL BANK OP BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with Chrysler Financial Corporation By Authorized OfficeF'his Note is one of the series of Notes referred to therein and in the within-mentioned Indenture.

CHEMICAL BANK, as Indenture Trustee By Authorized Officer 6091.CHRYSLER.2898.10 1

0 l

V I

Ol

~

SCHEDULE 1 TO THE FIXED RATE NOTE (DUE JULY 15, 1996)

Schedule of Principal Amortization

$ 20,851,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1992 $ 1,692'-,000 July 15, 1992 1,769,000 January 15, 1993 1,850,000 July 15, 1993 1,934,000 January 15, 1994 2,022,000 July 15, 1994 2,115,000 January 15, 1995 2,211,000 July 15, 1995 2,312,000 January 15, 1996 2,418,000 July 15, 1996 2,528,000 Principal Amount $ 20,851,000 Page 1 of 1 6091.CHRYSLER.2898.10:1

ASSIGNMENT Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST 'V FUNDING CORPORATION By President

po EXHIBIT A-3 TO AMENDMENT NO. 1

~

FORM OP FIXED RATE NOTE

( DUE JANUARY 15, 2012)

THIS NOTE HAS NOT BEEN 'REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSPEE&ED, SOLD OR OFFERED POR SALE IN VIOLATION OF SUCK ACT NONRECOURSE PROMISSORY NOTE, FIXED RATE SERZES (DUE JANUARY 15, 2012)

Issued at: New York, New York'ssue Date July 17, 1986 THE FIRST NATIONAL BANK OP BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16, 1985 with Chrysler Financial Corporation (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the prin-cipal sum of Ninety-Five Million One Hundred and Seventy-Seven Thousand Dollars ($ 95,177,000) on January 15, 2012, together with interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 10.3% per annum. Payments of principal installments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto. Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as here-inafter defined).

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 per annum equal to 11. 3% ( computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any'date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as on the date on which such payment was due.

if made and All payments of principal, interest to be made by premium, if any, the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof (the Indenture), between the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture

'e Estate and the Trust Estate and the Indenture Trustee shall have no obligation for .the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Pa'rticipant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Section 3.9(b) of the Indenture, then all the payments 6091.CHRYSLER.2898.10:1

o O~

i

to be made under this Note shall be made only from payments made by the Lessee under this Note in accor-dance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

shall Principal, premium, if any, and interest be payable, in the manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture; In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture 6091.CHRYSLER.2898.10:1

o

~ I

~ i o

~ i

for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and e'xtent security for, the Holders of the other Notes and of of'he certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of wh'ich terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note is subject to prepayment in whole as contemplated by Section 5.2 of the Indenture and in the circumstances therein described. In addi-tion, this Fixed Rate Note may be prepaid in whole or in part at any time by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment: 110.3% of its principal amount, such percentage to decline by .412 on July 15, 1987 and each anniversary thereof, until such date as such percentage shall be 100%, and 100% thereafter; provided, however, that no such prepayment'hall 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 Owner Trustee, the Lessee or any Affiliate of either thereof if such indebtedness has an effective interest cost to the Owner Trustee, the Lessee or such Affiliate, as the case may be (computed in accordance with generally accepted accounting practice) of less than 10.3% per annum. This Fixed Rate Note is not otherwise subject to prepayment in whole or in part.

In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the ef f ect provided in the Indenture. Upon such declaration there shall also be 6091.CHRYSLER.2898!10:1

due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust Trustee, as certified to the Indenture Trustee by the Collateral Trust trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indentuie Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-vided in the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of th'is Fixed Rate Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee .and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be, governed by, and construed in accordance with, the laws of the State of New York.

6091.CHRYSLER.2898.10:1

~

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly executed as of the date hereof.

THE FIRST NATIONAL BANK OF BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with.

Chrysler Financial Corporation By.

Authorized Officer This Note is one of the series of Notes referred to therein and in the within-mentioned Indenture.

II CHEN ICAL BANK, as Indenture Trustee By Authorized Officer 6091.CHRYSLER.2898.10:1

~ i i

I'i o

O

SCHEDULE 1 TO THE FIXED RATE'NOTE (DUE JANUARY 15, 2012)

Schedule of Principal Amortization

$ 95,177,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1997 $ 2,643,000 July 15, 1997 2,779,000 January 15, 1998 2,922,000 July 15, 1998 2,181,000 January 15, 1999 2,260,000 July 15, 1999 1,233,000 January 15, 2000 2,377,000 July 15, 2000 1,301,000 January 15, 2001 2,510,000 July 15, 2001 1,373,000 January 15, 2002 2,650,000 July 15, 2002 1,448,000 January 15, 2003 2,798,000 July 15, 2003 1,528,000 January 15, 2004 3,331,000 July 15, 2004 2,119,000 January 15, 2005 2,612,000 July 15, 2005 2,232,000 January 15, 2006 2,755,000 July 15, 2006 2,355,000 January 15, 2007 2,908,000 July 15, 2007 2 I 485 I 000 January 15, 2008 3,069,000 July 15, 2008 2,622,000 January 15, 2009 3,534,000 July 15, 2009 5,734,000 January 15, 2010 6,030,000 July 15, 2010 6,340,000 Page 1 of 2 6091.CHRYSLER.2898.10:1

SCHEDULE 1 TO THE FIXED RATE NOTE

( DUE JANUARY 1 5, 2012 )

Schedule of Principal Amortization (Continued)

Payment Principal Principal Date Amount Payable Amount Paid January 15, 2011 $ 6,667,000 July 15, 2011 7,010,000 January 15, 2012 3,371,000 Principal Amount $ 95,177,000 Page 2 of 2 6091.CHRYSLER.2898.10:1

t t

II 1

ASSIGNMENT Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING CORPORATION By President Page 1 of 2 6091.CHRYSLER.2898.10:1

I Cl

When Recorded, Return to: Greg R. Nielson SNELL & WILMER 3100 Valley Bank Center Phoenix, Arizona 85073 SUPPLEMENTAL INDENTURE NO. 1 dated as of July 15, 1986 To TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OP RENTS Dated as of December 16, 1985 between

'e THE FIRST NATIONAL BANK OF BOSTON, in its individual not capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with .Burnham Leasing Corporation and CHEHICAL BANK, as Indenture Trustee Original Indenture recoided December 31, 1985, as Instrument No. 85-623270, re-recorded April 17, 1986, as Instrument No. 86-187559, and confirmed by docu-ment recorded April 25, 1986, as Instrument No.

86-203241, all in Maricopa County, Arizona.Recorder's Office.

6091.BURNHAM.2898.10:1

gP Cl

SUPPLEMENTAL INDENTURE No. 1 dated as of July 15, 1986.to Trust Indenture, Mortgage, Security Agreement and Assignment Of Rents dated as of December 16, 1985, between THE FIRST NATIONAL BANK OF BOSTON, a national banking association (FNB), not in its individual capacity, but solely as trustee (the Owner Trustee) under a Trust Agreement dated as of December 16, 1985 between FNB, whose address is 100 Federal Street, Boston, Massachusetts 02110, with Burnham Leasing Corporation, and CHEMICAL BANK, a New York banking corporation (the Indenture Trustee), whose address is 55 Water Street, New York, New York 10041.

W IT NESS ETH:

WHEREAS, the Owner Trustee and the Indenture Trustee have entered into a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985 (the In'denture) pursuant to which the Owner Trustee has issued the Initial Series Note; WHEREAS, Section 3.5(1) of the Indenture pro-vides, among other things, that the Initial Series Note may be refunded with Additional Notes; WHEREAS, Section 3.5(4) of the Indenture pro-vides, among other things, that the Owner Trustee and the Indenture Trustee may enter into indentures supple-mental to the Indenture for, among other things, the purpose of establishing the terms, conditions and desig-nations of Additional Notes; WHEREAS, the Owner Trustee desires to issue Additional Notes to effect a refunding of the Initial Series Note and to enter into this Supplemental Indenture No. 1 to establish the terms, conditions and designations of such Additional Notes; WHEREAS, Section 10.1 of the Indenture pro-vides that, without the consent of Holders of the Notes Outstanding, the Indenture Trustee may, with the written consent of the Owner Trustee, from time to time and at any time execute a supplement to the Indenture for the purposes set forth in said Section 10.1; and

o WHEREAS, the Owner Trustee desires to make the amendments to,the Indenture set forth in Section 3 of this Supplemental Indenture No. 1; NOW, THEREFORE, in consideration of the premises and of'ther good and valuable consideration, receipt and sufficiency of which are hereby acknowl-edged, the parties hereto agree as follows:

SECTION 1. Definitions.

For purposes hereof, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in Appendix A to the Indenture; provided, however, that, for all purposes of the Indenture, to the extent different from Appendix A thereto, the definitions of Deemed Ioss Event, Event of Loss and Final Shutdown shall have the respective mean-ings set forth in or appended to the Facility Lease as amended from time to time in accordance with its terms and the terms of the Indenture.

SECTION 2. Terms, Conditions and Designations of the Additional Notes.

(a) The Fixed Rate Notes.

There is hereby created and established a sep-arate series of Notes of the Owner Trustee designated "Nonrecourse Promissory Notes, Fixed Rate Series" herein referred to as the Fixed Rate Notes. The Fixed Rate Notes shall be payable as to principal and bear interest on the principal amount thereof as follows:

Fixed Rate Note Interest Principal Due Rate Amount July 15, 1991 8.300% $ 7,017,000 July 15, 1996 9.125% $ 12,496,000 January 15, 2013 10.300% $ 58,031,000

$ 77,544,000 6091. BURNHAN. 2898. 10: 1

Each Fixed Rate Note shall bear interest on the principal amount thereof from time to time Outstanding f rom the date thereof until paid at the rate of interest set forth therein. The principal amount of each Fixed Rate Note shall be payable as set forth in Schedule 1 at tached ther eto. Installments of interest on and prin-cipal of (and premium, if any, on) each Fixed Rate Note shall be due and payable on the payment dates specified in Schedule 1 attached thereto. The Fixed Rate Note due July 15, 1991 shall be substantially in the form of Exhibit A-1 to this Supplemental Indenture No. 1. The Fixed Rate Note due July 15, 1996 shall be substantially in the form of Exhibit A-2 to this Supplemental.

Indenture No.'. The Fixed Rate Note due January 15, 2013 shall be substantially in the form of Exhibit A-3 to this Supplemental Indenture No. 1.

(b) Certain Adjustments to Amortization Schedules.

The schedule of principal amortization attached to each Fixed Rate Note may be adjusted at the discretion of the Owner Trustee at one time prior to July 15, 1988; provided, however, that no such adjust-ment shall be made by the Owner Trustee which will increase'r reduce the av'erage life of such Fixed Rate Note (calculated in accordance with genera'lly accepted financial practice from the date of initial issuance) by more than .six months; provided, however, such adjustment'ay be made only in connection with an adjustment to Basic Rent pursuant to Section 3(d) of the Facility Lease. If the Owner Trustee shall elect to make the foregoing adjustment, the Owner Trustee shall deliver to the Trustee and to the Lessee at least 60 days prior to the first payment date (specified on the schedule to such Fixed Rate Note) proposed to be affected by such adjustment, a certificate of the Owner Trustee (x) stat-ing that the Owner Trustee has elected to make such adjustment, (y) setting forth the revised schedule of principal amortization for such Fixed Rate Note and (z) attaching calculations showing that the average life of such Fixed Rate Note will not be reduced or increased except as permitted by this paragraph (b). The Trustee may rely on such Owner Trustee certificate and shall 6091. BURNHAM. 2898. 10: 1

have no duty with respect to the calculations referred to in the foregoing clause (z).

SECTION 3. Amendments.

(a) Amendment to Section 3.5(1).

The proviso to paragraph (1) of Section 3.5 of the Indenture is hereby amended to insert "(if applicable)" immediately following the reference to the "Participation Ag'reement" appearing in such proviso.

(b) Amendment to Section 3.5(2).

The firs.t sentence of paragraph (2) of Section 3.5 of the Indenture is hereby amended to insert the phrase "not less than 2 Business Days nor more than 30 Business Days" in lieu of the phrase "not.less than 10 nor more than 30 days."

(c) Amendment to Section 10.2.

'Section 10.2 is hereby amended to insert at the end thereof the following sentence:

"Notwithstanding the foregoing, the Indenture Trustee shall,'upon receipt of a written instruction from the 'Lessee and the Owner Trustee, consent to an amendment of the definitions of "Deemed Loss Event",

"Event of Loss" and "Final Shutdown" contained in or appended to the Facility Lease."

SECTION 4. Miscellaneous.

(a) Dating of Supplemental Indenture.

Although this Supplemental Indenture No. 1 is dated for convenience and for the purpose of reference as of the date mentioned, 'the actual date or dates of execution by the Owner Trustee and the Indenture Trustee are as indicated by their respective acknowledgements hereto annexed.

6091. BURNHAM. 2898. 10: 1

0' (b) Counterpart Execution.

This Supplemental Indenture No. 1 may be exe-cuted in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.

(c) Execution as Supplemental Indenture.

This Supplemental Indenture No. 1 is executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Indenture, this Supplemental Indenture No. 1 forms a part thereof.

(d) Disclosure.

Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is Burnham Leasing Corporation, a Delaware corporation.

The address of the beneficiary is 60 Broad Street, New York, New York 10004, Attention: Chief Financial Officer. A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.

IN WITNESS WHEREOF, the Owner Trustee and the Indenture Trustee have each caused this Supplemental Indenture No. 1 to be duly executed by their respective

~ officers thereunto duly authorized, all as of the date first set forth above.

THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee under the Trust Agr cement dated as of December 16, 1985, with Burnham Leasing Corporation Authorized 0 ficer CHEMICAL BANK,

'e By ice resi nt 6091. BURNHAN. 2898. 10: 1

STATE OF NEW YORK )

) ss.:

COUNTY OF NEW YORK )

0 On the 16th day of July, before me personally came .I.f , =to me known, who, being by me duly sworn, did acknowledge, depose and say that he resides at Boston, Massachusetts; that he is an Authorized Officer of THE FIRST NATIONAL BANK OF BOSTON, a national banking association, described in and which

'executed the foregoing instrument; that he knows the seal of said association; that the seal affixed to said instrument is such seal; that it- was -so affixed by authority of the by-laws of said association; and that he signed his name thereto on behalf of said association by like order.

No ic

[NOTARIAL SEAL] Term Expires:

PETER LIN BRIGHTBII.L York NOTARY PUBLIC, State of New NO. 31M52758 County Qualified in New York Commission Expires Janua y 21, I i~

,~

6091. BURNHAM. 2898. 10:1

e STATE OF NEW YORK )

) SS ~

COUNTY OF NEW YORK )

On the 16th day of July, before me personally came T. J. FOLEY, to me known, who, being by me duly sworn, did acknowledge, depose and say that he resides at Bethpage, New York; that he is a Vice President of CHEMICAL BANK, a New York banking corporation, described .

in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such seal; that it was so affixed by authority of the board of directors of said corporation; and that he signed his name thereto on behalf of said corporation by like order.

S N lic

&cfires

[NOTAREAL SEAL) Term Expires:

PETER LIN URIGHTBII.L NGTARY PUBLIC, State oI New Yor k I'<0. 3!.4852758

~iraiif,ed in New York CoontIi t:ontni" sion Sancta y Zl, 9I!8 6091.BURNHAN.2898.10:1

~ ~ ~

EXHIBIT A-1 TO AMENDMENT NO. 1 FORM OF FIXED RATE NOTE (DUE JULY 15, 1991)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES (DUE JULY 15, 1991)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trus te e ) under a Trust'greement dated as of December 16, 1985 with Burnham Leasing Corporation (the O~ner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the princi-pal sum of Seven Million Seventeen Thousand Dollars

($ 7,017,000) on July 15, 1991, together with interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 8.3% per annum. Payments of principal installments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto. Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as hereinafter defined).

6091. ~ BURNHAM.~ 2898.~ 10: 1

o Interest on any overdue principal and premium, if any, and (to the extent permitted by appli-cable law) any overdue interest shall be paid, on demand, from the due date thereof at the rate per annum equal to 9.3% (computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.

All payments of .principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Tru'st Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof ( the Indenture), b'etween the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the'ease Indenture

'e Estate and the Trust Estate and the Indenture Trustee

.shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the'ease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the'xtent available for distribution to the Holder hereof as above provided, and that nei'ther the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor.the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the-Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Section 3.9(b) of the Indenture, then all the payments 6091. BURNHAM. 2898. 10: 1

)

o 0

0, 0'i

to be made under this Note shall be made only from payments made by the Lessee under this Note in accor-dance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

shall Principal, premium, in the if any, and interest be payable, 'manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture.

In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this

'Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in the manner set forth'n Section 3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or. otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture 6091.BURNHAM.2898.10:1

o

~,

~

~,

0'

qr a statement of the rights of the Holders of, and the nature and. extent of the security for, this Fixed Rate Note and of .the 'rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note is not subject to pre-payment in whole or in part.

In case an .Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in

.the manner and with the ef f ect'rovided in the Indenture. Upon such declaration there shall= also be due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to'ay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

. There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-vided in the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of transfer duly accompanied by a written instrument of 6091. BURNHAN. 2898. 10: 1

P transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

6091.BURNHAM.2898.10:1

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly executed as of the date hereof.

THE FIRST NATIONAL BANK OF BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with Burnham Leasing Corporation By Authorized Officer This Note is one of the series of Notes referred to therein and in the within-mentioned Indenture.

CHEMICAL BANK, as Indenture Trustee By Authorized Officer 6091. BURNHAM. 2898. 10: 1

s l

S S,

SCHEDULE 1 TO THE FIXED RATE NOTE (DUE JULY 15, 1991)

Schedule of Principal Amortization

$ 7,017,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1987 $ 0 July 15, 1987 232,000 January 15, 1988 732,000 July 15, 1988 763,000 January 15, 1989 794,000 July 15, 1989 827,000 January 15, 1990 862,000 July 15, 1990 898,000 January 15, 1991 935,000 July 15, 1991 974,000 Principal Amount $ 7,017,000 Page 1 of 1 6091.BURNHAM.2898.08:1

e

ASSIGNMENT Date: July .17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING CORPORATION By President

o, i

4' e'

EXHIBIT A-2 TO AMENDMENT NO.,1 FORM OF FIXED RATE NOTE

( DUE JULY 15, 1996)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES (DUE JULY 15, 1996)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16, 1985 with Burnham Leasing Corporation (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the princ'i-pal sum of Twelve Million Four Hundred and Ninety-Six Thousand Dollars ($ 12,496,000) on July 15; 1996, together with interest (computed on the basis of a-360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 9.125% per annum. Payments of principal installments of this FiXed Rate Note shall be made. in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto. Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as here-inafter defined).

e 4

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 per annum equal to 10.125% (computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.

All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-thereof (the Indenture), between the Owner 'isions Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look .solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to 6091. BURNHAM. 2898. 10: 1

Section 3.9(b) of the Indenture, then all the payments to be made under this Note shall be made only from pay-ments made by the Lessee under this Note in accordance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

shall Principal, premium, in the if any, and interest be payable, manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture.

In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection 'with an adjustment to Basic Rent under Section 3(d) of the Facility. Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will .not in any event transfer or otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee'ncluded in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the 6091.BURNHAM.2898.10:1

e Indenture. Reference is hereby made to the Indenture for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note may be prepaid in whole or in part at any time by the Owner Trustee as follows:

upon the giving of not less than 30 days'otice as pro-vided in the Indenture and at the following prepayment prices (expressed as a percentage of'he unpaid princi-pal amount hereof), together with interest accrued to the date fixed for prepayment: 109.125% of its princi-pal amount, such percentage to decline by 1.304'n July 15, 1987 and on each second anniversary thereof and by 1.303 on July 15, 1988 and on each second anniversary thereof until such date as such percentage shall be 100%, and 100% thereafter; provided, however, that no shall be made prior to July 15, 1991,

'e such prepayment directly or indirectly, as a part of, or in anticipation of, any refunding operation involving the incurrence of indebtedness by the Owner Trustee, the Lessee or any Affiliate of either thereof if such indebtedness has an effective interest cost to the Owner Trustee, the Lessee or such Aff iliate, as the case may be (computed in accordance with generally accepted accounting practice) of less than 9.125% per annum. This Fixed Rate Note is not otherwise subject to prepayment in whole or in part.

In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. Upon such declaration there shall also be 6091. BURNHAM. 2898. 10: 1

e due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust

=

Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-vided in the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not:this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

6091.BURNHAH.2898.10:1

~ ~

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly executed as of the date hereof.

THE FIRST NATIONAL BANK OF BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with Burnham Leasing Corporation By Authorized Officer This Note is one of the series of Notes referred to t'herein and in the within-mentioned Indenture.

CHEMI CAL BANKi as Indenture Trustee By Authorized Officer 6091.BURNHAN.2898.10:1

o 8

SCHEDULE 1 TO THE FIXED RATE NOTE (DUE JULY 15, 1996)

Schedule of Principal Amortization

$ 12,496,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1992 $ 1,014,000 July 15, 1992 1,060,000 January 15, 1993 1,109,000 July 15,. 1993 1,159,000 January 15, 1994 1,212,000 July 15, 1994 1,267,000 January 15, 1995 1,325,000 July 15,.1995 1 I 386 I 000 January 15,.1996 1,449,000 July 15, 1996 1,515,000 Principal Amount $ 12,496,000 Page 1 of 1 6091.BURNHAM.2898.08:1

ASSIGNMENT Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated

. as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

F IRST PV FUNDING CORPORATION By President

EXHIBIT A-3 TO AMENDMENT NO. 1 FORM OF FIXED RATE NOTE (DUE JANUARY 15, 2013)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT, BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES (DUE JANUARY 15, 2013)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16, 1985 with Burnham Leasing Corporation (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the princi-pal sum of Fi f ty- Eight Million Thirty.-One Thousand Dollars ($ 58,031,000) on January 15, 2013, together with interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 10.3% per annum. Payments of principal installments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto.

Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as here-inafter defined).

~ I

~ i

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 per annum equal to 11.3% (computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.

All payments of principal, interest to premium, if any, and be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof (the Indenture), between the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder'will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for, distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, 'the Owner Trustee nor the Indenture Trustee is or'hall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to

'Section 3.9(b) of the Indenture, then all the payments 6091. BURNHAM. 2898. 10: 1

0 to be made under this Note shall be made only from payments made by the Lessee under this Note in accor-dance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment."

Principal, premium, if any, and interest shall be payable, in the manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided:in the Indenture.

In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in.

Section 3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal.

or interest made hereon and that it will not in any event transfer or otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest'ates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture 6091. BURNHAN. 2898. 10: 1

I o

~,

for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and extent of

~ the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note is subject to prepayment in whole as contemplated by Section 5.2 of the Indenture and in the circumstances therein described. In addi-tion, this Fixed Rate Note may be prepaid in whole or in part at any time by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as provided in the Indenture a'nd at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment: 110.3% of its principal amount, such percentage to decline by .412 on July 15, 1987 and each anniversary thereof, until such date as s'uch percentage shall be 100%, and 100% thereafter;

'e provided, however, that no such prepayment 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 Owner Trustee, the Lessee or any Affiliate of either thereof if such indebtedness has an effective interest cost to the Owner Trustee, the Lessee or such Affiliate, as the case may be (computed in accordance with generally accepted accounting practice) of less than 10.3% per annum. This Fixed Rate Note is not otherwise subject to prepayment in whole or in part.

In case an Inde'nture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the- manner and with the effect provided in the Indenture. Upon such declaration there shall also be

-4 6091. BURNHAN. 2898. 10: 1

~

~

due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-vided in the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

6091.BURNHAN.2898.10:1

IN WITNESS WHEREOF, the Owner Trustee has

~

caused this Fixed Rate Note to be duly executed as of the date hereof.

THE FIRST NATIONAL BANK OP BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with Burnham Leasing Corporation By Authorized Officer This Note is one of the series of Note's referred to therein and in the within-mentione'd Indenture.

CHEMICAL BANK, as Indenture Trustee By Authorized Officer 6091. BURNHAM. 2898. 10: 1

SCHEDULE 1 TO THE FIXED RATE NOTE

( DUE JANUARY 15, 2013 )

Schedule of Principal Amortization

$ 58,031,000 Principal Amount Payment Principal Principal Date Amount Payable Amount January 15, 1997 $ 1,584,000 July 15, 1997 1,666,000 Paid'e January 15, 1998 1,751,000 July 15, 1998 1,078;000 January 15, 1999 1,337,000 July 15, 1999 739,000 January 15, 2000 1,411,000 July 15, 2000 779,000 January 15, 2001 1,490,000 July 15, 2001 822,000 January 15, 2002 1,573,000 July 15, 2002 867,000 January 15, 2003 1,661,000 July 15, 2003 915,000 January 15, 2004 1,754,000 July 15, 2004 965,000 January 15, 2005 1,851,000 July 15, 2005 1,587,000 January 15, 2006 1,626,000 July 15, 2006 1,417,000 January 15, 2007 -1,715,000 July 15, 2007 1,495,000 January 15, 2008 1,810,000 July 15, 2008 .1;577,000 January 15, 2009 1,910,000 July 15, 2009 1,664,000 January 15, 2010 2,016,000 July 15, 2010 1,782,000 Page' of 2 6091. BURNHAM. 2898. 08: 1

SCHEDULE 1 TQ THE FIXED RATE NOTE (DUE JANUARY 15, 2013)

Schedule of Principal Amortization (Continued)

Payment Principal Principal Date Amount Payable Amount Paid January 15, 2011 $ 3,687,000 July 15, 2011 3,877,000 January 15, 2012 4,077,000 July 15, 2012 4,287,000 January 15, 2013 1,261,000 Principal Amount $ 58,031,000 Page 2 of 2 6091. BURNHAM. 2898. 08: 1

ASSIGNMENT Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING CORPORATION By President Page 1 of,2 6091. BURNHAM. 2898. 10: 1

8 0

~

When Recorded, Return to: Greg R., Nielson SNELL 6 WILMER 3100 Valley Bank Center Phoenix, Arizona 85073 SUPPLEMENTAL INDENTURE NO. 1 dated as of July 15, 1986 To I

TRUST INDENTURE i MORTGAGE i S E CUR TY AGREEMENT AND ASSIGNMENT OF RENTS Dated as of December 16, 1985 between THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp.

and CHEMICAL BANK, as Indenture Trustee Original Indenture recorded December 31, 1985, as Instrument No. 85-623277, re-recorded April 17, 1986, as Instrument No. 86-187562, and confirmed by docu-ment recorded April 25, 1986, as Instrument No.

86-203240, all in Maricopa County, Arizona Recorder's Office.

6091.MFS.2898.10:1

SUPPLEMENTAL INDENTURE No. 1 dated as of July 15, 1986 to Trust Indenture, Mortgage, Security Agreement and Assignment Of Rents dated as of December 16, 1985, between THE FIRST NATIONAL BANK OF BOSTON, a national banking association (FNB), not in its individual capacity, but solely as trustee (the Owner Trustee) under a Trust Agreement dated as of December 16, 1985 between FNB, whose address is 100 Federal Street, Boston, Massachusetts 02110, with MFS Leasing Corp., and CHEMICAL BANK, a New York banking corporation (the Indenture Trustee), whose address is 55 Water Street, New York,, New York 10041.

W I T NESS ETH:

WHEREAS, the Owner Trustee and the Indenture Trustee have entered into a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985 (the Indenture) pursuant to which the Owner Trustee has issued the Initial Series Note; WHEREAS, Section 3.5(1) of the Indenture pro-vides, among other things, that the Initial Series Note may be refunded with Addit:ional Notes; WHEREAS, Section 3.5(4) of the Indenture pro-vides, among other things, that the Owner Trustee and the Indenture Trustee may enter into indentures supple-mental to the Zndentur'e for, among other things, the purpose of establishing the terms, conditions and desig-nations of Additional Notes; WHEREAS, the Owner Trustee desires to issue Additional Notes to effect a refunding of the Initial Series Note and to enter into this Supplemental Indenture No.'1 to establish the terms, conditions and designations of such Additional Notes; WHEREAS, Section 10.1 of the Indenture pro-vides that, without the consent of Holders of the Notes Outstanding, the Indenture Trustee may, with the written consent of the Owner Trustee, from time to time and at any time execute a supplement to the Indenture for the purposes set forth in said Section 10.1; and 6091.MFS.2898.10:1

J l

0

~

WEEREAS, the Owner Trustee desires to make the amendments to the Indenture set forth in Section 3 of this Supplemental Indenture No. 1; NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt and sufficiency of which are hereby acknowl-edged, the parties hereto agree as follows:

SECTION 1. Definitions.

For purposes hereof, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in Appendix A to the Indenture; provided, however, that, for all purposes of the Indenture, to the extent different from Appendix A thereto, the definitions of Deemed Loss Event, Event of Loss and Final Shutdown shall have the respective mean-ings set forth in or appended to the .Facility Lease as amended from time to time in accordance with its terms and the terms of the Indenture.

SECTION 2. Terms, Conditions and Designations of the

-Additional Notes. 'I (a) The Fixed Rate Notes..

I There is hereby created and established a sep-arate series of Notes of the Owner .Trustee designated "Nonrecourse Promissory Notes, Fixed, Rate Series" herein referred to as the Fixed Rate Notes. The, Fixed Rate Notes shall be payable as to principal and bear interest on the principal amount thereof as follows:

Fixed Rate Note Interest Principal Due Rate Amount July 15, 1991 8.300% $ 4,693,000 July 15, 1996 9. $ 7,185,000

$ 34,605,000 125%'0.300%

January 15, 2014

$ 46,483,000 6091.MFS.2898.10:1

Each Fixed Rate Note shall bear interest on the principal amount thereof from time to time Outstanding from the date thereof until paid at the rate of interest set forth therein. The principal amount of each Fixed Rate Note shall be payable as set forth in Schedule 1 attached thereto. Installments of interest on and prin-cipal of (and premium, if any, on) each Fixed Rate Note shall be due and payable on the payment dates specified in Schedule 1 attached thereto. The Fixed Rate Note due July 15, 1991 shall 'be substantially in the form of Exhibit A-1 to this Supplemental Indenture No. 1. The Fixed Rate Note due July 15, 1996 shall be substantially in the form of Exhibit A-2 to this Supplemental Indenture No. 1. The Fixed Rate Note due January 15, 2014 shall be substantially in the form of Exhibit A-3 to this Supplemental Indenture No. 1.

(b) Certain Adjustments to Amortization Schedules.

The schedule of principal amortization attached to each Fixed Rate Note may be adjusted at the discretion of the Owner Trustee at one time prior to July 15, 1988; provided, however, that no such adjust-ment shall be made by the Owner Trustee which will increase or reduce the average life of such Fixed Rate Note (calculated,'in accordance with generally accepted financial practice from the date of initial issuance) by more than six months; provided, however, such adjustment may be made only in connection with an adjustment to Basic Rent pursuant to Section 3(d) of the Facility Lease. If the Owner Trustee shall elect to make the foregoing adjustment, the Owner Trustee shall deliver to the Trustee and to the Lessee at least 60 days prior to the first payment date (specified on the schedule to such Fixed Rate Note) proposed to be affected by such adjustment, a certificate of the Owner Trustee (x) stat-ing that the Owner Trustee has elected to make such adjustment, (y) setting forth the revised schedule of principal amortization for such Fixed Rate Note and (z) attaching calculations showing that the average life of such Fixed Rate Note will not be reduced or increased except as permitted by this paragraph (b). The Trustee may rely on such Owner Trustee certificate and shall 6091.MFS.2898.10:1

f have no duty with respect to the calculations referred to in the foregoing clause (z).

SECTION 3. Amendments.

(a) Amendment to Section 3.5(1).

The proviso to paragraph (1) of Section 3.5 of the Indenture is hereby amended to insert "(if applicable)" immediately following the reference to the "Participation Agreement" appearing in such proviso.

(b) Amendment to Section 3.5(2).

The first sentence of paragraph (2) of Section 3.5 of the Indenture is hereby amended to insert the phrase "not less than 2 Business Days nor more than 30 Business Days" in lieu of the phrase "not less than 10 nor more than 30 days."

(c) Amendment to Section 10.2.

Section 10.2 is hereby amended to insert at the end thereof the following sentence:

"Notwithstanding the foregoing, the Indenture Trustee shall, upon receipt of a written instruction from the Lessee and the Owner Trustee, consent to an amendment of the definitions of "Deemed Loss Event",

"Event of Loss" and "Final Shutdown" contained in or appended to the Facility Lease."

SECTION 4. Miscellaneous.

(a) Dating of Supplemental Indenture.

Although this Supplemental Indenture No. 1 is dated for convenience and for the purpose of reference as of the date mentioned, the actual date, or dates of execution by the Owner Trustee and the Indenture Trustee are as indicated by their respective acknowledgements hereto annexed.

6091. MFS. 2898. 10: 1

(b) Counterpart Execution.

This Supplemental Indenture No. 1 may be exe-cuted in any number of counterparts and by the different parties hereto on separate. counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall, together constitute but one and the same instrument.

(c) Execution as Supplemental Indenture.

This Supplemental Indenture No. 1 is executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Indenture, this Supplemental Indenture No. 1 forms a part thereof.

(d) Disclosure.

Pursuant to Arizona Revised Statutes Section 33-401, the beneficiary of the Trust Agreement is MFS Leasing Corp., a Delaware corporation. The address of the beneficiary is One Mellon Bank Center, Suite 3030, Pittsburgh, Pennsylvania 15258, Attention: President.

A copy of the Trust Agreement is available for inspec-tion at the offices of the Owner Trustee at 100 Federal 0 Street, Boston, Massachusetts 02110, Attention of Corporate Trust Division.

6091.MFS.2898.10:1

~ ~ ~

IN WITNESS WHEREOF, the Owner Trustee and the Indenture Trustee have each caused this Supplemental Indenture No. 1 to be duly executed by their respective officers thereunto duly authorized, all as of the date first set forth above.

THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trus.tee under the Trust Agreement dated'as of December 16, 1985, with MFS Leasing Corp.

By Authorized ficer CHEMICAL BANK, By ice Pres ent 6091.MFS.2898.10:1

j t

I l

l l

l I

l

STATE OF NEW YORK )

) ss.:

COUNTY OF NEW YORK )

On the lgth day of July, before me personally came Ki 0- M)end'5 to me known, who, being by me duly sworn, did acknowledge, depose and say that he resides at Boston, Massachusetts; that he is an Authorized Officer of THE FIRST NATIONAL BANK OF BOSTON, a national banking association, described in and which executed the foregoing instrument; that he knows the seal of said association; that the seal affixed to said instrument is such seal; that it was so affixed by authority of the by-laws of said association; and that he signed his name thereto on behalf of said association by like order.

Notary P blic MARK R. HUNT Notary Public, State ot New York

[NOTARIAL SEAL] Term Expires: No. 24-~3470t2 O;:a'i't .". In Kings Coun!y Cortlfica!e fitod In Now York County Commission Exp!res March 30, 19.

6091.MFS.2898.10:1

'7-

o STATE OF NEW YORK )

) ss ~ ~

COUNTY OF NEW YORK )

On the 16th day of July, before me personally came T.J. FOLEY, to me known, who, being by me duly sworn, did acknowledge, depose and say that he resides at Bethpage, New York; that he is a Vice President of CHEMICAL BANK, a New York banking corporation, described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such seal; that it was so affixed by authority of the board of directors of said corporation; and that he signed his name thereto on behalf of said corporation by like order.

Notar 'u lic (NOTARIAL SEAL] Term Expires:

PETER LIN BRIGHTBILL NOTARY PUBLIC, State of New York NO. 31-4852758, Qualified in New York County Commission Expires Janua g 21. f988 6091.MFS.2898.10:1

EXHIBIT A-1 TO AMENDMENT NO. 1 FORM OF FIXED RATE NOTE (DUE JULY 15, 1991)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFEREUH),

SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES (DUE JULY 15, 1991)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16,- 1985 with MFS Leasing Corp. (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the principal sum of Four Million Six Hundred and Ninety-Three Thousand Dollars ($ 4,693,000) on July 15, 1991, together with interest (computed on the basis of a 360-day year of twelve 30-day months).on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 8.3% per annum. Payments of principal installments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto.

Payments of accrued interest on this Fi*xed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as hereinafter defined).

6091.MFS.2898.10:1

Interest on any overdue principal and premi-

~

um, 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 per annum equal to 9.3%

(computed on the basis of a 360-day year of twelve 30--

day months) for the period during which any such princi-pal, premium or interest shall be overdue.

1n the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.

All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof ( the Indenture), between the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and'.the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Ar ticle V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust, Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any'mounts payable under this Fixed Rate No'te or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Section 3.9(b) of the Indenture, then all the payments 6091.MFS.2898.10:1

to be made under this Note shall be made only from payments.- made by the Lessee under this Note in accor-dance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

shall Principal, premium, in the if any, and interest be payable, manner provided in, the Indenture, on presentment of this Fixed, Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture.

=In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in'onnection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by hereunde'r shall be applied in the manner set forth in it Section '3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any, event tr'ansfer or otherwise dispose of this Fixed Rate Note unl'ess .and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may .have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture 6091.MFS.2898.10:1

o for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and extent of, the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note is not subject to pre-payment in whole or in part.

In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. Upon such declaration there shall also be due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral'rust Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally d'ischarged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee' Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-vided in the Indenture. The transfer of this Fixed Rate

'ote is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of transfer duly accompanied by a written instrument of 6091.MFS.2898.10:1

transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of .receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be. governed by, and construed in accordance with, the laws of the State of New York.

6091.MFS.2898.10:1

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly executed as of the date hereof.

THE FIRST NATIONAL BANK OP BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp.

By Authorized Officer This Note is one of the series of Notes referred to therein and in the within-mentioned CHEMICAL BANK~

as Indenture Trustee By Authorized Officer

-'6-6091. MFS. 2898. 10: 1

SCHEDULE 1 TO THE FIXED RATE NOTE (DUE JULY 15, 1991)

Schedule of Principal Amortization

$ 4,693,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1987 $ 388,000 July 15, 1987 404,000 January 15, 1988 421,000 July 15, 1988 439,000 January 15, 1989 457,000 July 15, 1989 476,000 January 15, 1990 495,000 July 15, 1990 516,000 January 15, 1991 537,000 July 15, 1991 560,000 Principal Amount $ 4,693,000 Page 1 of 1 6091.MFS.2898.08:1

tl t

o 4

1

'I I

ASSIGNMENT Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING. CORPORATION By President

0

~ 0

EXHIBIT A-2 TO AMENDMENT NO. 1 FORM OF FIXED RATE NOTE (DUE JULY 15, 1996)

THIS NOTE HAS NOT 'BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOZiD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTEi FIXED RATE SERIES (DUE JULY 15, 1996)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp. (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns, the principal sum of Seven Million One Hundred and Eighty-Five Thousand Dollars ($ 7,185,000) on July 15, 1996, together 'with interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 9. 125% per annum. Payments of principal in'stallments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specif ied in Schedule 1 hereto.

Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dates" specified in Schedule 1 hereto.

Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as here-inafter defined).

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 per annum equal to 10.125% (computed on the basis of a 360-day year of twelve 30-,day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day,with the same force and effect as if made on the date o'n which such payment was due.

All payments of principal, premium, ig any, and interest to be made by the Owner Trustee hereunder and under the Trus't Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of.

December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in accordance with the pro-visions thereof (the Indenture), between the Owner Trustee and Chemical Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee.nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event the Lessee shall assume all the obligations of the Owner Trustee hereunder and under th'e Indenture pursuant to 6091.MFS.2898.10:1

0, Section 3.9(b) of the Indenture, then all the payments to be made under this Note shall be made only from pay-ments made by the Lessee under this Note in accordance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such

'ayment.

shall Principal, premium, in the if any, and interest be payable, manner provided in the Indenture, on presentment of this Fixed Rate Note at the Indenture Trustee's Office, or as otherwise provided in the Indenture.

In the manner and to the extent provided in the, Indenture, Schedule 1 hereto may be adjusted ~ce at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adju'stment. to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in the manner set forth in Section 3.11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. .The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the'everal series may be for varying aggregate principal amounts and may have different maturity dates, interest rates,.

redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the 6091.NFS.2898.10:1

o Indenture. Reference is hereby made to the Indenture for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture,'o all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note may be prepaid in whole or in part at any time by the Owner Trustee as follows: ~

upon the giving of not less than 30 days'otice as pro-vided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid grinci-pal amount hereof)', together with interest accrued to the date fixed for prepayment: 109.125% of its princi-pal amount, such percentage to decline by 1.304 on July 15, 1987 and on each second anniversary thereof and by 1.303 on July 15, 1988 and on each second anniversary thereof until such date as such percentage shall be 100%, and 100% thereafter; provided, however, that no such prepayment 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 Owner Trustee, the Lessee or any Affiliate of either thereof if such indebtedness has an effective interest cost to the Owner Trustee, the Lessee or such Affiliate, as the case may be (computed in accordance with generally accepted accounting practice) of less than 9.125% per annum. This Fixed Rate Note is not otherwise subject to prepayment in whole or in part.

In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in be declared or'ay become due and payable inthe'ndenture, the manner and with the effect provided in the Indenture. Upon such declaration there shall also be 6091.MFS.2898.10:1

due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trust Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-in the Indenture. The transfer of this Fixed Rate 'ided Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of "

transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered Holder hereof, together with the amount of any appli-cable transfer taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

6091.MFS.2898.10:1

~ I IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly executed as of the date hereof.

~

THE FIRST NATIONAL BANK OF BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp.

By Authorized Officer This Note is one of the series of Notes ref erred to therein and in the 'within-mentioned

'e Indenture.

CHEMICAL BAiVK, as Indenture Trustee By Authorized Officer 6091.MFS.2898.10:1

~ ~

0, SCHEDULE 1 TO THE FIXED RATE NOTE (Due July 15, 1996)

Schedule of Principal Amortization

$ 7,185,000 Principal Amount Payment Principal Principal Da t'e Amount Payable Amount Paid January 15, 1992 $ 583,000 July 15, 1992 610,000 January 15, 1993 637,000 July 15, 1993 666,000 January 15, 1994 697,000

'July 15, 1994 729,000 January 15, 1995 762,000 July 15, 1995 797,000 January 15, 1996 833,000 July 15, 1996 871,000 Principal Amount $ 7,185,000

'e Page 1 of 1 6091.MFS.2898.08:1

ASSIGNMENT Dat.e: July 17, 1986 For value received, the undersigned hereby

~

sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING CORPORATION By President

EXHIBIT A-3 TO AMENDMENT NO. 1 FORM OF FIXED RATE NOTE (DUE JANUARY 15, 2014)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES (DUE JANUARY 15, 2014)

Issued at: New York, New York Issue Date: July 17, 1986 THE FIRST NATIONAL BANK bF BOSTON, not in its

'e individual capacity, but solely as owner trustee (Owner Trustee) under a Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp. (the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION, or registered assigns,'.: the principal sum of Thirty-Four Million Six Hundred and Five Thousand Dollars ($ 34,605,000) on January 15, 2014, together with interest (computed on the basis o'f a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of this Fixed Rate Note until due and payable, in arrears, at the rate of 10.3% per annum. Payments of principal installments of this Fixed Rate Note shall be made in the "principal amount payable" and on the "payment dates" specified in Schedule 1 hereto.

Payments of accrued interest on this Fixed Rate Note shall be made on the "payment dat;es" specified in Schedule 1 hereto; Capitalized terms used in this Fixed Rate Note which are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture (as here-inafter defined).

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 per annum equal to 11.3% (computed on the basis of a 360-day year of twelve 30-day months) for the period during which any such principal, premium or interest shall be overdue.

In the event any date on which a payment is due under this Fixed Rate Note is not a Business Day, then payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was due.

All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985, as at any time heretofore or hereaf-ter amended or supplemented in .accordance with the pro-visions thereof (the Indenture), between the Owner Trustee and Chemical. Bank, as Trustee (the Indenture Trustee), shall be made only from the Lease Indenture

'e Estate and the Trust Estate and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have suf-ficient income or proceeds from the Lease Indenture Estate to make such payments in accordance with the terms of Article V of the Indenture. The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that such Holder will look solely to the Trust Estate and the income and proceeds from the Lease Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee ~

is or shall be personally liable to the Holder hereof for any amounts payable under this Fixed Rate Note or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event 'the Lessee shall assume all the obligations of the Owner Trustee hereunder and under the Indenture pursuant to Section 3.9(b) of the Inde'nture, then all the payments 6091.MFS.2898.10:1

to be made under this Note shall be made only from payments made by the Lessee under this Note in accor-dance with the Assumption Agreement referred to in said Section 3.9(b) and the Holder of this Note agrees that on such event it will look solely to the Lessee for such payment.

Principal, premium, if any, and interest shall be payable, in the manner provided in the Indenture, on presentment of this Fixed Rate Note at the 1ndenture Trustee's Office, or as otherwise provided in the 1ndenture.

In the manner and to the extent provided in the Indenture, Schedule 1 hereto may be adjusted once at the discretion of the Owner Trustee prior to July 15, 1988, in connection with an adjustment to Basic Rent under Section 3(d) of the Facility Lease.

The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it Section '.

hereunder shall be applied in the manner set forth in 11 of the Indenture. The Holder of this Fixed Rate Note agrees, by its acceptance hereof, that it will duly note by appropriate means all payments of principal or interest made hereon and that it will not in any event transfer or otherwise dispose of this Fixed Rate Note unless and until all such notations have been duly made.

This Fixed Rate Note is one of the Fixed Rate Notes referred to in the Indenture. The Indenture per-mits the issuance of additional series of Notes, as pro-vided in Section 3.5 of the Indenture, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Lease Indenture Estate are pledged'o the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Fixed Rate Note and all other Notes issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture 6091.MFS.2898.10:1

for a statement of the rights of the Holders of, and the nature and extent of the security for, this Fixed Rate Note and of the rights of, and the nature and extent of the security for, the Holders of the other Notes and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust cre-ated by the Indenture, to all of which terms and condi-tions the Holder hereof agrees by its acceptance of this Fixed Rate Note.

This Fixed Rate Note is subject to prepayment in whole as contemplated by Section 5.2 of the Indenture and in the circumstances therein described. In addi-tion, this Fixed Rate Note may be prepaid in whole or in part at any time by the Owner Trustee as follows: upon the giving of not less than 30 days'otice as provided in the Indenture and at the following prepayment prices (expressed as a percentage of the unpaid principal amount hereof), together with interest accrued to the date fixed for prepayment: 110.3% of its principal amount, such percentage to decline by .412 on July 15, 1987 and each anniversary thereof, until such date as such percentage shall be 100%, and 100% thereafter; provided, however, that no such prepayment shall'e 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 Owner Trustee, the Lessee or any Affili'ate of either thereof if such indebtedness has an effective interest cost to the Owner Trustee, the Lessee or such Affiliate, as the case may be (computed in accordance with generally accepted accounting practice) of less than 10.3% per annum. This Fixed Rate Note is not otherwise subject to prepayment in whole or in part.

In case an Indenture Event of Default shall occur and be continuing, the unpaid balance of the prin-cipal of this Fixed Rate Note and any other Notes, together with all accrued but unpaid interest thereon, may, subject to certain rights of the Owner Trustee or the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. Upon such declaration there shall also be 6091.MFS.2898.10:1

~ '

due and payable as a special premium on this Fixed Rate Note an amount equal to a ratable portion of the fees and expenses then payable to the Collateral Trus't Trustee, as certified to the Indenture Trustee by the Collateral Trust Trustee.

The lien upon the Lease Indenture Estate is subject to being legally discharged prior to the matu-rity of this Fixed Rate Note upon the deposit with the Indenture Trustee of cash or certain securities suffi-cient to pay this Fixed Rate Note when due or an assump-tion of the obligation of the Owner Trustee under this Fixed Rate Note and the Indenture, in each case in accordance with the terms of the Indenture.

There shall be maintained at the Indenture Trustee's Office a register for the purpose of register-ing transfers and exchanges of Notes in the manner pro-vided in .the Indenture. The transfer of this Fixed Rate Note is registrable, as provided in the Indenture, upon surrender of this Fixed Rate Note for registration of transfer duly accompanied by a written instrument of transfer duly executed by or on behalf of the registered

'e Holder hereof, together with the amount of any,appli-cable transf er taxes. Prior to due presentment for reg-istration of transfer of this Fixed Rate Note, the Owner Trustee and the Indenture Trustee may treat the person in whose name this Fixed Rate Note is registered as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Fixed Rate Note and for all other purposes whatsoever, whether or not this Fixed Rate Note be overdue, and nei-ther the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary.

This Fixed Rate Note shall be governed by, and construed in accordance with, the laws of the State of New York.

6091.NFS.2898.10:1

II t

1 1

f

IN WITNESS WHEREOF, the Owner Trustee has caused this Fixed Rate Note to be duly execu'ted'as of the date hereof.

THE FIRST NATIONAL BANK OF BOSTON, not in its individ-ual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 16, 1985 with MFS Leasing Corp.

By Authorized Officer This Note is one of the series of Notes referred to therein and in the within-mentioned

'e Indenture.

CHEMICAL BANK, as Indenture Trustee By Authorized Officer 6091.MFS.2898.10:1

~,

SCHEDULE 1 TO THE FIXED RATE NOTE

~

e (DUE JANUARY 15, 2014)

Schedule of Principal Amor tization for the Long Amount

$ 34,605,000 Principal Amount Payment Principal Principal Date Amount Payable Amount Paid January 15, 1997 $ 911,000 July 15, 1997 958,000 January 15, 1998 1,007,000 July 15, 1998 819,000 January 15, 1999 596,000 July 15, 1999 612,000 January 15, 2000 629,000 July 15, 2000 646,000 January 15, 2001 664,000 July 15, 2001 682,000 January 15, 2002 701,000

'e July 15, 2002 January 15, 2003 July 15, 2003 January 15, 2004 720,000 740,000 760,000 781,000 July 15, 2004 802,000 January 15, 2005 824,000 July 15, 2005 847,000 January 15, 2006 '870,000 July 15, 2006 894,000 January 15, 2007 919,000 July 15, 2007 944,000 January 15, 2008 970,000 July 15, 2008 997,000 January 15, 2009 1,024,000 July 15, 2009 1,052,000 January 15, 2010 1,081',000 July 15, 2010 1,111,000 e 6091.MFS.2898.08:1 Page 1 of 2

o I It 0,

SCHEDULE 1 TO THE FIXED RATE NOTE Schedule of Principal Amortization (Continued)

Payment Principal Principal Date Amount Payable Amount Paid January 15, 2011 $ 1,141,000

~

July 15, 2011 1,173,000 January 15, 2012 1,205,000 July 15, 2012 1,540,000 January 15, 2013 2,385,000 July 15, 2013 2,507,000 January 15, 2014 1,093,000 E

Principal Amount $ 34,605,000 Page R of 2 6091.MFS.2898.08:1

ASSIGNMENT Date: July 17, 1986 For value received, the undersigned hereby sells, assigns and transfers to CHEMICAL BANK, as Trustee pursuant to the Collateral Trust Indenture dated as of December 16, 1985, as amended and supplemented, among the undersigned, Public Service Company of New Mexico and said Trustee, without recourse, the Fixed Rate Note to which this Assignment is annexed and all rights thereunder.

FIRST PV FUNDING CORPORATION By President 6091.MFS.2898.10:1

F IRST 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 6091.60.2898.04Alt:1

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 deliv-a Term Note Supplemental Indenture, dated as of December 31, 'red 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 aggre-gate principal amount of $ 250,250,000; WHEREAS, Section 1.03 of the Series 1985 Term Note Supplemental Indenture provides, among'ther 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 hereinaf-ter 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; 6091.60.2898.04Alt:1

WHEREAS, the Bonds to be issued hereunder are to be substantially in the form annexed as Schedule 1 hereto;

~

~ that, WHEREAS, Section 11.02 of the Original Indenture provides 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 obliga-tions 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; 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 supple-mental 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:

6091.60.2898.04Alt:1

~ ~ ~

NOW I THEREFORE g I TH S I SER ES 1 9 86A 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 pro-portionate benefit of the respective holders from time to time of the Securities, as follows:

'ARTICLE ONE THE BONDS SECTION 1.01. 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 princi-pal 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 Principal

'f Rate Amount July 15, 1991 8.300% -$ 25,332,000 July 15, 1996 9.1254 $ 40 I 532 J 000 January 15, 2014 10.300% $ 187,813,000

$ 253 g 677 I 000 6091. 60. 2898. 04Alt: 1

0

~

The Bonds shall be payable, bear interest and have and be subject to such other terms as provided in the form of Bond attached SECTION 1.02. 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'otes related to such Lease (the Prepaid Lessor Notes), prepaid'n 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 P'repaid 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 prin-cipal amount thereof, together with accrued interest to the Redemption Date.

SECTION 1'.03. 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 1.04. 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:

6091. 60. 2898. 04Alt: 1

Stated Maturity Sinking Fund Date Jul 15, 1991 Jul 15, 1996 Januar 15, 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 ',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 July 15, 1998 4,078,000 January 15, 1999 4,193,000 July 15, 1999 2,584,000 January 15, 2000 4,417,000 July 15, 2000 2,726,000 January,15, 2001 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 0 6091.60.2898.04Alt:1

0

~

Stated Maturity Sinking Pund Date Jul 15, 1991 Jul 15, 1996 Januar 15, 2014 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 I 450 ~ 000 January 15, 2010 9,127,0'00 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 6091.60.2898.04Alt:1

o similar adjustments for all Stated Maturities of principal) prior to July 15, 1988; provided, however, that no such adjustment 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 accor-dance 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. Ef 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 pro-posed 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 prin-cipal 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'f princi-pal 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 appli-cable Sinking Funds or at maturity. The'Trustee may rely on such Company Request and shall have no.duty with respect to the calcula-tions 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 appli-cable 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.

6091.60.2898.04Alt:1

0 ART I C LE TWO 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 identif ied on Schedule 2 hereto (herein referred to as the Pledged Lessor Notes).

TO HAVE AND TO HOLD the aforesai:d 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'onditions set forth in the Indenture.

ARTICLE THREE AMENDMENTS TO ORIGINAL INDENTURE (a) Amendment to Section 8.02. S e c t i on 8 . 0 2 o f t h e Original Indenture is hereby amended to delete (i) in its entirety 0 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 ) o f Section 11.02 of the Original Indenture is hereby amended to change the ref-erence to "Section 8.09" therein to "Section 8.08".

6091.60.2898.04Alt:1

i I

ART CLE FOUR MISCELLANEOUS SECTION 4.01. Execution as Supplemental Indenture.

This Series 1986A Bond Supplemental Indenture is executed and shall be'onstrued 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 4.02. Responsibility for Recitals, Etc.

The recitals contained herein and in the Bonds, except the Trustee's certificate of authentication, shall be taken as the state-ments of the Company and PNM, and the Trustee assumes no responsibil-ity for the corr'ectness of the same. The Trustee makes no represen-tation as to the validity or sufficiency of this Series 1986A Bond Supplemental Indenture or the Bonds.

SECTION 4.03. 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 expresseh or not.

SECTION 4.04. 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 4.05. Counterparts.

This Series 1986A Bond Supplemental Indenture may be exe-cuted in any number of counterparts, each of which shall be an origi-nal; but such- counterparts shall together constitute but one and the same instrument.

6091.60.2898.04Alt:1

0 IN WITNESS WHEREOF, the Company, PNM and the Trustee have caused this Series 1986A Bond Supplemental Indenture to be duly exe-cuted by their respective officers thereunto duly authorized, as of the date and year first .above written.

FIRST PV FUNDING CORPORATION

)CORPORATE SEAL]

By ident Attest:

Secretary PUBLIC SERVICE COMPANY OP NEW MEXICO (CORPORATE SEAL]

By Vice President an Corporate Contr er Attest:

Assis t Secretary 6091. 60. 2898. 04Alt: 1

CHENICAL BANKi as Trustee i

~

[CORPORATE SEAL]

By ice Pres ent Attest:

Tru Officer 0

6091. 60. 2898. 04A1t: 1

o S

STATE OF NEW YORK st  :

COUNTY OF NEW YORK )

On this 17th day of July, 1986, before me personally came JOSEPH A. BARBERA, to me known, who, being by me duly sworn, did depose and say that he resides at Wilmington, Delaware; that he is the President of FIRST PV FUNDING CORPORATION, one of the corpora-tions described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by author-ity of the Board of Directors of said corporation, and that he signed his name thereto by like authority.

[NOTARIAL.SEAL] f,~ / d.r ~

ANNA MARIE ffnPOU Notary Public. State of ifevs York tlo.

ed in Kings County 24-47592'ua'lif!

Certilicate Filed in Ncw YoA County Commission Expires August 31.19....v pg 6091.60.2898.04Alt:1

o STATE OF NEW YORK )

SS ~ :

COUNTY OF NEW YORK )

On this 17th day of July, 1986, before me personally came B.D. LACKEY, to me known, who, being by me duly sworn, did depose and say that he resides at Albuquerque, New Mexico; that he is a Vice President and Corporate Controller of PUBLIC SERVICE COMPANY OF NEW MEXICO, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said cor-poration, and that he signed his name thereto by like authority.

[NOTARIAL SEAL) /off CAA

'NNA MARIE NAFOLf Ifotary public, State of hew Yorft Vo 24 475928S Qua'flied ln Kings County Certificate Filed in iievi cwork Ccunty I Commission Expire. August 3I, 19.. a p 6091.60.2898.04Alt:3.

S STATE OP NEW YORK )

st .

COUNTY OP NEW YORK )

On this 17th day of July, 1986, before me personally came T. J. FOLEY, to me known, who, being by me duly sworn, did depose and say that he resides at Bethpage, New York; that he is Vice President of CHEMICAL BANK, one of the corporations described in and which exe-cuted the foregoing instrument; that he knows the seal of said corpo-ration; that the seal affixed to said instrument is such corporate s'eal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by, like authority.

(NOTARIAL SEAL]

AI>IIA QAIIIE NAPOLI Notanf Puh'Ic State ot i'lee York Ito. 24-'75r 288 Certtf:c"'. -.."

Qua':.'!'ed in K:nge CountY

'.; ork Count]

Cornntlr .'.on cR,.;.'" u,'ust 3l, t9. ~

6091.60.2898.04Alt:1

SCHEDULE 1 to SERIES 1986A BOND

~

e SUPPLEMENTAL INDENTURE

[FORM OF FACE OF BOND]

No. R-FIRST PV FUNDING CORPORATION LEASE OBLIGATION BOND SERIES 1986A INTEREST RATE STATED P1ATURITY REGISTERED HOLDER:

PRINCIPAL AMOUNT: DOLLARS P

I FIRST PV FUNDING CORPORATION, a Delaware corporation (hereinafter called the "Co'mpany", 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 inter-est 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 pro-vided 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 busi'ness on the Regular Record Date for 6091.60.2898.04Alt:1

I o

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 pay-able 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 incons's-tent 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 p'eriod during which any such principal, premium or interest shall be overdue.

Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof which further provisions shall for all purposes have the same effect as if set forth at this place.

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 obliga-tory for any purpose.

6091.60.2898.04Alt:1

o 1

I S

4

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

~

Dated: July 17, 1986 F IRST PV FUNDING CORPORATION By President Attest:

Secretary

[ FORM OF CERTIFICATE OF AUTHENTICATION]

'e 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 I

[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 corpora-tion (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 supple-mented 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 here-inafter defined), the Company, the Lease Indenture Trustee (as here-inafter 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'f such capac-ities 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 6091.60.2898.04Alt:1

~ ~ ~

s I

t

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 prop-erty 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 1ndenture, all payments of principal, premium, if any, and interest to be made on a Pledged Lessor Note and under such Lease 1ndenture 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 Indentur'e 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,

'xcept 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,'ith 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 6091.60.2898.04Alt:1

Company with the consent of the Holders of not less than a majority in aggregate principa'1 amount of the Securities at the time Outstanding, as defined in the Indenture. The Indenture also con-tains 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 con-clusive 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 i 332 i 000 July 15, 1996 9.125< $ 40,532,000 January 15, 2014 10.3% $ 187 p 813 i 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'rior 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.

4

.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 princi-

~ pal 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 aver-age 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 manda-tory 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 par-ticular 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'otice 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:

Bonds with a Stated Maturity of principal of July 15, 1996 may be redeemed at a price of 109.125% of the el

~ ~

S

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'uch date as such percentage shall be 100%,

and thereafter 100%; and Bonds with a Stated Matur.ity 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 anticipa-tion of any refunding operation involving the incurrence of indebted-ness 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 prin-cipal of'uly 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't the corporate trust office of the Paying Agent in exchange for one or more new Bonds for the unredeemed por-tion thereof.

Bonds (or portions thereof as aforesaid) for whose redemp-tion 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 Bon'ds of such Stated Maturity, but of a dif-ferent authorized denomination or denominations, as requested by the Holder surrender ing 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

'e 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 pro-vided 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.

6091.60.2898.04Alt:1

~ ~

o

~ '

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 6091.60.2898.04Alt:1

0,

$ 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; (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 No. 1, Owner Trustee No. 2 and Owner Trustee No. 3, respectively.

(4) Indenture Trustee means Chemical Bank, a New York banking corporation, as Trustee.

e

0 (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 Fac i 1 i ty 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 desig-nated 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

'e 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 desig-nated 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 desig-nated 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.

6091.60.2898.04Alt:1

~ ~ ~

0

COMMITMENT AGREEMENT July 17, 1986 First PV Funding Corporation 1209 Orange Street Wilmington, Delaware 19801 Attention of President

$ 253,677,000 Lease Obligation Bonds Series 1986A Gentlemen:

Reference is made to (i) the Underwriting Agreement dated April 17, 1986 (the Underwriting Agreement) and the Pricing Agreement dated July 10, 1986 (the Pricing Agreement) between Public Service Company of New Mexico, a New Mexico corporation (PNM), First PV Funding Corporation, a Delaware corporation (First PV), and Kidder, Peabody & Co. Incorporated, Drexel Burnham Lambert Incorporated and the other Underwriters named in the Pricing Agreement (the Underwriters) providing for the purchase by the Underwriters, sever-ally, of $ 253,677,000 aggregate principal amount of First PV's Lease Obligation Bonds Series 1986A (the Bonds) and (ii) the Collateral Trust Indenture dated as of December 16, 1985 (the Indenture), as heretofore supplemented and as further amended and supplemented by the Series 1986A Bond Supplemental Indenture dated as of July 15, 1986 (the Series 1986A Bond Supplemental Indenture), each among PNM, First PV and Chemical Bank, as Trustee'the Trustee), pursuant to which the Bonds are to be issued.

1. As an inducement to and as part of the consideration for the execution and delivery by First PV and the Underwriters of the Underwriting Agreement and the Pricing Agreement and purchase by the Underwriters of the Bonds pursuant thereto, PNM covenants and agrees with First PV that PNM will pay to First PV a commitment fee (the Commitment Fee) equal to $ 5,000.

6091.60.2898.03Alt:1

2. PNM agrees to make the payment of the Commitment Fee by check payable to First PV as soon as practicable following the Designated Closing Date (as defined in the Underwriting Agreement) for the Pricing Agreement.

3. If PNM, at'east 50 days prior to the date on which any Bonds of a particular Stated Maturity of principal (other than Bonds of a Stated Maturity of principal of July 15, 1991) are to be redeemed pursuant to a mandatory sinking fund redemption, delivers to First PV a certificate (i) stating that PNM or an Affiliate (as defined in the Indenture) of PNM beneficially owns certain specified Bonds of such Stated Maturity of principal and (ii) requesting that such Bonds be selected for the next following mandatory sinking fund redemption applicable to Bonds of such Stated Maturity of principal, First PV shall deliver to the Trustee a Company Request (as defined in the Indenture) to such effect pursuant to Section 1.04(b) of the Series 1986A Bond Supplemental Indenture. PNM agrees that (1) neither it nor any of its Affiliates shall purchase any Bond more than 180. days in advance of the date of the mandatory sinking fund redemption applicable thereto, (2) the aggregate of Bonds so pur-chased. shall not exceed the amount of the next succeeding sinking fund payment applicable thereto and (3) any Bonds so purchased shall be the subject of a request by PNM pursuant to the preceding senten'ce.

4. If PNM, in a timely manner, provides First PV with information sufficient for First PV to direct the adjustments described in Section 1.04(c) of the Series 1986A Bond Supplemental Indenture, First PV shall deliver,to the Trustee a Company Request pursua'nt to such Section 1.04(c).

I 6091.60.2898.03Alt:1

0' Oi

5. This Commitment Agreement has been executed and deliv-ered in the State of New York and shall be governed by, and be con-strued in accordance with, the laws of, the State of New York.

PUBLIC SERVICE COMPANY OF NEW MEXICO By Vice Preside nd Corporate Con lier Accepted and agreed:

FIRST PV FUNDING CORPORATION e" esident 6091.60.2898.03Alt:1

e

~ i