ML17306B323

Forwards Draft Amend 3 to Facility Lease Between First Natl Bank of Boston,Amend 2 to Facility Lease & Amend 2 to Facility Lease .Amends Should Be Executed on or About 930317

ML17306B323
Person / Time
Site:	Palo Verde
Issue date:	03/08/1993
From:	Conway W ARIZONA PUBLIC SERVICE CO. (FORMERLY ARIZONA NUCLEAR
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
212-01134-WFC-T, 212-1134-WFC-T, NUDOCS 9303110001
Download: ML17306B323 (83)

Text

AC>CELERY DOCVMENTMST VTION SYSTEM

=>, REGULA Y INFORMATION DISTRIBUTIO YSTEM (RIDS)

ACCESSION NBR:9303110001 DOC.DATE: 93/03/08 NOTARIZED:

NO DOCKET FACIL:STN-50-529 Palo Verde Nuclear Station, Unit 2, Arizona Publi 05000529 AUTH.NAME AUTHOR AFFILIATION CONWAYPW.F.

Arizona Public Service Co. (formerly Arizona Nuclear Power RECIP.NAME RECIPIENT AFFILIATION Document Control Branch (Document Control Desk)

SUBJECT:

Forwards draft Amend 3 to facility lease dtd 860801 between First Natl Bank of Boston, Amend 2 to facility lease dtd 861215 6

Amend 2 to facility lease dtd 860801.Amends should be executed on or about 930317.

DISTRIBUTION CODE:

AOOID COPIES RECEIVED:LTRt ENCL J SIZE:

TITLE: OR Submittal: General Distribution D

NOTES:Standardized plant.

/

05000529 RECIPIENT ID CODE/NAME PD5 LA TRAMMELL,C INTERNAL: ACRS NRR/DORS/OTSB NRR/DSSA/SCSB NRR/DSSA/SRXB OC HB REG FILE 01 EXTERNAL: NRC PDR COPIES LTTR ENCL 1

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6 1

1 1

1 1

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0 1

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1 1

1 1

1 1

1 1

1 1

0 1

1 D

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NOTE TO ALL"RIDS" RECIPIENTS:

PLEASE HELP US TO REDUCE WASTE! CONTACT THE DOCUMENT CONTROL DESK, ROOM Pl-37 (EXT. 504-2065) TO ELIMINATEYOUR NAME FROM DISTRIBUTION LISTS FOR DOCUMENTS YOU DON'7 NEED!

D TOTAL NUMBER OF COPIES REQUIRED:

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Arizona Public Service Company P.O, BOX 53999

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PHOENIX, ARIZONA85072-3999 WILLIAMF. CONWAY EXECUTIVEVICEPRESIDENT NUCLEAR 212-01134-WFC/TRB March 8, 1993 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Mail Station P1-37 Washington, DC 20555

Subject:

Palo Verde Nuclear Generating Station (PVNGS)

Unit 2 Docket No. STN 50-529 Facility Sale and Leaseback File: 93-056-026 Pursuant to Paragraph 2.B(8)(b) of Amendment No. 4, dated August 15, 1986, to License No. NPF-51, enclosed please find the following documents:

(i) Amendment No. 3 to Facility Lease dated as of August 1, 1986, between the First National Bank of Boston ("FNBB") not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of August 1, 1986, with Emerson Finance Co., Lesssor, and Arizona Public Service Company

("APS"), Lessee; (ii) Amendment No. 2 to Facility Lease dated as of December 15, 1986, between FNBB not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 15, 1986, with PV2-APS 150 Corporation (Assignee of Chase Manhattan Realty Leasing Corporation),

Lessor, and

APS, Lessee; and (iii)

Amendment No. 2 to Facility Lease dated as of August 1, 1986, between FNBB not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of August 1, 1986, with Security Pacific Capital Leasing Corporation, Lessor, and APS, Lessee.

Please be advised that we expect these Amendments to be executed on or about March 17, 1993.

Ifyou would like further information, please contact Thomas R. Bradish at (602) 393-5421.

Sincerely, WFC/TRB/fjb Enclosures 0900>8

>~+~03fi000l 9g0g08

~ZDR ADOCK 050005p9

"..pan

0 l

U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Facility Sale and Leaseback Page 2 212-01134-WFC/TRB March 8, 1993 cc:

J. B. Martin J. A. Sloan

EXHIBIT A CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS HERETOFORE AMENDED AND AS AMENDED BY THIS AMENDMENT NO.. 2 THERETO HAVE BEEN ASSXGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OFg CHEMICAL BANKS AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE, MORTGAGEg SECURITY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE DATED AS OF AUGUST 1, 1986.

THIS AMENDMENT NO.

2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.

SEE SECTION 4(b)

OF THIS AMENDMENT NO.

2 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.

THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.

AMENDMENT NO.

2 dated as of to 1993 FACILITY LEASE dated as of August 1, 1986 between THE FXRST NATIONAL BANK OF BOSTON not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of August 1,

1986 with SECURITY PACIFIC CAPITAL LEASXNG CORPORATION, Lessor and ARIZONA PUBLIC SERVICE COMPANYJ Lessee Original Facility Lease Recorded on August 18,

1986, as Instrument No. 86-439431 and Amendment No.

1 to Facility Lease Recorded on November 21,

$986 as Instrument No. 86-645151, Records of the County'ecorder of Maricopa County, Arizona

l

AMENDMENT N 2

Amendment No. 2, dated as of 1993

("Amendment No. 2"), to the Facility Lease dated as of August 1, 1986 between THE FIRST NATIONAL BANK OF BOSTON, a

national banking association, not in its individual capacity, but solely as Owner Trustee under a Trust Agreement, dated as of August 1, 1986, with SECURITY PACIFIC CAPITAL LEASING CORPORATION (the "Lessor" ),

and ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (the "Lessee" ).

WITNESSETH:

WHEREAS, the Lessee and the Lessor have heretofore entered into a Facility Lease dated as of August,l, 1986 (the "Facility Lease" ), providing for the lease by the Lessor to the Lessee vf the Undivided Interest and the Real Property Interest; WHEREAS, Section 3(e) of t.he Facility Lease provides for an adjustment to Basic Rent and to the schedules of Casualty Values, Extraordinary Casualty Values, Special Casualty Values, and Modified Special Casualty Values in order to preserve Net Economic Return if there is any change in the Current Pricing Assumptions; WHEREAS, Section 10.1(viii) of the Indenture

provides, among other things, that the Lessor and the 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; I

WHEREAS, the Lessor and the Indenture Trustee intend to execute Supplemental Indenture No. 2, dated as of 1993 to the Indenture, providing for the issuance under the Indenture of Additional Notes for the purpose of the refunding of the Notes heretofore issued under the Indenture and currently Outstanding;

WHEREAS, as a result of the refunding of the Outstanding Notes and the issuance of Additional Notes, the parties hereto desire to evidence certain adjustments to Basic Rent and to the schedules of Casualty Values, Extraordinary Casualty Values, Special Casualty Values, and Modified Special Casualty Values, such adjustments being deemed to be in compliance with Sections 3(e) and 3(f) of the Facility Lease without further act; and WHEREAS, the parties hereto also desire to evidence certain other agreed up6n changes to the Facility Lease.

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

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

The Facility Lease is hereby amended as follows:

(a)

The last sentence of Section 3(b) of the Facility Lease is deleted in its entirety and is hereby replaced with the following:

Each drawing under the Letter'f Credit shall be deemed to be in satisfaction of the Lessee's obligation to pay the Equity Portion of Rent to the extent of such drawing, but nothing in this sentence or in Section 16(f) is intended to or shall create any right or entitlement of the Lessee or any other

Person, contingent or otherwise, in or to the proceeds of such drawing, even if such drawing exceeds the Equity Portion of Rent.

(b)

The first sentence of Section 3(e) of the Facility Lease is amended by deleting the words "there is any change in the Current Pricing Assumptions" therein and by substituting in its place the words "the Refinancing Transaction Expenses paid by the Owner Trustee are less than the amount indicated in the Pricing Assumptions set forth in Schedule 3 to the Participation Agreement".

(c)

All references to Funding Corp in Sections 4 and 6(b) of the Facility Lease shall be deemed to include and refer also to New Funding Corp.

(d)

Section 16(f) of the Facility Lease is deleted in its entirety and is hereby replaced with the following:

(f)

Drawin under Le r

f Cr it.

As provided in and in accordance with the last sentence of Section 3(b),

any amount payable by the Lessee pursuant to this Section in respect of, or with reference to, Casualty Value shall be deemed to be satisfied to tfie extent of any amount paid under the

I

Letter of Credit in respect of the Event of Default giving rise to the obligation of the Lessee to pay such amount in respect of, or with reference to, Casualty Value.

follows: (e)

Appendix A to the Facility Lease is amended as Tr In n

r

" in its entirety to read as follows:

11 r

1 Tr In n

r shall mean (i) whenever any Bonds are Outstanding thereunder, the Collateral Trust Indenture dated as of November 1,

1986 among APS, Funding Corp and the Collateral Trust Trustee and (ii) at all

times, the Collateral Trust Indenture dated as of 1993 among

APS, New Funding Corp and the Collateral Trust Trustee.";

(ii) by deleting the definition of "Current Pricing Assumptions";

(iii) by amending the definition of "Final

$hu~i~wn" by restating clause (7) thereof in its entirety to read as follows:

"(7) the declaration by the Operating Agent of a

site area emergency set forth in the PVNGS Emergency Plan for any reason other than (i) a drill, (ii) a false alarm or (iii) a site area emergency declaration without actual major failure of any of the plant functions needed to achieve or maintain hot shutdown of Unit 2 when Unit 2 is in any of modes l through 4, as defined in the technical specifications for Unit 2;";

and by adding the following sentence at the end of such definition:

"In the event that the circumstances giving rise to a site area emergency declaration described in clause (7)(iii) above

change, resulting in a

Final Shutdown, such Final Shutdown shall be deemed to have occurred immediately upon the occurrence of such site area emergency declaration."

d'y inserting the phrase "New Funding Corp, the stockholder of'New Funding Corp and its officers and

directors," after the words "the stockholder of Funding Corp and its officers and directors," therein; Tr i

" in its entirety to read as follows:

"In n

r T

shall mean the office of the Indenture Trustee located at 450 West 33rd

Street, New York, New York 10001, or such other office as may be designated by the Indenture Trustee to the Owner Trustee and each Holder of a

Note Outstanding under the Indenture."

"liat

~R thorn" to read in its entirety as follows:

"N E

n mi R

rn shall mean the net after-tax yield and total after-tax cash flow expected by the Equity Participant on the Refunding Date with respect to the Undivided Interest, calculated utilizing the Assumptions and utilized in the computation of Basic Rent, Casualty Value, Special Casualty Value, Modified Special Casualty Value and Extraordinary Casualty Value derived from the Assumptions."

,A~m ~n

" by inserting the words "or New Funding Corp's" after the words "Funding Corp's" therein;

~B n~" by inserting the words "or of New Funding Corp" after the words "Funding Corp" therein; l

m n l In n

r " by inserting the words "or New Funding Corp, as the case may be," after the words "Funding Corp" therein; i n 6

A li a i n shall mean Funding Corp's Application for an Order under Section 6(c) of the Investment Company Act of 1940 exempting Funding Corp from all provisions of such Act, as filed with the Securities and Exchange Commission on May 13,

1986, and amended on July 31,

1986, and the Order of said Commission dated October 2,

1986, as such Application and Order applies to New Funding Corp

as indicated in the response of the staff of the Division of Investment Management of such Commission, dated October 16, 1992, to the

letter, dated August 27, 1992, of Nhite

&. Case."

'I

Corp, as the case may be," after the words "Funding Corp" therein; (xii) by amending the definition of "Trans tion Agreement, the Indemnity Agreement, the Escrow Deposit Agreement," after the words "the Participation Agreement," therein.

(xiii) by inserting in the appropriate alphabetical order the following new definitions:'Am n

m n N

2 h

F ili L

a means Amendment No.

2 dated as of 1993 to the Facility Lease dated as of August 1,

1986, as amended as of November 1,

1986, between the Lessee and the Owner Trustee.

"Am n m n N

2 o th Par i i ation A reement shall mean Amendment No.

2 dated as of March 1993 to the Participation Agreement dated as of August 1,

1986, as amended as of November 1,

1986, among the Equity Participant, Funding Corp, New Funding, Corp, The First National Bank of

Boston, as Owner Trustee, Chemical

Bank, as Indenture Trustee, and the Lessee.

"In mni A r m n shall mean the Indemnity Agreement dated as of

1993, by the Lessee.

"N w F ndin r

shall mean PVNGS II Funding Corp., Inc.,

a Delaware corporation.

"R fin n in A r m n shall mean that certain Refinancing Agreement dated as of 1993 among the Equity Participant, Funding Corp, New Funding Corp, Owner Trustee, Indenture Trustee and the Lessee.

"R finan in D

m n s shall have the meaning assigned to such term in the Refinancing Agreementr."

l(

(f)

Schedule 1 entitled "Basic Rent Percentages" is deleted in its entirety and is hereby replaced with Schedule 1

hereto.

(g)

Schedule 2 entitled "Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 2 hereto.

(h)

Schedule 3 entitled "Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 3

hereto.

(i)

Schedule 4 entitled "Modified Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 4 hereto.

(j)

Schedule 5 entitled "Extraordinary Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 5 hereto.

(k)

Section 20 of the Facility Lease is hereby amended by inserting the words ", the Indemnity Agreement, Section 17 of the Refinancing Agreement" after the words "Sections 10(b),

14 and 16 of the Participation Agreement" in the second sentence therein.

SECTION 3.

Eff tiv n This Amendment No.

2 shall become effective when all conditions referred to in Section 15 of the Refinancing Agreement shall have been satisfied or waived by the appropriate persons (the date of such satisfaction or waiver being referred to as the "Effective Date" ).

Once recorded, this Amendment shall be presumed to be effective, subject to any contrary statement in any document or certificate filed after the recordation of this Amendment.

SECTION 4.

Mis lian ou (a)

Governing Law.

This Amendment No.

2 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 the law of the State of Arizona is mandatorily applicable hereto.

(b)

Original Counterpart.

The single executed original of this Amendment No.

2 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the receipt of the Indenture Trustee thereon shall be the "Original" of this Amendment No. 2.

No security interest in this Amendment No.

2 may be created or continued through the transfer or possession of any counterpart other~ than the "Original."

(c)

Disclosure.

Pursuant to Arizona Revised Statutes Section 33-402, the beneficiary of the Trust Agreement is Security Pacific Capital Leasing Corporation, a Delaware corporation.

The address of the beneficiary is Four Embarcadero

Center, Suite 1200, San Francisco, California 94111.

A copy of the Trust Agreement is available for inspection at the offices of the. Owner Trustee at Blue Hill Office Park, Mail Stop 45-02-15, 150 Royall Street,

Canton, Massachusetts 02021, Attention:

Corporate Trust Division

(

Reference:

APS-PVNGS II Funding Corp.).

(d)

Owner Trustee.

Section 22(h) of the Facility Lease is applicable to this Amendment No. 2.

(e)

Counterpart Execution.

This Amendment No.

2 may be executed in any number of counterparts and by each of the parties hereto on separate counterparts, all such counterparts together constituting but one and the same instrument.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No.

2 to Facility Lease to be duly executed by an officer thereunto duly authorized.

THE FIRST NATIONAL BANK OF BOSTON, not in its individual

capacity, but solely as Owner Trustee under a Trust Agreement dated as of August 1, 1986 with Security Pacific Capital Leasing Corporation By:

Title:

ARIZONA PUBLIC SERVICE COMPANY By:

Title:

Treasurer and Assistant Secretary 1381b(B)

STATE OF NEW YORK

)

)

ss.

County of New York )

The foregoing instrument was acknowledged before me this day of

1993, by" of THE FIRST NATIONAL BANK OF BOSTON, a

national banking association, on behalf of the banking association as Owner Trustee under the Trust Agreement dated as of August 1,

1986 with Security Pacific Capital Leasing Corporation.

My commission expires:

Notary Public STATE OF NEW YORK

)

)

ss.

County of New York )

The foregoing instrument was acknowledged before me this day of

1993, by WILLIAMJ.

HEMELT, Treasurer and Assistant Secretary of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, on behalf of the corporation.

Notary Public My commission expires:

'1381b(B)

SCHEDULE 1 TO AMENDMENT NO 2 RENT PER ENTA T

BE OMPLETED 138lb(B)

SCHEDULE 2 TO AMENDMENT NO 2

CASUALTY VALUES P r f F TO BE COMPLETED l38lb(B)

I

SCHEDULE 3

TO AMENDMENT NO 2

Ex r SPECIAL CASUALTY VALUES P r f F ili T

BE MPLETED 1381b(B)

SCHEDULE 4 TO AMENDMENT NO 2 MODIFIED SPECIAL CASUALTY VALUES x r P r n

f F ili T

BE OMPLETED 138lb(B)

SCHEDULE 5

TO AMENDMENT NO 2

EXTRAORDINARY CASUALTY VALUES Ex r P r n

f F li T

BE MPLETED 1381b(B)

EXHIBIT A CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS HERETOFORE AMENDED AND AS AMENDED BY THIS AMENDMENT NO.

2 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OFg CHEMICAL BANKS AS INDENTURE TRUSTEE UNDER A TRUST INDENTURED MORTGAGE~

SECURITY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE DATED AS OF DECEMBER 15, 1986.

THIS AMENDMENT NO.

2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS..

SEE SECTION 4(Q)

OF THIS AMENDMENT NO.

2 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.

THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.

AMENDMENT NO.

2 dated as of to 1993 FACILITY LEASE dated as of December 15, 1986 between THE FIRST NATIONAL BANK OF BOSTON not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 15, 1986 with PV2-APS 150 CORPORATION (Assignee of Chase Manhattan Realty Leasing Corporation),

Lessor and ARIZONA PUBLIC SERVICE

COMPANY, Lessee Original Facility Lease Recorded on December 19,

1986, as Instrument No. 86-703291 and Amendment No.

1 to Facility Lease Recorded on August 14, 1987 as Instrument No. 87-514747, Records of the County Recorder of Maricopa County, Arizona

AMENDMENT N 2

Amendment No. 2, dated as of 1993

("Amendment No. 2"), to the Facility Lease dated as of December 15, 1986 between THE FIRST NATIONAL BANK OF BOSTON, a

national banking association, not in its individual capacity, but solely as Owner'rustee under a Trust Agreement, dated as of December 15, 1986, with PV2-APS 150 CORPORATION (Assignee of Chase Manhattan Realty Leasing Corporation)

(the "Lessor" ),

and ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (the "Lessee" ).

W I TNE S SETH:

WHEREAS, the Lessee and the Lessor have heretofore entered into a Facility Lease dated as of December 15, 1986 (the "Facility Lease" ), providing for the 'lease by the Lessor to the Lessee of the Undivided Interest and the Real Property Interest; WHEREAS, 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 order to preserve Net Economic Return if there is any issuance of the Fixed Rate Notes or certain changes in the Pricing Assumptions; WHEREAS, Section 10.1(viii) of the Indenture

provides, among other things, that the Lessor and the 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; E

WHEREAS, the Lessor and the Indenture Trustee intend to execute Supplemental Indenture No. 2, dated as of 1993 to the Indenture, providing for the issuance under the Indenture of Additional Notes for the purpose of the refunding of the Notes heretofore issued under the Indenture and currently Outstanding;

WHEREAS, as a result of the refunding of the Outstanding Notes and the issuance of Additional Notes, the parties hereto desire to evidence certain adjustments to Basic Rent and to the schedules of Casualty Values, Special Casualty

Values, and Termination Values; and WHEREAS, the parties hereto also desire to evidence certain other agreed upon changes to the Facility Lease.

1

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

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

SECTION 2.

Am n m n The Facility Lease is hereby amended generally so that references to "Funding Corp" shall also be deemed to be references to "New Funding Corp,"

as appropriate to the context, it being understood, however, that Funding Corp and New Funding Corp are unrelated Persons that are not liable jointly or severally for each other's separate acts or omissions.

The parties hereto agree that the term "as appropriate to the context" in this introductory paragraph will be interpreted in light of paragraphs (a) and (b) of this Section 2.

Without derogation of the foregoing (whether because of a specific amendment or lack thereof),

the Facility Lease is specifically amended as follows:

(a)

The parties agree that New Funding Corp is entitled to the rights and obligations of Funding Corp under the Facility Lease as if New Funding Corp were Funding Corp for so long as and to the extent that New Funding Corp has made any loan to the Owner Trustee pursuant to the Transaction Documents and such loan is evidenced by Outstanding Notes issued by the Owner Trustee under the Indenture.

(b)

The parties agree that Funding Corp will continue to be entitled to its rights and obligations under the Facility Lease only if and to the extent that Funding Corp has made any loan to the Owner Trustee and such loan is outstanding.

follows: (c)

Appendix A to the Facility Lease is amended as Tr In n

r

" to read in its entirety as follows:

"Colla eral Trust Ind nture shall mean (i) to the extent that any Bonds are Outstanding thereunder from time to time, the Collateral Trust Indenture dated as of November 1,

1986 among

APS, Funding Corp and the Collateral Trust Trustee and/or

(ii) to the extent that any Bonds are Outstanding thereunder from time to time, the Collateral Trust Indenture dated as of 1993 among

APS, New Funding Corp and the Collateral Trust Trustee.";

~N

" to read in its entirety as follows:

"Fix Ra N

shall mean the nonrecourse secured promissory notes issued by the Owner Trustee to refund the Initial Series Notes and any such notes issued in connection with a Refunding Loan.";

by inserting the phrase "the stockholder of New Funding Corp and its officers and directors," after the words "the stockholder of Funding Corp and its officers and directors," therein; Tr fi

" to read in its entirety as follows:

"In n

r Tr e'ffi shall mean the office of the Indenture Trustee located at 450 West 33rd

Street, New York, New York

10001, or such other office as may be designated by the Indenture Trustee to the Owner Trustee and each Holder of a

Note Outstanding under the Indenture."

(v) by restating the definition of""~L gggn~l" to read in its entirety as follows:

"L

'ns 1 shall mean Snell S Wilmer, One Arizona Center,

Phoenix, Arizona 85004-0001."

(vi) by restating the def inition of "~L~~i~~

ial o n el" to read in its entirety as follows:

"L ial un 1 shall mean White 8

Case, 1155 Avenue of the Americas, New York, New York 10036-2787."

(vii) by restating the definition of

"~L n

"L an Partici ant means Funding Corp or New Funding Corp, as the context may require."

(viii) by restating the definition of "~n Pa i i an 'o n el" to read in its entirety as follows:

an P r i an 's Coun 1 shall mean White S

Case, 1155 Avenue of the Americas, New York, New York 10036-2787."

~R pm" to read in its entirety as follows:

"N E

n mi R

rn shall mean the after-tax yield and after-tax cash flows (after all

Federal, state and local taxes) and the return on investment expected by the Owner Participant on the Refunding Date with respect to the Undivided Interest, utilizing the Pricing Assumptions and in accordance with the computation of Basic Rent, Casualty Values, Special Casualty Values and Termination Values derived from such Pricing Assumptions."

(x) by restating the definition of "gwn~r Par i i ant'al Co n 1" to read in its entirety as follows:

"Own r Par i i ant's S

ial n

1 shall mean Winston 8 Strawn, 175 Water Street, New York, New York 10038-4981; or, in the case of tax matters, Dewey Ballantine, 1301 Avenue of the Americas, New York, New York 10019."

(xi) by restating the definition of "gwn~r n

1" to read in its entirety as follows:

wn r Tr

'o n

1 shall mean Ropes

&. Gray, One International Place,

Boston, Massachusetts 02110-2624."

ixii) by restating the definition of "~Pri in "Pri in As m i n shall mean the pricing assumptions set forth on Schedule 2 to the Participation Agreement and the Additional Pricing Assumptions."

Eful" '"

~B nl~" to read in its entirety as follows:

"R f n in B n s shall mean Funding Corp's or New Funding Corp's Secured Lease Obligation Bonds, the Series of which shall be designated in the Refunding Supplemental Indenture relating

thereto, which may be issued, authenticated and delivered under the Collateral Trust Indenture, as supplemented by such Refunding Supplemental Indenture, as the same may be described in the Underwriting Agreement relating thereto, for purposes of refunding any previous Series of Bonds issued under the Collateral Trust Indenture.";

DaaD" to read in its entirety as follows:

n n

D shall mean the date of any issuance of Fixed Rate Notes.";

1 m n l In n

r " by inserting the words "or New Funding Corp, as the case may be," after the words "Funding Corp" therein; (xvi) by restating the definition of Section 6(c) Application to read in its entirety as follows:

i n A li a i n" shall mean Funding Corp's Application for an Order under Section 6(c) of the Investment Company Act of 1940 exempting Funding Corp from all provisions of such Act, as filed with the Securities and Exchange Commission on May 13,

1986, and amended on July 31,

1986, and the Order of said Commission, dated October 2,

1986, as such Application and Order applies to New Funding Corp as indicated in the response of the staff of the Division of Investment Management of such Commission, dated October 16, 1992, to the

letter, dated August 27, 1992, of White'. Case."

(xvii) by amending the definition of nd rwritin A r m n

" by inserting, the words "or New Funding Corp, as the case may be," after the words "Funding Corp" therein; (xviii) by inserting in the appropriate alphabetical order the following new definitions:

S I

I 1

"A i i n 1 Pri in A

m 'hall mean the additional pricing assumptions set forth on Schedule 2 to Amendment No.

2 to the Participation Agreement."

"Am n m n N

2 h

P r i

i n A r m n shall mean Amendment No.

2 dated.as-of March 1993 to the Participation Agreement dated as of December 15,

1986, as amended as of August 1,

1987, among the Owner Participant, Funding Corp, New Funding Corp, The First National Bank of

Boston, as Owner Trustee, Chemical

Bank, as Indenture Trustee, and the Lessee."

"N w F n in r

shall mean PVNGS II Funding Corp., Inc.,

a Delaware corporation."

Owner Trustee designated "Nonrecourse Promissory

Notes, Refunding Series 1993."

"Refinan in A r m n shall mean that certain Refinancing Agreement dated as of 1993 among the Owner Participant, Funding Corp, New Funding Corp, The First National Bank of

Boston, as Owner Trustee, Chemical Bank, as Indenture Trustee and New Collateral Trust

Trustee, and the Lessee."

"R fin n in D

m n shall have the meaning assigned to such term in the Refinancing Agreement."

(d)

Schedule 1 entitled "Schedule of Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 1 hereto.

(e)

Schedule 2 entitled "Schedule of Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 2 hereto.

(f)

Schedule 3 entitled "Schedule of Termination Values" is deleted in its entirety and is hereby replaced with Schedule 3 hereto.

(g)

A new Schedule 7 entitled "Basic Rent Percentages" (attached hereto as Schedule

4) is inserted immediately after Schedule 6 to the Facility Lease.

(h)

Sections 3(a) (ii) and 3(a) (iii) of the Facility Lease are amended in their entirety to read as follows:

"(ii)

On December 30, 1987 and on each Basic Rent Payment Date thereafter to, and including December 30,

1992, an amount equal to 4.63269210 o of Facility Cost; (iii)

On the Refunding Date and on each Basic Rent Payment Date thereafter to, and including, December 30,

2015, an amount -equal to the percentage of Facility Cost set forth opposite such Basic Rent Payment Date on Schedule 7 hereto."

(i)

Section 3(b) of the Facility Lease is amended by inserting the words ", any Refinancing Document" after the words "any other Transaction Document" in clause (i) thereof; (j)

Section 3(e) of the Facility Lease is amended by insertion of, after the phrase "Purchase Price" in clause (iii)

thereof, the phrase:

"or, if the Re inancing Transaction Expenses (as defined in the Refinancing Agreement) are less than the maximum amount of transaction expenses payable by the Owner Trustee indicated in the Additional Pricing Assumptions set forth in Schedule 2 of Amendment No.

2 to the Participation Agreement".

(k)

Section 3(g) of the Facility Lease is amended by inserting the words "or Refinancing Document" after the words "or any Financing Document" in the introductory phrase thereof; (1)

Section 4 of the Facility Lease is amended by inserting the words "or Refinancing Document" after the words "any Financing Document" each time such words appear therein.

(m)

Clause (2) of the third sentence of Section 9(c) is amended in its entirety to read as follows:

(2) if clause (1) shall not be applicable, Transfer the Undivided Interest and the Real Property Interest to the Lessee.,

(n)

The second sentence of Section 9(d) of the Facility Lease is amended in its entirety to read as follows:

Upon compliance in full by the Lessee with the foregoing provisions of this Section 9(d) and assumption by the Lessee of all the obligations and liabilities of t'e Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b) of the Indenture, the Lessor shall (so long as no Default or Event of Default shall have occurred and be

I l

f

continuing),

and at any time after the occurrence of a

Deemed Loss Event, the Lessor may, Transfer the Undivided Interest and the Real Property Interest to the Lessee.

SECTION 3.

f iv Da This Amendment shall become effective on the "Effective Date,"

as such term is defined in Section 4 of Amendment No.

2 to the Participation Agreement.

Once recorded, this Amendment shall be presumed to be effective, subject to any contrary statement in any document or certificate filed after the recordation of this Amendment.

SECTION 4.

Mi ellan ous.

(a)

Execution.

This Amendment No.

2 may be executed in any number of counterparts and by 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.

Th's Amendment No.

2 amends and modifies the Facility Lease and is to be read with and form part of the Facility Lease.

On and from the Effective Date any reference in any Transaction Document to the Facility Lease shall be deemed to refer to the Facility Lease, as amended and modified by Amendment No.

1, thereto, dated as of August 1,

1987, and by this Amendment No. 2.

(b)

Non-Waiver or Amendment.

The agreements contained in this Amendment shall not, except as expressly provided in this Amendment, operate as a waiver of any right, power or remedy of any party under any Transaction

Document, nor constitute, except as expressly provided in this Amendment, a waiver of any provision of any Transaction Document.

(c)

Governing Law.

This Amendment No.

2 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 laws of the State of Arizona such law is mandatorily applicable hereto.

(d)

Original Counterpart.

The single executed original of this Amendment No.

2 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the receipt of the Indenture Trustee thereon shall be the "Original" of this Amendment No. 2.

No security interest in this Amendment No.

2 may be created or continued through the transfer or possession of any counterpart other.than the "Original."

(e)

Disclosure.

Pursuant to Arizona Revised Statutes Section 33-402", the beneficiary of the Trust Agreement is PV2-APS 150 Corporation (Assignee of Chase Manhattan Realty Leasing Corporation),

a Delaware corporation.

The address 'of

I

the beneficiary is One Chase Manhattan Plaza, New York, New York 10081.

A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at Blue Hill Office Park, Mail Stop 45-02-15, 150 Royall Street,

Canton, Massachusetts 02021.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No.

2 to Facility Lease to be duly executed by an officer thereunto duly authorized.

THE FIRST NATIONAL BANK OF BOSTON, not in its individual

capacity, but solely as Owner Trustee under a Trust Agreement dated as of December 15, 1986 with PV2-APS 150 Corporation (Assignee of Chase Manhattan Realty Leasing Corporation),

Lessor By:

Title:

Date:

1993 ARIZONA PUBLIC SERVICE COMPANY By:

Title:

Date:

1993 1934b(B)

COMMONWEALTH OF

)

MASSACHUSETTS

)

)

ss.

County of Suffolk

)

The foregoing instrument was acknowledged before me this day of

1993, by of THE FIRST NATIONAL BANK OF BOSTON, a

national banking association, on behalf of the banking association as Owner Trustee under the Trust Agreement dated as of December 15, 1986 with PV2-APS 150 Corporation (Assignee of Chase Manhattan Realty Leasing Corporation).

My commission expires:

Notary Public STATE OF ARIZONA

)

)

ss.

County of Maricopa

)

The foregoing instrument was acknowledged before me this day of

1993, by WILLIAMJ.

HEMELT, Treasurer and Assistant Secretary of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, on behalf of the corporation.

My commission expires:

Notary Public 1934b(B)

SCHEDULE 1

TO AMENDMENT NO 2 Ex r CASUALTY VALUES P r n

F ili T

BE MPLETED 1934b(B)

SCHEDULE 2 TO AMENDMENT NO 2

Ex r SPECIAL CASUALTY VALUES P r n

f F ili TO BE MPLETED 1934b(B)

I l

Ex r TERMINATION VALUES P r n

F ili SCHEDULE 3 TO AMENDMENT NO 2

TO BE MPLETED 1934b(B) t

SCHEDULE 4

TO AMENDMENT NO 2 BASIC RENT PERCENTAGES T

BE MPLETED 1934b(B)

EXHIBIT A CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS HERETOFORE AMENDED AND AS AMENDED BY THIS AMENDMENT NO.

3 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OFI CHEMICAL BANK~ AS INDENTURE TRUSTEE UNDER A TRUST XNDENTURE, MORTGAGE, SECURXTY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE DATED AS OF AUGUST 1, 1986.

THIS AMENDMENT NO.

3 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.

SEE SECTION 4(b)

OF THIS AMENDMENT NO.

3 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.

THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.

AMENDMENT NO.

3 dated as of 1993 to FACILITY LEASE dated as of August 1, 1986 between THE FXRST NATIONAL BANK OF BOSTON not in its individual capacity, but solely as Owner Trustee under a Trust Agreement dated as of August 1, 1986 with EMERSON FINANCE CO.,

Lessor and ARIZONA PUBLIC SERVICE COMPANY, Lessee Original Facility Lease Recorded on August 18, 1986; as Instrument No. 86-439438 and Amendment No.

1 to Facility Lease Recorded on November 21, 1986 as Instrument No. 86-645156 and Amendment No.". 2 to Facility Lease Recorded on September 16, 1987 as Instrument No. 87-579420, Records of the County Recorder of Maricopa County, Arizona

~

f Il I

AMENDMENT N Amendment No. 3, dated as of 1993

("Amendment No. 3"), to the Facility Lease dated as of August 1, 1986 between THE FIRST NATIONAL BANK OF BOSTON, a

national banking association, not in its individual capacity, but solely as Owner Trustee (the "Lessor" ) under a Trust Agreement, dated as of August 1, 1986, with EMERSON FINANCE CO.,

and ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (the "Lessee" ).

WITNESSETH:

WHEREAS, the Lessee and the Lessor have heretofore entered into a Facility Lease dated as of August 1, 1986 (the "Facility Lease" ), providing for the lease by the Lessor to the Lessee of the Undivided Interest and the Real Property Interest; WHEREAS, Section 3(e) of the Facility Lease provides for an adjustment to Basic Rent and to the schedules of Casualty Values, Extraordinary Casualty Values, Special Casualty Values, and Modified Special Casualty Values in order to preserve Net Economic Return if there is any change in the Current Pricing Assumptions; WHEREAS, Section 10.1(viii) of the Indenture

provides, among other things, that the Lessor and the 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 Lessor and the Indenture Trustee intend to execute Supplemental Indenture No. 2, dated as of 1993 to the Indenture, providing for the issuance under the Indenture of Additional Notes for the purpose of the refunding of the Notes heretofore issued under the Indenture and currently Outstanding;

WHEREAS, as a result of the refunding of the Outstanding Notes and the issuance of Additional Notes, the parties hereto desire to evidence certain adjustments to Basic Rent and to the schedules of Casualty Values, Extraordinary Casualty Values, Special Casualty Values, and Modified Special Casualty Values, such adjustments being deemed to be in compliance with Sections 3(e) and 3(f) of the Facility Lease without further act; and WHEREAS, the parties hereto also desire to evidence certain other agreed upon" changes to the Facility Lease.

rf

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

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

The Facility Lease is hereby amended as follows:

(a)

The last sentence of Section 3(b) of the Facility Lease is deleted in its entirety and is hereby replaced with the following:

Each drawing under the Letter of Credit shall be deemed to be in satisfaction of the Lessee's obligation to pay the Equity Portion of Rent to the extent of such drawing, but nothing in this sentence or in Section 16(f) is intended to or shall create any right or entitlement of the Lessee or any other

Person, contingent or otherwise, in or to the proceeds of such drawing, even if such drawing exceeds the Equity Portion of Rent.

(b)

The first sentence of Section 3(e) of the Facility Lease is amended by deleting the word "Current" therein.

(c)

All references to Funding Corp in Sections 4 and 6(b) of the Facility Lease shall be deemed to include and refer also to New Funding Corp.

(d)

Section 16(f) of the Facility Lease is deleted in its entirety and is hereby replaced with the following:

(f)

Dr win un r L t r

f r i As provided in and in accordance with the last sentence of Section 3(b),

any amount payable by the Lessee pursuant to this Section in respect of, or with reference to, Casualty Value shall be deemed to be satisfied to the extent of any amount paid under the Letter of Credit in respect of the Event of Default giving rise to the obligation of the Lessee to pay such amount in respect of, or with reference to, Casualty Value.

follows: (e)

Appendi~ A to the Facility Lease is amended as Trus Inden ure" in its entirety to read as follows:

ll r

1 Tr In n

r shall mean (i) whenever any Bonds are Outstanding thereunder, the Collateral Trust Indenture dated as of November 1,

1986 among APS, Funding Corp and the Collateral Trust Trustee and (ii) at all

times, the Collateral Trust Indenture dated as of 1993 among

APS, New Funding Corp and the Collateral Trust Trustee.";

(ii) by deleting the definition of "Current Pricing Assumptions";

(iii) by amending the definition of "Final

~h t~d own" by restating clause (7) thereof in its entirety to read as follows:

"(7) the declaration by the Operating Agent of a

site area emergency set forth in the PVNGS Emergency Plan for any reason other than (i) a drill, (ii) a false alarm or (iii) a site area emergency declaration without actual major failure of any of the plant functions needed to achieve or maintain hot shutdown of Unit 2 when Unit 2 is in any of modes 1 through 4, as defined in the technical specifications for Unit 2;";

and by adding the following sentence at the end of such definition:

"In the event that the circumstances giving rise to a site area emergency declaration described in

, clause (7)(iii) above change, resulting in a Final Shutdown, such Final Shutdown shall be deemed to have occurred immediately upon the occurrence of such site area emergency declaration."

by inserting the phrase "New.Funding Corp, the stockholder of New Funding Corp and its officers and directors," after the words "the stockholder of Funding Corp and its officers and directors," therein; Trustee's Offi "'n its entirety to read as follows:

t

"Inden r

Tr 'fi shall mean the office of the Indenture Trustee located at 450 West 33rd

Street, New York, New York 10001', or such other office as may be designated by the Indenture Trustee to the Owner Trustee and each Holder of a

Note Outstanding under the Indenture."

~R pm" to read in its entirety as follows:

"N E

n mi rn shall mean the net after-tax yield and total after-tax cash flow expected by the Equity Participant on the Refunding Date with respect to the Undivided Interest, calculated utilizing the Assumptions and utilized in the computation of Basic Rent, Casualty Value, Special Casualty Value, Modified Special Casualty Value and Extraordinary Casualty Value derived from the Assumptions."

A~m nt" by inserting the words "or New Funding Corp's" after the words "Funding Corp's" therein;

(

~nl~" by inserting the words "or of New Funding Corp" after the words "Funding Corp" therein;

( *>

1 m n In n

" by inserting the words "or New Funding Corp, as the case may be," after the words "Funding Corp" therein; "S

i n 6

A li a ion shall mean Funding Corp's Application for an Order under Section 6(c) of the Investment Company Act of 1940 exempting Funding Corp from all provisions of such Act, as filed with the Securities and Exchange Commission on May 13,

1986, and amended on July 31,

1986, and the Order of said Commission, dated October 2,

1986, as such Application and Order applies to New Funding Corp as indicated in the response of the staff of the Division of Investment Management of such Commission, dated October 16, 1992, to the letter, dated August 27, 1992, of White S Case."

~

E ly t>

Corp, as the case may,be," after the words "Funding Corp" therein; Agreement, the Indemnity Agreement, the Escrow Deposit Agreement," after the words "the Participation Agreement," therein.

(xiii) by inserting in the appropriate alphabetical order the following new definitions:

m n m n No.

t h

Fa ili L a means Amendment No.

3 dated as of 1993 to the Facility Lease dated as of August 1,

1986, as amended as of November 1,

1986 and June 1,

1987, between the Lessee and the Owner Trustee.

"Am n m n N

2 h

Par i i n A r m n shall mean Amendment No.

2 dated as of March 1993 to the Participation Agreement dated as of August 1,

1986, as amended as of November 1,

1986, among the Equity Participant, Funding Corp, New Funding Corp,"The First National Bank of

Boston, as Owner Trustee, Chemical

Bank, as Indenture Trustee, and the Lessee.

"E crow D

o i A re m n shall mean the PVNGS Escrow Deposit Agreement, dated as of

1993, among the Equity Participant, the Owner Trustee and the Lease Indenture Trustee.

the Escrow Deposit Agreement.

"Indemni A r emen shall means the Indemnity Agreement dated as of

1993, by the Lessee.

w F n in r

shall mean PVNGS II Funding Corp., Inc.,

a Delaware corporation.

"R finan in A r m n shall mean that certain Refinancing Agreement dated as of 1993 among the Equity Participant, Funding Corp, New Funding Corp, Owner Trustee, Indenture Trustee and the Lessee.

lr

"R fi an in D

m n shall have the meaning assigned to such term in the Refinancing Agreement."

(f)

Schedule 1 entitled "Basic Rent Percentages" is deleted in its entirety and is hereby replaced with Schedule 1

hereto.

(g)

Schedule 2 entitled "Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 2 hereto.

(h)

Schedule 3 entitled "Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 3

hereto.

I (i)

Schedule 4 entitled "Modified Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 4 hereto.

(j)

Schedule 5 entitled "Extraordinary Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 5 hereto.

(k)

Section 20 of the Facility Lease is hereby amended by inserting the words ", the Indemnity Agreement, Section 17 of the Refinancing Agreement" after the words "Sections 10(b),

14 and 16 of the Participation Agreement" in the second sentence therein.

become effective when all conditions referred to in Section 15 of the Refinancing Agreement shall have been satisfied or waived by the appropriate persons (the date of such satisfaction or waiver being referred to as the "Effective Date" ).

Once recorded, this Amendment shall be presumed to be effective, subject to any contrary statement in any document or certificate filed after the recordation of this Amendment.

SECTION 4.

Mi lian s.

(a)

Governing Law.

This Amendment No.

3 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 the law of the State of Arizona is mandatorily applicable hereto.

(b)

Original Counterpart.

The single executed original of this Amendment No.

3 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the receipt of the Indenture Trustee thereorf shall be the "Original" of this

V lb

Amendment No. 3.

No security interest in this Amendment No.

3 may be created or continued through the transfer or possession of.any counterpart other than the "Original."

(c)

Disclosure.

Pursuant to Arizona Revised Statutes Section 33-402, the beneficiary of the Trust Agreement is Emerson Finance Co.,

a Delaware corporation.

The address of the beneficiary is 8000 West Florissant, P.

O.

Box 4100, St. Louis, Missouri 63136.

A copy of the Trust Agreement is available for inspection at the offices of the Owner Trustee at Blue Hill Office Park, Mail Stop 45-02-15, 150 Royall Street,

Canton, Massachusetts 02021, Attention:

Corporate Trust Division (

Reference:

APS-PVNGS II Funding Corp.).

(d)

Owner Trustee.

Section 22(h) of the Facility Lease is applicable to this Amendment No. 3.

(e)

Counterpart Execution.

This Amendment No.

3 may be executed in any number of counterparts and by each of the parties hereto on separate counterparts, all such counterparts together constituting but one and the same instrument.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No.

3 to Facility Lease to be duly executed by an officer thereunto duly authorized.

THE FIRST NATIONAL BANK OF BOSTON, not in its individual

capacity, but solely as Owner Trustee under a Trust Agreement dated as of August 1, 1986 with Emerson Finance Co.

By:

Title:

ARIZONA PUBLIC SERVICE COMPANY By:

Title:

Treasurer and Assistant Secretary 1935b(B)

STATE OF NEW YORK

)

)

ss.

County of New York )

The foregoing instrument was acknowledged before me this day of

1993, by I

of THE FIRST NATIONAL BANK OF BOSTON, a

national banking association, on behalf of the banking association as Owner Trustee under the Trust Agreement dated as of August 1, 1986 with Emerson Finance Co.

My commission expires:

Notary Public STATE OF NEW YORK

)

)

ss.

County of New York )

The foregoing instrument was acknowledged before me this day of 1 9 9 3 by WILLIAM J ~

HEMELT~

Treasurer and Assistant Secretary of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, on behalf of the corporation.

My commission expires:

Notary Public 1935b(B)

1

BA I RENT PER ENTA E SCHEDULE 1

TO AMENDMENT NO 3

TO BE COMPLETED l935b(B)

)t

SCHEDULE 2 TO AMENDMENT NO 3

Ex CASUALTY VALUES a

P r n

F ili TO BE MPLETED 1935b(B)

t ~

M

SCHEDULE 3 TO AMENDMENT NO 3 SPECIAL CASUALTY VALUES ExrdaPrn F ili TO BE OM LETED 1935b(B)

CI l

SCHEDULE 4 TO AMENDMENT NO 3

MODIFIED SPECIAL CASUALTY VALUES Ex r P r n

F ili TO BE OMPLETED 1935b(B)

<)

pl H

SCHEDULE 5 TO AMENDMENT NO 3 EXTRAORDINARY CASUALTY VALUES P r n

Fa ili TO BE COMPLETED 1935b(B)