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 L KELEHAR & MCLEOD
To:	MIRAGLIA F J 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 li 05000528 AUTH.NAME AUTHOR AFFILIATION 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 Cr leaseback i'inane ing transactions.

+]~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 ID CODE/NAME PWR-8 ADTS 09 PWR-8 PD7 PD 07 MIRAQLIA F.J.06 COPIEB LTTR ENCL 1 1 1 1 1 RECIPIENT COPIES ID CODE/NAME LTTR ENCL PWR-3 PD7 L*08 1 1 LI C ITR*>E 01 1 INTERNAL ACRB 20 ELD/HDB3 16 RCN5 1 1 1 1 EG 8 04 RM/DDAMI MID 17 1 1 1 EXTERNAL: LPDR NSIC 0S 05 NRC PDR 02 1 1 TOTAL NURSER OP COPIES REQUIRED: LTTR PO ENCL Pf nl>>n II I,W I I IP>>), Il>>j II>>I>>ll n>>>>tI s>>>>(<>>'ln'I li n)'>>C ,)>>II r.'I"~).(.~" I nl)I>>>>>>I'I))I ,ll"""~:)J>>j>>>>)t$'I>>,l'>>t~.I.t,'~.l'>>>><>>l t J,n~"~I, JJ p RUSSELL MOORC WILLIAM G.KCLCHCR MICHACI.L.KCLCHCR PATRICK W.HURLEY CHARLCS A.PHARRIS RICHARD 6.COLE ARTHUR D GCACH JOHN M KULIKOWSKI THOMAS F.KCLEHER PETER H~JOHNSTONC HCNRY F.NARVACZ CHARLES L.MOOR C ROGCRT H.CLARK GRIAN J.O'ROURKE RONALD F.HO R N PHIL KRCHGICL CLYDE F.WORTHCN SPENCER RCIO MICHAEL WILC CLIZAGETH E.WHITCFICLD ROGCRT C CONKLIN RCGECCA A.HOUSTON GARGARA ALGIN KATHRYN J.KUHLEN RANDOLPH L.HAM 6LIN MARK STYLCS EVAN S.HDGGS P.SCOTT EATON MARGARET C.OAVIOSDN THOMAS C.GRICSS PAULA Z.HANSOM THOMAS C.GIRD THDMAS H.TOEVS WILLIAM M.CASEY RICHARD L~ALVIDREZ PATRICK V.APOOACA KURT WIHL RIKKI L.QUINTANA HCLCN D.HILLCGASS CARDL LISA SMITH JUDITH L.DURZD THOMAS J.ZIMGRICK August 4, 1986 KELEHER Gc McLEOD, P.A.ATTORNEYS AND COUNSELORS AT LAW PUBLIc SERvIcc BUILDING P.O.DRAWER AA ALBUOUEROUE NEW MEXICO BTIOS W.A.KCLCHER I 888 l9 72 A, H, MPLCDD IGO2-I GT 8 JOHN 6, TITTMANN OF EDUNSCL TcI.cI HONE 842-6262 ARcA CDDc 505 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.Edwin J.Reis, Esq.Mr.George W.Knighton Arthur C.Gehr, Esq.Timothy M.Toy, Esq.Mr.A.J.Robison Bb08070197 8b0804 PDR*DOCK 05000528 I PDRg~'y Charles L.Moore (w/encl.)yIIg Ay SP I)I/$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.

Commitment Agreement.

10 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 MEXI CO I as Lessee Sale and Leaseback of an Undivided Interest in Palo Verde Nuclear Generating Station Unit 1 and Certain Common Facilities

~I6091.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;~e 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;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-3-6091.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-6-6091.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 Control orporate 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 No.1 to the Indenture.

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: 0'4 (1)the Secretary of State of the State of Arizona, on July 17, 1986;6091.CHRYSLER.2898.17:1 II

.0 (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 (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 I RST 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 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;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, 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 execute'upplemental 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 Indentu're Estate 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$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-5-6091.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 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 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-6-6091.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, 1986-7-6091.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 e Date.July 17, 1986 t 0 6091.BURNHAN.2898.17: 1-8-'

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 No.1 to the Indenture.

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 li 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 THE F I RST NAT I 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., a Delawarecorporation (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 E T H e 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 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 the'xtent 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.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,'ecordations, 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'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-3-~~~~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..(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 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-5-6091.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: Date: July 17, 1986 gg Pw~AJ'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 as'ndenture Trustee By ic Pres'nt~Date: July 17, 1986-8-~~~6091.MFS.2898.17:1

.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 No.1 tothe In'denture.

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.-2-6091.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 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 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-2-6091.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.-4-6091.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.'e)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 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-5-6091.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 BOSTON'ot in its individual 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-6-6091.CHRYSLER.2898.18:1 00 State of New York County of New York))ss:)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 pQER UH f yaw York tGHTS N,o.'N,York county'orrtrrtission State of New York County of New York))ss:)The foregoing instrument was acknowledged before me this 16th day of July, by tp~an Authorized Officer of THE FIRST NATIONAL BANK OF'BOSTON, a national banking association, on behalf of the banking association as trustee under that certain Trust Agreement dated as of December 16, 1985 with Chrysler Financial Corporation.

Notary Public MARK R.RU~gg ty public, State of NaW YOr No.244847012 Quatlf lsd ln Kings County Cortlflcato filed ln Novs York Coun/C mission~cplro March m 1'091.CHRYSLER.2898.18:1

SCHEDULE OF CASUALTY VALUES?age 1 o=2 Basic Rent Payment Date 7/15/1986-1/15/1987 7/15/1987 1/1S/1988-7/15/1988 1/15/1989 7/1S/1989-1/15/1998 7/15/1998 1/15/1.~7/15/1991 1/15/1992 7/15/1992-1/15/1993 7/15/1993'./l5/1994-7/15/1994 1/15/1995?/15/1995-

/15/1996/15/1996 1/15/1997-

/15/1997'/l5/1998 7/15/1998-1/15/1999 7/15/1999 1/15/2888-7/15/2888 1/15/2881 7/1S/2881 1/1S/2882 7/15/2882 1/15/2883-7/15/2883 1/15/2884 7/15/2884-1/15/2885 7/15/2885 1/15/2886-7/15/2886 1/15/2887 7/15/2887-1/15/2888 7/15/2888 1/15/2889-7/15/2889 Percentage of Facility Cost 187e 6849555 189.1933837 118.6884748 111.8224392.112.8567913 113.7244946 114.4248262 114.9418423 115.2711835 115.3989188.115.3318387 115.8666867 114.5969818-113.9867827 112.9892918 111.9135112 118.7848614 189.6823294 188.3659127 187.8722811 185.7187766 184.3826418.

182.8115819 181.2416599 99.6889135" 97.91 8235 96.1948761 94.4831822.92.5939862 98.787384S 88.8824498 86.8162199 84.8118345 82.7281933-88.6896991 78.4898883 76.2883317-73.9268341 71 6888789 69.2882945.66+7548942 64.2328512.61.6616849 59.8899288 56.3885653 53.5228168.58.7liR9887

SCHEDULE OF CASUALTY VALUES Pace 2 o="-Basic Rent Payment i'a te 0 Percentage of Facility Cost 1/15/2818 7/15/2818 1/15/2811'/15/2811 1/15/2812-7/15/2812 1/15/2813 7/15/2813-1/15/2814 7/15/2814 1/15/2815-47.9742978 45.3238292-42.7762178 48.3483146 38.8698895 35.7138812 33.1258284 38.3311399=27.3222754 24.8766811 28~0000000

<1 SCHEDULE OF TERNI'AATlON VALUES Page l c-" 2 Basic Rent Payment Date Percentage of Facility Cost 7/15/1986-1/15/1987 7/15/1987 1/15/1988-7/15/1988 1/15/1989 7/15/1989-1/iS/1998 7/15/1998 1/15/1991-7/15/1991 1/15/1992?/15/1992-1/15/1993?/15/1993!/15/1994-7/15/1994 1/15/1995./15/1995-

'15/1996:15/1996:/15/1997."'1S/1997'/1998: '15/1998-:/15/1999//15/1999 1/15/2888-7/15/2888-1/15/2881 7/15/2881 1/15/2882 7/15/2882 1/15/2883-7/15/2883 1/15/2884 7/15/2884.-

1/15/2885 7/15/2885 1/15/2886-7/1S/2886 1/15/2887 7/15/2887 1/15/2888 7/15/2888 1/15/2889 7/15/2889 186.5743448 188.1288554 189.4923232 118.6688916.

111+6488885 112.4665392 113.1149863 113.5786771 113.8533273 113.9234788-113.7955798 113.4687858 112.9348884-112.1762559 111.1883793 118, 8393517-~188.8336749 187.57261S5'.86.2S36458 184.8741819 183.4311917 181.9228149 188.3341286 98.6634421 96.9178329 95.1288149 93.2891811 91.3792217-89.4469533 87.4323567 85.3943813~83.2694531 81.1288114 78.8798466 76.6123229 74.2491283 71.8791752 69.4287995 66.9116845 64.3211276-61.6772788 58.9479159 56.1625499 53.2872121 58.3538915 47.3243174~44.2531335 io SCHEDULE OF TERifINATIO.'t UALUES Page 2 o=2 Basic Rent Payment Date Percentage of.Facil'ity Cost'/15/2818 7/15/2818 1/15/2811 7/15/2811 1/15/2812 7/15/F812 1/15/2813 7/15/2813 1/15/2814 7/15/2814 1/15/2815 41.2621926 38'387259 35.5878128 32.7834511 38.1973432 27.5283378 24.5998566 21.4584828 18.8886688 14.4675112 18 OOOOOOO o

SCHEDUI.E OF SPECIAL CASUALTY VALUES Pace'-" 8 Payment Date Percentage of Facility Cost IS JAN 1986 15 FEB 1986 I S NAR'986 15 APR 1986 15 NAY 1986 15 JUN 1986'5 JUL 1986 1S AUG 1986 15 SEP"1986 15 OCT 1986 15 NOV 1986 5 DEC 1986 15 JAN 1987 15 FEB 1987 15'NAR-1987-15 APR.1987 15 NAY 1987 15 JUN 1987 15 JUL 1987 IS AUG 1987 15 SEP 1987 15 OCT 1987 15 NOV 1987 15 DEC 1987 15 JAN 1988 15 FEB 1988 IS NAR 1988 15 APR 1988 15 NAY 1988 15 JUN 1988'5 JUL 1988 15 AUG 1988 15 SEP-1988 15 OCT 1988 15 NOV 1988 15 DEC-1988 IS JAN 1989 15 FEB 1989 15 NAR 1989 15 APR 1989 15 MAY 1989 15 JUN 1989 15 JUL 1989 15 AUG 1989 IS'EP 1989 15 OCT 1989 184.61753 185.89892 I86.17877 187.24891 188.26999 189.33866 118.94267 187.54249 188.59332 189.S9493 118.62739 111.66416 112.6S156 189.13416 118.15165'11.14945 112.11763 113.11223 I14.86522 118.46662 Ill.44478 112.38184 113.34349 114.36957 115.23379 111.68594 112.55449 113.48633 114.39469 115.32468'16.22898 112.56836 113.47598 114.35773 115.26885 116.16786 117.83943 113.35455 114.24553'15.12318 115.97536 116.84836 117.68788 113.9691S 114..82684 115.64926, 0e SCHEDULE i~E SPECIAL CASUALTY VALUES Pc(9 2 0 8 Payment Date Percentage of Fac11l.ty Cost 1989 1989 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1992 1992 1992 1992 1992 1992 1992 1992 1992-1992 1992 1992 1993 1993 1993'993 1993 1993 1993 1993 1993 1993 1993 15 NOV 15 DEC 15 JAN 15 FEB 15 NAR 15 APR 15 NAY 15 JUN IS JUL IS AUG 15 SEP-15 OCT 15 NOV 15 DEC.15 JAN 15 FEB'5 NAR.15 APR 15 NAY 15 JUN 15 JUL 15 AUG 15 SEP 15 OCT 15 NOV 15 DEC 15 JAN 15 FEB IS NAR 15 APR 15 MAY 15 JUN 15 JUL 15 AUG 15 SEP 15 OCT 15 NOV 15 DEC 15 JAN 15 FEB 15 NAR 15 APR 15 NAY 15 JUN 15 JUL, 1S AUG 15 SEP 15 OCT 15 NOV 116.49294 117.33916 118.15157, 114+48541 115.23454 116.84995 116.83998 117.64986l II8.42622) 114.64311~I IS.43494 116.19312 116.97886 117.758SI 118.49637 114.68222 115.44273 116.18916 116.91415 117.65683 118.36847 114.51795 115.24178 115.93683 116.64692 117.35911 118.84168 114.15989 114.85224 115.53199'16.1894S 116.86281 117.58698 113.58569 114.23819 114.86128 115.49998 116.13935 116.74915 112.79298 113.41823 114.81455 114.59662 115.19348 115.76127 111.76188 112.33551 112.98181 113.47187

.0 ,

SCHEDULE QFSPECIAL CASUALTY VALUES Page 3 of 8 Payment Date Percenta e of Facility.est 15 15 15 15 l5 15 15 l5 I 5)C 15 15 15 15 15 15-15 15 l5 15 1 5 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 DEC-1993 JAN 1994 FEB 1994 MAR&994'PR 1994 MAY 1994 JUN-1994 JUL 1994 AUG 1994 SEP-1994 C T 1994 NOV 1994 DEC 1994-.JAN 199S'EB 1995~MAR-1!395 APR 1995 MAY 1995 JUN"1995 JUL 1'995 AUG 1995 SEP 1995'CT 1995 NOV 1995 DEC 1995 JAN 1996 FEB 1996 MAR 1996 APR 1996 MAY 1996 JUN-1996'UL 1996 AUG 1996 SEP 1996'CT 1996 NOV 1996 DEC-'1996 JAN 1997 FEB 1997 MAR 1997 APR 1997 MAY 1997 JUN 1997 JUL 1997'UG 1997 SEP 1997 OCT 1997 NOV 1997 DEC 1997 114.84282 114.61225.118.68834 111.16142 111.72258 112.28383 112.84515 113o48657 189.38543 189.93727 118.48928 111.84121 111.59332" 112.14551 188.11471 188"65689 189.19917 189.74153 118.28399 118.82654 186.78563 187, 31772 187.84989 188.38216 188.914S3 189.44788 185.39552 185.91784 186.43865 186.96836 187.48217 188.88489 183.94155 184.45282 184.96259 185.47326 185.98483 186.49491 182.41925 182.91659 183.41484 183.91159 184.48925 184.98782 188.81755 181.38189'81.78473 182.26849 182.7S236 0'I o SCHEDULE Ol'PECIAL CASUALTY VALUES Page 4 of 8 Payment Date Percenta e of~e'e 15 JAN 15 FEB 1998 1998 15 MAR 1998';5 APR 1998'5 MAY 1998.'5 JUN 1998'.5 JUL 1998.'5 AUG 1998!5 SEP-1998 15 OCT 1998 15 AOV 1998 15 DEC 1998-15 JAN 1999 15 FEB 1999 15 MAR-1999 15 APR 1999 15 MAY 1999 15 JUN.1999'.=JUL 1999-UG 1999.5 CEP 1999'5 CCT 1999:5.'OV 1999'.5 DEC 1999 i5 JAN 2888'5 FEB 2888 15 MAR'2888'5 APR 2888 15 MAY'5 JUN 2888'.5 JUL 2888.'S AUG 2888 15 SEP 2888 15 OCT 2888 1S NOV 2888 15 DEC 2888 15 JAN 2881 15 FEB 2881 15 MAR"2881-15 APR 2881 1S MAY 2881 15 JUN 2881'5 JUL 2881 15 AUG 2881 15 SEP'2881 15 OCT 2881 15 NOV 2881 15 DEC 2881 15 JAN 2882 Facility Cost 183.23634 99.13234 99.68135 188.87847 188.53971 181.88987 181.49873 97.36999 97.82836 98.29256 98.75489 99.21578 99.69371 95.55783 96.88438 96.45771 96.92548 97.38582 97'6288 93.71826 94.'95 94.9361 95.84455 95.48966 95.95212 91.79759 92.22771 92.66396 93.11558 93.55849 94.81985 89.84952 98.27378 98.78488 91.13151 91~55921 92.83525 87.83281 88.24399 88.66225 89.89686 89.52228 89.96728.85.77728 86.18381 86.59584 87.88421 87.41358 87.84235

.0, SCHEDULE OF SPECIAL CASt;ALTY VALVES Damp 5 G=8 Payment Dace Percentage of Facilicv Coze 15 FEB 2882 15 MAR 2882 1S APR 2882 1S NAY 2882 15 JUN"2882 15 JUL 2882.'5 AUG 2882 15 SEP 2882'" 15 OCT 2882 15 NOV 2882 15 DEC 2882 15 JAN 2883 15 FEB 2883 15 MA~83 1S APR 2883 15 NAY 2883 15 JUN'2883 15 JUL 2883 15 AUG 2883 15 SEP-2883 15 OCT 2883:5 NOV 2883 15 DEC 2883 15 JAN 2884 15 FEB 2884 15 MAR 2884 15 APR 2884 15 NAY 2884 15 JUN 2884'-, 15 JUL 2884 15 AUG 2M4 15 SEP-2884-15 OCT 2M4 15 NOV 2884 15 DEC"2884" 15 JAN 2885 15 FEB 2885 15 NAR-2885'5 APR 2885 15 NAY 2885 15 JUN 2885 15 JUL 2885 15 AUG 2885 15 SEP"2885 15 OCT 2885 15 NOV 2885 15 DEC 2885 15 JAN 2886 1S FEB 2886 83.64939 84.84227 84.44159 84'S838 85.26529 8S.69291 81.48237 81.86868 82.26145 82.65138 83.84137 83.45194 79.23823 79.61188 79.99837 88.38824 88.77583 81'8522 76.95297 77.31883 77.69133 78.86885 78.43859 78.82282 74.59114 74.94416 75.38695 75.68816 76.85848 76.45287 72.19488 72.53724 72 98356 73.25895 73.61471 73.99369 69.72817 78.85913 78.48858 78.76138 71.11868 71.48458 67.28223 67.52292 67.86882 68.28157 68.53552 68.89482 64.68396 o

SCHEDl:LE EiF SPECIAL CASt:ALTY VALL'ES Page 6 o" 8 Payment Date Percenta e of Eacilitv Cost~/15 NAR 2886 15 APR 2886 1S'AY 2886'.5 JUN" 2886" 15 JUL 2M6 15 AUG 2886 15 SEP-2886-15 OCT 2886 1S NOV 2886 15 DEC 2886-15 JAN 2887 15 FEB 2887 15 NAR 2887-15 APR 2887 15 NAY 2887 15 JUN 2887-15 JUL 2887 15 AUG 2887 1S SEP"2887'1S OCT 2887 15 NOV 2887 15 DEC 2887 15 JAN 2388'5 FEB 2388 15 NAR 2888 15 APR 2'388 15 NAY 2888 iS JUN 2888 15 JUL 2888 1S AUG Z888 15 SEP 2888 15 OCT 2888 15 NOV 2M8 15 DEC 2888 15 JAN 2889 15 FEB 2889 15 NAR'2M9 15 APR 2889 15 NAY 2889 15 JUN 2889'5 JUL 2889 iS AUG Z889 iS SEP-2889 15 OCT 2889 15 NOV 2889 15 DEC 2889 15 JAN 2818 15 FEB 2818 15 MAR 2919 64.91173', 65.23851!65.S6983)65.89788 I 66.25817 I 61.94249 62.23948'2.56226 62.87284 63.18385 63.52881 59.28496 S9.48837 59.78348 68.18814 68.48485 68.73544 56.48185 6.67311 S6.97244 57.25888 57.S4578 57.86811 53.51715 53.77493 54.84S88 54.33881 54.61748 54.92599 S8.56349 S8.88936 51'8483 51.34511 Si.68667 51.89721 47.53171 47.76486 48.81185 48.28196 48.53841 48.82683 44.49662 44.74894 45.81663 45.27824 45.54888 45.83589 41.5111S 41.76134 0 s' SCHEDULE OF'PECIAL CASUALTY VALUES Page 7 of 8 Payment Date 15 APR 2818 15 MAY 2818 25 JUN 2818'5 JUL 2818 15 AUG 2818 15 SEP'2818 15 OCT 2818 15 NOV 2818 15 DEC 2818-15 JAN 2811 1S FEB 2811 15 MAR"2822-15 APR 2811 15 MAY Z811 15 JUN-2811 15 JUL 2811 15 AUG 2811 15 SEP'822 1S OCT 2811 15 NOV 2811 15 DEC 2811'S JAN 2812 iS FEB 2812 15 MAR'2812-15 APR 2812 15 MAY 2812 15 JUN 2822 15 JUL 2812 15 AUG 2812 15 SEP 2812 15 OCT 2812 15 NOV 2812 15 DEC 2822 15 JAN 2813 15 FEB 2813 15 MAR 2823 15 APR 2813 15 MAY 2813 15 JUN 2813 15 JUL 2813 15 AUG 2813 25 SEP'2813 15 OCT 2813 1S NOV 2813 15 DEC 2813 1S JAN 2814 15 FEB 2814 15 MAR 2824 15 APR 2814 Percentage of Facility Cost 42.82636 42.31977 42.59883 42.91162 38.68439 38.87185 39.17489 39.46326 39.75366 48.87991 35.78414 36.86358 36.36836 36.68953 37<88289 37.35635 33.88489 33.38932'33.73414 34.86374 34.39663 34.77824 38.43678 38.7295S 31.84281 31.38888 32.71959 32.89323 27.68641 27.95885 28.25577 28.54S82 28.83729 29.17195 24.72571 24.94946 25.19297 25.46961 25.72943 26.83138 21.55186 21.74283 21.97346 22.18755 22.48377 22.66156 18.13751 18.Z8257 18.44648

.4, i 0 SCHEnt:LE OF SPECIAL CASUALTY VALUES Page 8 of 8 Payment Date Percentage of Facility Cost 15 NAY 2814 15 JUN 2814--15 JUL 2814 15 AUG 2814 15 SEP.2814-15 OCT 2814 15 NOV.2814 15 DEC 2814'-15 JAN 2815 18.64258 18.82894 19.84841 14.47768 14.58344 14.72956 14.85734 14.98627 1C.OOCOO 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.

e AMENDMENT NO.1 Dated as of July 15, 1986 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 amended to read in its entirety as follows: is"(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-'nce 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 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 become'ffective 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 same instrument.

e (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 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-5-6091.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 BOSTON'ot in its individual 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 NEW MEXICO p By Vice President nd Corporate Contro r'e 6091.BURNHAM.2898.18: 1

.

State of New York County of New York))ss:)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 Rent Payment Date 7/15/1986'/15/1987 7/15/1987 1/15/1988 7/15/1988 1/15/1989 7/15/1989 1/15/1990 7/15/1990 1/15/1991 7/15/1991 1/15/1992 7/15/1992 1/15/1993 7/15/1993 1/15/1994 7/15/1994 1/15/1995~7/15/1995 1/15/1996 7/15/1996 1/15/1997 7/15/1997 1/15/1998 0 7/15/1998 1/15/1999 7/15/1999 1/15/2000 7/15/2000 1/15/2001 7/15/2001 1/15/2002 7/15/2002 1/15/2003 7/15/2003 1/15/2004 7/15/2004 e 1/15/2005 6091.BURNHAM.

Percentage of Pacility Cost 106.6269350 108.4620154 110 0191648 111.3308106 112.4699820 113.4394230 114.2371946 114.8476467 115.2657844 115.4747706 115.4811581 115.2837367 114.8727613 114.2315094 113.3518165 114.2544464 116.2447321 117.5625418 116.1352724 113.7700741 111.0905234 108.5017094 105.5182863 102.6512304 100.7617481 98.6890884 97.4270097 95.2439805 93.9169144 91.6175245 90.2230831 87.8022117 86.3380175 83.7888657 82.2508222 79.5667924 77.9527950 75.1293462 2898.18:1 Basic Rent Payment Date 7/15/2005 1/15/2006 7/15/2006 1/15/2007 7/15/2007 1/15/2008 7/15/2008 1/15/2009 7/15/2009 1/15/2010 7/15/2010 1/15/2011 7/15/2011 1/15/2012 7/15/2012 1/15/2013 7/15/2013 1/15/2014 7/15/2014 1/15/2015 Percentage of Pacility Cost 72.4819062 70.1272653 67.7223143 65.2424137 62.7159973 60.1110508 57.4576292 54.7218716 51.9355999 49.0630858 46.1380045 43.1255891 40.2351879 37.4545358 34.8021269 32.3125759 29.6407060 26.7123360 23.5329689 20.00Q00000

~)e

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

~l'R'.>C NERVY(:E Basic Rent Payment Date 12/30/2002 I/30/2003 2/30/2003 3/30/2003 4/30/2003 5/30/2003 6/30/2003 7/30/2003 8/30/2003 9/30/2003 10/30/2003 11/30/2003 12/30/2003 I/30/2004 2/30/2004 3/30/2004 4/30/2004 5/30/2004'6/30/2004 7/30/2004 8/30/2004 9/30/2004 10/30/2004 11/30/2004

~12/30/2004 I/30/2005 2/30/2005 3/30/2005 4/30/2005 5/30/2005 6/30/2005 7/30/2005 8/30/2005 9/30/2005 10/30/2005 ll/30/2005 12/30/2005 I/30/2006 2/30/2006 3/30/2006 4/30/2006 5/30/2006 6/30/20067/30/2006 8/30/2006 9/30/2006 10/30/2006 ll/30/2006 12/30/2006 0 I/30/2007 2/30/2007 CONPANY OF NEW Percentage of Facility Cost 84.1549965 80.2852074 80.6651963 80.7182764 81.1219511 81.5148273 81.9306252 78.5870581 78.9602796 78.4586946 78.8331087 79.2077209 79.6055938 75.7324981 76.0917968 76.1066169 76.4909708 76.8639177 77.261094B 73.9447211 74.2969169 73.7250314 74.0785035 74.4321905 74.8104651 70.9362855 71.2738234 71.2459504 71.6099603 71.9619216 72.3394936 68.0730056 68.3991238 68.7513806 69.0912309 69.4314766 69.7981485 65.5182775 65.8318202 66.1569719 66.5035386 66.8373860 67.1984976 62.9005129 63.2033238 63.5337717 63.8511120 64.1688770 64.5145639 60.2095553 60.4991358 MEXICv UNIT 1 Basic Rent Payment DRte 3/30/2007 4/30/2007 5/30/2007 6/30/2007 7/30/2007 8/30/2007 9/30/2007 10/30/2007 11/30/2007 12/30/2007 I/30/2008 2/30/2008 3/30/2008 4/30/2008 5/30/2008 6/30/2008 7/30/2008 8/30/2008 9/30/2008 10/30/2008 11/30/2008 12/30/2008 I/30/2009 2/30/2009 3/30/2009 4/30/2009 5/30/2009 6/30/2009 7/30/2009 8/30/2009 9/30/2009 10/30/2009 11/30/2009 12/30/2009 I/30/2010 2/30/2010 3/30/2010 4/30/2010 5/30/2010 6/30/2010 7/30/2010 8/30/2010 9/30/2010 10/30/2010 11/30/2010 12/30/2010 I/30/2011 2/30/2011 3/30/2011 4/30/2011 5/30/2011 IF Percentage of Pacility Cost 60.8010191 61.1255136 61'365804 61.7764532 57.4524084 57.7307275 58.0382460 58.3319272 58.6260648 58.9497026 54.6183102 54.8827187 55.1601300 55.4614318 55.7485590 56.0661201 51.7146639 51.9672357 52.2506558 52.5194695 52.7887736 53.0892439 48.7301015 48.9680452 49.2197313 49.4966581 49.7586230 50.0527397 45.6724792 45.8979902 46.1560906 46.3987735 46.6419836 46.9181187 42.5298259 42.7399638 42.9646252 43.2159533 43.4514896 43.7209919 39.3115246 39.5089879 39.7408968 39.9565359 40.1727495 40.4237658 36.0685335 36.2725758 36.4924178 36.7415607 36.9741664 Basic Rent-Payment Date 6/30/2011 7/30/2011 8/30/2011 9/30/2011 10/30/2011 11/30/2011 12/30/2011 I/30/2012 2/30/2012 3/30/2012 4/30/2012 5/30/2012 6/30/2012 7/30/2012 8/30/2012 9/30/2012 10/30/2012 11/30/2012

~12/30/2012 I/30/2013 2/30/2013.

3/30/2013 4/30/2013 5/30/2013 6/30/2013 7/30/2013 8/30/2013 9/30/2013 10/30/2013 11/30/2013 12/30/2013 I/30/2014 2/30/2014 3/30/2014 4/30/2014 5/30/2014 6/30/2014'7/30/2014 8/30/2014 9/30/2014 10/30/2014 11/30/2014 1/15/2015 Percentage of Pacility, Cost 37.2438571 32.9061843 33.1276222 33.3880555 33.6315938 33.8768170 34.1616107 29.8377510 30.0727675 30.3261358 30.6131522 30.8829984 31.1950184 26.8972285 27.1582177 27.4635357 27.7513591 28.0422598 28'781693 23.9710573 24.2071394 24.4638829 24.7568327 25'318253 25.3523356 20.8753173 21.0756993 21.3207056 21.5471233 21.7759750 22.0497917 17.5254847 17.6779874 17'508931 18.0586319 18.2473113 18.4804514 13.9149576 14.0257567 14.1800593 14.3146384 14.4505026 10.00000000 0

0 PUBLIC SER'PIC Basic Rent Payment Date 0 3/30/1990 4/30/1990 5/30/1990 6/30/1990 7/30/1990 8/30/1990 0 9/30/1990 10/30/1990 11/30/1990 12/30/1990 1/30/1991 2/30/1991~3/30/1991 4/30/1991 5/30/1991 6/30/1991 7/30/1991 8/30/1991 9/30/1991 10/30/1991 11/30/1991 12/30/1991 1/30/1992 2/30/1992 3/30/19924/30/1992 5/30/1992 6/30/1992 7/30/1992 8/30/1992 9/30/1992~10/30/1992 11/30/1992 12/30/1992 1/30/1993 2/30/1993 3/30/1993~4/30/1993 5/30/1993 6/30/1993 7/30/1993 8/30/1993 9/30/1993~10/30/1993 ll/30/1993 12/30/1993 1/30/1994 2/30/1994 3/30/1994 4/30/1994 5/30/1994 COi~ZAi"Y OF NEW Percentage of Facility Cost 115.8127529 116.6164370 117.4417493 118.2309505 114.4650598 115.2718567 116.0426987 116.8346756 117.6288686 118.3870062 114.5894174

'15.3640914 116'237373 116.8602001 117.6150972 118.3382255 114.5027974 115.2391186 115.9438590 116'6665461 117.3907609 118.0833047 114.2162646 114.9202294

.115.6107262 116.2770454 116.9607136 117.6127239 113.7043410 114.3663954 114.9970243 115.6444469 116.2926665 116.9093610 112.9649228 113.5903921 114.2020066 114.7894113 115'929380 115.9649496 111.9749265 112.5541938 113.7975464 114.3695393 114.9416143 116.7990391 112.7942485 113.3573574 114'4969708 116.3267919 116.8901562 NEXICO UNIT I Basic Rent Payment.Date 6/30/1994 7/30/1994 8/30/1994 9/30/1994 10/30/1994 11/30/1994 12/30/1994 1/30/1995 2/30/1995 3/30/1995 4/30/1995 5/30/1995 6/30/1995 7/30/1995 8/30/1995 9/30/1995 10/30/1995 11/30/1995 12/30/1995 1/30/1996 2/30/1996 3/30/1996 4/30/1996 5/30/1996 6/30/1996 7/30/1996 8/30/1996 9/30/1996 10/30/1996 11/30/1996 12/30/1996 1/30/1997 2/30/1997 3/30/1997 4/'30/1997 5/30/1997 6/30/1997 7/30/1997 8/30/1997 9/30/1997 10/30/1997 11/30/1997 12/30/1997 1/30/1998 2/30/1998 3/30/1998 4/30/1998 5/30/1998 6/30'/1998 7/30/1998 8/30/1998 Percentage of Facility Cost 118.7185007 114.7053342 115.2593247 117.0587606 117.6129279 118.1671845 119.9634413 115.9405816 116.4850345 117.5872129 117.7524901 118.2972203 118.4608819 114.4272433 114.9617173 114.9557537 115.4904197 116.0251828 116.0157395 111.9723237 112,4963634 112.8154630 112.7730131 113.2973541 113.2531361 109.1992437 109.7123720 109.6335828 110.1469197 110.6603621 110.5777674 106.5121035 107.0122704 107.2543773 107.1309959

.107.6314901 107.5058970

'03.4261335 103.9126619 103.7441158 104.2308709 104.7177404 104.5444217 100.4521334 100.9243217 101.1115772

.100.9416046 101.4147395

.101.9049255 98.4546107, 98.9182646 Basic Rent Payment Date 9/30/1998 10/30/1998 11/30/1998 12/30/1998 1/30/1999 2/30/1999 3/30/1999 4/30/1999 5/30/1999 6/30/1999 7/30/1999 8/30/1999 9/30/1999 10/30/1999 11/30/1999 12/30/1999 1/30/2000 2/30/2000 3/30/2000 4/30/2000 5/30/2000 6/30/2000 7/30/2000 8/30/2000 9/30/2000 10/30/2000 11/30/2000 12I 30 I2000 1/30/2001 2I 30/2001 3/30/2001 4/30 I2001 5/30/2001 6I 30I2001 7/30/2001 8/30/2001 9/30/2001-10/30/2001 11/30/2001 12/30/2001 1/30/2002 2I 30/2002 3/30/2002 4/30/2002 5/30/2002 6/30I2002 7/30/2002 8/30/2002 9/30/2002 10/30/2002 11/30/2002 Percentage of Facility Cost.98.7191253 99.1836346 99.6482756 100.1305252 96.2683714 96.7212981 96.9133184 97.3851756 97.8483679 98.3299062 94.8909132 95'382772 95.0840806 95.5323608 95.9807840 96.4478272 92.5846993 93.0207655 93.1798883 93.6359865 94.0829283 94.5492687 91.1324130 91.5626405 91.2511704 91.6823733 92.1137312 92.5647764 88.6994113 89.1177331 89.2434354 89.6829422 90.1127742 90.5631159 87.1690624 87.5812494 87.2100140 87.6232475 88.0366492 88.4708653 84.6032660 85~0029110 85.0933045 85.5153514 85.9271766 86.3606848 82.9915632 83.3847667 82.9496808 83.3439963 83.7384943 I

SCHEDULE 3 to AMENDMENT NO.1 SCHEDULE OF TERHZNATION VALUES Basic, Rent Payment Date Percentage of Facility Cost Basic Rent Payment Date Percentage of Facility Cost e 7/15/1986 1/15/1987 7/15/1987 1/15/1988 7/15/1988 1/15/1989 7/15/1989 1/15/1990 7/15/1990 1/15/1991 7/15/1991 1/15/1992 7/15/1992 1/15/1993 7/15/1993 1/15/1994 7/15/1994 1/15/1995 7/as/199s 1/as/1996 7/15/1996 1/15/1997 7/15/1997 i/is/a998 7/15/1998 1/as/1999 7/15/1999 1/15/2000 7/15/2000 1/15/2001 7/15/2001 1/15/2002 7/15/2002 1/15/2003 7/15/2003 1/15/2004 7/15/2004 1/15/2005 6091.BURNHAM.

105.6802338 107.4753404 108.9908282 110.2590532 111.3529705 112.2752465 113.0238617 113.5830816 113.947.8241 114.1011603 114.0495482 113.7916781 113.3177017 112.6107885 111.6626619 112.4939685 114.4099193 115.6502554 114.1422412 111.6928886 108.9256303 106.2'454052 103.1667114 100.2003619 98.2073936 96.0268782 94.6523896 92.3522041 90.9030350 88.4763863 86.9493125 84.3902087 82.7819452 80.0826409 78.3881048 75.5409746 73.7569900 70.7563765 7/15/2005 1/15/2006 7/15/2006 1/15/2007 7/15/2007 1/15/2008 7/15/2008 1/15/2009 7/15/2009 1/15/2010 7/15/2010 1/15/2011 7/15/2011 1/15/2012 7/15/2012 1/15/2013 7/15/2013 1/15/2014 7/15/2014 1/15/2015 67.9242911 65.3772083 62.7716897 60.0827526 57.3384734 54.5064650 51.6163938 48.6339944 45.5906667 42.4502425 39.2459388 35.9425111 32.7488097 29.6520508 26.6701878 23.8372717 20.8075384 17.5061945 13.9381049 10.00000000

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, LesseeOriginal 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: aym~~~6091.MFS.2898.18:1

"(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 ent Date thereafter to and including

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-2-6091.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 BOSTON'ot in its individual 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-6-6091.MFS.2898.18:1

State of New York County of New York 0))ss:)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'e State of New York County of New York))ss0)PETER LIN BRIGHT BILL NOTARY PUBLIC, State of New York NO.31M52758 Qualified in New York County Commission Expires Janus y 21, l988 The foregoing instrument was acknowledged before me this 16th day of July, by-8.(JuCtfOQ , an Authorized Officer of THE FIRST'ATIONAL BANK OF 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 MFS Leasing Corp..Notary ublic MARK R.HUNT IotNY public, State of New Yak No.2M847012 Cu&llf led 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 Rent Payment Date Percentage of Pacility Cost Basic Rent Payment Date Percentage of Pacility Cost'e 7/15/1986 1/15/1987 7/LS/1907 1/LS/1903 7/15/1980 1/LS/1989.

7/LS/1989 1/15/1990 7/15/1990 1/15/1991 7/15/1991 1/LS/1992 7/15/1992 1/15/1993 7/15/1993 1/15/1991 7/LS/1994 1/15/1995 7/15/1995 1/15/199 d 7/15/1996 1/15/1997 7/15/1997 L04 o2266355 105.9359024 107o4246044 103e721 1$11 109.0282415 110.7771349 lllo5594214 L12eL662044 112e5079697 112.0140296 112o0430290 112e60297$

2 112e3208980 ill o 7464043 110o94$3905 109e9152529 103.6901463 107.4256053 104o0951206 L04e704Nb-L03e2495979 10le~.100o%4739 1/15/199$7/15/199$1/15/1999 7/15/1999 1/LS/2000 7/15/2000 1/LS/2001 7/15/2001 1/15/2002 7/LSPc002 1/15/2003 7/15/2003 1/LS/2004 7/15/2004 1/1S/2005 7/15/2005 1/15/2006 7/15/2004 1/15/2007 7/LS/2007 1!LS/cOCI 7/15/2003 1/LS/2009 7/15/2009 1/15/2010 7/15/2010 1/15/2011 7/15/2011 1/15/2012 7/15/2012 1/15/2013 7/15/2013 1/15/2014 7/15/2014 1/LS/2015 90o4605278

'td o$16hlct 95o1540768 93e4S3105t 91e7103910 89e92PA44 03e1020110 04o2342041

$4e3233M 82e3609519

$0o 3704352 78o 3273459 7de2391906 74 o1055736 71o9260710 d9e7003412 67o 4232322 45o 1094549 62e7439243, 60o331447d 57o0726403 55o 3470511 52o0LSLbX 50e2LMLL 47.5739142 44eC3MSS 42o 1532692 3t.3776763 34e5600422 33e70LbXO 30o$4NN5 2$e09$4420 25e 4$91903 22oRSQ4 Lte 9999999 6091.MFSo2898o18:1

~, o SCHEDULE 2 to AHENDHENT NO.1 SCHEDULE OF SPECIAL CASUALTY Basic Rent Payment Date Percentage of Facility Cost Basic Rent Payment Date Percentage of Facility Cost 12/30/1985 1/30/1984 2/30/1984 3/30/1984 I/30/1986 5/30/1986 6/30/$986 7/30/$984&/30/$984 9/30/$986 10/30/1984 11/30/1986 12/30/1984 1/30/1987 2/30/1987 3/30/1987<<30/1981 5/30/1987 4/30/1987 7/30/$987 8/30/$987 9/30/1987 10/30/1987 tt/30/Nll 12/30/1987 1/30/1988 2/30/1988 3/30/$988'/30/1988 5/30/1988 6/30/1988 7/30/1'988 8/30/1988 9/30/$988 10/30/1988 11/30/$988 12/30/1988 101.4945161

$02.3454933 103.3984&98 104.4340954 105.4494156 104.447$A~4$07e489Ã33 104.7409797 105e783265$

104e C097097 101e81ld740 103.8175742 109e&274592 106e3401154 101,3447165

$0&e332M7 109.2995993 110.2702948 111.2446407 107e7047101

$05.bQ9924$09ed$277$2 1$0e5477095 ill e48595A 112 e4275454 10&eN4%77 109e7734429 110.6954855 111.600%90 112e SN704 113el204035 109.0215532 110.7140000 111.4093947 112.4879762

$13.3693599 114e2535762 1/30/1989 2/30/$989 3/30/$989 I/30/t989 5/30/1989 4/30/$969 7/30/$989 8/30/1989 9/30/$989$0/30/$989 11/30/1989 12/30/1989 1/30/1990 2/30/1990 3/30/1990 I/30/1990 5/30/$990 6/30/$990 7/30/$990 8/30/1990 9/30/1990 10/30/1990 t t/30/$990$2/W$990 1/30/1991 2/30/199$3/30/$99$I/30/1991 5/30/1991 6/30/1991 7/30/1991 8/30/1991 9/30/1991 10/30/1991 it/30/$991$2/30/$99$110ed270940 111 e4917636 112.3591392 113.2095996 114.062d 133 114e 91&i0&3 1tle24~112.0983487 112.9342639 113e 7571544 114e 5803344 115.405&347 lit e720155d t$2.5248950$13.3318120 114.$21811 114e91331dl

$15e 707N29$$$.9894142 112e7620474

$$3e5343111 114e 2034272 115e 0522044 115e 8127279 112e0415590 112el999995 113e540023$

114.264'14.9910221 it5ell&6937 111.9365910 112eh43704$

113e352$%5 114e 0452246$$4e7391752 115e 4349030

SCHEDULE 2 to AHENDHENT NO.1 SCHEDULE OF SPECIAL CASUALTY Basic Rent Payment Date 1/30/1992 2/30/1992 3/30/1992 I/30/1992 5/30/1992 6/30/1992 7/30/1992 8/30/1992 9/30/1992 10/30/1992 11/30/19t2 12/30/1992 1/30/1993 2/30/1993 3/30/1993 I/30/1993 5/30/1993 4/30/1993 7/30/1993 8/30/1993 9/30/1993 10/30/1993 11/30/1993 12/30/1993 1/30/199l 2/30/1994 3/30/1994 4/30/1994 5/30/1994 d/30/1994 7/30/1994 8/30/1994 9/30/1994 10/30/1994 Percentage of Facility Cost 111 ebltt496 112.2934968 112e9680762 113 ed272227 114.2872448 114e9401$19 111e09O4189 llie7367X4 112e 3757752 112.9992t78 113e 6233923 lll e24C06$0 110e3617919 110e9630922 111.5648104 112e1509112 112e737264$

113 e 3238730 109e3t923$

7 10te94ld727 110e5241944 ille0704447 llle 4331370 112e 1016073 108.2444390 itNe79207Q 10te3377124 109.C833494 110.489M 110.974420

.101e0244048 107e560802d 108.0972003 108eb33$981 Basic Rent Payment Date di/30/1991 12/30/1994 1/30/199$2/30/1995 3/30/1995 I/30/199$5/30/1995 4/30/1995 F/30/1995/30/1995 P/30/1995 10/30/1995 11/30/199$

g/30/1995 tf/30/1996 2/30/199d 3/30/199 d I/30/1996 5/30/1996 6/30/1996 7/X/1996 8/30/1994 9/30/1994 10/30/1996 11/30/19td 12/30/1994 1/30/1997 2/30/1997 3/30/1997 I/30/1997 5/30/1997 6/30/lt97 7/30/1997 8/30/1997 9/30/1997 10/30/1997 11/30/1997 12/30/1997 Percentage of Facility Cost 10t e16999$8 109e7063936 105.7447133 10de2734$38 106e8001942 107e 3269347 107e8$34751 105e38041$

4 104 e4108414 104.9274810 105e4441204 105.9407602 10d.4773998 104.9940393 103.0141210 103e$202035 104e02428$

9 104e 5323684 105e 0304509 105.5445333

,101e553C010 102.0488440 102e5~103.0389323 103e5339760 10le0290198 100e0261855 100eSN1969 100e9902083 101el722197 101e9542311 102e4362424 98e4200172 98e8883239 tte354430$

99.8249372 100e2932439

~100e7415505 6091.MFS.2898.18:1

~~~

SCHEC JLE 2 ta AHENDHENT NO.1 SCHEDULE OF SPECIAL CASUALTY VALUES Basic Rent Payment Date Percentage of Facility Cost Basic Rent Payment Date Percentage of Facility Cost 1/30/1998 2/30/1998 3/30/1998 4/30/1998 5/30/1998 6/30/1998 7/30/1998 8/30/l998 9/30/1998 10/30/1998 11/30/1998 12/30/1998 1/30/1999 2/30/1999 3/30/1999 I/30/1999 5/30/1999 4/3D/1999 7/30/1999 8/30/1999 9/30/1999 10/30/1999 il/30/1999 12/30/1999 1/30/2000 2/30/2000 3/30/2000 I/30/2000 5/30/2000 d/30/2000 7/30/2000 8/30/2000 9/30/2000 10/30/2000 ll/30/2000 12/30/2000 94e7312447 97+1051477 97m d390487 98e0933705 98o5474969 tto00202X 94 o 9591318 95.40ld997 95.8442717 96.2951814 9he7461861 97a1972868 93o 1443708 93'784075 94o0124482 94e4550777 94.8978048 95.3404306 tl.27%MQ 91e704342t 92e 1296260 92'437404 t2o91?9%0 93'322710 89.~418231 89.7781077 90.1943963 90ahl97655 91 o0452377'tie4708140 87+3912328, 87.7982704 88<2053120 88ed214901 8te0381740 89.4547648 1/30/2001 2/30/2001 3/30/2001 I/g/2001 5f30/2001 4/30/2001 WX/2001 8/30/2001 9/30/2001 10/30/2001 11/A/2001 12/30/2001 1/30/2002 2/30/2002 3/30/2002 4/30/2002 5/30/2002 6/30/2002 7/30/2002 8/30/2002 9/30/2002 10/30/2002 11/30/2002 12/30f2002 1/30/2003 2f30/2003 3/30/2003 4/30/2003 5/30/2003 4/30/2003 7/30/2003 8/30/2003 9/30/2003 10/30/2003 11/30/2003 12/30/2003 1/30f2004, 2/30/2004 3/30/2004 I/30/2004 5/30/2004 4/30/2004 7/30/2004 8/30/2004 9/30/2004 10/30/2004 85.34%075 85.7633489 86 1403944 84eQN396 86o9752933 87.3326569 83.284N2 83,471@%84.0596210 84.4572755 84,N50407 85.2529186 81.1444220 01 e5221770 81,8tt93h0 82.2870428 82,67SW2 83.0440013 78.9453265 79.3127764 79,4802304 80.0511173 80,4341219 80,8142454 74.6851201 77.0419840 77.&QSO 77,7464523 78.1341694 78,5020056 74o36213Q 74.7081207 75.0541095 75.410257 75.7682659 7bo1255315 71.9746211 72.3094290 72,44423$72,NN45 73,3344415 73.4803 4't.5234011 69,8441140 70.1d74305 70,5024015 o 1 l.

SCHEDULE 2 to AHENDHENT NQ.1 SCHEDULE OF SPECIAL CASUALTY VALUES Basic Rent Payment Date Percentage of Facility Cost Basic Rent Payment Date Percentage of Facility Cost 11/30/2004 12/30/2004 1/30/2005 2/30/200$3/30/2005 I/30/200$.5/30/2005 6/30/2005 7/30/2005 8/30/200$9/30/2005 10/30/2005 ti/30/2005

, 12/30/2005 1/30/2006 2/30/2006 3/30/2006 I/30/200d 5/30/2006 6/30/2006 7/30/2006 8/30/2006 9/30/2004 10/30Pc006 11/30/2004 12/30/2006 1/30/2007 2/30/2007 3/30/2007 I/30/2007 5/30/2007 6/30/2007 7/30/2007 8/30/2007 9/30/2007 10/30/2007 11/30/2007 12/30/2007 70e 837%30 71 e 172736$46.9988083 67.3i03099 47.6218149 67e94FA07 68e2639203 48e S26752 44e 4047712 44.70d1433 45.0055187 Ne3172104 65e 6290394 N.941C073 6t.7427886 d2.029d924 42e316S91 d2.bld1464 d2e91N7N 63e 2157259 S.COI8578 Se 2789517 Se5FOCN Se0401S9 40e1274140 60.4t43101 Sbe 1909632 Sbe4519032 54.7128459 Sde9871d77 57e2616378 Sl e5342579 53e 2990497 53e5464495 53.7933917 54 eOSSj469 54e3t63944 Sie$7787Q 6091.MFS.2898e18:1

~~~1/30/2008 2/A~/2008 3/30/2008 I/30/2008 5/30/2008 d/30/20C3 7/30/2008 8/30/2008 9/30/2008 10/30/2008 1t/30/2008 12/30/2008 1/30/2009 2/30/2009 3/30/2009 I/30/2009 5/30/2009 6/30/2009 7/30/2009 8/A~/2009 9/30/2009 10/A/2009 1t/30/2009 12/~A/2009 t/30/2010 2/30/2010 3/30/2010 , I/30/2010 5/30/2010 6/30/2010 7/30/2010 8/30/20ta 9/30/2010 10/30/2010 il/30/2010 12/30/2010 1/30/2011 2/30/2011 3/30/2011 I/30/2011 ,5/30/2011 4/30/2011 7/30/2011 8/30/2011 9/30/2011 10/30/2011 11/30/2011 50.326985 50e5604792 50.7940t04 51e041d787 Sle@NN 51e5374860 47.2724747 47.4917373 47e7110022 47.9447994 48 1787571 48.4128772 iie t3%005 iie 3379772 44.5425762 44.7621130 44e981814d 45 20t4827 40.9073013 41.09682b2 il e28435 41.4912343 Iied962847 41.901 Aht 37.S18337 37.7658738 37.9399155, 38e1297400 38e3197NO 38.5%1 14 34.1845345 34.342669d 34eMC062 34ed751657 34e8497034 35,0244213 X.6828923 30e8244749 30e96645$4 3tet249171

'le203RQ 31e442%45 27.0842793 27e 2092710 27e3342N4 27e4743985 27.d107194

SCHEDULE 2 to AHENDHENT NQ.1 SCHEDULE OP SPECIAL CASUALTY VALUES'e Basic Rent-Payment Date 1/30/2012 2/30/2012 3/30/2012 4/30/2012 5/30/2012 4/30/2012 7/30/2012 S/30/2012 9/30/2012 10/30/2012 11/30/2012 12/30/2012 1/30/2013 2/30/2013 3/30/2013 4/30/2013 5/30/2013 4/30/2013 7/30/2013 8/30/2013 9/30/2013 10/30/2013 11/30/2013 12/30/2013 1/30/2014 2/30/2014 3/30/2014 4/30/2014 5/30/2014 4/30/2014 7/30/2014 8/30/2014 9/30/2014 10/30/2014 11/30/2014 12/30/2014 I/Py~>/ao/o?OW Percentage of Pacility Cost 23e386082d 23e492191 23e6015Q5 23e 7269108 23e 8524578 23e978199d 19.SFP321 19e 6893224 19e7053PA 19.8997491 20e 0144363 20e 1294399 15.75~$78 15.9%3333 15.9543965 ide07454S1 ide1954470 ide 3171012 11 e 9486442 12.055I9 12eidWA'2 2918682 12e 4219033 12e 5531837 8e1547900 8e 2409549 le 32C0577 Se4367240 Se54N773 Se4576243 4,2091087 4e 2519822 4e 2953224 4e 3598195 4e 4250186 4.4909274 4~Ka7O u.eeeeeeee Basic Rent Payment Date Percentage of Pacility Cost

SCHEDULE 3 to ANENDHENT NO.1 SCHEDULE OF TERMINATION VALUES Basic Rent Payment Date Percentage of Facility Cost Basic Rent.Payment Date Percentage of Facility Cost'/15/198d 1/15/1987 7/15/1987 l/15/1988 7/15/1988 1/15/1989 7/15/1989 1/15/1990 7/15/1990 1/15/1991 7/15/1991~1/15/1992 7/15/1992 1/15/1993 7/15/1993 1/15/1994 1/15/1994 1/15/1995 7/15/1995 1/15/199d 7/15/1994 1/15/1997 7/15/1997 1/15/1998 7/15/1998 1/15/1999 7/15/1999 1/15/2000 7/15/2000 1/15/2001 1/15/2001 1/15/2002 1/15/2002 1/15/2003 1/iS/2003 1/15/2004 7/15/2004 1/15/2005 7/15/2005 1/15/2004 7/15/2004 1/15/2007 7/15/2007 1/15/2008 7/15/2000 1/15/2009 104e2244355 105.9359324 107.4244844 103e7211811 109 e 8232415 110e777134'9 ill e 5594214 112e 14Q044 112 Q9N97 112.8148294 112e8430298 112eb829702 112e32MFA 111.7444043 110e94QN5 109e9152529 103.4981443 107.4254053 104e0951Ma 104.704004 103e2495979 101e~100ei300M~

98e48i580 9be8144129 95e1543748 93e 4531'1 e7105918 89e92PA44.88e1020110 84.2342041 84.383$9 82e 3489519 80e 3704352 18e 3273459 74.2391904 14e10557A 11e9240710 49e7003412 47e 4282322 45.1094549 42e7439248 40e 3314474 57.8724408 55e3470511

'2ell51488 7/15/2009 1/15/2010 1/15/2010 1/15/2011 7/lS/2011 1/15/2012 7/15/2012 1/15/2013 7/15/2013 1/15/2014 7/15/2014 1/15/2015 50.2173011 47.5739142 44eCÃV5 42e1532492 39.3774743 34e 5400422'3.701b3Q 30eS45725 28e 0984420 25e 4891983 22.CNlQh 19e9999999

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 Due Interest Rate Principal Amount July 15, 1991 July 15, 1996 January 15, 2012 8.300%9.125%10.300%$13,622,000

$20,851,000

$95,177,000

$129 p 650 g 000 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.

i~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.(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.

'e.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 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'e[NOTARIAT SEAL],'erm 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 on'ehalf of said corporation by like order.~Not ic[NOTARIAL SEAL]Term Expires: 'E-'ittN BR<GHTBILL NOTAftY PUBLIC, State of New.Yo!k t'f 0.3l.4852758 Qualified in New York County Commission Expires Janua y 2L l988-8-6091.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.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.'e The Holder hereof, by its acceptance of this Fixed Rate Note, agrees that each payment received by it hereunder shall be applied in'he 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 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 shall'ccur and be continuing, the unpaid balance of the prin-.'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'e This Note is-one of the series of Notes referred to therein and in the within-mentioned Indenture.

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

~FORM OF FIXED RATE NOTE (DUE JULY 15, 1996)EXHIBIT A-2 TO AMENDMENT.NO.1 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 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 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.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 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.'e 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 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 Af f 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 6091.CHRYSLER.2898.10:1

-4.

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 Date Principal Amount Payable Principal Amount Paid January 15, 1992 July 15, 1992 January 15, 1993 July 15, 1993 January 15, 1994 July 15, 1994 January 15, 1995 July 15, 1995 January 15, 1996 July 15, 1996 Principal Amount$1,692'-,000 1,769,000 1,850,000 1,934,000 2,022,000 2,115,000 2,211,000 2,312,000 2,418,000 2,528,000$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

~FORM OP FIXED RATE NOTE (DUE JANUARY 15, 2012)EXHIBIT A-3 TO AMENDMENT NO.1 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 if made on the date on which such payment was due.'e 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 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.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 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 of'he 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 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 Date Principal Amount Payable Principal Amount Paid January 15, 1997 July 15, 1997 January 15, 1998 July 15, 1998 January 15, 1999 July 15, 1999 January 15, 2000 July 15, 2000 January 15, 2001 July 15, 2001 January 15, 2002 July 15, 2002 January 15, 2003 July 15, 2003 January 15, 2004 July 15, 2004 January 15, 2005 July 15, 2005 January 15, 2006 July 15, 2006 January 15, 2007 July 15, 2007 January 15, 2008 July 15, 2008 January 15, 2009 July 15, 2009 January 15, 2010 July 15, 2010$2,643,000 2,779,000 2,922,000 2,181,000 2,260,000 1,233,000 2,377,000 1,301,000 2,510,000 1,373,000 2,650,000 1,448,000 2,798,000 1,528,000 3,331,000 2,119,000 2,612,000 2,232,000 2,755,000 2,355,000 2,908,000 2 I 485 I 000 3,069,000 2,622,000 3,534,000 5,734,000 6,030,000 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 Date Principal Amount Payable Principal Amount Paid January 15, 2011 July 15, 2011 January 15, 2012$6,667,000 7,010,000 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, not in its individual 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 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 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 Due Interest Rate Principal Amount July 15, 1991 July 15, 1996 January 15, 2013 8.300%9.125%10.300%$7,017,000$12,496,000

$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'e CHEMICAL BANK, 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 NOTARY PUBLIC, State of New York NO.31M52758 Qualified in New York County 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[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&cfires 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.'e 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 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

)o0 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.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'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 Date Principal Amount Payable Principal Amount Paid January 15, 1987 July 15, 1987 January 15, 1988 July 15, 1988 January 15, 1989 July 15, 1989 January 15, 1990 July 15, 1990 January 15, 1991 July 15, 1991$0 232,000 732,000 763,000 794,000 827,000 862,000 898,000 935,000 974,000 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-'isions 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 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.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 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.'e 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 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 Af f 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 BANK i 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 Date Principal Amount Payable Principal Amount Paid January 15, 1992 July 15, 1992 January 15, 1993 July 15,.1993 January 15, 1994 July 15, 1994 January 15, 1995 July 15,.1995 January 15,.1996 July 15, 1996$1,014,000 1,060,000 1,109,000 1,159,000 1,212,000 1,267,000 1,325,000 1 I 386 I 000 1,449,000 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, 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 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.'e 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; 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 6091.BURNHAN.2898.10: 1-4

~~

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 Payment Date$58,031,000 Principal Principal Amount Payable Amount Principal Amount Paid'e January 15, 1997 July 15, 1997 January 15, 1998 July 15, 1998 January 15, 1999 July 15, 1999 January 15, 2000 July 15, 2000 January 15, 2001 July 15, 2001 January 15, 2002 July 15, 2002 January 15, 2003 July 15, 2003 January 15, 2004 July 15, 2004 January 15, 2005 July 15, 2005 January 15, 2006 July 15, 2006 January 15, 2007 July 15, 2007 January 15, 2008 July 15, 2008 January 15, 2009 July 15, 2009 January 15, 2010 July 15, 2010$1,584,000 1,666,000 1,751,000 1,078;000 1,337,000 739,000 1,411,000 779,000 1,490,000 822,000 1,573,000 867,000 1,661,000 915,000 1,754,000 965,000 1,851,000 1,587,000 1,626,000 1,417,000-1,715,000 1,495,000 1,810,000.1;577,000 1,910,000 1,664,000 2,016,000 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 Date Principal Amount Payable Principal Amount Paid January 15, 2011 July 15, 2011 January 15, 2012 July 15, 2012 January 15, 2013$3,687,000 3,877,000 4,077,000 4,287,000 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 80~

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 TRUST INDENTURE i MORTGAGE i S E CUR I 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 CHEMI CAL 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 Due Interest Rate Principal Amount July 15, 1991 July 15, 1996 January 15, 2014 8.300%9.125%'0.300%

$4,693,000$7,185,000$34,605,000

$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.

0 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 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[NOTARIAL SEAL]Term Expires: MARK R.HUNT Notary Public, State ot New York 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.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'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 it hereunde'r 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 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 6091.MFS.2898.10: 1-'6-

SCHEDULE 1 TO THE FIXED RATE NOTE (DUE JULY 15, 1991)Schedule of Principal Amortization

$4,693,000 Principal Amount Payment Date Principal Amount Payable Principal Amount Paid January 15, 1987 July 15, 1987 January 15, 1988 July 15, 1988 January 15, 1989 July 15, 1989 January 15, 1990 July 15, 1990 January 15, 1991 July 15, 1991$388,000 404,000 421,000 439,000 457,000 476,000 495,000 516,000 537,000 560,000 Principal Amount$4,693,000 Page 1 of 1 6091.MFS.2898.08:1 tl t 4 1'I I 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 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.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~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 the'ndenture, be declared or'ay 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 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-'ided 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.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'e This Note is one of the series of Notes ref erred to therein and in the'within-mentioned 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 Da t'e Principal Amount Payable Principal Amount Paid January 15, 1992 July 15, 1992 January 15, 1993 July 15, 1993 January 15, 1994'July 15, 1994 January 15, 1995 July 15, 1995 January 15, 1996 July 15, 1996$583,000 610,000 637,000 666,000 697,000 729,000 762,000 797,000 833,000 871,000'e Principal Amount$7,185,000 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'e THE FIRST NATIONAL BANK bF 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 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.'e 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 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 hereunder shall be applied in the manner set forth in Section'.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.

'e 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 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'e 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.MFS.2898.10:1

~,

~e SCHEDULE 1 TO THE FIXED RATE NOTE (DUE JANUARY 15, 2014)Schedule of Principal Amor tization for the Long Amount Payment Date$34,605,000 Principal Principal Amount Payable Amount Principal Amount Paid'e January 15, 1997 July 15, 1997 January 15, 1998 July 15, 1998 January 15, 1999 July 15, 1999 January 15, 2000 July 15, 2000 January 15, 2001 July 15, 2001 January 15, 2002 July 15, 2002 January 15, 2003 July 15, 2003 January 15, 2004 July 15, 2004 January 15, 2005 July 15, 2005 January 15, 2006 July 15, 2006 January 15, 2007 July 15, 2007 January 15, 2008 July 15, 2008 January 15, 2009 July 15, 2009 January 15, 2010 July 15, 2010$911,000 958,000 1,007,000 819,000 596,000 612,000 629,000 646,000 664,000 682,000 701,000 720,000 740,000 760,000 781,000 802,000 824,000 847,000'870,000 894,000 919,000 944,000 970,000 997,000 1,024,000 1,052,000 1,081',000 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 Date Principal Amount Payable Principal Amount Paid January 15, 2011~July 15, 2011 January 15, 2012 July 15, 2012 January 15, 2013 July 15, 2013 January 15, 2014 E Principal Amount$1,141,000 1,173,000 1,205,000 1,540,000 2,385,000 2,507,000 1,093,000$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-'red a Term Note Supplemental Indenture, dated as of December 31, 1985 (the Series 1985 Term Note Supplemental Indenture), to the Trustee, and the Company issued thereunder a series of Securities designated"Term Lease Obligation Notes, Series 1985" in the 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;WHEREAS, Section 11.02 of the Original Indenture provides that, with the consent of Holders of not less than a majority in principal amount of the Outstanding Securities and PNM, the Company and the Trustee may enter into an indenture supplemental to the Original Indenture for the purpose of changing the rights and 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:-2-6091.60.2898.04Alt:1

~~~

NOW I THEREFORE g TH I S SER I 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'f Principal Interest Rate Principal Amount July 15, 1991 July 15, 1996 January 15, 2014 8.300%9.1254 10.300%-$25,332,000

$40 I 532 J 000$187,813,000

$253 g 677 I 000-3-6091.60.2898.04Alt: 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:-4-6091.60.2898.04Alt: 1

~Sinking Fund Date January 15, 1987 July 15, 1987 January 15, 1988 July 15, 1988 January 15, 1989 July 15, 1989 January 15, 1990 July 15, 1990 January 15, 1991 July 15, 1991 January 15, 1992 July 15, 1992 January 15, 1993 July 15, 1993 January 15, 1994 July 15, 1994 January 15, 1995 July 15, 1995 January 15, 1996 July 15, 1996 January 15, 1997 July 15, 1997 January 15, 1998 July 15, 1998 January 15, 1999 July 15, 1999 January 15, 2000 July 15, 2000 January,15, 2001 July 15, 2001 January 15, 2002 July 15, 2002 January 15, 2003 July 15, 2003 Jul 15, 1991$1,515,000 1,809,000 2,375,000 2,475,000 2,577,000',684,000 2,795,000 2,912,000 3,032,000 3,158,000 Stated Maturity Jul 15, 1996 Januar 15, 2014$3,289,000 3,439,000 3,596,000 3,759,000 3,931,000 4,111,000 4,298,000 4,495,000 4,700,000 4,914,000$5,138,000 5,403,000 5,680,000 4,078,000 4,193,000 2,584,000 4,417,000 2,726,000 4,664,000 2,877,000 4,924,000 3,035,000 5,199,000 3,203,000 0 6091.60.2898.04Alt:1 0~

Sinking Pund Date Jul 15, 1991 Stated Maturity Jul 15, 1996 Januar 15, 2014$5,866,000 3,886,000 5,287,000 4,666,000 5,251,000 4,666,000 5,542,000 4,924,000 5,849,000 5,196,000 6,468,000 8 I 450~000 9,127,0'00 9,233,000 11,495,000 12,060,000 8,653,000 5,827,000 3,,646,000 2,507,000 1,093,000 January 15, 2004 July 15, 2004 January 15, 2005 July 15, 2005 January 15, 2006 July 15, 2006 January 15, 2007 July 15, 2007 January 15, 2008 July 15, 2008 January 15, 2009 July 15, 2009 January 15, 2010 July 15, 2010 January 15, 2011 July 15, 2011 January 15, 2012 July 15, 2012 January 15, 2013 July 15, 2013 January 15, 2014 (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-6-6091.60.2898.04Alt: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.-7-6091.60.2898.04Alt: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 0 (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 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".-8-6091.60.2898.04Alt:1 i

ART I 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-10-6091.60.2898.04Alt: 1

CHENICAL BANKi as Trustee i~[CORPORATE SEAL]By ice Pres ent Attest: Tru Officer 0-11-6091.60.2898.04A1t: 1 o S STATE OF NEW YORK COUNTY OF NEW YORK)st: 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.24-47592'ua'lif!

ed in Kings County Certilicate Filed in Ncw YoA County pg Commission Expires August 31.19....v 6091.60.2898.04Alt:1 o

STATE OF NEW YORK)COUNTY OF NEW YORK)SS~: 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 Qua':.'!'ed in K:nge CountY Certtf:c"'.

-.."'.;ork Count]Cornntlr.'.on cR,.;.'" u,'ust 3l, t9.~6091.60.2898.04Alt:1

~e SCHEDULE 1 to SERIES 1986A BOND SUPPLEMENTAL INDENTURE[FORM OF FACE OF BOND]No.R-FIRST PV FUNDING CORPORATION LEASE OBLIGATION BOND SERIES 1986A INTEREST RATE STATED 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.-2-6091.60.2898.04Alt:1 o 1 I S4 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 Attest: By President Secretary'e[FORM OF CERTIFICATE OF AUTHENTICATION]

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

CHEMI CAL 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-4-6091.60.2898.04Alt: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-5-6091.60.2898.04Alt: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 of Principal Interest Rate Principal Amount July 15, 1991 July 15, 1996 January 15, 2014 8.3%9.125<10.3%$25 i 332 i 000$40,532,000

$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 theIndenture.

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.'e No service charge will be made to any Holder of Bonds for any such transfer or exchange, but the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment for registration of transfer, the person in whose name this Bond is registered shall be deemed to be the owner hereof for the purpose of receiving payment as herein 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.-9-6091.60.2898.04Alt: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 December 16., 1985, between Trustee No.1, as lessor, No.1 thereto, dated as of Lease, dated as of PNM, as lessee, and Owner as amended by Amendment July 15, 1986;(ii)the Facility December 16, 1985, between Trustee No.2, as lessor, No.1 thereto, dated as of Lease, dated as of PNM,.as lessee, and Owner as amended by Amendment July 15, 1986;and (iii)the Fac i 1 i ty December 16, 1985, between Trustee No.3, as lessor, No.1 thereto, dated as of Lease, dated as of PNM, as lessee, and Owner as amended by Amendment July 15, 1986.(6)Participation Agreement means each of: 'e (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 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.-3-6091.60.2898.04Alt:1

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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-2-6091.60.2898.03Alt: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-3-6091.60.2898.03Alt:1 e~i