When recorded, return to:  Greg R. Nielsen
                           Snell & Wilmer
                           3100 Valley Bank Center
                           Phoenix, Arizona 85073


================================================================================


                TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND
                               ASSIGNMENT OF RENTS


                            Dated as of December 15, 1986


                                     between


                     THE FIRST NATIONAL BANK OF BOSTON, not
                     in its individual capacity, but solely
                         as Owner Trustee under a Trust
                         Agreement dated as of July 31,
                           1986, with chase Manhattan
                           Realty Leasing Corporation


                                       and


                                 CHEMICAL BANK,
                              as Indenture Trustee

================================================================================

              Sale and Leaseback of a .7933333% Undivided Interest
             in Palo Verde Nuclear Generating Station Unit 2 and a
                 .2644444% Undivided Interest in Certain Common
                                   Facilities

================================================================================


<PAGE>


                                TABLE OF CONTENTS
                                                                        Page
                                                                        ----
                                    ARTICLE I

                   CONSTRUCTION, GOVERNING LAW, INTERPRETATION
                                 AND DEFINITIONS
SECTION 1.1    Governing Law ...........................................  2

SECTION 1.2    Headings and Table of Contents ..........................  2

SECTION 1.3    Definitions; Construction of
               References; Schedules ...................................  2

SECTION 1.4    Disclosure of Beneficiaries .............................  3


                                   ARTICLE II

                                    SECURITY



SECTION  2.1   Grant of Security Interest; Mortgage ....................  4

SECTION  2.2   Payments Under the Facility Lease .......................  6

SECTION  2.3   Release of Lien on Lease Indenture Estate ...............  7

SECTION  2.4   Power of Attorney .......................................  9







                                       -i-


6091.CHASEU.LEASE.07:1
<PAGE>


                          TABLE OF CONTENTS (Continued)

                                   ARTICLE III

                   ISSUE, EXECUTION, AUTHENTICATION, FORM AND
                              REGISTRATION OF NOTES
                                                                        Page
                                                                        ----


SECTION 3.1   Limitation on Notes ....................................   10

SECTION 3.2   Execution of Notes .....................................   10

SECTION 3.3   Effect of Certificate of
              Authentication .........................................   10

SECTION 3.4   Creation of the Initial Series
              Note; Aggregate Principal Amount,
              Dating and Terms; Prerequisites to
              Authentication and Delivery of the Initial
              Series Note; Application of Proceeds ...................   11

SECTION 3.5   Additional Notes .......................................   12

SECTION 3.6   Security for and Parity of Notes .......................   15

SECTION 3.7   Source of Payments Limited .............................   15

SECTION 3.8   Place and Medium of Payment ............................   16

SECTION 3.9   Prepayment of notes; Assumption by
              Lessee; Notice of Assumption or Prepayment .............   17

SECTION 3.10  Muti1ated, Destroyed, Lost or Stolen Notes .............   19

                                      -ii-


6091.CHASEU.LEASE.07:1
<PAGE>


                          TABLE OF CONTENTS (Continued)
                                                                        Page
                                                                        ----

SECTION  3.11  Allocation of Principal and Interest ..................   19


                                   ARTICLE IV

                        REGISTRATION, TRANSFER, EXCHANGE,
                       CANCELLATION AND OWNERSHIP OF NOTES

SECTION  4.1   Register of Notes .....................................   20

SECTION  4.2   Registration of Transfer or
               Exchange of Notes .....................................   21

SECTION  4.3   Cancellation of Notes .................................   22

SECTION 4.4    Limitation on Timing of Registration of Notes .........   22

SECTION 4.5    Restrictions on Transfer Resulting
               from Federal Securities Laws;
               Legend ................................................   22

SECTION 4.6    Charges upon Transfer or Exchange
               of Notes ..............................................   23

SECTION 4.7    Inspection of Register of Notes .......................   23

SECTION 4.8    Ownership of Notes ....................................   23







                                       iii

6091.CHASEU.LEASE.07:1
<PAGE>


                          TABLE OF CONTENTS (Continued)

                                                                        Page
                                                                        ----

                                    ARTICLE V

                    RECEIPT, DISTRIBUTION AND APPLICATION OF
                  INCOME AND PROCEEDS FROM THE LEASE INDENTURE
                                     ESTATE


SECTION 5.1    Basic Rent, Interest on Overdue
               Installments of Basic Rent and
               Prepayments of Interest ................................  24

SECTION 5.2    Amounts Received as Result of
               Event of Loss, Deemed Loss Event,
               Exercise of Option to Terminate,
               Exercise of Cure Option or
               Occurrence of Special Purchase
               Event ..................................................  25

SECTION 5.3    Amounts Received After, or Held 
               at Time of, Indenture Event of
               Default under Section 6.2 ..............................  26

SECTION 5.4    Amounts Received for Which
               Provision Is Made in a Transaction
               Document ...............................................  28

SECTION 5.5    Amounts Received for Which No
               provision Is Made ......................................  28

SECTION 5.5    Payments to Owner Trustee ..............................  28

SECTION 5.7    Excepted Payments ......................................  29




                                      -iv-


6091.CHASEU.LEASE.07:1
<PAGE>
                          TABLE OF CONTENTS (Continued)
                                                                        Page
                                                                        ----

                                   ARTICLE VI

                   REPRESENTATIONS, WARANTIES AND COVENANTS OF
                   OWNER TRUSTEE; EVENTS OF DEFAULT; REMEDIES
                            OF THE INDENTURE TRUSTEE


SECTION 6.1    Representations, Warranties and
               Covenants of Owner Trustee .............................  29

SECTION 6.2    Indenture Events of Default ............................  30

SECTION 6.3    Enforcement of Remedies ................................  31

SECTION 6.4    Specific Remedies; Enforcement of
               Claims without possession of Notes .....................  32

SECTION 6.5    Rights and Remedies Cumulative .........................  33

SECTION 6.6    Restoration of Rights and
               Remedies ...............................................  34

SECTION 6.7    Waiver of Past Defaults ................................  34

SECTION 6.8    Right of Owner Trustee to Pay
               Rent; Note Purchase; Substitute
               Lessee .................................................  34

SECTION 6.9    Further Assurances .....................................  37

SECTION 6.10   Right of Indenture Trustee To
               Perform Covenants, etc. ................................  37

                                       -v-


6091.CHASEU.LEASE.07:1
<PAGE>


                          TABLE OF CONTENTS (Continued)
                                                                        Page
                                                                        ----

SECTION 6.11   Certain Other Rights of the Owner
               Trustee ................................................  37


                                   ARTICLE VII

                   CERTAIN DUTIES OF THE OWNER TRUSTEE AND THE
                                INDENTURE TRUSTEE



SECTION 7.1    Duties in Respect of Events of
               Default, Deemed Loss Events and
               Events of Loss; Acceleration of
               Maturity ...............................................  38

SECTION 7.2    Duties in Respect of Matters
               Specified in Directive .................................  39

SECTION 7.3    Indemnification ........................................  40

SECTION 7.4    Limitations on Duties; Discharge
               of Certain Liens Resulting from
               Claims Against Indenture Trustee .......................  40

SECTION 7.5    Restrictions on Dealing with Lease
               Indenture Estate .......................................  41

SECTION 7.6    Filing of Financing Statements and
               Continuation Statements ................................  41






                                       -vi-
6091.CHASEU.LEASE.07:1
<PAGE>


                          TABLE OF CONTENTS (Continued)


                                                                         Page
                                                                         ----

                                  ARTICLE VIII

                      CONCERNING THE OWNER TRUSTEE AND THE
                                INDENTURE TRUSTEE

SECTION 8.1   Acceptance of Trusts; Standard of
              Care ....................................................   42

SECTION 8.2   No Duties of Maintenance, Etc ...........................   43

SECTION 8.3   Representations and warranties of
              Indenture Trustee and the Owner Trustee .................   43

SECTION 8.4   Moneys Held in Trust;
              Non-Segregation of Moneys ...............................   43

SECTION 8.5   Reliance on Writings, Use of
              Agents, Etc.. ...........................................   44

SECTION 8.6   Indenture Trustee to Act Solely as
              Trustee .................................................   45

SECTION 8.7   Limitation on Rights Against
              Registered Holders, the Owner
              Trustee or Lease Indenture Estate .......................   46

SECTION 8.8   Investment of Certain Payments
              Held by the Indenture Trustee ............................  46

SECTION 8.9   No Responsibility for Recitals,
              etc. .....................................................  47






                                      -vii-


6091.CHASEU.LEASE.07:1
<PAGE>


                          TABLE OF CONTENTS (Continued)
                                                                        Page
                                                                        ----

SECTION 8.10  Indenture Trustee May Engage in
              Certain Transactions ....................................  47

SECTION 8.11  Construction of Ambiguous
              Provisions ..............................................  47


                                   ARTICLE IX

                               SUCCESSOR TRUSTEES



SECTION 9.1   Resignation and Removal of
              Indenture Trustee; Appointment of
              Successor ...............................................  47

                                    ARTICLE X

                  SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
                               AND OTHER DOCUNENTS

SECTION 10.1  Supplements, Amendments and
              Modifications to This Indenture
              Without Consent of Holders of
              Notes ...................................................  49

SECTION 10.2  Supplements and Amendments to this
              Indenture and the Facility Lease
              With Consent of Holders of Notes ........................  49

SECTION 10.3  Certain Limitations on Supplements
              and Amendments. .........................................  51




                                      -viii-

6091.CHASEU.LEASE.07:1
<PAGE>

                          TABLE OF CONTENTS (Continued)

                                                                        Page
                                                                        ----
SECTION 10.4   Directive Need Not Specify
               Particular Form of Supplement or
               Amendment ..............................................  51

SECTION 10.5   Trustee to Furnish Copies of
               Supplement or Amendment ................................  52


                                   ARTICLE XI

                                  MISCELLANEOUS

SECTION 11.1   Moneys for Payments in Respect of
               Notes to be Held in Trust ..............................  52

SECTION 11.2   Disposition of Moneys Held for
               Payments of Notes ......................................  52

SECTION 11.3   Transfers Not to Affect Indenture
               or Trusts ..............................................  53

SECTION 11.4   Binding Effect of Sale of Lease
               Indenture Estate .......................................  53

SECTION 11.5   Limitation as to Enforcement of
               Rights, Remedies and Claims ............................  53

SECTION 11.6   Notices ................................................  54

SECTION 11.7   Separability of Provisions .............................  54

SECTION 11.8   Benefit of Parties, Successors and
               Assigns ................................................  54

                                      -ix-
6091.CHASEU.LEASE.07:1

<PAGE>

                          TABLE OF CONTENTS (Continued)


                                                                        Page
                                                                        ----
 
SECTION 11.9   Survival of Representations and Warranties .............  55

SECTION 11.10  Bankruptcy of the Owner Trustee ........................  55

SECTION 11.11  Bankruptcy of the Owner Participant ....................  55

SECTION 11.12  Counterpart Execution ..................................  56

SECTION 11.13  Dating of Indenture ....................................  56


      Exhibit A-1 - Form of Fixed Rate Note (Due
                    January 15, 1992)

      Exhibit A-2 - Form of Fixed Rate Note (Due
                    January 15, 1997)

      Exhibit A-3 - Form of Fixed Rate Note (Due
                    January 15, 2016)

      Exhibit B   Form of Assumption Agreement

      Exhibit C   Form of Undivided Interest Indenture Supplement

      Schedule 1  Undivided Interest Description

      Schedule 2  Real Estate Interest Description

      Exhibit A   Form of Initial Series Note


      Appendix A  Definitions





                                       -ix-
6091.CHASEU.LEASE.07:1
<PAGE>

           TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
dated as of December  15, 1986,  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 15,
1986 between FNB,  whose address is 100 Federal  Street,  Boston,  Massachusetts
02110, with Chase Manhattan Realty 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 N E S S E T H:

         WHEREAS, the Owner Trustee has entered into a Participation  Agreement,
dated as of  December  15,  1986 among the Owner  Participant,  First PV Funding
Corporation, a Delaware corporation, Public Service Company of New Mexico, a New
Mexico corporation, and the Indenture Trustee;

         WHEREAS, the Owner Trustee,  acting on behalf of the Owner Participant,
pursuant to the Trust  Agreement  and the  Participation  Agreement,  intends to
purchase the  Undivided  Interest  and the Real  Property  Interest  from Public
Service  Company  of New Mexico and lease the  Undivided  Interest  and the Real
Property  Interest  to Public  Service  Company  of New Mexico  pursuant  to the
Facility Lease;

         WHEREAS,  in order to  finance a portion of the  Purchase  Price of the
Undivided  Interest,  the Owner Trustee  desires to issue its  promissory  notes
hereunder with such promissory notes to be substantially in the form of Exhibits
A-1, A-2 and A-3 hereto;

         WHEREAS,  in order to  finance  all or a  portion  of the  Supplemental
Financing  Amount of  Capital  Improvements  and to refund  Notes of any  series
previously issued,  the Owner Trustee may desire to issue additional  promissory
notes hereunder (the Additional  Notes) secured on a pari passu basis with other
Notes Outstanding from time to time;

         WHEREAS,  in order to secure the  obligations  referred to herein,  the
Owner Trustee  desires to grant to the Indenture  Trustee the security  interest
herein provided and the parties hereto desire that this Indenture be regarded as
a security agreement" and as a "financing statement" for such security agreement
under the Uniform Commercial Code;

6091.CHASEU2.LEASE.07:1


<PAGE>


        NOW, THEREFORE,  in consideration of. the premises, of the acceptance by
the  Indenture  Trustee  of the  trusts  hereby  created  and of other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:


                                    ARTICLE I

                          CONSTRUCTIONI GOVERNING LAW,
                         INTERPRETATION AND DEFINITIONS


                  SECTION 1.1.  Governing Law.

                  This  Indenture  (i) is being  executed  and  delivered in the
State of New York,  (ii) shall be deemed to be a contract made in such State and
(iii) for all purposes shall be construed in accordance with and governed by the
laws of the State of New York,  except to the extent  that the laws of the State
of Arizona are mandatorily applicable hereto.

                  SECTION 1.2.  Headings and Table of Contents.

                  The division of this Indenture into articles and sections, the
provision  of a  table  of  contents  and  the  insertion  of  headings  are for
convenience  of  reference  only  and  shall  not  affect  the  construction  or
interpretation of this Indenture.

         SECTION 1.3. Definitions; Construction of References; Schedules.

                  In this Indenture, unless the context otherwise requires:

         (a) the term this Indenture  means this  instrument,  together with all
exhibits,  appendices and schedules hereto, as originally executed and as it may
from  time  to  time  be  supplemented  or  amended  by one or  more  indentures
supplemental  hereto pursuant to the provisions hereof; to designated  Articles,
Sections and other subdivisions of this instrument unless otherwise indicated;


6Q9 1 CHASEUZ. LEASE. 07:1

                                       -2-


<PAGE>


                  (c) all  accounting  terms not otherwise  defined herein shall
have  the  meanings  assigned  to them in  accordance  with  generally  accepted
accounting principles; and

                  (d)  capitalized  terms used  herein  which are not  otherwise
defined  herein shall have the meanings set forth in Appendix A hereto,  and the
rules of construction set forth in Appendix A hereto shall be applicable hereto.

                  (e)  Attached as Schedule 1  hereto.is  a  description  of the
Undivided  Interest  and attached as Schedule 2 hereto is a  description  of the
Real Property Interest.

                  SECTION 1.4.  Disclosure of Beneficiaries.

                  Pursuant to Arizbna Revised Statutes  Section 33-401,  Ci) the
beneficiary  of  the  Trust   Agreement  is  Chase   Manhattan   Realty  Leasing
Corporation, a New York corporation,  whose address is One Chase Manhattan Plaza
(20th Floor), flew York, New York 10021, Attention of Leasing Administrator. and
Cii) the  beneficiary  of this  Indenture  is the Holder of the Notes,  First PV
Funding  Corporation,  whose address is  Corporation  Trust Center,  1209 Orange
Street, Wilmington, Delaware 19801 and, by pledge and assignment, Chemical Sank,
as trustee  under the  Collateral  Trust  Indenture,  whose  address is S5 Water
Street, New York, New York 10041: Attention of Corporate Trustee Administration.
Copies of the Trust Agreement and this Indenture are available for inspection at
the Indenture Trustee's office.













                                      -3-


<PAGE>


                                   ARTICLE II

                                     SECURITY



                  SECTION 2.1.  Grant of Security Interest; Mortgage.

                  As security for the due and punctual  payment of the principal
of and premium, if any, and interest on the Notes according to their respective
terms and effect and the  performance and observance by the Owner Trustee of all
the  covenants  and  agreements  made by it or on its behalf in the  Notes,  the
Participation  Agreement  and this  Indenture,  the  Owner  Trustee  does by its
execution  and delivery  hereof  hereby grant a security  interest in and grant,
bargain, convey, warrant, assign, transfer,  mortgage,  pledge and set over unto
the Indenture Trustee, and to its successors and assigns in trust, the following
(the Lease Indenture Estate):

                  (1) all right,  title and interest of the Owner Trustee in, to
                  and under the Facility Lease recorded concurrently herewith in
                  the records of Maricopa County,  Arizona,  to the extent,  and
                  dnly to the extent,  constituting Rent (including, but without
                  limitation,   Basic  Rent,   payments   of   Casualty   Value,
                  Termination  Value and Special  Casualty  Value,  and payments
                  under  and  pursuant  to  section  16 of the  Facility  Lease~
                  excluding  all Excepted  Payments)  (the  Assigned  Payments),
                  together  with all rights,  powers and remedies on the part of
                  the owner Trustee  arising under the Facility Lease to demand,
                  collect or receive the Assigned Payments;

                  (2) all moneys and  securities  deposited  or  required  to be
                  deposited with the Indenture  Trustee  pursuant to any term of
                  this  Indenture  and  held  or.required  to  be  held  by  the
                  Indenture Trustee hereunder;




                                       -4-



<PAGE>

                  (3) all  profits,  revenues  and other  income of all property
                  from time to time subjected to the lien of this Indenture, and
                  all right,  title and interest of every nature  whatsoever  of
                  the Owner Trustee in and to the same and every part thereof;

                  (4) all right,  title and interest of the owner Trustee in and
                  to any right to restitution  from the Lessee in respect of any
                  determination of invalidity of the Facility Lease; and

                  (5)    all proceeds of the foregoing;

but excluding,  hovever,  from the Lease  rndenture  Estate any and all Excepted
Payments;  and  subject,  hovever,  to Ci)  the  terms  and  provisions  of this
Indenture and (ii) the rights of the Lessee under the Facility Lease.

                  To the extent that any portion of the Lease  Indenture  Estate
constitutes  fixtures or real  property,  this  Indenture  constitutes  a realty
mortgage  and an  assignment  of rents  with  respect  to all such items of real
property  and in addition  to all  other~rights  or  remedies  set forth in this
rndenture,  or otherwise  available under Applicable Law, the Indenture  Trustee
shall have all of the rights,  remedies  and  benefits  of a  mortgagee  of real
property under Applicable Law,  including,  without  limitation,  the rights and
remedies pursuant to Arizona Revised Statutes  133-702.5,  and the Owner Trustee
shall be deemed a mortgagor with respect to such items.

                  TO RAVE AND TO HOLD all the aforesaid  properties,  rights and
interests unto the Indenture Trustee,  its successors and 'assigns forever,  but
in.  trust,  nevertheless,  for the use and  purposes  and  with the  power  and
authority  and subject to the terms and  conditions  mentioned  and set forth in
this Indenture.

                  UPON CONDITION  that,  unless and until an Indenture  Event of
Default  shall have  occurred  and be  continuing,  the Owner  Trustee  shall be
permitted,  to the exclusion.  of the Indenture  Trustee1 to possess and use the
Lease Indenture Estate and exercise all rights with respect thereto and, without
limitation  of the  foregoing,  the Owner Trustee may exercise all of its rights
under the Facility Lease to the same extent as if its right,  title and interest
therein had not been assigned to the  Indenture  Trustee to the extent set forth
above, except that the Indenture Trustee shall receive all payatents of Assigned
Payments and all moneys and securities  required to be held by or deposited with
the maenture Trustee hereunder.




                                       -5-


<PAGE>


                  It is expressly agreed that,  anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain obligated to the Lessee
under the  Facility  Lease to  perform  all of the Owner  Trustee's  obligations
thereunder in accordance with and pursuant to the terms and provisions  thereof,
and the  Indenture  Trustee  shall not be required or  obligated  in any manner,
except as expressly  provided  herein,  to perform or fulfill any obligations of
the Owner  Trustee under the Facility  Lease or to make any payment,  or to make
any inquiry as to the nature or sufficiency of any payment received by it, or to
present  or file any claim,  or to take any  action to  collect  or enforce  the
payment of any amounts  which may have been assigned to it or to which it may be
entitled at any time or times.

                  The Owner Trustee hereby  warrants and represents  that it has
not~assigned or pledged any of its right,  title or interest in and to the Lease
Indenture Estate to anyone other than the Indenture Trustee.



                  SECTION 2.2.  Payments Under the Facility Lease.

                  The Facility Lease provides that (i) all payments constituting
Assigned  Payments  shall  be made to the  Indenture  Trustee  at the  Indenture
Trustee's Office,  (ii) all other payments other than Excepted Payments shall be
made to the Lessor at such address as the Lessor may direct by notice in writing
to the  Lessee,  and (iii) all  Excepted  Payments  shall be made to the  Person
entitled to receive such payments. The Owner Trustee agrees that, ma long as any
Notes shall be Outstanding hereunder, all payments described in clause (i) above
shall be directed to be made to the Indenture  Trustee or in accordance with the
Indenture Trustee's  instruction and that if it should receive any such payments
or any proceeds for or with respect to the Lease  Indenture  Estate or otherwise
constituting  part of the Lease maenture  Estate,  it will promptly forward such
payments to the Indenture Trustee or in accordance with the Indenture  Trustee's
instructions.  The Indenture  Trustee agrees to apply payments from time to time
received by it (from the Lessee,  the Owner Trustee or otherwise) with.  respect
to the Lease Indenture Estate in the manner provided in Section 3.11 and Article
V hereof.





                                       -6-


<PAGE>


                  SECTION 2.3.  Release of Lien on Lease Indenture Estate.

                  (a) Upon  receiving  evidence  satisfactory  to the  Indenture
Trustee that Ci) it has received, or pro-vision has been made in accordance with
paragraph (c) hereof for, full payment of all principal of and premiurn, if any,
and  interest on the Notes and any other sums payable to the  Indenture  Trustee
and the Holders of the Notes under this  Indenture  or the Facility  Lease,  and
(ii)  all  Trustee's  Expenses  shall  have  been  paid  in  full  or  provision
satisfactory to the Indenture Trustee shall have been made for such payment,

                  (A) the  security  interest  and all other  estate  and rights
        granted by this  Indenture  shall cease and become null and void and all
        of the property,  rights and interests  included in the Lease  Indenture
        Estate shall revert to and revest in the Owner Trustee without any other
        act or formality wtatscever, and

                  (B) the Indenture  Trustee shall,  at the request of the Owner
        Trustee,  execute  and  deliver to the Owner  Trustee  such  termination
        statements,  releases or other  instruments  presented to the  Indenture
        Trustee  by or at the  direction  of  the  Owner  Trustee  as  shall  be
        requisite to evidence the  satisfaction  and discharge of this Indenture
        and the lien hereby created with respect to the Lease Indenture  Estate,
        to release or reconvey to the Owner  Trustee or as directed by the Owner
        Trustee all the Lease  Indenture  Estate,  freed and discharged from the
        provisions  herein  contained with respect  thereto,  and~to release the
        Owner.Trustee from its covenants herein contained.

                  (b) Upon receipt by the  Indenture  Trustee of the  Assumption
Agreement and other  documents and opinions  described in Section 3.9(b) hereof,
(i) the  security  interest  and all other  estate  and  rights  granted by this
rndenture by or on behalf of the Owner  Trustee  shall cease and become null and
void  and all of the  property,  rights  and  interests  included  in the  Lease
Indenture  Estate  shall revert to and revest in the Owner  Trustee  without any
other act or formality  whatsoever and (ii) the Indenture  Trustee shall, at the
request of the Owner  Trustee,  execute  and deliver to the Owner  Trustee  such
termination statements, releases or other instruments presented to the Indenture
Trustee by or at the direction of the Owner Trustee as shall be requisite



                                       -7-


<PAGE>


to evidence the  satisfaction  and  discharge of this  Indenture as to the owner
Trustee and the lien hereby created with respect to the Lease Indenture  Estate,
to release or reconvey to the Owner  Trustee or as directed by the Owner Trustee
all the Lease Indenture Estate,  freed and discharged from the provisions herein
contained  with  respect  thereto,  and td release  the Owner  Trustee  from its
covenants herein contained.

                  (C) Any Note shall,  prior to the maturity or redemption  date
thereof 1 be deemed to have been paid  within  the  meaning  and with the effect
expressed  in this section 2.3 if (i) there shall have been  deposited  with the
Indenture  Trustee  either  moneys in an amount  which shall be  sufficient,  or
direct  obligations of or obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America or certificates of an
ownership  interest  in the  principal 4 of or  interest  on  obligations  of or
guaranteed as to principal and interest by the united States of America (Federal
securities),  in each case which shall not  contain  provisions  permitting  the
redemption  thereof  at the  option  of the  issuer,  the  principal  of and the
interest on which when due, and without any reinvestment  thereof,  will provide
moneys in an amount which shall be sufficient, together with the moneys, if any,
deposited  with  or  held  by the  Indenture  Trustee  at the  same  time  (such
sufficiency  to be  established  by the delivery to the  Indenture  Trustee of a
certificate of an independent public accountant),  to pay when due the principal
of and premium,  if any,  and.interest due and to become due on said Note on and
prior to the redemption date or maturity date thereof,  as the case may be, and.
(ii) in the event  said Note does not  mature or is not to be  redeemed 4 within
the next 45 days,  the  Indenture  Trustee  shall  have been  given  irrevocable
instructions to give, as soon as practicable,  a notice to the registered Holder
of such Note that the deposit required by subolause (i) above has been made with
the  Indenture  Trustee  and that  said  Note is  deemed  to have  been  paid in
accordance  with this  sectiow2.3  and stating such maturity or redemption  date
upon which  moneys are to be available  for the payment of the  principal of and
premiurn,  if any, and interest on said Note. Neither the Federal Securities nor
moneys  deposited  with the  Indenture  Trustee  pursuant to this section 2.3 or
principal or interest payments on any such Federal securities shall be withdrawn
qr used for any purpose other than,  and shall be held in trust for, the payment


                                       -8-



<PAGE>

of the  principal of and premium,  if any, and interest on said Note:  provided,
however1 that any cash received from such principal or interest payments on such
Federal  Securities  deposited with the Indenture  Trustee,  shall be reinvested
pursuant to Section 8.8 hereof in Federal  Securities.  At such time as any Note
shall be deemed paid as aforesaid,  it shall no longer be secured by or entitled
to the benefits of the Lease  Indenture  Estate or this  Indenture,  except that
such  Note  shall be  entitled  to the  benefits  of the  portions  of the Lease
Indenture  Estate  described in Granting Clauses (2), (3) and (5), to the extent
such portions  relate to such moneys or Federal  Securities  deposited  with the
Indenture Trustee.

                  (d) So long as any Note as to which  this  Indenture  has been
discharged remains unpaid,  this Indenture shall continue in effect with respect
to such Note solely with respect to rights of registration of transfer, exchange
or replacement of such Note,  rights to receive payment of the principal thereof
and premium,  if any, and interest  thereon in accordance with the terms of this
Indenture  from such  deposited  funds or the  proceeds  of or  interest on such
Federal  Securities  and the  correlative  rights  and  responsibilities  of the
Indenture Trustee;  provided,  however1 that, following such discharge, no claim
for payment of principal  of or premium,  if any, or interest on such Note shall
be made against the Owner  Trustee or the Lease  Indenture  Estate other than as
provided  in  this  Section;   provided,   further,   that  the  Owner  Trustee,
following'such  4is-charge,  shall  be  released  from  any  further  duties  or
obligations under this Indenture and, except as expressly provided therein,  any
other Transaction Document.

                  SECTION 2.4.  Power of Attorney.

                  Subject  to the  other  terms of this.  Indenture,  the  Owner
Trustee   hereby   appoints  the  Indenture   Trustee  the  Owner   Trustee's  
attorney-in-fact, irrevocably, with full power of substitution, to collect, ask,
require,  demand, receive and give acquittance for any and all moneys and claims
for moneys due and td become due to the Owner  Trustee  under or arising  out of
the Lease Indenture Estate, to endorse any checks or other instruments or orders
in  connection  therewith,  and to take any  action  (including  the  filing  of
fiziancing statements or other documents) or institute any proceedings which the
Indenture  Trustee  may deem to be  necessary  or  apprdpriate  to  protect  and





                                      -9-


<PAGE>

preserve the interest of the Indenture  Trustee in the Lease  Indenture  Estate.
Prior to any exercise by it (acting as  attorney-in-fact  for the owner Trustee)
of the pcwers,  authority or rights  granted by this Section 2.4, the  Indenture
Trustee will give three Business Day's prior written notice to the Owner Trustee
and the Owner Participant.



                                   ARTICLE III

                        ISSUE, EXECUTION, AUTHENTICATION,
                         FORM AND REGISTRATION OF NOTES

                  SECTION 3.1.  Limitation on Notes.

                  No Notes may be  issued  under  the  provisions  of, or become
secured by, this  Indenture  except in  accordance  with the  provisions of this
Article  III.  No Note shall be issued in an original  principal  amount of less
than $5,000.

                  SECTION 3.2.  Execution of Notes.

                  All Notes  shall be  manually  executed on behalf of the Owner
Trustee by one of its Responsible  Officers.  In case any Responsible Officer of
the Owner  Trustee  who shall have  executed  any of the Notes shall cease to be
such a  Responsible  Officer  before  such  Motes so  executed  shall  have been
authenticated by the Indenture Trustee and delivered or disposed of by the Owner
Trustee,  such Notes nevertheless may be authenticated and delivered or disposed
of as though  the  person  who  executed  such Notes had not ceased to be such a
Respottsible  Officer  of the Owner  Trustee;  and any Note may be  executed  on
behalf of the Owner  Trustee by such person as, at the actual time of  execution
of such Note, shall be a Responsible  Officer of the Owner Trustee,  although at
the date of such Note any such person was not such a Responsible Officer.

                  SECTION 3.3.  Effect of Certificate of Authentication.





                                      -10-


<PAGE>

                  Only  such  flotes as shall  bear  thereon  a  certificate  of
authentication  substantially  in the following  form  manually  executed by the
Indenture  Trustee  shall be entitled to the  benefits of this  Indenture  or be
valid or obligatory for any purpose.  Such certificate of  authentication of the
Indenture  Trustee  upon  any  Note  executed  by the  Owner  Trustee  shall  be
conclusive   evidence   that  the  Note  so   authenticated   was  duly  issued,
authenticated and delivered under this Indenture:

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

                                       CHEMICAL HANK,
                                         as Indenture Trustee


                                       By
                                           ----------------------
                                             Authorized Officer

                  SECTION  3.4.  Creation  of the Fixed  Rate  Notes;  Aggregate
Principal Amount, Dating and Terms, Prerequisites to Authentication and Delivery
of the Fixed Rate Notes; Application of Proceeds.

                  (a) There is hereby created and  established a separite series
of Notes of the Owner Trustee  designated  "Nonrecourse  Promissory Notes, Fixed
Rate 5eries~' herein referred to as the rixed Rate Notes..  The Fixed Rate Notes
shall be payable in the principal amounts and bear interest as follows:

           Fixed Rate Note                  Interest            Principal
                 Due                          Rate                Amount
           ---------------                  --------            ---------
 
          January 15, 1992                    8.05%             $1,270,000     
          January 15, 1997                    8.95%             $3,501,000 
          January 15, 2016                   10.15%            $23,229,000
                                                               -----------
                                                               $28,000,000
                                                               ===========

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,  as such Schedule 1 may
be  adjusted,  in the case of the  Fixed  Rate Note due  January  15,  2016,  in
accordance  with  the  terms  of  such  Fixed  Rate  Note  and  this  Indenture.
Installments  of interast on and  principal  of (and  premium,  if any, on) each
Fixed Rate Note shall be due and payable on the dates and at the rates





                                      -11-


<PAGE>


of interest  specified  in such rued Rate Note.  The Fixed Rate Note due January
15, 1992 shall be  substantially  in the form of Exhibit A-i to this  Indenture.
The Fixed Rate Note due January 15, 1997 shall be  substantially  in the form of
Exhibit A-2 to this  Indenture.  The Fixed Rate Note due January .15, 2016 shall
be substantially in the form of Exhibit A-3 to this Indenture.

                  (b) Subject to the  provisions  of Section  3.10  hereof,  the
aggregate  principal  amount of the Fixed Rate Notes issued by the Owner Trustee
and  authenticated  and delivered by the Indenture  Trustee  hereunder shall not
exceed $28,000,000.

                  (c) The Fixed Rate  Notes,  subject to  paragraph  (d) of this
section 3.4, shall be executed and issued by the Owner Trustee and authenticated
and delivered by the Indenture  Trustee on the date and to the Person  specified
by the Owner Trustee in its request and  authorization  for  issuance,  shall be
dated the date  specified by the Cwner Trustee in its request and  authorization
for  issuance,  and shall be in the form of a  registered  Note  payable  to the
Person designated in the owner Trustee' S request and authorization for issuance
or its registered assigns.

                  (d) The Indenture  Trustee shall  authenticate  the Fixed Rate
Notes and  deliver  the Fixed Rate Notes to the Person  designated  by the Owner
Trustee in the request and  authorization  for  issuance in respect of the Fixed
Rate Notes in accordance with the provisions of this Section 3.4.

                  (e) Upon receipt of the proceeds of the Fixed Rate Notes, othe
tndentu're  Trustee shall  immediately  transfer the same to, or pursuant to the
direction  of,  the  Owner  Trustee,  all  as  set  forth  in  the  request  and
authorization  for  issuance  submitted  by the Owner  Trustee to the  Indenture
Trustee.

                  SECTION 3.5.  Additional Notes.

                  (1)  Subject to Section 3.6  hereof,  Additional  Notes of the
owner Trustee may be issued under and secured by this Indenture,  at any time or
from time to time,  in  addition  to the Fixed  Rate  Notes and  subject  to the
conditions  hereinafter  provided in this Section, for cash in the amount of the
original  principal  amount of such  Additional  Notes,  for the  purpose of (i)





                                      -12-


<PAGE>

refunding any previously issued series of Notes, in whole or in part and/or (ii)
providing  funds  for the  payment  of all or any  portion  of the  Supplemental
Financing Amount relating to Capital  rrnprovements  made or installed from time
to time pursuant to the Facility Lease;  provided,  however, that in the case of
Notes  issued for the  purposes set forth in clause (ii) of this section 3.5, no
Note shall be issued by the Owner  Trustee  pursuant to this  Section 3.5 unless
such Notes may be pledged in accordance with Section 2.l5(b) of the Collateral
Trust Indenture and serve as the basis for Additional Bonds. 

                  (2) Before any  Additional  Notes  shall be issued  under the
provisions  of this Section 3.5, the Owner  Trustee shall have received from the
Owner  Participant,  and  delivered  to the  Indenture  Trustee  not less than 2
Business  Days nor more than 30  Business  Days  prior to the  proposed  date of
issuance of such Additional  Notes as set forth in the below  mentioned  request
and authorization,  a request and authorization to issue Additional Notes, which
request and authorization shall include the amount of such Additional Notes, the
date of issuance of such Additional Note and details with respect thereto which
are  not  inconsistent  with  this  section.   Additional  Notes  shall  have  a
designation so as to distinguish such Additional Notes from the Fixed Rate Notes
but otherwise shall be  substantially  similar in terms to the Fixed Rate Notes,
shall specify maturity dates, rank pan passu with all Notes then Outstanding, be
dated their  respective  dates of  authentication,,  bear interest at such rates
(which may be fixed or floating)  as shall be  indicated  in the  aforementioned
request and authorization,  and shall be stated to be payable by their terms not
later than the last day of the Basic Lease Term.

                  (3)  Except  as to any  differences  in  the  rity  dates  and
amortization  schedules of the Additional Notes or the rate or rates of interest
thereon  and the date or dates such  interest is payable or the  provisions  for
redemption with respect thereto,  if any, such  Additional,  Notes shall be on a
parity  with,  and shall be entitled to the same  benefits  and security of this
Indenture as, other Notes issued pursuant to the terms hereof.

                  (4) The terms,  conditions and designations of such Additional
Notes (which shall be consistent with this  rndenture)  shall be set forth in an





                                      -13-


<PAGE>

indenture  supplemental to this Indenture  executed by the Owner Trustee and the
Indenture  Trustee.  Such  Additional  Notes  shall be  executed  as provided in
section 3.2 and deposited  with the Indenture  Trustee for  authentication,  but
before  such  Additional  Notes  shall be  authenticated  and  delivered  by the
Indenture Trustee there shall be filed with the Indenture  Trustee,  in addition
to the other  documents  and  certificates  required by this  section  3.5,  the
following,  all of which  shall  be  dated  as of the  date of the  supplemental
indenture:

                  (a) a copy of such supplemental indenture (which shall include
the form of such series of Notes in respect thereof);

                  (b) a  certificate  of a  Responsible  Officer  of  the  Owner
Trustee (i) stating  that to the best of his  knowledge,  no Default or Event of
Default or Indenture  Event of Default has occurred and is  continuing  and (ii)
stating,  in reliance upon a certificate of a Responsible  officer of the Lessee
as to such matters,  that payments pursuant to the Facility Lease of Basic Rent,
casualty Value,  special casualty Value and Termination  Value and df amounts in
respect  of the  exercise  of the  Cure  option  are  sufficient  to pay all the
outstanding  Notes,  after taking into  account the issuance of such  Additional
Notes and any related redemption;

                  (c) such additional  documents,  certificates  and~opinions as
shall be reasonably  requested by, and  acceptable to, the Owner Trustee and the
Indenture Trustee;

                  (d) a request and authorization to the Indenture Trustee by or
on behalf of the Owner Trustee to authenticate and deliver such Additional Notes
to or upon the  order of the  Person or  Persons  noted in such  request  at the
address set forth therein,  and in such principal amounts as are stated therein,
upon payment to the Indenture Trustee, but for the account of the Owner Trustee,
of the sum or sums specified in such request and authorization; and

                  (e) an opinion of  counsel to the effect  that the  conditions
precedent  required  under this  Indenture  for the issuance of such  Additional
Notes have been complied with.

                  When the documents  r1eferred to in the foregoing  clauses (a)
through (e) above shall have baen filed with the Indenture  Trustee and when the



                                      -14-



<PAGE>

Additional Notes described in the above-mentioned  order and authorization shall
have  been  executed  and  authenticated  as  required  by this  Indenture,  the
Indenture Trustee shall deliver such Additional Notes in the manner described in
clause (d) above,  but only upon payment to the Indenture  Trustee of the sum or
sums specified in such request and authorization.


                                  SECTION 3.6.
                           Security for and Parity of Notes

                                       
                  All Notes  issued  and,outstanding  hereunder  shall rank on a
parity with each other and shall as to each other be secured equally and ratably
by this Indenture,  without  preference,  priority or distinction of any thereof
over any other by reason of  difference  in time of issuance or  otherwise.  The
maximum  principal  amount of Notes  Outstanding  and secured by this  Indenture
shall be $56,000,000.

                  SECTION 3.7.  Source of Payments Limited.

                  All  payments  to be  made by the  Owner  Trustee  under  this
rndenture or on the Notes shall be made only from the Lease Indenture Estate and
the Trust Estate. Each Holder of a Note, by its acceptance of such Note, and the
Indenture  Trustee  agree that they will look solely to the Trust Estate and the
income and proceeds from the Lease  Indenture  Estate to the extent ava4able for
distribution to such Holder or the Indenture Trustee as herein provided and that
neither  the  Owner  Participant  nor,  except  as  expressly  provided  in this
Indenture,  the Owner  Trustee nor the  Indenture  Trustee,  shall be personally
liable to such Holder of a Note or the rndenture  Trustee,  as tyle case may be,
for any amounts payable hereunder or under such Note; provided, however, that in
the event that the Lessee shall assume all the  obligations  and  liabilities of
the Owner Trustee hereunder and under the Notes pursuant to Section 3.9(b), then
all  payments to be made under this  Indenture  and the Motes shall be made only
from  payments  made by the  Lessee  under  the  Notes  in  accordance  with the
Assumption Agreement referred to in Section 3.9(b) and each Holder of a Note and
the  Indenture  Trustee  agree that in such  event they will look  solely to the
Lessee for such  payment.  Nothing  herein  contained  shall be  interpreted  as
affecting  the duties and  obligations  of the  Indenture  Trustee  set forth in
Section 7.4 hereof.





                                      -15-


<PAGE>


                  In  furtherance  of  the  foregoing,  to  the  fullest  extent
permitted by law, each Holder of a Note (and each  assignee of such Person),  by
its acceptance  thereof,  and the Indenture Trustee agree, as a condition to the
Notes being  secured  under this  Indenture,  that  neither  such Holder nor the
Indenture Trustee will exercise any statutory right to negate the agreements set
forth in this section 3.7

                  SECTION 3.8.  Place and Mediunt of Payment.

                  The  principal  of and  premium,  if any, and interest on each
Note shall be payable at the Indenture Trustee's office in immediately available
funds in such coin or currency of the United States of America as at the time of
payment  shall be legal  tender for the  payment of public  and  private  debts.
Notwithstanding  the foregoing or any provision in any Note to the contrary,  if
so  requested  by the  Holder of any Note,  by written  notice to the  Indenture
Trustee, all amounts (other than the final payment) payable with respect to such
obligation  shall be paid by  crediting  the  amount to be  distributed  to such
Holder to an account maintained by such Holder with the Indentiare Trustee or by
the  Indenture  Trustee's  transferring  such  amount  by wire,  with  such wire
transfer to be initiated by such time as to permit,  to the extent  practicable,
oral confirmation thereof (specifying the wire number) to be given no later than
12:00 noon New York City time on the date scheduled for payment, but only to the
extent of funds  available  for such wire  transfer,  to such  other bank in the
United States having wire transfer facilities, including a Federal Reserve Bank,
as shall have been  specified in such notic~,  for credit to the account of such
Holder  maintained  at such bank,  any such credit or transfer  pursuant to this
Section 3.8 to be in immediately  available  funds,  without any presentinent or
surrender  of such  Note.  Final  payment  of any such  Note  shall be made only
against surrender of such Note at the Indenture Trustee's office.

                  SECTION 3.9. Prepayment of Notes; Assimption by rassee; Notice
of Assumption or Prepayment.

                  (a) Notes shall be subject to  prepayment  (other than through
application of the installment payments on such Notes) from time to time only as
provided in this Indenture and as otherwise specifically provided,  with respect
to Notes of a particular series, in such Notes.


                                      -16-



<PAGE>


                  (b) In the event of the  occurrence  of a Deemed Loss Event or
Event of Loss or exercise of the Cure Option,  and upon receipt by the Indenture
Trustee of the documents  listed below,  all the  obligations and liabilities of
the Owner  Trustee  hereunder and under the Notes shall be assumed by the Lessee
and the Owner Trustee shall be released and  discharged  without  further act or
formality  whatsoever from all  obligations and liabilities  hereunder and under
the Notes:

                  (1) a duly executed Assumption Agreement  substantially in the
                  form of Exhibit B to this Indenture;

                 (2) an  opinion  of counsel  to the  Lessee,  addressed  to the
                 Indenture Trustee and the Holders of  theOutstanding  Notes, to
                 the  effect  that the  conditions  precedent  required  by this
                 rndenture for such assumption have been complied with, that the
                 Assumption  Agreement  has been duly  authorized,  executed and
                 delivered on behalf of the Lessee,  that no Governmental Action
                 is necessary  or required in  connection  therewith  (or if any
                 such  Governmental  Action is necessary  or required,  that the
                 same has been duly  obtained and is in full force and effect) ,
                 and that the Assumption Agreement is a legal, valid and binding
                 agreement  and   obligation  of  the  Lessee,   enforceable  in
                 accordance  with its terms  (except as  limited by  bankruptcy,
                 insolvency or similar laws of general application affecting the
                 enforcement  of  creditors'   rights  generally  and  equitable
                 principles);

                 (3) copies of all Governmental Actions referred to in such 
                 opinion;

                 (4) an indenture  supplemental  to this Indenture  which shall,
                 among other  things,  confirm the release of the Owner  Trustee
                 and the Lease  rndenture  Estate  thereby  effected and contain
                 provisions  appropriately  amending  references to the Facility
                 Lease in this Indenture;

                  (5) a  certificate  of a  Responsible  Officer  of the  Lessee
                  stating that, to the best of his knowledge (i) the conditions
                  precedent  required by this Indenture for such assumption have
                  been  complied  with,  (ii) no Indenture  Event of Default has
                  occurred and is




                                      -17-


<PAGE>

                  occurred and is continuing, (iii) such assumption is permitted
                  by the  provisions of the Lessee's  Articles of  Incorporation
                  and  By-Laws and (iv) the Lessee is not  insolvent  within the
                  meaning of any applicable  preferential  transfer,  fraudulent
                  conveyance or bankruptcy law; and

                 (6) a certificate of a Responsible Officer of the Owner Trustee
                 stating that, to the best of his knowledge,  no Indenture Event
                 of Default has occurred and is continuing.

                  (c) Notice  of any  assumption or prepayment of Notes shall be
given to the  registered  Holders of the Notes which have been assumed or are to
be  prepaid  (and any  assignee  of a  registered  Holder  which  has  given the
Indenture  Trustee written notice of such assignment) as promptly as practicable
after the Indenture Trustee is notified thereof, and, in the case of prepayment,
in no event  later than 30 days before the date fixed for  prepayment  (provided
the Indenture  Trustee  receives such  notification at least three Business Days
before such 30th day) in the event of the  exercise by the Owner  Trustee of its
option to terminate the Facility Lease pursuant to Section 14 thereof.

                  (d) If the assumption described in paragraph (b) above has not
occurred,  then,  as required by Section 9(j) of the Facility.  Lease,  not less
than 2 Business  Days prior to the date on which the Lessee is  required to make
the payments  specified in Section 9(c) or 9(d) of the Facility Lease, the Owner
Trustee  will cause the  Undivided  Interest and the Real  Property  Interest to
be~subjected  to the lien of this  Indenture by executing and  delivering to the
Indenture Trustee an undivided  Interest Indenture  Supplement  substantially in
the form of Exhibit C to this  Indenture.  Subject to Section 10.3  hereof,  the
Indenture  Trustee shall  execute and accept  delivery from the Owner Trustee of
the undivided Interest Indenture supplement.

                  SECTION 3.10.  Mutilated, Destroyed, rast or stolen Notes.

                  If any Note shall become mutilated or shall be destroyed, lost
or stolen,  the Owner Trustee shall,  upon the written  request of the Holder of
such Note, execute,  and the Indenture Trustee shall authenticate and deliver in
replacement  thereof,  a new Note, payable in the same original principal amount
and  dated  the  same  date  and of the same  series  as the Note so  mutilated,





                                      -l9-


<PAGE>

destroyed,  lost or stolen. The Indenture Trustee shall inake a notation on each
new Note of the amount of all payments of principal theretofore made on the Note
so mutilated,  destroyed,  lost or stolen and the date to which interest on such
old Note has been paid. If the Note being replaced has been mutilated, such Note
shall be delivered to the Indenture Trustee who shall then deliver a certificate
of  destruction  of the type  required by Section 4.3 hereof.  Zf the Note being
replaced  has been  destroyed,  lost or  stolen,  the  Holder of such Note shall
furnish to the Lessee,  the Owner  Trustee and the  Indenture  Trustee a bond or
surety  agreement  of such Holder as shall be  satisfactory  to them to save the
Lessee, the Owner Trustee, the Indenture Trustee, the Trust Estate and the Lease
Indenture  Estate harmless from any loss,  however remote,  including claims for
principal of, and premium,  if any, and interest on the  purportedly  destroyed,
lost or stolen Note,  together with  evidence  satisfactory  to the Lessee,  the
Owner Trustee and the  Indenture  Trustee of the  destruction,  loss or theft of
such Nqte and of the ownership thereof; provided, however, that if the Holder of
such Note is the Collateral Trust Trustee,  the unsecured written undertaking of
the Collateral Trust Trustee,  in its individual  capacity,  shall be sufficient
indemnity for purposes of this Section.


                  SECTION 3.11.  Allocation of Principal and Interest.

                  In the case of each Note,  each payment of  principal  thereof
and  interest  thereon  shall be applied,  first,  to the payment of accrued but
unpaid  interest on such Note (as well as any interest on overdue  principal or,
to the extent permitted by law,  interest) to the date of such~payment,  second,
to the payment of the  principal  amount of, and  premium,  if any, on such Note
then due Cincluding any overdue installment of principal)  thereu~der and third,
the balance, if any, remaining thereafter,  to the balance of the payment of the
principal amount of, and premium, if any, on such Note.

                  SECTION 3.12. Certain Adjustments to the Amortization Schedule
of the Fixed Rate Note due January 15, 2016.

                  (a) The  schedule of  principal  amortization  attached to the
Fixed Rate Note due January 15,  2016 may be adjusted at the  discretion  of the
Owner  Trustee at one time prior to July 15, 1997;  provided,  however,  that no
such adjustment shall be made by the Owner Trustee which will increase or reduce




                                      -19-


<PAGE>

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  twQ  years;  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 Indenture 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) stating that the Owner Trustee has elected
to make such  adjustment,  Cy) 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 Section 3.12(a).  The Indenture  Trustee may rely on
such  Owner  Trustee  certificate  and shall  have no duty with  respect  to the
calculations referred to in the foregoing clause (z).

                  (b) 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 paragraph (a) of this Section
3.12, together with a certificate (in form and substance reasonably satisfactory
to the Owner  Participant)  to the effect  that such  adjustments  minimize  the
aggregate  increase  or  decrease  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  paragraph  (a) .
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.








                                      -20-



<PAGE>


                                   ARTICLE IV

                        REGISTRATION, TRANSFER, EXCHANGE,
                          CANCELLATION AND OWNERSHIP OF
                                      NOTES

                  SECTION 4.1.  Register of Notes.

                  The Indenture  Trustee on behalf of the Trustee shall maintain
at the Indenture  Trustee's  Office a register for the purpose of  registration,
and  registration of transfer and exchange,  of the Notes by series and in which
shall be  entered  the names and  addresses  of the owners of such Notes and the
principal amounts of the Notes owned by them? respectively.  For these purposes,
the Indenture  Trustee is hereby appointed  transfer agent and registrar for the
Notes.

                  SECTION 4.2.  Registration of Transfer or Exchange of Notes.

                  A Holder of a Note  intending  to register the transfer of any
Outstanding  Note held by such Holder  (including  any transfer in the form of a
pledge or  assignment) or to exchange any  Outstanding  Note held by such Holder
for a new Note or Notes of the same series may surrender tuch  Outstanding  Note
at the Indenture  Trustee's  Office,  together with the written  request of such
Holder,  or of its  attorney  duly  authorized  in  writing,  in each  case with
signatures  guaranteed,  for the  registration  of such  Note in the name of any
pledgee  or  assignee  (in the case of a  transfer  in the  form of a pledge  or
assignment)  or for the  issuance  of a new Note or  Notes  of the same  series,
specifying the authorize& denomination or denominations of any new Note or Notes
to be issued and the name and  address of the Person or Persons in whose name or
names the Note or Notes are to be  registered  (either as pledgee or assignee or
as owner).  Promptly upon receipt by the Indenture  Trustee of the foregoing and
satisfaction of the  requirements of Sections A.5 and 4.6 hereof,  the Indenture
Trustee shall register stich Note or Notes in the name or names of the Person or
Persons as shall be specified in the written request and, in the case in which a
new Note or Notes are to be issued,  the Owner  Trustee  shall  execute  and the
Indenture  Trustee shall  authenticate and deliver such new Note or Notes of the
same series, in' the same aggregate  principal amount and dated the same date as





                                      -21-


<PAGE>

the  Outstanding   Note   surrendered,   in  such  authorized   denomination  or
denominations  as shall be  specified  in the  written  request.  The  Indenture
Trustee  shall make a notation on each new Note of the amount of all payments of
principal  theretofore made on the old Note or Notes in exchange or transfer for
which any new Note has been  issued and the date to which  interest  on such old
Note or Notes has been paid.

                  SECTION 4.3.  Cancellation of Notes.

                  All Notes  surrendered to the Indenture Trustee for payment in
full,  prepayment  in full or  registration  of transfer  or  exchange  shall be
cancelled  by it;  and no Notes  shall  be  issued  in lieu  thereof  except  as
expressly  permitted by any of the provisions of this  Indenture.  The Indenture
Trustee shall destroy cancelled Notes held by it in a manner satisfactory to the
owner Trustee and deliver a certificate of destruction to the Owner Trustee.  If
the Owner  Trustee shall acquire any of the Notes,  such  acquisition  shall not
operate as a redemption of or the satisfaction of the  indebtedness  represented
by such  Notes  unless and until the same shall be  delivered  to the  Indenture
Trustee for cancellation.

                  SECTION 4.4.  Limitation on Timing of Registration of Notes.

                  The  Indenture  Trustee  shall  not be  required  to  register
transfers or exchanges of Notes on any date fixed for the payment or  prepayment
of principal  of or interest on the Notes or during the fifteen  days  preceding
any such date.

                  SECTION 4.5.  Restrictions on Transfer  Resulting from Federal
securities Laws; legend.

                  If not  prohibited by the  Securities  Act, each Note shall be
delivered to the initial Holder thereof without  registration of such Mote under
the Securities Act and without  qualification  of this Indenture under the Trust
Indenture  Act.  Prior to any transfer of any Note,  in whole or in part, to any
Person other than the Collateral Trust Trusteer the Holder thereof shall furnish
to the  Lessee,  the  Indenture  Trustee  and the Owner  Trustee  an  opinion of
counsel, which opinion and which counsel shall be reasonably satisfactory to the
Indenture  Trustee,  the owner  Trustee and the Lessee,  to the effect that such
transfer will not violate the  registration  provisions of the Securities Act or


                                      -22-
6091.CHASEU2.LEASE.07:l


<PAGE>

require  qualification  of this Indenture under the Trust Indenture Act, and all
Notes  issued  hereunder  shall be  endorsed  with a  legend  which  shall  read
substantially as follows:

                  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.

                  SECTION 4.6.  Charges upon Transfer or Exchange of Notes.

                  As a further condition to registration of transfer or exchange
of any Note,  the Indenture  Trustee and the Owner Trustee may charge the Holder
thereof for any stamp  taxes or  governmental  charges  required to be paid with
respect to such registration of transfer or exchange.

                  SECTION 4.7.  Inspection of Register of Notes.

                  The  register  of the  Holders  of the  Notes  referred  to in
Section 4.1 shall at all  reasonable  times be open for inspection by any Holder
of a Note.  Upon  request by any Holder of a Note,  or the Owner  Trustee or the
Lessee,  the Indenture Trustee shall furnish such Person, at the expense of such
Person,  with a list of the names and  addresses of all Holders of Notes entered
on the register kept by the Indenture Trustee  indicating the series,  principal
amount and number of each Note held by each such Holder.

                  SECTION 4.8.  Ownership of Notes.

                  (a) Prior to due presentment  for  registration of transfer of
any Note,  the Owner  Trustee and the  Indenture  Trustee may deem and treat the
Holder of record of such Note as the absolute owner of such Note for the purpose
of  receiving  payment of all amounts  payable with respect to such Note and for
all other  purposes,  and neither the Owner  Trustee nor the  Indenture  Trustee
shall be affected by any notice to the contrary.

           


                                      -23-
6091 CHASEU2 LEASE. 07:1


<PAGE>
                  (b) The Owner Trustee and the Indenture  Trustee may, in their
discretion,  treat the Holder of record of any Note as the owner thereof without
actual production of such Note for any purpose hereunder,  except as provided in
the last sentence of Section 3.8 hereof.

                  (c) Neither the owner Trustee nor the Indenture  Trustee shall
be bound to take notice of or carry out the execution of any trust in respect of
any Note,  and may  register  the  transfer of the same on the  direction of the
Holder of record thereof,  whether named as trustee or otherwise, as though such
Holder were the beneficial owner thereof.

                  (d) The  receipt  by the  Holder  of record of any Note of any
payment of principal, premium or interest shall be a good discharge to the Owner
Trustee and the Indenture Trustee for the same and neither the Owner Trustee nor
the  Indenture  Trustee  shall be bound to  inquire  into the  title of any such
Holder.



                                    ARTICLE V

                            RECEIPT, DISTRIBUTION AND
                       APPLICATION OP INCOME AND PROCEECS
                        FROM THE LEASE INflENTURE ESTATE


                  SECTION 5.1. Basic Rent,  Thterwt on overdue  Installments  of
Basic Rent and Prepayments of Interest.

                  Except as  otherwise  provided  in Section  5.3 or 5.7 hereof,
each  payment  of  Basic  Rent,  as well as any  payment  of  Supplemental  Rent
representing  interest on overdue  installments  of Basic Rent,  received by the
Indenture  Trustee at any time, shall be distributed by the Indenture Trustee in
the  following  order of  priority:  first,  so much of such payment as shall be
required  to pay in full the  aggregate  amount~of  the  payment or  payments of
principal  and/or interest (as well as any interest on overdue  principal or, to
the extent permitted by law, interest) then due and unpaid on all Notes shall be
distributed  to the Molders of the Notes ratably,  without  priority of one over
the  other,  in the  proportion  that the  aggregate  amount of such  payment or
payments  then due and unpaid on all Notes held by each such Holder on such date
bears to the aggregate amount of such payment or payments then due and unpaid on
all Notes Outstanding on such date,  without priority of interest over principal
or principal over  interest;  and second,  the balance,  if any, of such payment



6091. CHASEU2 LEASE. 07:1
                                      -24-


<PAGE>


remaining  thereafter shall be distributed,  concurrently  with any distribution
pursuant to clause first  hereof,  to the Owner  Trustee or as the Owner Trustee
may direct.  If there shall not otherwise have been  distributed on any date (or
within any applicable  period of grace),  pursuant to this Section 5.1, the full
amount then  distributable  pursuant to clause  first of this  Section  5.1, the
Indenture  Trustee shall distribute  other payments  referred to in Sections 5.4
and 5.5 then  held by it or  thereafter  received  by it,  except  as  otherwise
provided in Section 5.3, to the Holders of all Notes to the extent  necessary to
enable it to make all the distributions  then due pursuant to such clause first;
provided that to the extent any  distribution is made from amounts held pursuant
to Section  5.4 hereof and the Lessee  subsequently  makes the  payment of Basic
Rent or Supplemental  Rent in respect of which such  distribution was made, such
payment of Basic Rent or Supplemental Rent shall, unless an Indenture Default or
an Indenture Event of Default shall have occurred and be continuing,  be applied
to the purpose for which such amount held pursuant to Section 5.4 had been held,
subject,  in all cases,  to the terms of Section  5.4.  The portion of each such
payment  made  to  the  Indenture  Trustee  which  is to be  distributed  by the
Indenture  Trustee  in payment of Notes  shall be  applied  in  accordance  with
Section 3.11. Any payment received by the Indenture  Trustee pursuant to Section
6.8 shall be distributed to the Molders of the Notes, ratably,  without priority
of one over the other,  in the  proportion  that the  amount of such  payment or
payments  then due and unpaid on all Notes held by each such Holder bears to the
aggregate  amount of the payments then due and unpaid on all Notes  Outstanding.
Amounts  distributed.  by the  Indenture  Trustee  pursuant to this Section .5.1
shall be distributed as promptly as practicable  after such amounts are actually
received by the  Indenture  Trustee;  provided,  however,  that in the event the
Indenture  Trustee  shall be directed to make payments to the Holder of any Note
by wire transfer in accordance with Section 3.8 hereof,  any amounts received by
the Indenture Trustee after 11:00 A.M., New York City time, rnay~be  distributed
on the following Business Day.

                  SECTION  5.2.  Amounts  Received  as  Result of Event of Loss,
Deemed loss Event, Exercise of Option to Terminate or Exercise of Cure Option.

                  If an Event  of Loss or Deemed  Loss Event  shall occur or the
Lessee shall exercise the Cure Option, and it either the Assumption Agreement or





                                      -25-
                                        k


<PAGE>

the  Undivided  Interest  Indenture  Supplement  shall  have been  executed  and
delivered,  any amounts of Casualty Value, Special Casualty value or Fair Market
Sales Value  received or held by the Indenture  Trustee in respect of such Event
of Loss or Deemed Loss Event or exercise  of the Cure  Option  shall,  except as
otherwise  provided  in  Section  5.3,  be  distributed  forthwith  to the owner
Participant.  If the  Lessee or the  owner  Trustee,  as the case may be,  shall
exercise  its option to  terminate  the  Facility  Lease  pursuant to Section 14
thereof,  then there shall be  prepaid,  on the date  payments of proceeds  with
respect thereto art received by the indenture  Trustee (or as soon thereafter as
practicable) under Section 14 of the Facility Lease, the unpaid principal amount
of all Notes,  together  with the  premium,  if any,  and all accrued but unpaid
interest thereon to the data of such prepayment. Notice of such prepayment shall
be given as  provided in Section  3.9(c) and may  provide  that it is subject to
receipt of funds for such  prepayment.  Except as otherwise  provided in Section
5.3 or 5.7, any payments  received and amounts realized by the Indenture Trustee
upon  exercise of the Lessee's or the Owner  Trustee's  option to terminate  the
FacilitY Lease under Section 14 thereof shall in each cas&be  distributed on the
date of  prepayment  as provided in clauses  first,  second and fifth of Section
5.3.

                  SECTION  5.3.  Amounts  Received  After,  or Held at Time  of,
Indenture Event of Default under Section 6.2.

                  Except as  otherwise  provided in Section  5.7,  all  payments
received and amounts realized by the  Indentur&Trus~tee  in tespect of the Lease
Indenture Estate  (including any amounts realized by the Indenture  Trustee from
the  exercise of any remedies  pursuant to the  Facility  Lease or Article VI of
this Indenture)  after an Indenture Eve?1t of Default referred to in Section 6.2
shall  have  occurred  and be  continuing  and the Notes  have been  accelerated
pursuant to Section 7.1, as well as all payments  thereafter received or amounts
then held by the Indenture Trustee as part of the Lease Indenture Estate,  shall
be distributed by the Indenture Trustee in the following order of priority:

                  first,  so much of such  payments  or  amounts  as  sha.1.l be
         required to reimburse the Indenture Trustee for any Trustee's  Expenses
         (to the extent not  previously  reimbursed)  and to pay the  reasonable
         remuneration of the Indenture Trustee, shall be applied by the 
         Indenture Trustee to such reimbursement and payment;

                                      -26-

<PAGE>


                  second, so much of such payments or amounts remaining as shall
        be required to pay in full the aggregate  unpaid principal amount of all
        Notes,  together with premium,  if any, plus accrue& but unpaid interest
        (as well as interest on overdue  principal and, to the extent  permitted
        by law, on overdue interest) thereon to~the date of distribution,  shall
        be  distributed  to the Holders of such Notes and in case the  aggregate
        amount so to be distributed  shall be insufficient to pay all such Notes
        in full as  aforesaid,  then ratably,  without  priority of one over the
        other, in the proportion that the aggregate  unpaid  principal amount of
        all such Notes held by each such Holder,  together with premium, if any,
        plus  accrued but unpaid  interest  thereon to the date of  distribution
        bears to the aggregate unpaid  principal  amount of all Notes,  together
        with premium,  if any, plus accrued but unpaid  interest  thereon to the
        date of distribution;

                  third, so much of such payments or amounts  remaining as shall
        be  required  to pay the  present  or  former  Holders  of the Notes the
        amounts  payable to them as  Indemnitees  (to the extent not  previously
        reimbursed)  shall  be  distributed  to such  Holders;  and in case  the
        aggregate  amount so to be paid to all such Holders in  accordance  with
        this  clause  third  shall be  insufficient  to pay all such  amounts as
        aforesaid,  then ratably, without priority of one over the other, in the
        proportion  that the amount of such indemnity or other payments to which
        such Person is entitled bears to the aggregate  amount of such indemnity
        or other payments to which all such Persons are entitled;

                  fourth,  the  balance,  if any,  of such  payments  or amounts
        remaining  shall be applied to the payment of any other  indebtedness at
        the time due and owing to the  Indenture  Trustee or the  Holders of the
        Notes which this Indenture by its terms secures; and

                  fifth,  the  balance,  if any,  of such  payments  or  amounts
        remaining  thereafter  shall be  distributed to or upon the direction of
        the Owner Trustee.






6091. CHASEU2 LEASE.07:1
                                      -27-


<PAGE>


                  SECTION 5.4. Amounts Received for which Provision Is Made in a
Transaction Document.

                  Except  as  otherwise  provided  in  Section  5.1,  5.3 or 5.7
hereof,  any payments  received by the Indenture Trustee in respect of the Lease
Indenture Estate for which provision as to the application  thereof is made in a
Transaction  Document shall be applied to the purpose for which such payment was
made in accordance with the terms of such Transaction  Document,  as determined,
in the first instance, from instructions or other information  accompanying such
payment, or, other-wise,  in accordance with instructions from the payor of such
payments.

                  SECTION 5.5. Amounts Received for which No Provision Is Made.

                  Except as otherwise provided in Section 5.1, 5.2, 5.3 or 5.7,
any  payments  received  and any amounts  realized by the  Indenture  Trustee in
respect of the Lease Indenture Estate.

        (a) for which no  provision as to the  application  thereof is made in i
        Transaction Document or elsewhere in this Article V shall be held by the
        Indenture Trustee as part of the tease Indenture Estate, and

        (b) to the extent received or realized at any time after payment in full
        of the principal of and premium,  if any, and interest on all the Notes,
        as well as any other  amounts  remaining as part of the Lease  Indenture
        Estate after payment iw lull of the  principal of and premiurn,  if any,
        and interest on all the Notes,  shall be  distributed  by the  Indenture
        Trustee  in the order of  priority  set forth in section  5.3  (omitting
        clause second thereof).

                  SECTION 5.6.  Payments to Owner Trustee.

                  Unless otherwise  directed by the Owner Trustee,  all payments
to be made to the Owner Trustee hereunder shall be made to the Owner Participant
by wire transfer of immediately  available funds as soon as practicable  t'ut in
any event no later than the close Qf business  on the date of receipt  (assuming
the Indenture Trustee has received such funds prior to 11:00 a.m. New York City



                                      -28-



<PAGE>

time on the same  day),  to such  account  at such bank or trust  company as the
Owner  Participant shall from time to time designate in writing to the Indenture
Trustee.

                  SECTION 5.7.  Excepted Payments.

                  Anything in this Article V or  elsewhere in this  Indenture to
the contrary  notwithstanding,  any Excepted Payment received at any time by the
Indenture  Trustee shall be distributed as promptly as practicable to the Person
entitled to receive such Payment (such entitlement to be conclusively determined
by reference to payment instructions from such Person)



                                   ARTICLE VI

       REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER TRUSTEE; EVENTS
                           OF DEFAULT; REMEDIES OF THE
                                INDENTURE TRUSTEE


                  SECTION  6.1.  Representations,  Warranties  and  Covenants of
Owner Trustee.

                  The Owner Trustee hereby covenants and agrees that (i) it will
duly and punctually pay the principal of, and premium,  if any, and interest on,
the Notes in accordance with the terms thereof and this Indenture,  (ii) it will
not pledge, create a security interest in or mortgage1 so long as this Indenture
shall remain in effect,  any of its. estate,  right, title or interest in and to
the Lease Indenture Estate or otherwise  constituting  part of the Trust Estate,
to anyone  other than the  Indenture  Trustee,  (iii) so long as this  Indenture
shall  remain in effect,  it will not purchase or agree to purchase any property
or asset other than the Undivided  Interest and the Real  Property  Interest and
other  than as  contemplated  by the  Transaction  Documents,  (iv) it will not,
except  with  the prior  written  concurrence  of the  Indenture  Trustee  or as
expressly  provided in or  permitted  by this  Indenture  or with respect to the
Trust  Agreement or any property not  constituting  part of the Lease  Indenture
Estate,  take any action which would result in an  impairment of any Note br the
obligation  of the Lessee to pay any amount  under the  Facility  Lease which is
part of the Lease  Indenture  Estate (not in any event  including  in respect of





                                      -29-


<PAGE>

Excepted  Payments) or any of the other  rights or security  created or effected
thereby,  or (v) issue, or incur any obligation in respect of,  indebtedness for
borrowed money except for its obligations in respect of Notes.

                  A signed  copy of any  amendment  or  supplement  to the Trust
Agreement  shall be delivered by the Owner Trustee to the Indenture  Trustee and
the Lessee.  This Indenture and the Lease Indenture Estate shall not be affected
by any  action  taken  under or in  respect  of the  Trust  Agreement  except as
otherwise  provided in or permitted by this  rndenture.  The Trust Agreement may
not in any event be terminated by the Owner  Participant or the owner Trustee or
revoked  by the  Owner  Participant  so long as any of the  Notes or any  unpaid
obligations  under this  Indenture  remain  outstanding.  The Owner  Trustee may
resign  as  Owner  Trustee,  appoint  a  successor  Owner  Trustee  and take all
necessary and proper action to constitute  one or more Persons as  co-trustee(s)
jointly with the Owner Trustee or as separate trustee(s), all in accordance with
the terms and conditions of Article IX of the Trust Agreement.

                  SECTION 6.2.  Indenture Events of Default.

                The term Indenture Event of Default1 wherever used herein, shall
mean any of the following  events  (whatever the reason for such Indenture Event
of Default and whether it shall be voluntary or  involuntary or come about or be
effected by operation of law or pursuant to or in compliance  with any judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
administrative or governmental body):

                  (a) any of the Events of Default  specified  in the  following
clauses  of  Section  15 of the  Facility  Lease:  (1) clause (i) (y) , except a
failure of the Lessee to pay any  amount  which  shall  constitute  an  Excepted
Payment;  (2) clause  (i) (x),  except a failure of the Lessee to pay any amount
which shall  constitute  an Excepted  Payment or except where the Owner  Trustee
shall not have  rescinded or terminated  the Facility  Lease pursuant to Section
16(a) (i) of the Facility Lease; or (3) clause (vii) ; or

                  (b) the rescission or termination  of, or the taking of action
by the owner  Trustee or the Owner  Participant  the effect of which would be to
rescind or terminate,  the Facility Lease, whether pursuant to Section 16(a) (1)
of the Facility Lease or otherwise; or


                                      -30-
6091. CHASEU2 LEASE. 07:1


<PAGE>


                  (c) any failure by the Lessee to perform and observe.  Section
10(b) (3) (iii) of the Participation Agreement; or

                  (d) the  Owner  Trustee  shall  fail to make  any  payment  in
respect of the  principal  of, or premium,  if any,  or  interest  on, the Notes
within ten (10)  Business  Days after the same shall have become due (other than
by virtue of any failure by the Lessee to make any payment of Rent therefor); or

                  (a) the Owner  Trustee  shall fail to  perform or observe  any
covenant or agreement to be  performed  or observed by it under  Section.6.1  of
this Indenture,  or the Owner  Participant  shall fail to perform or observe any
covenant or agreement to be performed or observed by it under Section 7(b)(l) of
the  Participation  Agreement and, in any such case, such failure shall continue
for a period of 30 days after notice  thereof shall have been given to the Owner
Trustee,  the  Owner  Participant  and  the  Lessee  by the  rndenture  Trustee,
specifying such failure and requiring it to be remedied.

                  SECTION 6.3.  Enforcement of Remedies.

                  (a) In the event that an Indenture Event of Default shall have
occurred and be continuing,  then and in every such case the Indenture  Trustee,
subject to  paragraph  (b) of this Section 6.3 and Section  6.11,  may, and when
required pursuant to the provisions of Article VII hereof shall, exercise any or
all of the rights and  powers  and  pursue,  subject to the rights of the Lessee
under the Facility  Lease,  (x) in the event such Indenture Event of 'Default is
referred to in  paragraph  (d) or (e) of section 6.2, any or all of the remedies
then available  pursuant to this Article VI and Article VII, or (y) in the event
such  Indenture  Event of Default is referred tQ in paragraph (a), (b) or (c) of
Section  6.2,  any or all of such  remedies  concurrently  with the exercise and
pursuit by the owner Trustee of any or all of the remedies then available to the
Owner Trustee under the Facility Lease.

                  (b) Any  provisions of the Facility Lease or this Indenture to
the  contrary  notwithstanding,  if the Lessee  shall  fail to pay any  Excepted
Payment to any Person  entitled  thereto as and when due, such Person shall have
the right at all times,  to the exclusion of the Indenture  Trustee,  to demand,
collect,  sue for, enforce performance of obligations  relating to, or otherwise
obtain all amounts due in respect of such Excepted Payment.


6091. CHASEU2 LEASE. 07:1
                                      -31-
                                        


<PAGE>

                  SECTION 6.4. Specific Remedies;  Enforcement of Claims without
Possession of Notes.

                  Subject to Sections  6.2, 6.3 and 6.11 hereof and the terms of
the  documents  constituting  a part of the  Lease  Indenture  Estate,  upon the
occurrence and during the continuance of an Indenture Event of Default:

                  (a) The Indenture  Trustee may, in order to enforce the rights
of the Indenture  Trustee and of the Holders of the Notes,  direct payment to it
of all moneys and enforce any agreement or  undertaking.  constituting a part of
the Lease Indenture Estate by any action, suit, remedy or proceeding  authorized
or  permitted  by this  Indenture  or by law or by equity,  and  whether for the
specific  performance of any agreement  contained  herein,  or for an injunction
against the violation of any of the terms  hereof,  or in aid of the exercise of
any power granted hereby or by Applicable Law, and in addition may sell, assign,
transfer and deliver,  from time to time to the extent  permitted by  Applicable
Law, all or any part of the Lease maenture  Estate or any interest  therein,  at
any private sale or public  auction  with or without  demand,  advertisement  or
notice  (except as herein  required or as may be required by Applicable  Law) of
the  date,.  time and place of sale and any  adjournment  there-of,  for cash or
credit or other property, for immediate or future delivery and for such price or
prices  and on such  terms  as the  Indenture  Trustee,  in its  tincontrol  led
discretion,  may determine,. or as may be required by Applicable Law, so long as
the  Owner  Participant  and the  Owner  Trustee  are  afforded  a  commercially
reasonable opportunity to bid for all or such part of the Lease Indenture Estate
in  connection  therewith.  It is  agreed  that 90  days'  notice  to the  Owner
Participant, the Owner Trustee and the Lessee of the date, time and place of any
proposed sale by the Indenture Trustee of all or any part of the Lease Indenture
Estate or interest  therein is reasonable.  The Indenture  Trustee may file such
proofs of claim and other  papers or  documents as may be necessary or advisable
in order to have the claims of the  Indenture  Trustee and of the Holders of the
Notes  asserted or upheld in any  bankruptcy,  receivership  or other judicial
proceedings.





6091.CHASEU2.LEASE.07:l
                                      -32-


<PAGE>


                       (b)  Without   limiting  the  foregoing,   the  Indenture
      Trustee, its assigns and its legal representatives,  subject to the rights
      of the Lessee under the Facility Lease, shall have as to such of the Lease
      Indenture  Estate as is subject to the Uniform  Commercial Code or similar
      law in each  relevant  jurisdiction  all the  remedies of a secured  party
      under the Uniform  Commercial Code or similar law in such jurisdiction and
      such further remedies as from time to time may it hereafter be provided in
      such jurisdiction for a secured party.

                      (c) All rights of action and rights to assert claims under
      this Indenture or under any of. the Notes may be enforced by the Indenture
      Trustee  without  the  possession  of the  Notes  at any  trial  or  other
      proceedings  instituted  by the Indenture  Trustee,  and any such trial or
      other  proceedings  shall  be  brought  in its own name as  trustee  of an
      express  trust,  and any  recovery  or  judgment  shall be for the ratable
      benefit of the Holders of the Notes as herein provided. In any proceedings
      brought by the Indenture  Trustee (and also any proceedings  involving the
      interpretation  of any provision of this  Indenture to which the Indenture
      Trustee shall be a party) the Indenture Trustee shall be held to represent
      all the Holders of the Notes,  and it shall not be  necessary  to make any
      such Holders parties to such proceedings.

                      (d) The Indenture  Trustee may exercise any other right or
    remedy  that may be  available  to it under  Applicable  Law or  proceed  by
    appropriate  court action to enforce the terms hereof or to recover  damages
    for the breach hereof,

                     SECTION 6.5.  Rights and Remedies cumulative.

                      Subject to Sections 6.2, 6.3 and 6.11 hereof, (a) each and
      every right,  power and remedy herein  specifically given to the Indenture
      Trustee under this Indenture  shall be cumulative and shall be in addition
      to every other right, power and remedy herein specifically given or now or
      hereafter  existing at law,  in equity or by  statute,  and each and every
      right,  power and remedy  whether  specifically  herein given or otherwise
      existing may be exercised from time to time and as often and in such order
      as may be deemed  expedient by the  Indenture  Trustee and the exercise or
      the  beginning of the exercise of any right,  power or remedy shall not be





                                      -33-


<PAGE>

         construed  to be a waiver of the right to  exercise at the same time or
         thereafter  any  other  right,  power  or  remedy,  and Cb) no delay or
         omission by the Indenture  Trustee in the exercise of any right,  power
         or remedy or in the  pursuance  of any  remedy  shall  impair  any such
         right, power or remedy or be construed to be a waiver of any default on
         the part of the Owner  Participant,  the Owner Trustee or the Lessee or
         to be an acquiescence therein.

 

                  SECTION 6.6.  Restoration of Rights and Remedies

                  In case the Indenture  Trustee shall have proceeded to enforce
any  right,  power or remedy  under  this  Indenture  by  foreclosure,  entry or
otherwise, and such proceedings shall have been discontinued onabandoned for any
reason or shall have been determined  adversely to the Indenture  Trustee,  then
and in every such case the Owner Trustee,  the Owner Participant,  the Indenture
Trustee and the Lessee  shall be restored to their former  positions  and rights
hereunder with respect to the Lease Indenture Estate, and all rights, powers and
remedies of the Indenture  Trustee shall continue as if no such  proceedings had
been taken.

                  SECTION 6.7.  Waiver of Past Defaults.

                  Any past Indenture  Default or Indenture  Event of Default and
its  consequences  may be waived by the  Indenture  Trustee,  except an maenture
Default or an Indenture  Event of Default (i) in the payment of the principal of
or interest on any Note,  subject to the  provisions  of Section 7.1 hereof,  or
(ii) in respect of a covenant or  provision  hereof  which,  under  Section 10.2
hereof,  cannot be.  modified or amended without the consent of each Holder~of a
Note then Outstanding. Upon any such waiver, such Indenture Default or Indenture
Event of Default shall cease to exist,  and any other Indenture Event of Default
arising  therefrom shall be deemed to have been cured, for every purpose of this
Indenture;  but no such waiver shall ettend to any subsequent or other Indenture
Default or Indenture Event of Default or impair any right consequent thereon.

                  SECTION  6.8.  Right  of  owner  Trustee  to  Pay  Rent;  Note
Purchase; Substitute Lessee.

                  Anything  in this  Article VI or Article  VII to the  contrary
notwithstanding:




6091. CHASEU2 LEASE. 07:1
                                      -34-


<PAGE>


                  (a) an  Indenture  Event of Default  shall be deemed  cured if
such  Indenture  Event of  Default  results  from  non-payment  of Basic Rent or
Supplemental  Rent under the Facility Lease,  and the Owner Trustee or the Owner
Participant  shall  have paid all  principal  of and  interest  on the Nctes due
(other  than by  acceleration)  on the date such  Basic Rent was  payable  (plus
interest on such amount as required  hereby) within 20 days after the receipt by
the Owner  Trustee of notice of such  non-payment1  such receipt to be evidenced
by,  among  other  things',,  any  notice  thereof  given to the  Owner  Trustee
in~adcordance  with the notice  provisions of the Participation  Agreement.  The
Owner Trustee or the Owner  Participant,  upon exercising cure rights under this
paragraph  (a),  shall not  obtain  any Lien on any part of the Lease  Indenture
Estate  on  account  of such  payment  for the costs and  expenses  incurred  in
connection  therewith  nor,  except  as  expressly  provided  in the  succeeding
sentence, shall any claim~ of the Owner Trustee or the Owner Participant against
the Lessee or any other Person for the repayment  thereof impair the prior right
and security  interest of the Indenture  Trustee in and to the o~Lease Indenture
Estate. Upon any payment by the Owner Trustee or the Owner Participant  pursuant
to this Section 6.8, the Owner Trustee or the Owner Participant, as the case may
be,  shall (to the extent of.  such  payment  made by it) be  subrogated  to the
rights of the  Indenture  Trustee  and the  Holders of the Notes to receive  the
payment of Rent with respect to which the Owner Trustee or the Owner Participant
made such payment and interest on account of such Rent payment  being overdue in
the  manner  set forth in the next  sentence.  If the  Indenture  Trustee  shall
thereafter receive such payment of Rent or such interest,  the Indenture Trustee
shall, notwithstanding the requirements of Section 5.1, on the date such payment
is received by. the Indenture Trustee, remit such payment of Rent (to the extent
of the payment made by the Owner  Trustee or the Owner  Participant  pursuant to
this  Section  6.8)  and  such  interest  to the  Owner  Trustee  or  the  Owner
Participant,  as the case may be, in reimbursement  for the funds so advanced by
it.

                  (b) Each Holder of a Note agrees, by accep tance thereof, that
if the Notes  have been  accelerated  pursuant  to  Section  7.1,  and the Owner
Trustee,  within 30 days  after  receiving  notice  from the  Indenture  Trustee
pursuant to Section  7.1 hereof,  shall give  writ-ten  notice to the  Indenture
Trustee  of the  Owner  Trustee's  intention  to  purchase  all of the  Notes in




6091. CHASEU2. LEASE. 07:1

                                      -35-


<PAGE>

accordance with this  paragraph,  accompanied by assurances of the Owner Trustee
to purchase the Notes,  then,  upon receipt  within 10 Business  Days after such
notice  from the  Owner  Trustee  of an  amount  equal to the  aggregate  unpaid
principal  amount of and any premium  with respect to any unpaid Notes then held
by such Holder, together with accrued but unpaid interest thereon to the date of
such  receipt (as well as any interest on overdue  principal  and, to the extent
permitted by law, interest),  such Holder will forthwith sell, assign,  transfer
and convey to the Owner Trustee (without  recourse or warranty of any kind other
than of title to the Notes so conveyed) all of the right,  title and interest of
such Holder in and to the Lease Indenture  Estate,  this Indenture ~nd all Notes
held by such  Holder;  pravided,  that no such  Holder  shall be  required so to
convey unless (1) the Ow'ner Trustee shall have simultaneously  tendered payment
for all other Notes issued by the Owner Trustee at the time Outstanding pursuant
to this paragraph and (2) such  conveyance is not in violation of any Applicable
Law.

                  (c) Each  Holder of a Note  further  agrees by its  acceptance
thereof that the Owner Trustee shall have the right,  pursuant to Section 16 of
the  Facility  Lease,  to  terminate  the  Facility  Lease  and,  in  connection
therewith,  to arrange for the  substitution of another Person as lessee under a
new  lease  substantially   similar  to  the  Facility  Lease  (hereinafter  the
substituted  Lessee) and,  subject to: (i) any Indenture  Event of Default under
paragraphs  (d) and (e) of Section 6.2 having  been cured by the Owner  Trustee,
(ii) the  Substituted  Lessee's  assuming all of the  obligations  of the Lessee
under the Facility Lease and (iii) the  Substituted  Lessee's having an assigned
credit rating by Standard & Poor's  Corporation and Moody's  Investors  Service,
Inc. (or, if either of such  organizations  shall not rate securities  issued by
such Substituted Lessee, by any other nationally  recognized rating organization
in the United States of America) with respect to at least one series of its debt
obligations  or  preferred  stock equal to or better than the ratings  assigned,
immediately  prior to such  substitution,  by such  organizations  to comparable
securities of the Lessee  immediately prior to such substitution but in no event
less than "investment  grade", then the Facility Lease between the Owner Trustee
and such Substituted Lessee shall, for all purposes of this Indenture, be deemed
to be the Facility Lease subject to the lien of this Indenture.





6091. CHASEU2 LEASE. 07:1
                                      -36-


<PAGE>


                  SECTION 6.9. Further Assurances.

                  Subject to Section 7.6 hereof,  the Owner  Trustee  covenants
and  agrees  from  time  to  time to do all  such  acts  and  execute  all  such
instruments  of  further  assurance  as shall  be  reasonably  requested  by the
Indenture  Trustee for the purpose of fully carrying out and  effectuating  this
Indenture and the intent hereof.

                  SECTION 6.10. Right of Indenture Trustee To Perform Covenants,
etc.
                                       
                  If the owner Trustee shall fail to make any payment or perform
any act  required to be made or  performed by it hereunder or under the Facility
Lease or if the Owner Trustee shall fail to release any Lien affecting the Lease
Indenture Estate which it is required to release by the terms of this Indenture,
the Indenture  Trustee,  without  notice to or demand upon the Owner Trustee and
without waiving or releasing any obligation or default,  may (but shall be under
no obligation to) at any time  thereafter  make such payment or perform such act
for the account and at the expense of the Lease  Indenture  Estate.  All sums so
paid by the  Indenture  Trustee and all costs and  expenses  (including  without
limitation   reasonable   fees  and   expenses   of  legal   counsel  and  other
professionals)  so incurred,  together  with  interest  thereon from the date of
payment or occurrence,  shall constitute additional indebtedness secured by this
Indenture  and shall be paid from the Lease  Indenture  Estate to the  Indenture
Trustee on demand.  The  Indenture  Trustee  shall not be liable for any damages
resulting  from any such  payment  or action  unless  such  damages  shall.be  a
consequence  of  willful  misconduct  or  gross  negligence  on the  part of the
Indenture Trustee.

                 SECTION 6.11. Certain other Rights of the Owner Trustee.

                  Notwithstanding   any   provision  to  the  contrary  in  this
Indenture,  the Owner Trustee shall at all times retain, tb the exclusion of the
Indenture Trustee,  all frights of the Owner Trustee to exercise any election or
option  or to make any  decision  or  determination  or to give or  receive  any
notice,  consent,  waiver or  approval or to take any other  action  under or in
respect of the Facility Lease, as well as all rights, powers and remedies on the
part of the  Owner  Trustee,  whether  arising  under the  Facility  Lease or by
statute or at law or in equity or otherwise, arising out of any Default or Event


                                      -37-
6091. CHASEU2 . LEASE.07:l


<PAGE>


of Default subject,  however, to Section 10.2. Without the prior written consent
of the  Indenture  Trustee,  the  exercise  of any of the  aforesaid  rights  so
retained by the Owner  Trustee shall not be exercised in such a manner as to (i)
reduce the  amounts  payable by the Lessee  under the  Facility  Lease below the
amounts  necessary to provide the Owner Trustee with  sufficient  monies to make
timely  payments in full of amounts  due with  respect to the  principal  of and
premium,  if any, and  interest on all Notes or (ii)  rescind or  terminate  the
Facility  Lease  pursuant  to Section 16  thereof.  Nor shall the Owner  Trustee
exercise any other right or remedy under the Facility  Lease the effect of which
would be to effect such rescission or termination.



                                   ARTICLE VII

                           CERTAIN DUTIES OF THE OWNER
                        TRUSTEE AND THE INDENTURE TRUSTEE


                  SECTION  1.1.  Duties in Respect of Events of Default,  Deemed
Loss Events and Events of Loss; Acceleration of Maturity.

                  In the event the Owner Trustee shall have actual  knowledge of
an Indenture  Event of Default,  an Event of Default,  a Deemed Loss Event or an
Event of Loss, the Owner Trustee shall give prompt written notice thereof to the
Owner  Participant,  the  Lessee  and the  Indenture  Trustee.  In the event the
Indenture  Trustee  shall  have~actual  knowledge  of an  Event of  Default,  an
Indenture  Event of  Default,  a  Deemed  Loss  Event  or an Event of Loss,  the
Indenture  Trustee  shall  give  prompt  written  notice  thereof  to the  Owner
Participant, the Owner Trustee, the Lessee and each Holder of a Note. Subject to
the terms of Sections 6.2, 6.3, 6.4, 6.8, 6.11 and 7.3 hereof, (a) the Indenture
Trustee  shall  take such  action  (including  the  waiver of past  Defaults  in
accordance  with Section 6.7 hereof),  or refrain from taking such action,  with
respect to any such Indenture  Event of Default,  Event of Default,  Deemed Loss
Event  or Event  of Loss as the  Indenture  Trustee  shall  be  instructed  by a
Directive,  (b) if the rndenture Trustee shall not have reccived instructions as
above provided  within 20 days after mailing by the Indenture  Trustee of notice
of such Indenture Event of Default, Event of Default, Deemed Loss Event or Event
of Loss to the




                                      -38-


<PAGE>


Persons  referred to above,  the Indenture  Trustee may, subject to instructions
thereafter  received  pursuant to the preceding  sentence,  take such action, or
refrain from taking such  action,  but shall be under no duty to take or refrain
from taking any action,  with respect to such Indenture Event of Default,  Event
of Default,  Deemed Loss Event or Event or Loss as it shall determine  advisable
in the best  interests  of the Holders of the Notes of all series and (c) in the
event that an Indenture  Event of Detault shall have occurred and be continuing,
the  Indenture  Trustee in its  discretion  may, or upon  receipt of a Directive
shall,  by~w?itten  notice to the Owner  Trustee,  declare the unpaid  principal
amount of all Notes with  accrued  interest  thereon to be  immediately  due and
payable,  upon which declaration such principal amount and such accrued interest
shall  immediately  become due and p4yable  without further act or notice of any
kind. For all purposes of this  Indenture,  in the absence of actual  knowledge,
neither the Owner  Trustee  nor the  Indenture  Trustee  shall be deemed to have
knowledge of an rndenture  Event.of  Default or Event of Default except that the
Indenture Trustee shall be deemed to have knowledge of the failure of the Lessee
to pay any  installment  of Basic Rent  within 10  Business  Days after the same
shall become due. For  purposes of this Section 7.1,  neither the Owner  Trustee
nor the  Indenture  Trustee  shall be deemed  to have  actual  knowledge  of any
Indenture Event of Default, Event of Default, Deemed Loss Event or Event of Loss
unless it shall have received notice thereof  pursuant to Section 11.6 hereof or
such  Indenture  Event of Default or Event of Default shall actually be known by
an officer in the  corpor4te  trust  department  of the Owner  Trustee or by an.
officer in the  Corporate  Trustee  Administration  Department  of the Indenture
Trustee, as the case may be.

                  SECTION  7.2.  Duties  in  Respect  of  Matters  Specified  in
Directive.

                  Subject to the terms of Sections 6.2, 6.3, 6.4, 6.S, 6.11, 7.1
and 7.3 hereof,  upon receipt of a Directive,  the Indenture  Trustee shall take
such of the following  actions as may be specified in such  Directive:  (i) give
such  notice or  direction  or exercise  such right,  remedy or power  permitted
hereunder or permitted  with respect to the Facility  Lease or in respect of any
part  or all of the  Lease  Indenture  Estate  as  shall  be  specified  in such
Directive; and (ii) take such action to preserve or protect the Lease Indenture



                                      -39-


<PAGE>


Estate as shall be  specified  in such  Directive,  it being agreed that without
such a Directive,  the Indenture Trustee shall not waive,  consent to or approve
any such matter as satisfactory to it.

                  SECTION 7.3.  Indemnification.

                  The Indenture Trustee shall not be required to take or refrain
from taking any action under Section 7.1 or 7.2 or Article VI hereof which shall
require the Indenture Trustee to expend or risk its own funds or otherwise incur
any financial liability unless the Indenture Trustee shall have been indemnified
by the  Holders  of the Notes  against  liability,  cost or  expense  (including
counse~ fees) which may be incurred in connection  therewith,  or unless, in the
reasonable  judgment of the Indenture  Trustee,  the  indemnities  of the Lessee
shall be adequate for such  purpose:  provided,  however,  that if the Holder of
such Motes is the Collateral Trust Trustee, the unsecured written undertaking of
the collateral Trust Trustee,  in its individual  capacity,  shall be sufficient
indemnity  for purposes of this  Section.  The  Indenture  Trustee  shall not be
required  to take any action  under  section 7.1 or 7.2 or Article VI hereof nor
shall any other  provision  of this  Indenture be deemed td impose a duty on the
Indenture  Trustee to take any action, if the Indenture Trustee shall reasonably
determine,  or shall have been advised by counsel, that such action is likely to
result in  personal  liability  or is  contrary  to the  terms  hereof or of the
Facility Lease or is otherwise contrary to law.

                  SECTION 7.4. Limitations on Duties: oischacge of Certain Liens
Resulting from dabs Against Indenture Trustee.

                  The Indenture Trustee shall have no duty or obligation to take
or refrain from taking any action under,  or in connection  with, this Indenture
or the  Facility  Lease,  except  as  expressly  provided  by the  terms of this
Indenture.  The  Indenture  Trustee  nevertheless  agrees  that it will,  in its
individual  capacity and at its own cost and expense,  promptly take such action
as may be  necessary  duly to  discharge  all  Liens  on any  part of the  Lease
Indenture  Estate which result from acts by or claims  against it arising out of
events or conditions not related to its rights in the Lease Indenture  Estate or
the   administration   of  the  Lease  Indenture   Estate  or  the  transactions
contemplated hereby.


                                      -40-
6091. CHASEU2 LEASE. 07:1


<PAGE>


                  SECTION  7.5.  Restrictions  on Dealing  with Lease  Indenture
Estate.

                  Except as provided  in the  Transaction  Documents,  the Owner
Trustee shall not use, operate, store, lease, control,  manage, sell, dispose of
or 0th-erwise deal with any part of the Lease Indenture Estate.

                  SECTION 7.6. Filing of Financing  Statements and  Continuation
Statements.

                  Pursuant to Section 10(b) (2) of the Participation  Agreement,
the Lessee has covenanted to maintain the priority of the lien of this Indenture
on the Lease Indenture Estate.  The Indenture Trustee shall, at the- request and
expense of the Lessee as provided in the  Participation  Agreement,  execute and
deliver to the Lessee and the Lessee  will  file,  if not  already  filed,  such
financing  statements~or  other  documents and such  continuation  statements or
other  documents  with  respect  to  financing  statements  or  other  documents
previously  filed relating to the lien created under this Indenture in the Lease
Indenture  Estate as may be necessary to protect,  perfect and preserve the lien
created  under  this  Indenture.  - At any time and from time to time,  upon the
request of the Lessee or the Indenture Trustee,  at the expense of the Lessee as
provided  in the  Participation  Agreement  (and  upon  receipt  of the  form of
document so to be executed),  the Owner Trustee shall  promptly and duly execute
and deliver any and all such further  instruments and documents as the Lessee or
the Indenture Trustee may reasonably  request in order for the Indenture Trustee
to obtain the full benefits of the security  interest,  assignment  and mortgage
created or  intended  to be created  hereby and of the rights and powers  herein
granted.   Upon  the  reasonable   instructions  (whAch  instructions  shall  be
accompanied  by the form of  document  to be filed) at any time and from time to
time of the Lessee or the Indenture Trustee, the Owner Trustee shall execute and
file any financing statement (and any continuation statement with respect to any
such financing  statement),  any certificate of title or any other document,  in
each case relating to the security interest,  assignment and mortgage created by
this  Indenture,  as may be specified  in such  instructions.  Zn addition,  the
Indenture   Trustee  and  the  Owner  Trustee  will  execute  such  continuation
statements with respect to financing  statements and other documents relating to




6091. CHASEU2 LEASE. 07:1
                                      -41-


<PAGE>

the lien created under this  Indenture in the Lease  Indenture  Estate as may be
reasonably  specified from time to time in written instructions of any Holder of
a Note (which  instructions  may, by their terms,  be operative only at a future
date and which shall be accompanied by the form of such  continuation  statement
or other document so to be filed).



                                  ARTICLE VIII

                        CONCERNING THE OWNER TRUSTEE AND
                              THE INDENTURE TRUSTIZ


                  SECTION 8.1.  Acceptance of Trusts; Standard of care.

                  The Indenture  Trustee  accepts the trusts hereby  created and
applicable  to it and agrees to perform the same but only upon the terms of this
Indenture and the Participation Agreement and agrees to receive and disburse all
moneys  constituting  part of the Lease Indenture  Estate in accordance with the
provisions hereof,  provided that no implied duties or obligations shall be read
into  this  Inaenture  or the  Participation  Agreement  against  the  Indenture
Trustee.  The  Indenture  Trustee  shall enter into and perform its  obligations
under the Participation Agreement, and, at the request of the owner Trustee, any
other agreement  relating to any transfer of the Undivided  Interest or the Real
Property   Interest  or  the   assignment   of  rights   under  the   Assignment
and~Assumption  or, at the  request of the Owner  Trustee,  the  purchase by any
Person of Notes or  Additional  Notes.  issued  hereunder,  all as  contemplated
hereby.  The  Indenture  Trustee  shall not be liable  under any  circumstances,
except for its own willful  misconduct  or gross  negligence.  If any  Indenture
Event of Default shall have occurred and be  continuing,  the Indenture  Trustee
shall exercise such of the rights and remedies vested.  in it by this Indenture,
subject to the provisions hereof, and shall use the same degree of care in their
exercise as a prudent  man would  exercise  or use in the  circumstances  in the
conduct of his own  affairs;  provided  that if in the opinion of the  Indenture
Trustee such action may tend to involve  expense or  liability,  it shall not be
obligated to take such action unless it is furnished with indemnity satisfactory
to it.




                                      -42-



<PAGE>


                  SECTION 8.2.  No Duties of Maintenance, Etc.

                  Except  pursuant  to Section 7.2 hereof and except as provided
in, and without  limiting the  generality of,  Sections 7.1 and 7.4 hereof,  the
Indenture  Trustee  shall have no duty (i) to see to any  recording or filing of
any Transaction  Document, or to see to the maintenance of any such recording or
filing,  or (ii) to see to the payment or  discharge of any tax,  assessment  or
other  governmental  charge or any lien or  encumbrance  of any kind  owing with
respect  to, or  assessed  or levied  against,  any part of the Lease  Indenture
Estate  (except such as are required to be paid or  discharged by it pursuant to
this Indenture or any of the other Transaction Documents) or to make or file any
reports or returns related thereto.

                  SECTION  8.3.  Representations  and  Warranties  of  Indenture
Trustee and the owner Trustee.

                  NEITHER THE OWNER TRUSTEE NOR THE INDENTURE  TRUSTEE MAKES ANY
REPRESENTATION  OR  WARRANTY  AS TO THE  VALUE,  CONDITION,  MERCHANTABILITY  OR
FIThESS  FOR USE OF UNIT 2, THE  UNDIVIDED  INTEREST  OR ANY PART OF THE  LAASE.
INDENTURE ESTATE OR AS TO ITS INTEREST THEREIN,  OR ANY OTHER  REPRESENTATION OR
WARRANTY WITH RESPECT TO UNIT 2, THE UNDIVIDED INTEREST OR ANY PART OF THE LEASE
INDENTURE ESTATE  WHATSOEVER.  The Owner Trustee and the Indenture  Trustee each
represents  and warrants,  in its  individual  capacity,  as to itself that this
Indenture has been executed and delivered by one or more of its officers who are
duly authorized to execute and deliver this Indenture on its behalf.

                  SECTION 8.4.  Moneys Held in Trust; Non-Segregation of Moneys.

                  All  moneys  and  securities  deposited  with  and held by the
Indenture  Trustee under this  Indenture for the purpose of paying,  or securing
the  payment of, the  principal  of or premium or interest on the Notes shall be
held~in  trust.  Except as  provided in Sections  2.3(c),  8.8 and 11.1  hereof,
moneys  received  by the  Indenture  Trustee  under this  Indenture  need not be
segregated  in any  manner  except to the  extent  required  by law,  and may be
deposited under such general  conditions as may be prescribed by law;  provided,
however,  that any  payments  received  or applied  hereunder  by the  Indenture
Trustee  shall be  accounted  for by the  Indenture  Trustee so that any portion




6091. CHASEU2 . LEASE.O7:l
                                      -43-


<PAGE>

thereof paid or applied  pursuant  hereto shall be identifiable as to the source
thereof.  Except as otherwise  expressly  provided herein, the Indenture Trustee
shall  not be  liable  for any  interest  on any  money  held  pursuant  to this
Indenture.

                  SECTION 8.5.  Reliance on writings, Use of Agents, Etc.

                  The  Indenture  Trustee  shall incur no liability to anyone in
acting upon any signature,  instrument,  notice,  resolution,  request, consent,
telegram, order,  certificate,  report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper party
or parties.  In the case of the Lessee,  the Indenture Trustee may accept a copy
of a resolution of the Board of Directors or any duly constituted and authorized
dommittee of the Board of Directors of the Lessee, certified by the Secretary or
an  Assistant  Secretary  of the  Lessee as duly  adopted  and in full force and
effect,  as conclusive  evidence that such  resolution  has been duly adopted by
such Board or  Committee  and that the same .15 in full force and effect.  As to
the aggregate unpaid  principal amount of the Notes  outstanding as of any date,
the Owner Trustee may for all purposes  hereof rely on a  certificate  signed by
any Authorized  Officer of the Indenture  Trustee.  As to any fact or matter the
manner of  ascertainment  of which is not  specifically  described  herein,  the
Indenture Trustee may for all purposes hereof rely on~a  certificate~  signed by
the Chairman of the Board,  the president,  any Vice President and the Treasurer
or the  secretary or any  Assistant  Treasurer  or  Assistant  secretary of the'
Lessee , or a Holder of a Note or any Responsible  Officer of the owner Trustee,
as the case may be,  as to such  fact or  matter,  and  such  certificate  shall
constitute  full  protection  to the  Indenture  Trustee for any action taken or
omitted to  be~taken  by it in good faith in  reliance  thereon.  The  Indenture
Trustee shall furnish to the owner  Trustee upon request such  information.  and
copies of such documents as the Indenture  Trustee may have and as are necessary
for the Owner  Trustee to perform its duties  under  Article III hereof.  In the
administration of the trusts hereunder, the Indenture Trustee may execute any of
the trusts or powers hereof and perform its powers and duties hereunder directly
or through agents or attorneys  selected by it in good faith and with reasonable
care,  and, with respect to matters  relating to the Notes,  the Lease Indenture



                                      -44-



<PAGE>

Estate and its rights and duties under this Indenture and the other  Transaction
Documents,  may,  at the  expense of the  Lessee,  or, if the Lessee  shall have
failed to pay or provide  for the payment  thereof,  at the expense of the Lease
Indenture Estate, consult with counsel, accountants and other skilled persons to
be selected and employed by it in good faith and with  reasonable  care, and the
Indenture Trustee shall not be liable for anything done,  suffered or omitted in
good faith by it in  accordance  with the advice or opinion of any such counsel,
accountants or other skilled  persons so selected.  Unless  otherwise  specified
herein or in any other Transaction Document,  any opinion of counsel referred to
in this Indenture or in such other Transaction  Document may be relied on by the
Indenture  Trustee  to the  extent  it is  rendered  by an  attorney  or firm of
attorneys  satisfactory  to the Indenture  Trustee  (which may be counsel to the
Owner Participant, the Owner Trustee, the Lessee or any party to any Transactioh
Document).

                  SECTION 8.6. Indenture Trustee to Act Solely as Trustee.

                  The  Indenture  Trustee  acts  hereunder  solely as trustee as
herein  provided  and  not in  any  individual  capacity,  except  as  otherwise
expressly  provided herein;  and except as provided in Segtions 9(a) and 9(b) of
the Participation Agreement or Section 7.4 or 8.1 hereof, all Persons having any
claim against the Indenture  Trustee arising from matters  relating to the Notes
by reason of the transactions contemplated hereby shall, subject to the lien and
priorities of payment as herein provided and~to Sections 3.6 arid 5.7, look only
to the Lease Indenture Estate for payment or satisfaction thereof.

                  SECTION 8.7. Limitation on.Rights Against Registered liolders1
the Owner Trustee or Lease Indenture Estate.

                  The  Indenture  Trustee  shall  be  entitled  to  be  paid  or
reimbursed  for  Trustee's   Expenses  as  provided  herein  and  in  the  other
Transaction Documents.  Nonetheless,  the Indenture Trustee agrees that it shall
have no right against the Holders of the Notes, the Owner Trustee (except to the
extent included in Transaction  Expenses  payable by the Owner  Participant) or,
except as provided in Article V and Section 6.4 or this Article VIII,  the Lease
Indenture Estate for any fee as compensation for its services hereunder.



6091. CHASEU2 LEASE. 07:1
                                      -45-


<PAGE>


                  SECTION  8.8.  Investment  of  Certain  Payments  Held  by the
Indenture Trustee.

                  Any amounts held by the Indenture Trustee hereunder other than
pursuant  to section  2.3(c) or 11.1 hereof  shall be ipvested by the  Indenture
Trustee from time to time as directed in writing by the Owner Participant and at
the  expense  and  risk of the  Owner  participant  in Ci)  obligations  of,  or
guaranteed  as to  interest  and  principal  by,  the United  States  Government
maturing  not  more  than  90 days  after  such  investment,  (ii)  open  market
commercial  paper of any corporation  incorporated  under the laws of the United
States of America or any State  thereof  rated  "prime-1" or its  equivalent  by
Moody's Investors Service,  Inc. or "A-1" or its equivalent by Standard & Poor's
Corporation or (iii)  certificates of deposit maturing within go days after such
investment  issued by commercial  banks  orgahired  under the laws of the United
States of  America or of any  political  subdivision  thereof  having a combined
capital  and  surplus in excess of  $500,000,000;  provided,  however,  that the
aggregate amount at any one time so invested (a) in open market commercial paper
of any  corporation  shall  not-exceed  $2,000,000  and (b) in  certificates  of
deposit issued by any one bank shall not exceed $io,000,000.  Any income or gain
realized  as a result bf any such  investment  shall be  applied  to make up any
losses  resulting  from any such  investment to the extent such losses shall not
have been paid by the Owner  Trustee or the Owner  Participant  pursuant to this
Section  8.6.  Any  further  income  or  gain  so  realized  shall  be  promptly
distributed  (in no event later than the next Business Day) to the Owner Trustee
or the Owner Participant, except after the occurrence and during the continuance
of an maenture Event of Default.  The Indenture  Trustee shall have no liability
for any loss resulting from any investment made in accordance with this Section.
Any  such  investment  may be sold  (without  regard  to  maturity  date) by the
Indenture  Trustee  whenever  necessary  to make any  distribution  required  by
Article V hereof.

                  SECTION 8.9.  No Responsibility for Recitals, etc.

                  The Indenture  Trustee makes no  representation or warrahty as
to the  correctness  of any  statement,  recital or  representation  made by any
Person other than the Indenture Trustee in this Indenture, any other Transaction
Document or the Notes.


                                      -46-
6091. CHASEU2 LEASE. 07:1


<PAGE>


                  SECTION  8.10.   Indenture   Trustee  May  Engage  in  Certain
Transactions.

                  The  Indenture  Trustee may engage in or be  interested in any
financial or other transaction with the Lessee, the Owner Participant, the Owner
Trustee  and any other party to a  Transaction  Document,  provided  that if the
Indenture  Trustee  determines  that any such  relation is in conflict  with its
duties  under this  Indenture,  it shall  eliminate  the  conflict  or resign as
Indenture Trustee.


                  SECTION 8.11. Construction of Ambiguous rovisions.
                         
                  The  Indenture  Trustee,  subject to Section 8.1  hereof,  may
construe any ambiguous or  ;nconsistent  provisions of this  Indenture,  and any
such   construction  by  the  Indenture   Trustee  shall  be  binding  upon  the
Noteholders.  In construing any such  provision,  the Indenture  Trustee will be
entitled to rely upon  opinions of counsel and will not be  responsible  for any
loss or damage resulting from reliance in good faith thereon, except for its own
gross negligence or willful misconduct.



                                   ARTICLE IX

                               SUCCESSOR TRUSTEES


                  SECTION.9.l.  Resignation  and Removal of  Indenture  Trustee;
Appointment of Successor.

                  (a) The Indenture Trustee may resign at any time without cause
by giving at least 30 days' prior written notice to the Owner  Participant,  the
Owner Trustee,  the Lessee and to each Holder of a Note, such  resignation to be
effective upon the acceptance of such  trusteeship by a successor.  In addition,
the Indenture  Trustee may be removed without cause by a Directive  delivered to
the Owner Participant,  the Owner Trustee, the Lessee and the Indenture Trustee,
and the Indenture  Trustee shall promptly give notice thereof in writing to each
Holder of a Note.  Zn the case of the  resignativn  or removal of the  Indenture
Trustee,  a  successor  trus:tee  may be  appointed  by such a  Directive.  If a




6091 .CHASEU2 LEASE. 07:1
                                      -47-


<PAGE>

successor trustee shall not have been appointed within 3O days after such notice
of  resignation  or removal,  the  Indenture  Trustee,  the owner Trustee or any
Holder of a Note may apply to any court of competent  jurisdiction  to appoint a
successor  to act until  such  time,  if any,  as a  successor  shall  have been
appointed  as above  provided.  The  successor  Sc appointed by such court shall
immediately and without further act be superseded by any successor  appointed as
above provided within one year from the date of the appointment by such court.

                  (b) Any successor trustee,  however  appointed,  shall execute
and deliver to its predecessor and to the Owner Trustee an instrument  accepting
such  appoint;nent,  and thereupon such  successor,  without  further act, shall
become vested with all the estates, properties, rights, powers and duties of its
predecessor  hereunder in the trusts under this Indenture  applicable to it with
like effect as if originally  named the Indenture  Trustee;  but,  nevertheless,
upon the written  request of such  successor  trustee or receipt of a Directive,
its  predecessor  shall execute and deliver an instrument  transferring  to such
successor  trustee,  upon the trusts herein expressly  applicable to it, all the
estates1 properties, rights and powers of such predecessor under this Indenture,
and such predecessor shall duly assign,  transfer,  deliver and pay over to such
successor  trustee all moneys or other  property  then held by such  predecessor
under this Indenture.

                  (c) Any successor trustee, however appointed,  shall be a bank
or  trust  company  organized  under  the  laws  of  the  United  States  or any
jurisdiction  thereof  having  a  combined  capital  and  surplus  of  at  least
sioo,ooo,aoo,  if  there  be such  an  institution  willing,  able  and  legally
qualified  to  perform  the  duties  of the  Indenture  Trustee  hereunder  upon
reasonable or customary terms.

                  (d) Any  corporation  into which the Indenture  Trustee may be
merged or converted  or with which it may be  cansolidated,  or any  corporation
resulting from any merger,  conversion or  consolidation  to which the Indenture
Trustee shall be a party,  or any  corporation  to which  substantially  all the
corporate  trust business of the Indenture  Trustee may be  transferred,  shall,
subject to the terms of  paragraph  (c) of this  Section  9.1, be the  Indenture
Trustee under this Indenture without further act.




                                      -48-
6091. CHASEU2 LEASE. 07:1


<PAGE>


                                    ARTICLE X

                       SUPPLEXENTS AND AMENDMENTS TO THIS
                          INDENTURE AND OTHER DOCUMENTS

                  SECTION 10.1.  Supplements,  Amendments and  Modifications  to
This Indenture Without Consent of Holders of Notes.

                  The  Indenture  Trustee may,  with the written  consent of the
Owner  Trustee,  from time to time and at any time execute a supplement  to this
Indenture  without the consent of the Holders of Notes  Outstanding  in order to
(i) cure any defect,  omission or ambiguity  in this  Indenture or for any other
purpose if such action does not adversely  affect the interests of such Holders,
(ii) grant or confer upon the Indenture  Trustee for the benefit of such Holders
arty additional  rights,  remedies,  powers,  authority or security which may be
lawfully granted or conferred and which are not contrary to or inconsistent with
this  Indenture1  (iii) add to the covenants or agreements to be observed by the
Owner  Trustee and which are not contrary to this  Indenture  or  surrender  any
right or power of the  Owner  Trustee,  (iv)  confirm  or  amplify,  as  further
assurance, any pledge under, and the subjection to any lien or pledge created or
to be created by, this Indenture,  of the properties  covered hereby, or subject
to the lien or pledge of this Indenture additional revenues, properties or other
collateral,  including pursuant to an Undivided  Interest Indenture  Supplement,
(v) qualify this  Indenture  under the.  provisions of the Trust  Indenture Act,
(vi) evidence the appointment of any successor Indenture Trustee pursuant to the
terms  hereof,  (vii)  evidence  the  assumption  and  release  affected  by the
Assumption Agreement,  or (viii) execute supplemental indentures to evidence the
issuance of and to provide the terms of, Additional Notes to be issued hereunder
in accordance with the terms hereof.

                  SECTION 10.2. Supplements and Amendments to this Indenture and
the Facility Lease With Consent of Holders of Notes.

                  Except as provided  in Section  10.1  hereof,  at any time and
from time to time, (i) upon receipt of a Directive,  the Indenture Trustee shall
execute a supplement to this Indenture (to which the Owner Trustee has agreed in



                                      -49-
6091. CHASEU2 LEASE. 07:1


<PAGE>

writing)  for the purpose of adding  provisions  to, or changing or  eliminating
provisions of, this Indenture, but only as specified in such Directive and, (ii)
upon receipt of a written instruction from the Lessee and the Owner Trustee, the
Indenture  Trustee  shall  consent  to any  amendment  of or  supplement  to the
Facility Lease or execute and deliver such written waiver or modification of the
terms of the  Facility  Lease to which the Owner  Trustee  may agree;  provided,
however,  that,  without  the  consent  of the  Holders  of all the  Notes  then
Outstanding  no such  supplement or amendment to this  Indenture or the Facility
Lease,  or waiver or  modification  of the  terms of either  thereof,  shall (x)
modify any of the  provisions of this SectiQn or of Section 7.1 or 7.2 hereof or
section 4 of the Facility Lease or of the  definition of Directive  contained in
Appendix A hereto or the definition of Indenture Event of Default herein, reduce
the  amount  of  the  Basic  Rent,  Casualty  Value,   Special  Casualty  Value,
Termination Value or any payment under or pursuant to Section 16 of the Facility
Lease as set forth in the Facility Lease below such amount as is required to pay
the full principal of, and premium, if any, and interest on, the Notes when due,
or extend the time of payment  thereof,  (y) except as  permitted  by clause (x)
above,  modify,  amend  or  supplement  the  Facility  Lease on  consent  to the
termination  or any  assignment  thereof,  in any  case  reducing  the  Lessee's
obligations in respect of the payment of the Basic Rent, Casualty Value, Special
Casualty Value, Termination Value or any payment under or pursuant to Section 16
of the Facility Lease below the amount  referred to in clause (x) above,  or (z)
deprive  the  Holders  of any Notes of the lien of this  Indenture  on the Lease
Indenture  Estate  (except  as  contemplated  by section  3.9(b)) ~r  materially
adversely  affect the  rights  and  reeedies  for the  benefit  of such  Holders
provided in Article VI of this Indenture; and, provided,  further, that, without
the  consent  of the  Holders  of all the Notes then  Outstanding  and  affected
thereby no such supplement or amendment to this Indenture or the Facility Lease,
or waiver or  modification  of the terms of either  thereof,  shall  reduce  the
amount or extend  the time of  payment  of any  amount  payable  under any Note,
reduce or modify the  provisions  for the  computation  of the rate of  interest
owing or payable thereon,  adversely alter or modify the provisions of Article V
with respect to the order of  priorities  in which  distributions  there-1 under
with  respect  to the  Notes  shall be made,  or  reduce,  modify  or amend  any
indemnities  in favor of the  Holders of the  Notes.  Anything  to the  contrary


                                      -50-
60Y1.CHASEU2. LEASE. 07:1


<PAGE>

contained  herein  notwithstanding,  without the necessity of the consent of the
Holders of Notes or the Indenture  Trustee,  (a) any indemnities in favor of the
Owner Trustee or the Owner  Participant may be modified,  amended or changed and
(b) the owner  Trustee may enter into any  agreement  with  respect to the Lease
Indenture  Estate  which by its terms  does not  become  effective  prior to the
satisfaction  and  discharge  of this  Indenture,  provided,  however,  that any
agreerr~ent  entered into by the Owner Trustee pursuant to this clause (b) shall
not materially adversely affect the Indenture Trustee or the Molder of any Note.
Notwithstanding  the foregoing,  the Indenture  Trustee shall, upon receipt or 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 '1rinal
Shutdown" contained in or appended to the Facility Lease or this Indenture.  The
Owner Trustee shall deliver to the Indenture Trustee a copy of each amendment to
the Facility  Lease whether or not the Indenture  Trustee is required to consent
or otherwise act with respect thereto.

                  SECTION  10.3.   Certain   Limitations  an   Supplements   and
Amendments.

                  If in  the  opinion  of the  Owner  Trustee  or the  Indenture
Trustee, each of which shall be entitled to rely on counsel for purposes of this
Section 10.3, any document required to be executed by either of them pursuant to
the terms of Section  10.1 or 10.2 does not comply with the  provisions  of this
Indenture or adversely affects any right,  immunity or indemnity in favor of, or
increases  any duty of, the Owner Trustee or the  Indenture.  Trustee under this
Indenture,  the Facility Lease or the Participation Agreement, the Owner~Trustee
or the Indenture  Trustee,  as the case may be, may in its discretion decline to
execute stick document.

                  SECTION 10.4.  Directive Need Not Specify  Particular  Form of
Supplement or Amendment.

                  It shall not be necessary for any Directive furnished pursuant
to section 10.2 hereof to specify the particular form of the proposed  documents
to be executed  pursuant to such  Section,  but it shall be  sufficient  if such
request shall indicate the substance thereof.







6091. CHASEU2 LEASE. 07:1
                                      -51-


<PAGE>


                  SECTION  10.5.  Trustee to  Furnish  Copies of  Supplement  or
Amendment.

                  Promptly  after  the  execution  by the Owner  Trustee  or the
Indenture  Trustee of any document  entered into pursuant to Section  10.2,  the
Indenture Trustee shall mail, by first-class mail,  postage prepaid, a conformed
copy thereof to each Holder of an Outstanding Note at the address of such Person
set forth in the  register  kept  pursuant to Section 4.1 but the failure of the
Indenture  Trustee to mail such conformed  copies shall not impair or affect the
validity of such document.



                                   ARTICLE XI

                                  MISCELLANEOUS


                  SECTION  11.1.  Moneys for  Payments in Respect of Notes to be
Held in Trust.

                  In case the Holder of any Note shall fail to present  the same
for  payment  on any date on which the  principal  thereof or  interest  thereon
becomes  payable,  the Indenture  Trustee may Set aside in trust the moneys then
due thereon  uninvested  and shall pay such moneys to the Holder of such Note or
such Person upon due  presentation  or surrender  thereof in accordance with the
provisions of this  Indenture,'subject  always,  however,  to the  provisions of
Sections 3.8 and 11.2.

                  SECTION  11.2.  Disposition  of Moneys  Held for  Payments  of
Notes.

                  Any  moneys  set  aside  under  Section  11.1 and not paid to
Holders  of Notes as  provided  in Section  11.1 shall be held by the  Indenture
Trustee in trust  until the latest of (i) the date three years after the date of
such  setting  aside,  (ii) the date all other  Holders of the Notes  shall have
received full payment of all principal of and interest and other sums payable to
them on such Notes or the Indenture  Trustee shall hold (and shall have notified
such Persons that it holds) in trust for that  purpose an amount  sufficient  to
make full payment  thereof when due and (iii) the date the Owner  Trustee  shall
have fully performed and observed all its covenants and obligations contained in




6091.CHASEU2.LEASE.07:l
                                      -52-


<PAGE>

this  Indenture with respect to the Notes;  and thereafter  shall be paid to the
Owner  Trustee by the Indenture  Trustee on demand;  and thereupon the Indenture
Trustee  shall be  released  from all  further  liability  with  respect to such
moneys;  and thereafter the Holders of the Notes in respect of which such moneys
were so paid to the Owner Trustee shall have no rights in respect thereof except
to obtain payment of such moneys from the Owner Trustee.  Upon the setting aside
of such moneys, interest shall cease to accrue on the Notes.

                  SECTION 11.3.  Transfers Not to Affect Indenture or Trusts.

                  No Holder of a Note shall have legal  title to any part of the
Lease Indenture  Estate.  No transfer1 by operation of law or otherwise,  of any
Note or other  right,  title and  interest of any Holder of a Note in and to the
Lease Indenture Estate or hereunder shall operate to terminate this Indenture or
the trusts  hereunder  with  respect to such Note or entitle  any  successor  or
transferee  of such Molder to an  accounting  or to the  transfer to it of legal
title to any part of the Lease Indenture Estate.

                SECTION 11.4. Binding Effect of Sale of Lease Indenture Estate.

                  Any sale or other  conveyance of the Lease Indenture Estate or
any part  thereof by the  Indenture  Trustee~made  pursuant to the terms of this
Indenture or the Facility Lease shall bind the Holders of the Notes and shall be
effective to transfer or convey all right,. title and inte,rest.of the Indenture
Trustee,  the Owner Trustee and such Holders in and to the same. No purchaser or
other grantee shall be required to inquire as to the  authorization,  necessity,
expediency or regularity of such sale or conveyance or as to the  application of
any sale or other proceeds with respect thereto by the Indenture Trustee.

                  SECTION 11.5. Limitation as to Enforcement of Rights, Remedies
and Claims.
                  Nothing in this Indenture,  whether express or implied,  shall
be  construed  to give to any Person,  other than the Owner  Trustee,  the Owner
'Participant, the Lessee (to the extent. the Lessee's consent or other action by
the Lessee is expressly  provided for), the :ndenture Trustee and the Holders of



                                      -53-



<PAGE>

the Notes, any legal or equitable right,  remedy or claim under or in respect of
this Indenture or any Note.

                SECTION 11.6.  Notices.

                  Unless otherwise expressly specified or permitted by the terms
hereof,  all communications and notices given hereunder to the Lessee, the Owner
Trustee,  the owner  Participant or the Indenture  Trustee shall~be given in the
manner  provided in section 18 of the  Participation  Agreement.  Notices by the
Indenture Trustee to any Holder of a Note shall be in writing and shall be given
in  person or by means of  telex,  telecopy  or other  wire  transmission  (with
request  for  assurance  of  receipt  in  a  manner   typical  with  respect  to
communications  of that  type)1 or  mailed  by  registered  or  certified  mail,
addressed to such Holder at the address set forth in the register  kept pursuant
to Section  4.1.  Whenever  any notice in writing is required to be given by the
Indenture  Trustee to any Holder of a Note such notice shall be effective (x) if
sent by telex, telecopy or other wire transmission,  on the date of transmission
thereof, or (y) if sent by mail, three Business Days after being mailed.

                  SECTION 11.7.  separability of Provisions

                  In case any one or more of the provisions of this Indenture or
any  application  thereof  shall be  invalid,  illegal or  unenforceable  in any
respect,  the validity,  legality and enforceability of the remaining provisions
hereof and any other  application  hereof  shall not in any way be  affected  or
impaired.

                  SECTION 11.8.  Benefit of Parties, Successors and Assigns.

                  All  representations,  warranties,  covenants  and  agreements
contained  herein shall be binding upon,  and inure to the benefit of, the Owner
Trustee,  the Indenture Trustee and their respective  successors and assigns and
each Holder of a Note, all as herein provided. Any request,  notice,  direction,
consent, waiver or other instrument or action by any Holder of a Note shall bind
the  successors  and  assigns of such  Holder and any Holder of a Note issued in
transter or exchange of such Note.






6091 CHASEU2 LEASE. 07:1
                                      -54-


<PAGE>


                  SECTION 11.9.  Survival of Representations and Warranties. 
                                              
                  All  representations  and warranties  made with respect to the
Notes shall survive the execution and delivery of this  Indenture and the issue,
sale and delivery of any Notes and shall  continue in effect so long as any Note
issued hereunder is Outstanding and unpaid.



                 SECTION 11.10.  Bankruptcy of the Owner Trustee.

                  If (a) the  Owner  Trustee  becomes  a debtor  subject  to the
reorganization  provisions of the Bankruptcy  Code, or any successor  provision,
(b) pursuant to such reorganization provisions the Owner Trustee is required, by
reason of the Owner Trustee being held to have  recourse  liability  directly or
indirectly to the Holder of any Note or the Indenture -Trustee,  to make payment
on account of any amount  payable as  principal or interest on such Note and (c)
such Holder or the  Indenture  Trustee  actually  receives any Excess Amount (as
hereinafter  defined) which reflects any payment by the Owner Trustee on account
of clause Cb) of this Section, then such Holder or the Indenture Trustee, as the
case may be, shall  promptly  refund to the Owner  Trustee  such Excess  Amount.
"Excess  Amount" means the amount by which such payment exceeds the amount which
would have been  received on or prior to the date of such payment by such Holder
or the  Indenture  Trustee if the Owner  Trustee  had not become  subject to the
recourse liability referred to in clause (b) of this Section.  Nothing contained
in this  Section  shall  prevent  such  Holder  dt the  Indenture  Trustee  from
enforcing any recourse  obligation  (and retaining the proceeds  thereof) of the
Owner Trustee expressly provided for under this Indenture or in the Notes.



                  SECTION 11.11.  Bankruptcy of the Owner Participant.

                  The  Indenture  Trustee  and the Holders of the Notes shall be
bound by the provisions of Section 19(f) of the Participation Agreement.








6091. CHASEU2.LEASE.07:l
                                      -55-


<PAGE>


                  SECTION 11.12.  Counterpart Execution.

                  This  Indenture  and  any  amendment  or  supplement  to  this
Indenture  may be executed in any number of  counterparts  and by the  different
parties  hereto and thereto 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.

                  SECTION 11.13.  Dating of Indenture.

                  Although this Indenture 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 acknowledgments hereto annexed.





























                                      -56-
6091. CHASEU2 LEASE. 07:1


<PAGE>


                  IN  WITNESS   Indenttire   Trustee   duly   executed  by  duly
authorized,  above.  WHEREOF,  the Owner  Trustee  and the have each caused this
Indenture to be their respective officers thereunto 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
                                          Agreement  dated  as of  December  15,
                                          1986  with  Chase   Manhattan   Realty
                                          Leasing Corporation

                                         By
                                             -------------------------------
                                                 Assistant Vice President


                                        CHEMICAL BANK


                                         By
                                             -------------------------------
                                                     Vice  President




















                                      -57-

6091. CHASEU2.LEASE. 07:1


<PAGE>


STATE OF NEW YORK COUNTY OF NEW YORK  )
                                      )   ss.
COUNTY OF NEW YORK                    )

                  On the 16th day of  December,  1986,  before me  personally
came Martin P. Henry, to me known, who, being by me duly sworn, did acknowledge,
depose and say that he resides at Boston, Massachusetts; that he is an Assistant
Vice  President  of THE  FIRST  NATIONAL  BANK OF  BOSTON,  a  national  banking
association,  described in and which executed the foregoing instrument; and that
he signed his name  thereto on behalf of said  association  by  authority of the
Board of Directors of such association.




(NOTARIAL SEAL)

                                                   ----------------------------
                                                     /s/ Delia T. Santiago

                                                       Notary Public
                                                     DELIA T. SANTIAGO
                                              Notary Public State of New York
                                                        No 41-3451160
                                                Qualified In Queens County
                                             Commission Expires March 30, 1987





















                                      -58-



<PAGE>

STATE OF NEW YORK COUNTY OF NEW YORK  )
                                      )   ss.
COUNTY OF NEW YORK                    )


                  On the 16th day of December,  1986,  before me personally care
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 flew York banking corporation,  described in and which executed
the foregoing instrument;  and that he signed his name thereto on behalf of said
corporation by authority of the Board of Directors of such corporation.


(NOTARIAL SEAL)

                                                   ----------------------------
                                                     /s/ Delia T. Santiago

                                                       Notary Public
                                                     DELIA T. SANTIAGO
                                              Notary Public State of New York
                                                        No 41-3451160
                                                Qualified In Queens County
                                             Commission Expires March 30, 1987






















6091. CHASEU2 LEASE.07:1
                                      -59-

<PAGE>
                                                                   EXHIBIT A-1
                                                                  TO INDENTURE
                             FORM OF FIXED RATE NOTE
                             (DUE JANUARY 15, 1992)

                   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, 1992)

                                          Issued at: New York, New
                                          York Issue Date: December ______, 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 15, 1986 with Chase  Manhattan  Realty Leasing  Corporation
(the Owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION,
or registered assigns,  the principal sum of $1,270,000 (One Million Two Hundred
Seventy Thousand  Dollars) on January 15, 1992 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 8.05% per
annum. Payments of principal  installments of this Fixed Rate Note shall be ma4.
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 January 15 and July 15 in each year, commencing January 15, 1987, to and
including the last "payment date" 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.CHASEU2.LEASE.07:1
                                       A-1


<PAGE>
                  Interest on any overdue principal and premium, it 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 9.05% (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 15, 1986, as at
any time heretofore or hereafter  amended or supplemented in accordance with the
provisions 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 sufficient  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 Indenture,  then all the payments to be made under this Fixed Rate
Note shall be made only from  payments  made by the Lessee under this Fixed Rate
Note in accordance  with the  Assumption  Agreement  referred to in said section
3.9(b) and the Holder of this Fixed Rate Note  agrees that in such event it will
lock solely to the Lessee for such payment.




                                       A-2
6091.CHASEU2.LEASE.07:1


<PAGE>


                  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.

                  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 permits the issuance of additional series of
Notes as provided 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  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 created by
the Indenture,  to all of which terms and conditions the Holder hereof agrees by
its acceptance of this Fixed Rate Note.

                  This Fixed Rate Note is not 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 principal 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.



6091.CHASEU2.LEASE.07:1
                                       A-3


<PAGE>


                  The lien upon the Lease  Indenture  Estate is subject to being
legally  discharged  prior to the  maturity  of this  Fixed  Rate  Note upon the
deposit with the Indenture Trustee of cash or certain  securities  sufficient to
pay this Fixed Rate Note when due or an

                  There shall be maintained at the Indenture  Trustee's Office a
register for the purpose of registering  transfers and exchanges of Notes in the
manner  with  the  amount  of  any  applicable  transfer  taxes.  Prior  to  due
presentment  for  registration  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 neither 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.
















                                       A-4
6091.CHASEU2.LEASE.07:1


<PAGE>


                  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 individual capacity,  but solely as
                                         Owner Trustee  under a Trust  Agreement
                                         dated  as of  December  15,  1986  with
                                         Chase    Manhattan    Realty    Leasing
                                         corporation

                                       By
                                           --------------------------------- 
                                                  Assistant Vice President




                  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.CHASEU2.LEASE.O7:1
                                       A-5


<PAGE>


                                   SCHEDULE 1
                             TO THE FIXED RATE NOTE
                             (DUE JANUARY 15, 1992)

                       Schedule of Principal Amortization
                          $1,270,000 Principal Amount

                                   
   Payment                                  Principal             Principal
    Date                                  Amount Payable          Amount Paid
   -------                                --------------          -----------

January 15, 1990                            $  234,000
July 15, 1990                                  244,000
January 15, 1991                               254,000
July 15, 1991                                  264,000
January 15, 1992                               274,000
                                            ----------
Principal Amount                            $1,270,000
                                            ==========

























                                   Page 1 of 1
6091.CHASEU2.LEASE.07:1


<PAGE>


                                   ASSIGNMENT

                          Date: December ________, 1986

                  For value received,  FIRST PV FUNDING  CORPORATION  (First PV)
hereby  sells,  assigns and  transfers to CHEMICAL  BANK,  as  Collateral  Trust
Trustee  pursuant to the  Collateral  Trust  Indenture  dated as of December 16,
1985, as heretofore  amended and  supplemented,  among First PV, Public  Service
Company of New Mexico and said Collateral Trust Trustee,  without recourse,  the
Fixed Rate Note to which this Assignment is annexed and all rights thereunder.


                                FIRST PV FUNDING CORORATION

                                By
                                   ------------------------
                                        Vice President


<PAGE>


                                                                    EXHIBIT A-2 
                                                                   TO INDENTURE

                             FORM OF FIXED RATE NOTE
                             (DUE JANUARY 15, 1997)


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

                 NONRECOURSE PROSESSORY NOTE, FIXED RATE SERIES
                             (DUE JANUARY 15, 1997)

                                             Issued at: New York, New York

                                             Issue Date: December __, 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 15, 1986 with Chase  Manhattan  Realty Leasing  Corporation
(the owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION,
or registered  assigns,  the principal  sum of  $3,501,000  (Three  Million Five
Hundred  One  Thousand  Dollars)  on January 15,  1997  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 8.95% 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 January  15 and July 15 in each year;  commencing  January
15, 1987,  to and  including  the last  "payment  date"  specified in Schedule I
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).

                  Interest on any overdue principal and premium, it 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 9.95% 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.

<PAGE>


                  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
data 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 15, 1986, as at
any time heretofore or hereafter  amended or supplemented in accordance with the
provisions 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 sufficient  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 Indenture,  then all the payments to be made under this Fixed Rate
Note shall be made only from  payments  made by the Lessee under this Fixed Rate
Note in accordance  with the  Assumption  Agreement  referred to in said Section
3.9(b) and the Holder of this Fixed Rate Note  agrees that in 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.





6091.CHASEU2.LEASE.07:1
                                       -2-


<PAGE>
                  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 permits the issuance of additional Series of
Notes,  as provided 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  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 created by
the Indenture,  to all of which tarts and conditions 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 on or after  January 15, 1992 by the Owner  Trustee  upon the giving of not
less than 30 days' notice (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:

      Twelve Month                                    Redemption
    Period Beginning                                     Price
    ----------------                                  ----------

    January 15, 1992                                    102.557%
    January 15, 1993                                    101.279







6091.CHASEU2.LEASE.07:1
                                       -3-


<PAGE>



and thereafter at the principal  amount thereof,  together with interest accrued
to the date fixed for prepayment.  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 principal 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.

                  The lien upon the Lease  Indenture  Estate is subject to being
legally  discharged  prior to the  maturity  of this  Fixed  Rate  Note upon the
deposit with the Indenture Trustee of cash or certain  securities  sufficient to
pay this  Fixed Rate Note when due or an  assumption  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 registering  transfers and exchanges of Notes in the
manner  provided  in  the  Indenture.   The  transfer  of  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 applicable  transfer taxes.  Prior to due presentment for
registration  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,


                                       -4-
6091.CHASEU2.LEASE.07:1


<PAGE>


and neither 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.CHASEU2.LEASE.07:1
                                       -5-


<PAGE>


                  IN WZTNESS  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 individual capacity,  but solely as
                                         Owner Trustee  under a Trust  Agreement
                                         dated  as of  December  15,  1986  with
                                         Chase    Manhattan    Realty    Leasing
                                         Corporation


                                        By
                                            -------------------------------
                                                Assistant Vice President



                  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.CHASEU2.LEASE.07.:1
                                       -6-


<PAGE>


                                   SCHEDULE 1
                             TO THE FIXED RATE NOTE
                             (DUE JANUARY 15, 1997)

                       Schedule of Principal Amortization

                           $3,501,000 Principal Amount

    Payment                       Principal                   Principal
     Date                       Amount Payable               Amount Paid
    -------                     --------------              ------------  
July 15, 1992                      $285,000
January 15, 1993                    298,000
July 15, 1993                       311,000
January 15, 1994                    325,000
July 15,1994                        340,000
January15, 1995                     355,000
July 15, 1995                       371,000
January 15, 1996                    388,000
July 15, 1996                       405,000
January 15, 1997                    423,000
                                 ----------
Principal Amount                 $3,501,000
                                 ==========



















                                   Page 1 of 1

6091.CHASEU2.LEASE.07.:1


<PAGE>


                                   ASSIGNMENT
                              Date: December , 1966


                  For value received,  FIRST PV FUNDING  CORPORATION  (First PV)
hereby  sells,  assigns and  transfers to CHEMICAL  BANK,  as  Collateral  Trust
Trustee  pursuant to the Collateral  Trust  Indenture  dated as of December 16.,
1985, as heretofore  amended and  supplemented,  among First PV, Public  Service
Company of New Mexico and said Collateral Trust Trustee,  without recourse,  the
Fixed Rate Note to which this Assignment is annexed and all rights thereunder.


                                              FIRST PV FUNDING CORPORATION

                                              By
                                                 ------------------------
                                                       Vice President



<PAGE>


                                                                   EXHIBIT A-3
                                                                  TO INDENTURE

                             FORM OF FIXED RATE NOTE
                             (DUE JANUARY 15, 2016)

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

                 NONRECOURSE PROMISSORY NOTE, FIXED RATE SERIES
                             (DUE JANUARY 15, 2016)

                                             Issued at: New York, New York

                                             Issue Date: December __, 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 15, 1986 with Chase  Manhattan  Realty Leasing  corporation
(the owner Participant), hereby promises to pay to FIRST PV FUNDING CORPORATION,
or registered  assigns,  the principal sum of $23,229,000  (Twenty Three Million
Two Hundred  Twenty Nine  Thousand  Dollars) on January 15, 2016  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 10.15* 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,  as such  Schedule may be adjusted in accordance
with the Indenture and the terms contained herein.  Payments of accrued interest
on this  Fixed  Rate Note  shall be made on January 15 and July 15 in each year,
commencing  January 15, 1987, to and including the last "payment date" 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).

                  Interest on any overdue principal and premium, it 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  11.15%
(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.

<PAGE>

                  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 15, 1986, as at
any time heretofore or hereafter  amended or supplemented in accordance with the
provisions 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 sufficient  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 Indenture,  then all the payments to be made under this Fixed Rate
Note shall be made only from  payments  made by the Lessee under this Fixed Rate
Note in accordance  with the  Assumption  Agreement  referred to in said Section
3.9(b) and the Holder of this Fixed Rate Note agrees that in.
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.



                                       -2-
6091.CHASEU2.LEASE.07:1


<PAGE>



                  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, 1997,  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 permits the issuance of additional series of
Notes,  as provided 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  for a statement  of the
rights of the Holders of, and the nature and extant 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 created by
the Indenture,  to all of which terms and conditions 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 addition, this Fixed Rate Note may be prepaid in whole or in part
at any time on or after January 15, 1992 by the Owner Trustee upon the giving of



6091.CHASEU2.LEASE.07:1
                                       -3-


<PAGE>


not  less  than 30  days'  notice  (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:

       Twelve Month                                      Redemption
     Period Beginning                                       Price
     ----------------                                    ----------

    January 15, 1992                                        108.120%
    January is, 1993                                        107.714
    January 15, 1994                                        107.308
    January is, 1995                                        106.902
    January 15, 1996                                        106.496
    January 15, 1997                                        106.090
    January 15, 1998                                        105.684
    January 15, 1999                                        105.279
    January 15, 2000                                        104.872
    January 15, 2001                                        104.466
    January 15, 2002                                        104.060
    January 15, 2003                                        103.654
    January 15, 2004                                        103.248
    January 15, 2005                                        102.842
    January 15, 2006                                        102.436
    January 15, 2007                                        102.030
    January 15, 2008                                        101.624
    January 15, 2009                                        101.219
    January 15, 2010                                        100.812
    January 15, 2011                                        100.406

and thereafter at the principal  amount thereof,  together with interest accrued
to the data fixed for prepayment.  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 principal 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.

                  The lien upon the Lease  Indenture  Estate is subject to being
legally  discharged  prior to the  maturity  of this  Fixed  Rate  Note upon the
deposit with the Indenture Trustee of cash or certain  securities  sufficient to
pay this  Fixed Rate Note when due or an  assumption  of the  obligation  of the


                                       -4-
6091.CHASEU2 LEASE.07:1


<PAGE>

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 registering  transfers and exchanges of Notes in the
manner  provided  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 applicable  transfer taxes.  Prior to due presentment for
registration  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 neither 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.CHASEU2.LEASE.07:l
                                       -5-


<PAGE>


                  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 individual
                                                  capacity,  but solely as Owner
                                                  Trustee    under    a    Trust
                                                  Agreement dated as of December
                                                  15, 1986 with Chase  Manhattan
                                                  Realty Leasing Corporation


                                             By
                                                 ---------------------------
                                                  Assistant Vice President



                  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.CHASEU2.LEASE.07:1
                                       -6-


<PAGE>


                                   SCHEDULE 1
                             TO THE FIXED RATE NOTE
                             (DUE JANUARY 15, 2016)

                       Schedule of Principal Amortization

                          $23,229,000 Principal Amount

                                 Principal                      Principal       
Payment Date                   Amount Payable                  Amount Paid
------------                   --------------                  -----------

July 15, 1997                     $442,000                         
January 15, 1998                   465,000
July 15, 1998                      488,000
January 15, 1999                   513,000
July 15, 1999                      539,000                              
January 15, 2000                   566,000  
July 15, 2000                      585,000  
January 15, 2001                   416,000 
July 15, 2001                      464,000  
January 15, 2002                   427,000  
July 15, 2002                      468,000 
January 15, 2003                   422,000  
July 15, 2003                      472,000  
January 15, 2004                   430,000  
July 15, 2004                      501,000  
January 15, 2005                   456,000   
July 15, 2005                      532,000  
January 15, 2006                   484,000 
July 15, 2006                      565,000 
January 15, 2007                   514,000  
July 15, 2007                      600,000  
January 15, 2008                   545,000 
July 15, 2008                      637,000  
January 15, 2009                   579,000  
July 15, 2009                      676,000   
January 15, 2010                   614,000  
July 15, 2010                      717,000  
                                    
           
           
      




                                   Page 1 of 2

6091.CHASEU2.LEASE.07:1


<PAGE>



                                   SCHEDULE 1
                             TO THE FIXED RATE NOTE
                             (DUE JANUARY 15, 2016)

                       Schedule of Principal Amortization
                                   (Continued)

Payment                            Principal                    Principal
Date                           Amount Payable                  Amount Paid
-------                        --------------                  -----------

January 15, 2011                  $   652,000
July 15, 2011                         762,000
January 15, 2012                      692,000
July 15, 2012                         808,000
January 15, 2013                      734,000
July 15, 2013                         858,000
January 15, 2014                      780,000
July 15, 2014                         911,000
January 15, 2015                      827,000
July 15, 2015                         968,000
January 15, 2016                    1,120,000
                                  -----------
Principal Amount                  $23,229,000
                                  ===========





















                                   Page 2 of 2

6091.CHASEU2.LEASE.07:1


<PAGE>


                                   ASSIGNMENT

                            Date: December __ , 1986


                  For value received,  FIRST PV FUNDING  CORPORATION  (First PV)
hereby  sells,  assigns and  transfers to CHEMICAL  BANK,  as  Collateral  Trust
Trustee  pursuant to the  Collateral  Trust  Indenture  dated as of December 16,
1985, as heretofore  amended and  supplemented,  among First PV, Public  Service
Company of New Mexico and said Collateral Trust Trustee,  without recourse,  the
Fixed Rate Note to which this Assignment is annexed and all rights thereunder.


                                              FIRST PV FUNDING CORPORATION


                                              By
                                                 --------------------------
                                                        Vice President


<PAGE>


                                    EXHIBIT B


                              ASSUMPTION AGREEMENT



        TO:       The Holders (as defined  below) from time to tile of the Notes
                  (as defined below) of The First  National Bank of Boston,  not
                  in its individual capacity,  but solely as owner trustee under
                  a Trust  Agreement  dated as of  December  15, 1986 with Qiase
                  Manhattan  Realty Leasing  Corporation (in such capacity,  the
                  "Issuer")  under  the  Trust  Indenture,   Mortgage,  Security
                  Agreement,  and Assignment of Rents (the "Indenture") dated as
                  of December 15, 1986 among the Issuer and  Chemical  Bank (the
                  "Trustee").


           The undersigned,  PUBLIC SERVICE COMPANY OF NEW MEXICO( a New' Mexico
corporation  (the  "Obligor"),  for  the  purpose  of  satisfying  in  part  its
obligation to make certain  payments under that certain  Facility Lease dated as
of December 15, 1986 between the Issuer and the Obligor (the "Facility  Lease"),
does hereby  covenant  and agree with the Holders (as defined in the  Indenture)
from time to time at the Notes (as defined in the Indenture) as follows:

                  SECTION 1. The Obligor  does hereby agree to, and does hereby,
assume  unconditionally  the  payment of the  principal  of the Notes and of the
interest and premium (if any) thereon,  At the rates provided in the Notes, when
and as the same  shall  become due and  payable,  whether  at  maturity  or upon
mandatory prepayment or upon declaration or otherwise, according to the terms of
the Notes and of the Indenture.

                  SECTION 2. The assumption  herein  contained  shall be binding
upon the Obligor,  its successors and assigns and shall remain in full force and
effect  irrespective  of the power or authority of the Issuer to issue the Notes
or to execute,  acknowledge  and deliver the  Indenture  or the  validity of the
Notes,  or the Indenture,  or of any defense  whatsoever  that the Issuer may or
might have to the payment of the Motes (principal,  interest or premium),  or to


                                       B-1
6091.CHASEU2.LEASE.07:1


<PAGE>


the  performance  or  observance  of any of the  provisions or conditions of the
Indenture or any Note,  or of the  existence or  continuance  of the Issuer as a
legal   entity;   nor  shall  said   assumption   be  affected  by  the  merger,
consolidation,  or other dissolution of the Issuer or the sale or other transfer
of the property of the Issuer or by the Issuer as an entirety,  or substantially
so, to any other person;  nor shall the  assumption be discharged or impaired by
any act,  failure or omission  whatsoever on the part of any Holder of any Notes
or the Trustee,  including,  among other such acts) failures and omissions,  the
following:

                  (a) any  failure to present  any Note for payment or to demand
        payment  thereof,  or to give to the  Obligor  notice  of  dishonor  and
        non-payment of any Note when and as the same may become due and payable,
        or  notice  of any  failure  on the part of the  Issuer to do any act or
        thing or to perform or keep any  covenant or agreement by it to be done,
        kept or performed under the terms of Notes or the Indenture;

                  (b)  any  extension  of the  obligation  of any  Note,  either
        indefinitely or for any period of time, or any other modification in the
        obligations  under any Note or the Indenture or of the Issuer thereon or
        in connection therewith;

                  (C) any act or failure  to act with  regard to any Note or the
         Indenture or anything which might vary the risk of the Obligor; and

                  (d) any action taken under the  Indenture and the Notes in the
        exercise  of any right or power  thereby  conferred  or any  failure  or
        omission on the part of the Trustee or the Holder of any Note to enforce
        any right or security  given  under the  Indenture  or any Note,  or any
        waiver  of any  right  or any  failure  or  omission  on the part of the
        Trustee or any Holder of any Note to enforce  any right of any Holder of
        any Note against the Issuer;

provided,  always,  that the specific  enumeration of the above  mentioned acts,
failures,  waivers or  omissions  shall not be deemed to exclude any other acts,
failures,  waivers or omissions though not  specifically  mentioned  herein,  it
being the purpose and intent of this Assumption Agreement that the obligation of
the Obligor shall be absolute and  unconditional  to the extent herein specified




6091.CHASEU2 LEASE.07:1
                                       B-2


<PAGE>

and shall not be  discharged,  impaired  or varied  except by the payment of the
principal  of and  interest  on any  Note  and any  premium  thereon  in case of
prepayment, and then only to the extent of such payments.

                  SECTION 3. (a) Subject to the  requirements  of Sections 10(b)
(3) (iii) and (b) (3) (iv) of the Participation  Agreement and to the provisions
of paragraph (b) of this Section, nothing contained in this Assumption Agreement
shall prevent any  consolidation or merger of the Obligor with or into any other
corporation or  corporations  (whether or not affiliated  with the Obligor),  or
successive  consolidations  or mergers in which the Obligor or its  successor or
successors shall be a party or parties,  or shall prevent any sale conveyance or
lease of all or  substantially  all the  property of the  Obligor,  to any other
corporation  authorized to acquire and operate the same; provided,  however, and
the  Obligor  hereby  covenants  and agrees,  that upon any such  consolidation,
merger,  sale,  conveyance or lease,  all  obligations of the Obligor under this
Assumption  Agreement  on or in  respect of any Note,  and the due and  punctual
performance  and  observance  of all of the  covenants  and  conditions  of this
Assumption Agreement to be performed by the Obligor, shall be expressly and duly
assumed,  by an agreement  reasonably  satisfactory in form and substance to the
Trustee,  executed and delivered by the  corporation (if other than the Obligor)
formed by such consolidation,  or into which the Obligor shall have been merged,
or by the corporation which shall have acquired such property.

                  (b) The  Indenture  Trustee  (as  defined  in the  Indenture),
subject to applicable  provisions of the Indenture,  may rely upon an opinion of
counsel  to  the  Obligor  as   conclusive   evidence   that  any  such  merger,
consolidation, sale or conveyance complies with the provisions of this Section.

                  SECTION 4. The Obligor does hereby consent to all of the terms
and conditions of each Note Series and of the  Indenture,  and hereby waives any
and all rights of notice of any fact or facts or circumstance  or  circumstances
whatsoever and consents to any extension or extensions of time of any payment or
payments,  or of any other act or thing  which any Holder or Molders of any Note
or the Issuer may agree to consent to,  either  expressly,  by  acquiescence  or
otherwise,  and hereby agrees not to claim or enforce any rights of  subrogation




6091.CHASEU2.LEASE.07:1
                                       B-3


<PAGE>

or any other right or privilege  which might  otherwise  arise on account of any
payment  made by it or act or thing done by it on  account  of or in  accordance
with its  assumption  herein  contained,  unless and until all of the Notes have
been fully paid and discharged.

                  SECTION 5. The assumption  herein expressed may be transferred
or  assigned  at any time or from  time to time and  shall be  considered  to be
transferred and assigned upon the transfer of any Note,  whether with or without
the consent of or notice to the obligor or the Issuer. The Obligor hereby agrees
to  execute  and  deliver  such  instruments  and to do such acts  arid  "things
requested  by the  Trustee  as shall be  reasonably  necessary  to carry out and
effectuate  the  purposes  and  intents  of  this  Assumption  Agreement.   This
Assumption  Agreement may not be amended or modified in any respect  without the
prior written consent (evidenced as provided in the Indenture) of the Holders of
not less than a  majority  in  principal  amount of the  Notes  Outstanding  (as
defined in the Indenture);  provided,  however, that without the written consent
of  the  Holders  of  all  of  the  Notes  Outstanding,  no  such  amendment  or
modification  shall be  effective  which will  change any of the  provisions  of
Sections 1, 2, 4 or 5 of this Assumption  Agreement.  The Obligor agrees to file
with the Indenture Trustee a duplicate original of each such consent.


                                          PUBLIC SERVICE COMPANY OF NEW
                                            MEXICO


                                          By
                                             ---------------------------
                                             Title:
ATTEST:


--------------------------
Title:

                          





6091.CHASEU2.LEASE.07:1
                                       B-4


<PAGE>


                                    EXHIBIT C

                    UNDIVIDED INTEREST SUPPLEMENTAL INDENTURE



                  SUPPLEMENTAL INDENTURE NO. _____ dated as of _________ ____ to
the  TRUST  INDENTURE,  MORTGAGE,  SECURITY  AGREEMENT  AND  ASSIGMENT  OF RENTS
(hereinafter,  together with  supplements  thereto,  the Indenture)  dated as of
December 15, 1986,  between THE FIRST NATIONAL BANK OF BOSTON (FNB),  not in its
individual  capacity,  but solely as trustee (the Owner  Trustee)  under a Trust
Agreement,  dated as of December 15, 1986,  between  FNB,  whose  address is 100
Federal Street, Boston,  Massachusetts 02110, and Chase Manhattan Realty 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 N E S S E T H:


                  WHEREAS,  in  accordance  with  Section  9(j) of the  Facility
Lease., the Owner Trustee is obligated, in certain cases, to cause the Undivided
Interest  and the Real  Property  Interest  to be  subjected  to the Lien of the
Indenture: and

                  WHEREAS,  in order to further secure the obligations  referred
to in the Indenture, the Owner Trustee desires to grant to the Indenture Trustee
the security interest and realty mortgage herein provided and the parties hereto
desire  that the  Indenture  be regarded  (i) to the extent  that the  Undivided
Interest  constitutes  personal  property,  as a "security  agreement"  and as a
"financing  statement" under the Uniform  Commercial Code and (ii) to the extent
that the Undivided Interest and the Real Property Interest  constitute  fixtures
or real property, as a realty mortgage:

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

                  SECTION  1.1.  The  Indenture.   This  Supplemental  Indenture
No._________  shall  be  construed  as  supplemental  to and  amendatory  of the
Indenture  and  shall  form  a  part  thereof,   and  the  Indenture  is  hereby
incorporated by reference herein and is hereby ratified, approved and confirmed.


6091.CHASEU2.LEASE.07:1
                                       C-1


<PAGE>




                  SECTION 1.2.  Definitions.  Capitalized terms used herein, but
which are not  otherwise  defined  herein  shall have the  meanings set forth in
Appendix A to the Indenture.

                  SECTION 1.3. Recording Information. The Indenture was recorded
on ___________ in Maricopa County,  Arizona  [describe]  [specify other recorded
documents] [specify other places of recordation].

                  SECTION 1.4. Governing Law. This Supplemental Indenture No. __
and the Indenture shall,  for all purposes,  be construed in accordance with and
governed by the laws of the State of New York except to the extent that the laws
of the State of Arizona shall be mandatorily applicable thereto.

                  SECTION 1.5. Security Interest and Realty Mortgage. As further
security for the due and punctual  payment of the  principal of and premium,  if
any, and interest on the Notes  according to their  respective  terms and effect
and the performance and observance by the Owner Trustee of all the covenants and
agreements made by it or on its behalf in the Notes, the Participation Agreement
and the Indenture, the Owner Trustee does, by its execution and delivery hereof,
hereby grant a security interest in, bargain, convey, warrant, assign, transfer,
mortgage,  pledge and set over unto the Indenture Trustee, and to its successors
and  assigns  in  trust,  the  following  (which  shall  be a part of the  Lease
Indenture  Estate for all purposes of the  Indenture  and the other  Transaction
Documents):

                  (1) the  Undivided  Interest and the Real  Property  Interest,
        including,  but without  limitation,  the Owner  Trustee's  share of all
        capital  Improvements  (including  any which  constitute  fixtures under
        Applicable  Law) now existing or which  hereafter may become part of the
        Undivided Interest;

                  (2) all right,  title and interest of the Owner Trustee in, to
        and under (a) the Bill of sale,  (b) the ANPP  Participation  Agreement,
        (c) the Deed and (d) the Assignment of Beneficial  Interest,  including,
        but without limitation, all amounts of Rent, insurance



609l.CHASEU2.LEASE.07:1
                                       C-2


<PAGE>


        proceeds and condemnation,  requisition and other awards and payments of
        any kind for or with respect to any part of the Lease  Indenture  Estate
        as contemplated in such documents;

                  (3) all other  property of every kind and  description,  real,
        personal and mixed, and interests therein now held or hereafter acquired
        by the Owner Trustee  pursuant to any term of any Transaction  Document,
        whether or not  subjected  to the Lien of the  Indenture by an indenture
        supplemental hereto; and

                  (4)     all proceeds of the foregoing;

but  excluding,  however,  (i) such of the foregoing as, in accordance  with the
terms of the Indenture,  shall have been released from the lien of the Indenture
and distributed to the Owner Trustee or the Owner  Participant,  as the case may
be, and (ii) any and all Excepted  Payments;  and subject,  however,  to (x) the
terms and provisions of the Indenture and (y) the rights of the Lessee under the
Facility Lease.

                  TO HAVE AND TO HOLD all the aforesaid  properties,  rights and
interests unto the Indenture Trustee, its successors and assigns forever, but in
trust,  nevertheless,  for the use and purposes and with the power and authority
and subject to the terms and conditions mentioned and set forth in the Indenture

                  UPON CONDITION  that,  unless and until an Indenture  Event of
Default  shall have  occurred  and be  continuing,  the Owner  Trustee  shall be
permitted,  to the  exclusion of the Indenture  Trustee,  to possess and use the
Lease Indenture Estate and exercise all rights with respect thereto and, without
limitation  of the  foregoing,  the Owner Trustee may exercise all of its rights
under the  documents  specified in clause (2) above to the same extent as if its
right, title and interest therein had not been assigned to the Indenture Trustee
to the extent set forth above,  except that the Indenture  Trustee shall receive
all payments of Assigned  Payments and all moneys and securities  required to be
held by or deposited with the Indenture Trustee hereunder.

                  The Owner Trustee hereby  warrants and represents  that it has
not assigned or pledged any of its right, title or interest in and to the Lease
Indenture Estate to anyone other than the Indenture Trustee.


6091.CHASEU2.LEASE.07:1
                                       C-2


<PAGE>


                  SECTION 1.6. Real Estate Remedies. In addition to the remedies
specified  in the  Indenture  (including  but  without  limitation  Section  6.4
thereof) or otherwise  available  pursuant to Applicable Law, to the extent that
any portion of the Lease Indenture Estate constitutes fixtures or real property,
the  Indenture  and this  Supplemental  Indenture  No.__  shall be, and shall be
deemed to be, a realty  mortgage  and  assignment  of rents with  respect to all
items of real property and fixtures and the Indenture Trustee shall have all the
rights,  remedies and benefits of a mortgagee of real property under  Applicable
Law (including, but without limitation,  rights and remedies pursuant to Arizona
Revised Statutes Section 33-702.3,  or any comparable  successor  provision) and
the Owner Trustee shall be and be deemed to be, a mortgagor with respect to such
fixtures and real property.

                  SECTION  1.7.  Certain  Releases.  In case a release  from the
security  and other  interests  created by Section  1.5 hereof by the  Indenture
Trustee of a portion of the  Undivided  Interest  shall be necessary in order to
enable the Owner Trustee or the Lessee to perform its  covenants and  agreements
set forth in the Transaction Documents or in the ANPP Participation Agreement or
the Owner Trustee or the Lessee to carry out any action required by Section 8 of
the Facility  Lease,  the Indenture  Trustee shall execute and deliver to, or as
directed  by,  the Owner  Trustee  or the Lessee an  appropriate  instrument  or
instruments provided to the Indenture Trustee by the Owner Trustee or the Lessee
(in due form for filing or  recording),  so releasing a portion of the Undivided
Interest,  provided,  however,  that the  Indenture  Trustee  shall  have  first
received an officer's Certificate in form and substance reasonably  satisfactory
to the Indenture Trustee,  executed by the Lessee,  accompanied by an opinion of
counsel reasonably.  satisfactory to the Indenture Trustee,  each of which shall
be to the  effect  that all  necessary  actions  have  been or are  being  taken
simultaneously  with such  release in  connection  with the  proposed  action to
comply with the terms of this Indenture and Section 8 of the Facility Lease.




6091.CHASEU2.LEASE.07:1
                                       C-4


<PAGE>
                  SECTION 1.8.  Severance.  The parties  hereto  understand  and
agree that Unit 2 and the Common Facilities  (including the Undivided Interest),
each Capital Improvement and each part thereof is or shall be severed, and shall
be and remain severed, from the real estate constituting the PVNGS Site and even
if physically attached thereto, shall retain the character of personal property,
shall be treated as personal  property with respect to the rights of all persons
whomsoever, shall not be or become fixtures or otherwise part of the real estate
constituting the PVNGS Site, and, by virtue of its nature as personal  property,
shall not be affected in any way by any instrument  dealing with the real estate
constituting the PVNGS Site.

                  SECTION 1.9. ANPP  Participation  Agreement.  The provision by
the Owner  Trustee  to the  Indenture  Trustee of the  realty  mortgage  and the
security  interest  contemplated by this Supplemental  Indenture  No._____ is in
compliance with the provisions of the ANPP Participation  Agreement,  including,
but without limitation, Section 15.6.3.2 thereof.

                  SECTION 1.10. Appointment of Co-Trustees or Separate Trustees.

                  (a) At any time or times, when necessary or prudent or for the
purpose of meeting the legal  requirements of any jurisdiction in which any part
of the Lease  Indenture  Estate  may,  at any time,  be  located  the  Indenture
Trustee,  except as set forth in subsection  (b) (6) of this Section 1.10,  may,
and upon  receipt of a Directive  shall,  appoint one or more  Persons to act as
co-trustee  of all or any such part of the Lease  Indenture  Estate or to act as
separate trustee of any property  constituting part thereof, in either case with
such powers as may be provided in the instrument of appointment,  and to vest in
such Person or Persons any property,  title,  right or power deemed necessary or
desirable,  subject to the remaining  provisions of this Section 1.10. Except as
set forth in subsection (b)(6) of this Section 1.10 the Owner Trustee shall join
in any such  appointment  upon the request of the  Indenture  Trustee,  but such
joining will not be necessary for the effectiveness of such appointment.

                  (b)     Every separate trustee or co-trustee shall be 
appointed subject to the following terms:

                  (1) The rights,  powers,  duties and obligations  conferred or
         imposed  upon any such  separate  trustee  or  co-trustee  shall not be




6091.CHASEU2.LEASE.07:1
                                                        C-5


<PAGE>

         greater than those conferred or imposed upon the Indenture Trustee, and
         such  rights and powers  shall be  exercisable  only  jointly  with the
         Indenture  Trustee,  except to the  extent  that,  under any law of any
         jurisdiction  in which any  particular act or acts are to be performed,
         the Indenture  Trustee shall be  incompetent  or unqualified to perform
         such act or acts, in which event, except as set forth in subsection (b)
         (6) of this Section 1.10,  such rights and powers shall be exercised by
         such  separate  trustee  or  co-trustee  subject to the  provisions  of
         subsection (b) (4) of this Section 1.10.

                  (2) The Indenture Trustee may at any time, by an instrument in
        writing  executed.  by it, accept the  resignation of, and may (and upon
        the  receipt  of a  Directive,  shall)  remove any  separate  trustee or
        co-trustee appointed under this Section 1.10.

                  (3) No  trustee  under  the  Indenture  and this  Supplemental
        Indenture No._____ all be liable by reason of any act or omission of any
        other trustee or co-trustee under this Indenture.

                  (4) Except as set forth in subsection  (b) (6) of this section
        1.10,  no power given to such separate  trustee or  co-trustee  shall be
        separately  exercised  hereunder by such separate  trustee or co-trustee
        except with the consent in writ mg of the Indenture Trustee.

                  (5) The Indenture Trustee shall maintain custody of all money 
        and securities.

                  (6) Notwithstanding anything contained to the contrary in this
        Section  1.10, to the extent the laws of any  jurisdiction  preclude the
        Indenture Trustee from taking any action hereunder either alone, jointly
        or through a separate  trustee  under the  direction  and control of the
        Indenture  Trustee,  the  Owner  Trustee,  at  the  instruction  of  the
        Indenture   Trustee,   shall   appoint  a  separate   trustee  for  such
        jurisdiction, which separate trustee shall have full power and authority
        to take all action hereunder as to matters relating to such jurisdiction
        

                                       C-6
6091.CHASEU2.LEASE. 07:1


<PAGE>

         without the consent of the Indenture  Trustee,  but subject to the same
         limitations  in any  exercise  of his power and  authority  as those to
         which the Indenture Trustee is subject.

                  (c) Upon the acceptance in writing of such  appointment by any
such  separate  trustee or  co-trustee,  it shall be vested  with the estates or
property to which its  appointment  relates as  specified in the  instrument  of
appointment,  subject to all the terms of the  Indenture  and this  Supplemental
Indenture No.

                  (d) Any  separate  trustee  or  co-trustee  may,  at any time,
constitute the Indenture Trustee, its agent or attorney-in-fact, with full power
and  authority,  to the extent not prohibited by law, to do any lawful act under
or in respect of the Indenture and this Supplemental  Indenture No.______ on its
behalf and in its name. If a separate  trustee or co-trustee  shall die,  become
incapable  of acting,  resign or be  removed,  all of its  estates,  properties,
rights,  remedies and trusts  shall vest in and be  exercised  by the  Indenture
Trustee,  to the extent  permitted by law,  without the  appointment of a new or
successor trustee.

                  SECTION 1.11.  Separability of Provisions.  In case any one or
more of the provisions of this Supplemental  Indenture No. __ or any application
thereof  shall  be  invalid,  illegal  or  unenforceable  in any.  respect,  the
validity, legality and enforceability of the remaining provisions hereof and the
Indenture and any other  application  hereof and thereof shall not in any way be
affected or impaired.

                  SECTION  1.12.   Counterpart   Execution.   This  Supplemental
Indenture  No._____  may be  executed in any number of  counterparts  and by the
different  parties hereto and thereto 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.












6091.CHASEU2.LEASE.07:1
                                       C-7


<PAGE>


                  IN  WITNESS  WHEREOF,  the  Owner  Trustee  and the  Indenture
                  Trustee have each caused this Indenture 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 Agreement
                                         dated  as  of  December  15,1986,  with
                                         Chase    Manhattan    Realty    Leasing
                                         Corporation

                                        By
                                            ---------------------------
                                             Assistant Vice President

                                        CHEMICAL BANK


                                        By
                                            ----------------------------
                                                  Vice President
















                                      C-8

6091.CHASEU2.LEASE.O7:1


<PAGE>


                                                    SCHEDULE 1
                                                        to
                                                     INDENTURE




                         UNDIVIDED INTEREST DESCRIPTION


                  The Undivided  Interest is a (i) .7933333%  undivided interest
in and to the property  described  under A below and (ii) a .2e44444%  undivided
interest in and to the property described in B below.

                  A.       Unit 2 of the Palo Verde Nuclear  Generating  Station
                           (PVNGS),   located  in  Maricopa   County,   Arizona,
                           approximately  55 miles west of the City of  Phoenix,
                           Arizona,  and approximately 16 miles west of the City
                           of Buckeye, Arizona, consisting of:

        I. Unit 2 Combustion  Engineering  "System 80" pressurized water reactor
        nuclear  steam  supply  system (the NSSS).  The NSSS is  comprised  of a
        reactor vessel  containing 241 fuel  assemblies with  approximately  100
        tons of enriched uranium fuel assemblies,  however, are not part of Unit
        2 and are not included in the Undivided  Interest being sold), two steam
        generators,  four reactor coolant pumps and various  additional  systems
        and subsystems. The licensed thermal ratin4 of the NSSS is 3800 MW.

         II.  Unit 2 GE  TC6F-43,  1800 RPM  tandem-compound,  six flow,  reheat
         turbine,    generator    including   turbine,    generator,    moisture
         separator-reheater,  exciter,  controls, and auxiliary subsystems.  The
         turbine-generator  is conductor cooled and rated at 1,554 MVA at 24,000
         V, 3 phase,  60 Hz,  1.5 in Hg ABS back  pressure.,  and  approximately
         1,363 MW maximum gross electric output.

         III. Unit 2 146 ft. inside diameter, steel-lined, prestressed concrete,
         cylindrical containment building with a hemispherical dome designed for
         60 psig. The containment building houses the reactor system.



6091.CHASEU2.LEASE.07:1


<PAGE>


         IV.  Unit  2  auxiliary  systems  and  equipment  including  engineered
         safeguards  Systems,  reactor auxiliary  systems and  turbine-generator
         auxiliary systems associated with items I, II, and III above, extending
         to and including the Unit 2 start-up transformer.

         V. Unit 2 cooling tower system consisting of three (3) mechanical draft
         cooling  towers,  including a closed cycle  circulating  water  system,
         make-up water systems and essential spray ponds.

         VI.  Unit 2  radioactive  waste  treatment  system,  including  liquid,
         gaseous,  and  solid  waste  subsystems,   controls,   instrumentation,
         storage, handling and shipment facilities.

         VII.   Unit  2   emergency   diesel-generator   system,   including   a
         diesel-generator  building which contains two diesel  generators,  fuel
         oil systems,  storage tanks,  control and  instrumentation  systems and
         other equipment.

         VIII.  Unit 2  internal  communication  systems,  including  associated
         interconnections and computer data links.

BUT EXCLUDING:

         I. Nuclear fuel for Unit 2, including spare fuel assemblies.

         II. Spare Parts (Unit 2).

         III.  Transmission  facilities  (including  any and all  facilities and
         equipment  providing   interconnection   between  the  Unit  2  turbine
         generator  and the ANPP  High  Voltage  Switchyard,  including  step-up
         transformers and standby equipment and systems).





6091.CHASEU2 LEASE.07:1
                                       -2-


<PAGE>


         IV. Oil and diesel fuel inventories (Unit 2).

           B.  All PVNGS common facilities, INCLUDING LIMITED BUT NOT TO


         I. Surveillance systems,  including associated  radioactive  monitoring
         Systems and equipment.

         II. Water  treatment  facilities  and  transport  systems for supply of
         waste water effluent.

         III. Warehouse and related storage facilities and equipment.

BUT EXCLUDING:

         I. Nuclear fuel, including spare fuel assemblies.

         II.   All transmission and ANPP High Voltage Switchyard facilities.
         III.  Administration Building.

         IV. Administration Annex Building.

         V. Technical Support Center.

         VI. Visitor Center.

         VII.External communication systems and equipment,  including associated
         interconnections and computer data links.

         VIII. Parking lot improvements, road improvements, fencing and dikes.

         IX. Spare parts (common facilities).

         X. Simulator.

         XI. Oil and diesel fuel inventories.

         XII.Real property,  beneficial interest in Title USA Company of Arizona
         Trust No. 530, and Project Agreement interests described in Schedule 2.





6091.CHASEU2.LEASE.07:l
                                       -3-


<PAGE>



                                                    SCHEDULE 2
                                                        to
                                                     INDENTURE



                  REAL PROPERTY NTEREST DESCRIPTION

                  The  Real  Property  Interest  is a  (i)  .2333334%  undivided
interest in the land described in I below, a (ii) .2644444%  undivided  interest
in the  rights  and  interests  described  in II below,  and  (iii) a  .2644444%
undivided interest in the right and interests described in III below.


I.      PVNGS PLANT SITE

PARCEL NO. 1: Lot Four (4); the Southwest quarter of the Northwest quarter;  and
the West half of the Southwest quarter, all in Section Two (2), Township One (1)
South,  Range Six (6) West of the Gila and Salt River Base and Meridian Maricopa
County, Arizona.

PARCEL NO. 2: All of Section  Three (3),  Township One (1) South,  Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.

PARCEL NO. 3: The East half of Section Four (4)  Township  One (1) South,  Range
Six (6) West of the Gila and Salt  River  Base and  Meridian,  Maricopa  County,
Arizona.

PARCEL  NO. 4: The West  half of,  Section  Twenty-six  (26),  Township  One (l)
North',  Range  Six (6)  West of the  Gila and  salt  River  Base and  Meridian,
Maricopa County, Arizona.

PARCEL NO. 5: Section  Twenty-seven (27),  Township One (1) North, Range Six (6)
West of. The Qua and Salt River Base and  Meridian,  Maricopa  County,  Arizona;
EXCEPT the Northwest quarter of section 27.

PARCEL NO. 6 The Southeast quarter of Section  Twenty-eight  (28),  Township One
(1)  North,  Range Six (6) West of the Gila and Salt  River  Base and  Meridian,
Maricopa County,  Arizona; EXCEPT 50% of all oil, gas and other mineral deposits
and  geothermal  resources  recovered  from or  developed  on the  property,  as
reserved in instrument recorded May 10, 1974 in Docket 10647, page 136.


6091.CHASEU2.LEASE.07:1


<PAGE>


PARCEL NO. 7: The East half of Section Thirty-three (33) Township One (1) North,
Range Six (6) West of the Gila and Salt River Ease and Meridian Maricopa County,
Arizona.

PARCEL NO. 8: All of Section Thirty-four (34), Township One (1) North, Range Six
(6) west of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.

PARCEL NO. 9: The West half of Section Thirty-five (35), Township One (1) North,
Range  Six (6)  West of the  Gila and Salt  River  Base and  Meridian,  Maricopa
County, Arizona.

PARCEL NO. 10: The  Southeast  quarter  of Section  Nine (9),  Township  one (1)
South, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona; EXCEPT the Northwest quarter thereof.

PARCEL NO. 11: All of Section Ten (10),  Township  One (1) South,  Range Six (6)
West of the Gila and Salt River Base and  Meridian,  Maricopa  County,  Arizona;
EXCEPT the East half of the Southeast quarter thereof; and EXCEPT the North half
of the South half of the Northwest quarter of the Northwest quarter thereof.

PARCEL NO. 12:  That part of the East half of the  Southwest  quarter of Section
Twenty-three  (23),  Township One (1) North,  Range Six (6) West of the Gila and
Salt  River Base and  Meridian,  Maricopa  County,  Arizona,  more  particularly
described as follows:

                  BEGINNING at the Southeast corner of the said East half of the
        Southwest  quarter of Section 23; thence West, an assumed  bearing along
        the South line of the said East half of the Southwest quarter of Section
        23, for a distance of 762.04 feet;  thence North 0 degrees 03 minutes 39
        seconds  West;  parallel  to the East  line of the said East half of the
        Southwest  quarter of Section  23, for a distance  of 1946.46  feet to a
        point  on  the   South   right-of-way   line  of  the  200   foot   wide
        HASSAXAMPA-SALOME  HIGHWAY,  as recorded in Book 12 of Road Maps.,  page
        82,  Maricopa  County  Recorder,   Maricopa  County,   Arizona;   thence
        continuing  North 0 degrees 03 minutes 39 seconds west for a distance of
        234.15 feat to. a point on the North  right-of-way line of said highway;
        thence  South 58 degrees 43  minutes 35 seconds  East,  along said North



                                                        -2-
6091.CHASEU2.LEASE.07:1


<PAGE>

        right-of-way line for a distance of
         892.17  feet to a point on the said  East  line of the East half of the
         Southwest  quarter of Section 23;  thence South 0 degrees 03 minutes 39
         seconds  East,  along said East line for a distance of 234.15 feet to a
         point on the said South  right-of-way  line;  thence continuing South 0
         degrees 03 minutes 39 seconds  East for a distance  of 1483.31  feet to
         the true point of beginning;

                  EXCEPT the East 305 feet of the South 305 feet thereof; and

                  EXCEPT one-half of the minerals and mineral rights and mineral
        estates  of every  kind and  nature,  as set forth in Deed  recorded  in
        Docket 11652, page 526 Maricopa County Records.

PARCEL NO. 13: The North half of the South half of the Northwest  quarter of the
Northwest quarter of Section.  Ten (10),  Township One (1) South,  Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.


II. HASSAYAMPA PUNPING STATION AND EFFLUENET PIPELINE All real property, leases,
licenses, easements,  rights-of-way and other property held by Title USA Company
of Arizona  Trust No. 530  established  by that certain  Trust  Agreement  dated
October 15, 1975, as amended, but excluding therefrom all improvements.


III.        MISCELLANEOUS REAL PROPERTY INTERESTS

                  Those  ANPP  Project   Agreements  (as  defined  in  the  ANPP
Participation  Agreement),  in  addition  to the Trust  Agreement  for Title USA
Company of Arizona Trust 530,  consisting of leases,  licenses,  easements,  and
permits, which provide land and land rights for (a) the pipeline to supply waste
water effluent to PVNGS from the 91st Avenue sewage  treatment plant serving the
Phoenix Metropolitan area and (b) railroad access to the nuclear 'Plant Site (as
defined in the ANPP Participation Agreement).










6091.CHASEU2.LEASE.07:1
                                       -3-