Document:

exv10w1

 

Exhibit 10.1

AMENDMENT NO. 5

Decommissioning Trust Agreement

(PVNGS Unit l)

          This Amendment No. 5 dated as of May 1, 2007, to the Decommissioning Trust Agreement (PVNGS
Unit 1), dated as of July 1, 1991, as amended by Amendment No. 1 thereto dated as of December 1,
1994, Amendment No. 2 thereto dated as of December 16, 1996, Amendment No. 3 thereto dated as of
March 18, 2002, and Amendment No. 4 thereto dated as of December 19, 2003 (the “Decommissioning
Trust Agreement”, terms used herein as therein defined), is entered into between Arizona Public
Service Company (“APS”) and Mellon Bank, N.A., as Decommissioning Trustee (“Decommissioning
Trustee”).

R E C I T A L S:

          WHEREAS, the parties hereto wish to amend the Decommissioning Trust Agreement.

          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. Amendment.

	 	(a)	 	Paragraph (c) of Section 5 shall be restated as follows:
	 
	 	 	 	to (i) hold assets, in a depository, in a clearing corporation, in book
entry form, or by any subcustodian or other entity or in any other manner
permitted by law; provided that the Decommissioning Trustee shall not be
responsible for any losses resulting from the deposit or maintenance of
securities or other property (in accordance with market practice, custom, or
regulation) with any foreign or domestic clearing facility, book-entry
system, centralized custodial depository, or similar organization generally
used by professional custodians engaged in the banking or trust company
industry within the applicable market for the asset type in question, and
(ii) settle transactions in futures and/or options contracts, short-selling
programs, foreign exchange or foreign exchange contracts, swaps and other
derivative investments with third parties;
	 
	 	(b)	 	Paragraph (a) of Section 8 shall be restated as follows:
	 
	 	 	 	To hold, manage, invest, and reinvest the assets of the Funds; provided
however that notwithstanding the provisions of Section 8(c), Decommissioning
Trustee shall, at the close of business on each day, without prior approval
or direction from the Investment Manager(s), have the power, rights, and
responsibility to invest cash balances, including those held as part of an
account of the Investment Manager(s), as authorized in writing delivered to
the Decommissioning Trustee by APS. Nothing in this Section shall be
construed as authorizing

 

 

	 	 	 	Decommissioning Trustee to carry on any business or to divide the gains therefrom.
	 
	 	(c)	 	The first sentence of clause (ii) of Paragraph (c) of Section 8 shall be
deleted.
	 
	 	(d)	 	The third sentence of clause (ii) of Paragraph (c) of Section 8 shall be
restated as follows:
	 
	 	 	 	Upon proper notification from the Investment Manager(s), Decommissioning Trustee shall
execute and deliver instruments in accordance with the appropriate trading authorizations;
provided that the Decommissioning Trustee shall not follow any direction that would result
in assets of the Second Fund being invested in investments not allowed for a qualified
nuclear decommissioning reserve fund under Section 468A of the Code and the regulations
thereunder.
	 
	 	(e)	 	Clause (ii) of Paragraph (d) of Section 8 shall be restated as follows:
	 
	 	 	 	Decommissioning Trustee is required to supervise and review the securities and other
assets and investments authorized for purchase by the Investment Managers(s) within two
weeks of the end of the calendar month during which such purchase was made to determine
that such securities, assets and/or investments are in accordance with the notice
communicated in writing to and accepted by the Decommissioning Trustee, whose acceptance
shall not be unreasonably withheld. Upon the completion of such review, the
Decommissioning Trustee shall promptly notify APS in writing if any securities, assets or
investments are not consistent with such notice.
	 
	 	(f)	 	Section 11 shall be restated as follows:
	 
	 	 	 	Limitations on Transfer and Assignment. APS may not, in whole or in part,
transfer, assign, pledge, encumber, or grant any security interest in its beneficial
interest under this Agreement or in either of the Funds, whether voluntary or involuntary,
except for (i) Permitted Liens, and (ii) as otherwise required or allowed by Applicable
Law.
	 
	 	 	 	Notwithstanding the foregoing, if the Decommissioning Trustee advances cash or securities
for any purpose or in the event that the Decommissioning Trustee shall incur or be
assessed taxes, interest, charges, expenses, assessments, or other liabilities in
connection with the performance of this Agreement, except such as may arise from its
failure to exercise due care, any property at any time held for the Fund or under this
Agreement shall be security therefor and the Decommissioning Trustee shall be entitled to
collect from the Fund sufficient cash for reimbursement, and if such cash is
insufficient, dispose of the assets held under this Agreement to the extent necessary to
obtain reimbursement.

2

 

	 	 	 	Nothwithstanding the foregoing, nothing in this Agreement shall prohibit the
lending of the assets of the Fund in accordance with the terms and
conditions of a separate securities lending agreement.
	 
	 	(g)	 	The second sentence of the fourth paragraph of Section 21
shall be restated as follows:
	 
	 	 	 	Decommissioning Trustee shall promptly advise APS if it has actual knowledge
that any of the investments are not in accordance with the notice
communicated in writing to and accepted by the Decommissioning Trustee.
	 
	 	(h)	 	The following shall be added to the first paragraph of Section 23.
	 
	 	 	 	The Decommissioning Trustee shall not be responsible or liable for any
losses or damages suffered by the Fund arising as a result of the insolvency
of any custodian, (other than the Decommissioning Trustee or any affiliate
of the Decommissioning Trustee) subtrustee or subcustodian, except to the
extent the Decommissioning Trustee failed to exercise due care in its
selection, monitoring or continued retention of such entity. Settlements of
transactions may be effected in trading and processing practices customary
in the jurisdiction or market where the transaction occurs. APS acknowledges
that this may, in certain circumstances, require the delivery of cash or
securities (or other property) without the concurrent receipt of securities
(or other property) or cash. In such circumstances, provided the Trustee has
exercised due care and used reasonable efforts, the Decommissioning Trustee
shall have no responsibility for nonreceipt of payment (or late payment) or
nondelivery of securities or other property (or late delivery) by the
counterparty.
	 
	 	(i)	 	The definition of the term “Permitted Investments” in
Exhibit A to the Decommissioning Trust Agreement is hereby deleted.
	 
	 	(j)	 	Exhibit B to the Decommissioning Trust Agreement is hereby deleted. 

    
      SECTION 2. Miscellaneous

	 	(a)	 	Full Force and Effect.

          Except as expressly provided herein, the Decommissioning Trust Agreement shall remain
unchanged and in full force and effect. Each reference in the Decommissioning Trust Agreement and
in any exhibit or schedule thereto to “this Agreement,” “hereto,” “hereof” and terms of similar
import shall be deemed to refer to the Decommissioning Trust Agreement as amended hereby.

	 	(b)	 	Counterparts/Representations.

3

 

          The Amendment No. 5 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument, and any of the parties hereto may execute this
Amendment No. 5 by signing any such counterpart. Each party represents and warrants to the other
that it has full authority to enter into this Amendment upon the terms and conditions hereof and
that the individual executing this Amendment on its behalf has the requisite authority to bind that
Party.

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to the
Decommissioning Trust Agreement to be duly executed as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ARIZONA PUBLIC SERVICE COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Janice Emery
 

	 	 
	 

	 	Title:
	 	Director, Trust Investments	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MELLON BANK, N.A. as Decommissioning Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. McNally	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	 	 	 	 	 

4

 

	 	 	 	 	 
	STATE OF ARIZONA

	) 	 		 
	 

	) ss: 	

	County of Maricopa

	) 	 		 

     The
foregoing instrument was acknowledged before me this 16th day of
April, 2007, by Janice Emery, the Director Trust Invest of ARIZONA
PUBLIC SERVICE COMPANY, an Arizona corporation, on behalf of said corporation.

	 	 	 	 	 
	 

	 	/s/ Suzanne Wineck
 

Notary Public
	 	 

	 	 	 	 	 
	COMMONWEALTH OF PENNSYLVANIA

	) 	 		 
	 

	) ss: 	

	County of Allegheny

	) 	 		 

     The
foregoing instrument was acknowledged before me this
26th day
of April, 2007, by Thomas J. McNally, a Vice President of Mellon Bank, N.A. a
national banking association having trust powers, as Decommissioning Trustee, on behalf of
said national banking association.

	 	 	 	 	 
	 

	 	/s/ Julie Ann Mosco
 

Notary Public
	 	 

	 	 	 	 	 
	 

	 	COMMONWEALTH
OF PENNSYLVANIA
	 	 
	 

	 	Notarial
Seal 
 Julie Ann Mosco, Notary Public 

City Of Pittsburgh, Allegheny County

My Commission Expires Oct. 13, 2007
	 	 
	 	 	 	 	 
	 	 	Member, Pennsylvania Association Of Notaries	 	 

My commission expires:

October 13,
2007

5exv10w2

 

Exhibit 10.2

AMENDMENT NO. 5

Decommissioning Trust Agreement

(PVNGS Unit 3)

          This Amendment No. 5 dated as of May 1, 2007, to the Decommissioning Trust Agreement (PVNGS
Unit 3), dated as of July 1, 1991, as amended by Amendment No. 1 thereto dated as of December 1,
1994, Amendment No. 2 thereto dated as of December 16, 1996, Amendment No. 3 thereto dated as of
March 18, 2002, and Amendment No. 4 thereto dated as of December 19, 2003 (the “Decommissioning
Trust Agreement”, terms used herein as therein defined), is entered into between Arizona Public
Service Company (“APS”) and Mellon Bank, N.A., as Decommissioning Trustee (“Decommissioning
Trustee”).

R  E  C  I  T  A  L  S:

          WHEREAS, the parties hereto wish to amend the Decommissioning Trust Agreement.

          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. Amendment.

	 	(a)	 	Paragraph (c) of Section 5 shall be restated as follows:
	 
	 	 	 	to (i) hold assets, in a depository, in a clearing corporation, in book
entry form, or by any subcustodian or other entity or in any other manner
permitted by law; provided that the Decommissioning Trustee shall not be
responsible for any losses resulting from the deposit or maintenance of
securities or other property (in accordance with market practice, custom, or
regulation) with any foreign or domestic clearing facility, book-entry
system, centralized custodial depository, or similar organization generally
used by professional custodians engaged in the banking or trust company
industry within the applicable market for the asset type in question, and
(ii) settle transactions in futures and/or options contracts, short-selling
programs, foreign exchange or foreign exchange contracts, swaps and other
derivative investments with third parties;
	 
	 	(b)	 	Paragraph (a) of Section 8 shall be restated as follows:
	 
	 	 	 	To hold, manage, invest, and reinvest the assets of the Funds; provided
however that notwithstanding the provisions of Section 8(c), Decommissioning
Trustee shall, at the close of business on each day, without prior approval
or direction from the Investment Manager(s), have the power, rights, and
responsibility to invest cash balances, including those held as part of an
account of the Investment Manager(s), as authorized in writing delivered to
the Decommissioning Trustee by APS. Nothing in this Section shall be
construed as authorizing

 

 

	 	 	 	Decommissioning Trustee to carry on any business or to divide the gains therefrom.
	 
	 	(c)	 	The first sentence of clause (ii) of Paragraph (c) of Section 8 shall be
deleted.
	 
	 	(d)	 	The third sentence of clause (ii) of Paragraph (c) of Section 8 shall be
restated as follows:
	 
	 	 	 	Upon proper notification from the Investment Manager(s), Decommissioning Trustee shall
execute and deliver instruments in accordance with the appropriate trading authorizations;
provided that the Decommissioning Trustee shall not follow any direction that would result
in assets of the Second Fund being invested in investments not allowed for a qualified
nuclear decommissioning reserve fund under Section 468A of the Code and the regulations
thereunder.
	 
	 	(e)	 	Clause (ii) of Paragraph (d) of Section 8 shall be restated as follows:
	 
	 	 	 	Decommissioning Trustee is required to supervise and review the securities and other
assets and investments authorized for purchase by the Investment Managers(s) within two
weeks of the end of the calendar month during which such purchase was made to determine
that such securities, assets and/or investments are in accordance with the notice
communicated in writing to and accepted by the Decommissioning Trustee, whose acceptance
shall not be unreasonably withheld. Upon the completion of such review, the
Decommissioning Trustee shall promptly notify APS in writing if any securities, assets or
investments are not consistent with such notice.
	 
	 	(f)	 	Section 11 shall be restated as follows:
	 
	 	 	 	Limitations on Transfer and Assignment. APS may not, in whole or in part,
transfer, assign, pledge, encumber, or grant any security interest in its beneficial
interest under this Agreement or in either of the Funds, whether voluntary or involuntary,
except for (i) Permitted Liens, and (ii) as otherwise required or allowed by Applicable
Law.
	 
	 	 	 	Notwithstanding the foregoing, if the Decommissioning Trustee advances cash or securities
for any purpose or in the event that the Decommissioning Trustee shall incur or be
assessed taxes, interest, charges, expenses, assessments, or other liabilities in
connection with the performance of this Agreement, except such as may arise from its
failure to exercise due care, any property at any time held for the Fund or under this
Agreement shall be security therefor and the Decommissioning Trustee shall be entitled to
collect from the Fund sufficient cash for reimbursement, and if such cash is
insufficient, dispose of the assets held under this Agreement to the extent necessary to
obtain reimbursement.

2

 

	 	 	 	Nothwithstanding the foregoing, nothing in this Agreement shall prohibit the
lending of the assets of the Fund in accordance with the terms and
conditions of a separate securities lending agreement.
	 
	 	(g)	 	The second sentence of the fourth paragraph of Section 21
shall be restated as follows:
	 
	 	 	 	Decommissioning Trustee shall promptly advise APS if it has actual knowledge
that any of the investments are not in accordance with the notice
communicated in writing to and accepted by the Decommissioning Trustee.
	 
	 	(h)	 	The following shall be added to the first paragraph of Section 23.
	 
	 	 	 	The Decommissioning Trustee shall not be responsible or liable for any losses
or damages suffered by the Fund arising as a result of the insolvency of any
custodian, (other than the Decommissioning Trustee or any affiliate of the
Decommissioning Trustee) subtrustee or subcustodian, except to the extent the
Decommissioning Trustee failed to exercise due care in its selection,
monitoring or continued retention of such entity. Settlements of transactions
may be effected in trading and processing practices customary in the
jurisdiction or market where the transaction occurs. APS acknowledges that
this may, in certain circumstances, require the delivery of cash or
securities (or other property) without the concurrent receipt of securities
(or other property) or cash. In such circumstances, provided the Trustee has
exercised due care and used reasonable efforts, the Decommissioning Trustee
shall have no responsibility for nonreceipt of payment (or late payment) or
nondelivery of securities or other property (or late delivery) by the
counterparty.
	 
	 	(i)	 	The definition of the term “Permitted Investments” in
Exhibit A to the Decommissioning Trust Agreement is hereby deleted.
	 
	 	(j)	 	Exhibit B to the Decommissioning Trust Agreement is hereby deleted.

          SECTION 2. Miscellaneous

               (a) Full Force and Effect.

          Except as expressly provided herein, the Decommissioning Trust Agreement shall remain
unchanged and in full force and effect. Each reference in the Decommissioning Trust Agreement and
in any exhibit or schedule thereto to “this Agreement,” “hereto,” “hereof” and terms of similar
import shall be deemed to refer to the Decommissioning Trust Agreement as amended hereby.

               (b) Counterparts/Representations.

3

 

     The Amendment No. 5 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument, and any of the parties hereto may execute this
Amendment No. 5 by signing any such counterpart. Each party represents and warrants to the other
that it has full authority to enter into this Amendment upon the terms and conditions hereof and
that the individual executing this Amendment on its behalf has the requisite authority to bind that
Party.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to the
Decommissioning Trust Agreement to be duly executed as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ARIZONA PUBLIC SERVICE COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Janice Emery
 

	 	 
	 

	 	Title:
	 	Director, Trust Investments	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MELLON BANK, N.A. as Decommissioning Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. McNally	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	 	 	 	 	 

4

 

	 	 	 	 	 
	STATE OF ARIZONA

	) 	 		 
	 

	) ss: 	

	County of Maricopa

	) 	 		 

     The
foregoing instrument was acknowledged before me this
16th day of
April, 2007, by Janice Emery, the Director Trust Invest of ARIZONA PUBLIC SERVICE
COMPANY, an Arizona corporation, on behalf of said corporation.

	 	 	 	 	 
	 

	 	/s/ Suzanne Wineck
 

Notary Public
	 	 

	 	 	 	 	 
	COMMONWEALTH OF PENNSYLVANIA

	) 	 		 
	 

	) ss: 	

	County of Allegheny

	) 	 		 

     The
foregoing instrument was acknowledged before me this
26th day
of
April, 2007, by Thomas J. McNally, a Vice President of Mellon Bank, N.A. a
national banking association having trust powers, as Decommissioning
Trustee, on behalf of said national banking association.

	 	 	 	 	 
	 

	 	/s/ Julie Ann Mosco
 

Notary Public
	 	 

	 	 	 	 	 
	 

	 	COMMONWEALTH
OF PENNSYLVANIA
	 	 
	 

	 	Notarial
Seal 
 Julie Ann Mosco, Notary Public 

City Of Pittsburgh, Allegheny County

My Commission Expires Oct. 13, 2007
	 	 
	 	 	 	 	 
	 	 	Member, Pennsylvania Association Of Notaries	 	 

My commission expires:

October 13,
2007

5

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