Document:

Decommissioning Trust Agreement as decommissioning trustee for Palo Verde Unit 3

 Exhibit 10.4 
 DECOMMISSIONING TRUST AGREEMENT 
 Dated as of April 1, 2006 
 between 
 EL PASO ELECTRIC COMPANY 

and 
 WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association 
 As Decommissioning Trustee 
 for 
 Palo Verde Unit 3 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 

 DECOMMISSIONING TRUST AGREEMENT 
 FOR PALO VERDE NUCLEAR GENERATING STATION 
 UNIT 3 
 This Decommissioning Trust Agreement (the “Agreement”), to be effective as of April 1, 2006 (the “Effective
Date”), between Wells Fargo Bank, National Association, a national banking association (“Decommissioning Trustee”) and El Paso Electric Company, a Texas corporation (“El Paso”). 
 The Nuclear Regulatory Commission (“NRC”), an agency of the United States of America, pursuant to the Atomic Energy Act of 1954, as
amended, and the Energy Reorganization Act of 1974, has promulgated regulations codified in Title 10, Chapter 1 of the Code of Federal Regulations, Part 50, as amended. These regulations, applicable to El Paso, require that each holder of a license
issued pursuant thereto must provide assurance that funds will be available for Decommissioning. 
 El Paso and others entered into the
Arizona Nuclear Power Project Participation Agreement executed as of August 23, 1973 (the “ANPP Participation Agreement”). Amendment 13 to the ANPP Participation Agreement, effective June 15, 1991, requires El Paso to
establish and maintain funds for the accumulation, over a period not in excess of the remaining term of the operating license for Unit 3 and the period thereafter until completion of Decommissioning, of funds sufficient to pay Decommissioning Cost.

 In addition, El Paso is required by the Public Utility Commission of Texas (“PUCT”), the New Mexico Public Regulation
Commission (“NMPRC”), the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission to establish a source of funds to pay for Decommissioning. 
 Under Applicable Tax Law, certain federal income tax benefits are available to El Paso from establishing and making contributions to a “Nuclear
Decommissioning Reserve Fund” for Unit 3. In order to satisfy its obligations under the ANPP Participation Agreement, to comply with the requirements of the governmental authorities referred to above, and to obtain such federal income tax
benefits, on December 1, 1987, El Paso entered into a Decommissioning Trust Agreement, which was amended by Amendment No. 1 dated September 1, 1991 (the “Original Agreement”), creating two decommissioning trust funds
to provide external funds for Decommissioning, for purposes of this Agreement designated as the Decommissioning Trust Fund and the Second Fund. The Decommissioning Trust Fund is intended at all times to qualify as a “Nuclear Decommissioning
Reserve Fund” under Applicable Tax Law. 
 On January 9, 1996, in Cause No. 92-10148-FM, styled In re: El Paso Electric
Company, the United States Bankruptcy Court for the Western District of Texas (Austin Division) entered an order confirming the Fourth Amended Plan of Reorganization of El Paso (the “Plan”). In accordance with the Plan, which
became effective on February 12, 1996, El Paso and Decommissioning Trustee restated and amended the Original Agreement to ensure that the Decommissioning Trust Fund and the Second Fund would continue to be held, managed and distributed, without
interruption, in accordance with the terms of the Original Agreement, Applicable Law, and Applicable Tax Law. 
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Trust 
  

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 This Agreement, in turn, amends and restates the Original Agreement, as restated and amended effective
February 12, 1996, and as further restated and amended effective December 24, 2003, to read in its entirety as follows and continues the Decommissioning Trust Fund and the Second Fund. 
 Therefore, in consideration of the foregoing premises, the acceptance by Decommissioning Trustee of the trusts created, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto restate and amend the Original Agreement, as restated and amended effective February 12, 1996, as follows: 
 SECTION 1. Definitions; References to Sections. All capitalized terms used in this Agreement and not otherwise defined herein shall have the
meanings set forth in Appendix A hereto. Unless otherwise stated, references to a “Section” are to a section of this Agreement. 
 SECTION 2. Creation of Trust Funds. El Paso has established and hereby confirms the establishment with Decommissioning Trustee of the Decommissioning Trust Fund and the Second Fund (each a “Fund” and together the
“Funds”). Each Fund shall include: (A) all cash and investments thereof, as more specifically described in Section 7; (B) all dividends, interest, cash, instruments, and other property from time to time received,
receivable, or otherwise distributed or distributable in respect of or in exchange for any or all such investments; (C) all rights and privileges with respect to such investments; and (D) all proceeds of any of the foregoing and any
property of any character whatsoever into which any of the foregoing may be converted. 
 SECTION 3. Purpose of Trust Funds; Tax
Qualification. The Funds are for the accumulation and funding of amounts to pay costs, liabilities, and expenses of Decommissioning, including the accumulation, over a period not in excess of the remaining term of the operating license for Unit
3 and the period thereafter until completion of Decommissioning, of amounts which are sufficient to pay Decommissioning Cost. The Decommissioning Trust Fund, but not the Second Fund, is intended at all times to qualify as a “Nuclear
Decommissioning Reserve Fund” under Applicable Tax Law. El Paso and the applicable Fiduciary Investment Manager(s), if any, and Decommissioning Trustee (but with respect to Decommissioning Trustee only as to those assets of the Funds that
are not under the direction of a Fiduciary Investment Manager) shall seek to obtain the best possible tax treatment of amounts collected for nuclear plant decommissioning; and in this regard, El Paso and the applicable Fiduciary Investment
Manager(s), if any, and Decommissioning Trustee (but with respect to Decommissioning Trustee only as to those assets of the Funds that are not under the direction of a Fiduciary Investment Manager) shall take maximum advantage of tax deductions and
credits when it is consistent with sound business practices to do so. The assets of the Decommissioning Trust Fund must be used as authorized by section 468A of the Code and shall be used exclusively: 
 (A) subject to the limitations and conditions of Section 9, to satisfy, in whole or in part, El Paso’s obligation to pay for Decommissioning;

 (B) subject to the limitations and conditions of Section 8, to pay Expenses; and 
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 (C) to the extent not currently required for the uses described in (A) and (B) above, and
subject to the limitations and conditions of Section 7, for investment in Qualified Investments. 
 The Funds shall be used exclusively
for Decommissioning of Unit 3. This Agreement may not be amended so as to violate section 468A of the Code or the regulations thereunder. 
 SECTION 4. Declaration and Acceptance of Trust. Decommissioning Trustee accepts the trusts created hereby and declares that it will hold and administer all estate, right, title, and interest in and to each Fund upon the trusts set
forth herein, but only on the terms of this Agreement, and agrees to receive and disburse all moneys and investments constituting any part of each Fund in accordance with this Agreement. No implied duties or obligations shall be read into this
Agreement against Decommissioning Trustee. Decommissioning Trustee shall not commit any act, enter into any transaction, or permit any act or transaction to occur that is an “act of self dealing” between the Decommissioning Trust Fund and
“a disqualified person” as those terms are defined by Applicable Tax Law, and, if such an act occurs, Decommissioning Trustee shall promptly take all necessary steps to correct it as soon as it has knowledge of the occurrence. 

SECTION 5. Ownership of Funds. Not in limitation of its fiduciary duty hereunder, title to any and all property held in each Fund shall be held
by Decommissioning Trustee in its name as trustee as owner of record. At all times, Decommissioning Trustee shall follow the directives of (A) the applicable Fiduciary Investment Manager, if any, with respect to exercising any and all
corresponding voting, consensual, and other rights accruing to the owner of such property in connection with such property, and, except as provided in this subsection 5.(A), (B) El Paso with respect to exercising any and all such voting,
consensual, and other rights. Decommissioning Trustee shall have the right, in its name, as trustee upon prior written notice to El Paso, to settle, compromise, prosecute, or defend any action, claim, or proceeding with respect to any and all
property held in each Fund. Subject to the provisions of this Agreement, Decommissioning Trustee may sell, assign, endorse, pledge, transfer, and make any agreement respecting, or otherwise deal with, any and all property held in each Fund;
provided, however, that except as required by Section 7, nothing herein contained shall be construed as requiring or obligating Decommissioning Trustee to make any inquiry as to the nature or sufficiency of any payment received by it, to
present or file any claim or notice, or to take any action with respect to any of the property held in each Fund. It is not the duty of Decommissioning Trustee or a Fiduciary Investment Manager to ensure that the Funds are adequate to pay for
Decommissioning. 
 SECTION 6. Payments into the Funds. From time to time, but not less than quarter-annually, El Paso shall pay
amounts into one or both of the Funds. El Paso may deposit all or any part of any payment entirely into the Decommissioning Trust Fund, entirely into the Second Fund, or partly into each in whatever proportion El Paso shall determine in its
discretion; except that, if a deduction is allowed under Applicable Tax Law for payments into the Decommissioning Trust Fund, El Paso shall not make, and Decommissioning Trustee shall not accept, any payment into such Fund unless such payment
(a) is in cash, to the extent Applicable Tax Law requires the payment to be in cash, and (b) complies with the amount limitation imposed by Applicable Tax Law and a deduction pursuant to Applicable Tax Law is allowed for the entire
payment. Decommissioning Trustee may accept from El Paso, as proof that these 
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 conditions are satisfied, a certificate executed by El Paso as to compliance with the amount limitation and deductibility
of such payment, and, unless Decommissioning Trustee has actual knowledge to the contrary, Decommissioning Trustee may rely on such certificate without further inquiry or verification. 
 SECTION 7. Investment of Funds. 
 (A)
Decommissioning Trustee. Any amounts held by Decommissioning Trustee in each Fund shall be invested and reinvested by it from time to time, but only in Qualified Investments; provided, however, if El Paso has delivered to Decommissioning
Trustee a copy of an order of a state or federal regulatory agency that El Paso certifies is binding on El Paso and limits the investments in which all or a part of either Fund may be invested, the investment of such Fund shall not violate such
order. A Fiduciary Investment Manager appointed by El Paso may direct investments and reinvestments of the Funds by written direction which shall certify that the directed investment qualifies as an investment in Qualified Investments and is within
the limitation set forth in the preceding sentence. Decommissioning Trustee may rely upon such direction and certification without further inquiry or verification unless Decommissioning Trustee has actual knowledge that the directed investment does
not satisfy the conditions and limitations of this Section 7. 
 In performing its duties and exercising its powers as Decommissioning
Trustee hereunder, and in performing any investment management functions hereunder, Decommissioning Trustee shall comply with the following: 
 (i) it shall add all income, including interest, earned on the corpus of each Fund to such corpus as a part thereof, and shall owe the same duties with regard to such income as it owes with regard to such corpus;

 (ii) it shall have the continuing duty to review the assets of each Fund to determine the appropriateness of the
investments consistent with all terms, provisions and limitations of this Agreement, including without limitation to ensure compliance with the provisions of the investment guidelines of this Section 7, any order of a state or regulatory agency
limiting investments that El Paso has delivered and certified to Decommissioning Trustee as provided above, and any other applicable governing regulations; 
 (iii) it shall not lend all or any part of either Fund to itself or to any of its officers or directors or permit any act of “self-dealing” prohibited by Applicable Tax Law; 
 (iv) it shall not invest or reinvest amounts in either Fund with, or in any instrument or security issued by, itself or any of its
officers or directors, except that it may invest or reinvest amounts in the Funds in time deposits, demand deposits, or money market accounts of Decommissioning Trustee, and except that it may invest amounts in the Funds in mutual funds that contain
securities issued by Decommissioning Trustee provided such securities constitute no more than five percent (5%) of the fair market value of the assets of such mutual funds at the time of the investment; 
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 (v) it shall not invest or reinvest amounts in either Fund with, or in any instrument or
security issued by, El Paso, its subsidiaries or affiliates or their successors or assigns, except that it may invest or reinvest amounts in the Funds in mutual funds that contain securities issued by El Paso provided such securities constitute no
more than five percent (5%) of the fair market value of the assets of such mutual funds at the time of the investment; and 
 (vi) Notwithstanding anything to the contrary in this Agreement, if directed by El Paso, Decommissioning Trustee shall hold and maintain one or both of the Funds in a segregated account and invest and administer such Fund(s) separately from
the assets of Decommissioning Trustee or other trusts. 
 (B) Fiduciary Investment Manager. Any amount of each Fund directed to be
invested by a Fiduciary Investment Manager shall be invested and reinvested by Decommissioning Trustee as directed by such Fiduciary Investment Manager from time to time, but only in Qualified Investments; provided, however, if El Paso has delivered
to a Fiduciary Investment Manager a copy of an order of a state or federal regulatory agency that El Paso certifies is binding on El Paso and limits the investments in which all or a part of a Fund may be invested, the investment of such Fund shall
not violate such order. A Fiduciary Investment Manager appointed by El Paso may direct investments and reinvestments of the Funds by written direction which shall certify that the directed investment qualifies as an investment in Qualified
Investments and is within the limitation set forth in the preceding sentence. Decommissioning Trustee may rely upon such written direction and certification without further inquiry or verification unless Decommissioning Trustee has actual knowledge
that the directed investment does not satisfy the conditions and limitations of this Section 7. 
 In performing its duties and
exercising its powers as a Fiduciary Investment Manager hereunder, a Fiduciary Investment Manager shall comply with the following: 
 (i) it shall direct the addition of all income, including interest, earned on the corpus of each Fund subject to its direction to such corpus as a part thereof, and shall owe the same duties with regard to such income as it owes with regard
to such corpus; 
 (ii) it shall have a continuing duty to review the assets of each Fund subject to its direction to
determine the appropriateness of the investments consistent with all terms, provisions and limitations of this Agreement, including without limitation to ensure compliance with the provisions of the investment guidelines of this Section 7, any
order of a state or regulatory agency limiting investments that El Paso has delivered to such Fiduciary Investment Manager as hereinabove provided and any other applicable governing regulations; 
 (iii) it shall not direct the lending of all or any part of either Fund to itself or to any of its officers or directors or permit any act
of “self-dealing” prohibited by Applicable Tax Law; 
 (iv) it shall not direct the investment or reinvestment of
amounts in either Fund with, or in any instrument or security issued by, itself or any of its officers or directors; 
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Decommissioning Trust 
  

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 (v) it shall not invest or reinvest amounts in either Fund with, or in any instrument or
security issued by, Decommissioning Trustee or any of Decommissioning Trustee’s officers or directors, except that it may invest or reinvest amounts in the Funds in time deposits, demand deposits, or money market accounts of Decommissioning
Trustee, and except that it may invest amounts in the Funds in mutual funds that contain securities issued by Decommissioning Trustee provided such securities constitute no more than five percent (5%) of the fair market value of the assets of
such mutual funds at the time of the investment; 
 (vi) it shall not direct the investment or reinvestment of amounts in
either Fund with, or in any instrument or security issued by El Paso, its subsidiaries or affiliates or associates or their successors or assigns of El Paso, except that it may direct the investment or reinvestment of amounts in the Funds in mutual
funds that contain securities issued by El Paso provided such securities constitute no more than five percent (5%) of the fair market value of the assets of such mutual funds at the time of the investment; and 
 (vii) it shall provide Decommissioning Trustee directives concerning voting, consensual, and other rights and powers accruing in
connection with assets of the Funds subject to such Fiduciary Investment Manager’s direction. 
 (C) General. It is the intent of
El Paso that neither Decommissioning Trustee nor a Fiduciary Investment Manager shall have any powers that are greater than those provided to trustees under the Texas Trust Code or that are inconsistent with the limitations that are set out in this
Section 7. 
 (D) Investments Standards. To the extent not inconsistent with the other provisions of this Section 7 and to
the extent that Decommissioning Trustee does not currently require the assets of the Funds for the purpose of satisfying the liability of El Paso for Decommissioning and to pay Expenses: 
 (i) Decommissioning Trustee shall, in connection with investing and reinvesting assets of the Funds, exercise the same standard of care
that a reasonable person would exercise in the same circumstances; provided, however, that this subsection 7.(D)(i) shall apply only as to those assets of the Funds that are not subject to the direction of a Fiduciary Investment Manager; and

 (ii) a Fiduciary Investment Manager appointed to direct the investment and reinvestment of all or any portion of the assets
of the Funds shall, with respect to such assets subject to its direction, exercise the same degree of care that a reasonable person would exercise in the same circumstances. 
 For purposes of this subsection entitled “Investment Standards”, a “reasonable person” means a prudent investor as described in Restatement of the Law, (Third), Trusts,
Section 227, including the general comments and reporter’s notes with respect thereto. 
 (E) Qualified Investments.
Qualified Investments include those investments meeting the investment standards, limitations, conditions, and requirements prescribed in the foregoing 
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 subsections of this Section 7 and the following criteria which may be amended by El Paso upon written notice to
Decommissioning Trustee and each Fiduciary Investment Manager. 
 (i) Investment Portfolio Goals. The Funds shall be invested
consistent with the goals set forth in this subsection 7.(E)(i). 
  

	 	(a)	Assets of the Decommissioning Trust Fund shall be invested only as permitted for a “Nuclear Decommissioning Reserve Fund” under Applicable Tax Law.

  

	 	(b)	Assets of the Funds shall be invested with a goal of earning a reasonable return commensurate with the need to preserve the value of the assets of the Funds.

  

	 	(c)	In keeping with prudent investment practices, the portfolio of securities held in the Funds shall be diversified to the extent reasonably feasible given the size of the Funds.

  

	 	(d)	Asset allocation and the acceptable risk level of the assets of the Funds should take into account market conditions, the time horizon remaining before the commencement and
completion of Decommissioning, and the funding status of the Funds. While maintaining an acceptable risk level consistent with the goal referenced in subsection 7.(E)(i)(b) of this Section 7, the investment emphasis when the remaining life of
the liability, as defined in subsection 7.(E)(ii)(d)(4) of this subsection, exceeds five years should be to maximize net long-term earnings. The investment emphasis in the remaining investment period of the Funds should be on current income and the
preservation of each Fund’s assets. 

  

	 	(e)	In selecting investments, the impact of the investment on the volatility and expected return of the assets of the Funds, net of fees, commissions, expenses, and taxes should be
considered. 

 (ii) General Requirements. The restrictions contained in this subsection 7.(E)(ii)apply to the
Decommissioning Trust Fund and Second Fund in the aggregate. For purposes of this subsection 7.(E)(ii), a commingled funds is defined as a professionally managed investment fund of fixed-income or equity securities established by an investment
company regulated by the Securities Exchange Commission or a bank regulated by the Office of the Comptroller of the Currency. 
  

	 	(a)	Diversification. For the purpose of this subsection 7.(E)(ii)(a), a commingled or mutual fund is not considered a security; rather, the diversification standard applies to all
securities, including the individual securities held in commingled or mutual funds. Once the portfolio of securities (including those held in commingled or mutual funds) held in the Funds contains securities with an 

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	 	    	aggregate value in excess of $20 million, it shall be diversified such that: 

  

	 	(1)	no more than five percent (5%) of the securities held may be issued by one entity, with the exception of the federal government, its agencies and instrumentalities; and

  

	 	(2)	the portfolio shall contain at least 20 different issues of securities, and municipal securities and real estate investments shall be diversified as to geographic region.

  

	 	(b)	Derivatives. The use of derivative securities in the Funds is limited to those whose purpose is to enhance returns of the Funds without a corresponding increase in risk or to reduce
risk of the assets of the Funds. Derivatives may not be used to increase the value of the assets of the Funds by any amount greater than the value of the underlying securities. Prohibited derivative securities include, but are not limited to,
mortgage strips; inverse floating rate securities; leveraged investments or internally leveraged securities; residual and support tranches of collateralized mortgage obligations; tiered index bonds or other structured notes whose return
characteristics are tied to non-market events; uncovered call/put options; large counter-party risk through over-the-counter options, forwards and swaps; and instruments with similar high-risk characteristics. 

  

	 	(c)	Leverage. The use of leverage (borrowing) to purchase securities or the purchase of securities on margin for a Fund is prohibited. 

  

	 	(d)	Investment limits in equity securities. The following investment limits shall apply to the percentage of the aggregate market value of all non-fixed income investments relative to
the total portfolio market value: 

  

	 	(1)	except as noted in subsection 7.(E)(2)(b), when the weighted average remaining life of the liability exceeds 5 years, the equity cap shall be sixty percent (60%);

  

	 	(2)	when the weighted average remaining life of the liability ranges between 5 years and 2.5 years, the equity cap shall be thirty percent (30%). Additionally, during all years in which
expenditures for Decommissioning occur, the equity cap shall also be thirty percent (30%); 

  

	 	(3)	when the weighted average remaining life of the liability is less than 2.5 years, the equity cap shall be zero percent (0%); 

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	 	(4)	for purposes of this subsection 7.(E)(ii)(4), the weighted average remaining life in any given year is defined as the weighted average of years between the given year and the years
of each Decommissioning outlay, where the weights are based on each year’s expected Decommissioning expenditures divided by the amount of the remaining liability in that year; and 

  

	 	(5)	should the market value of non-fixed income investments, measured monthly, exceed the appropriate cap due to market fluctuations, the market value of the non-fixed income
investments shall be reduced below the cap as soon as practicable. Such reductions may be accomplished by investing all future contributions to a Fund in debt securities as is necessary to reduce the market value of the non-fixed income investments
below the cap, or if prudent, by the sale of equity securities. 

 (iii) Specific Investment Restrictions. The
restrictions contained in this subsection 7.(E)(iii). apply to the Decommissioning Trust Fund and the Second Fund in the aggregate. 
  

	 	(a)	Fixed-income investments. Assets of the Funds shall not be invested in corporate or municipal debt securities that have a bond rating below investment grade “BBB-” by
Standard & Poor’s Corporation or “Baa3” by Moody’s Investor’s Service) at the time that the securities are purchased. If the debt rating of a company or municipality issuing the particular debt security falls below
investment grade at some time after the security was purchased, the appropriateness of continuing to hold such security shall be reexamined. The overall portfolio of debt instruments shall have a quality level, measured quarterly not below an
“AA” grade by Standard & Poor’s Corporation or “Aa2” by Moody’s Investor’s Service. In calculating the quality of the overall portfolio, debt securities issued by the federal government shall be considered
as having an “AAA” rating. 

  

	 	(b)	Equity Investments. 

  

	 	(1)	At least seventy percent (70%) of the aggregate market value of the equity assets of the Funds, including the individual securities in commingled funds, shall have a quality
ranking from a major rating service such as the earnings and dividend ranking for common stock by Standard and Poor’s or the quality rating of Ford Investor Services. Further, the overall portfolio of ranked equities shall have a weighted
average quality rating equivalent to the composite rating of the Standard and Poor’s 500 Index 

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Decommissioning Trust 
  

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 assuming equal weighting of each ranked security in the Index. If the quality rating, measured
quarterly, falls below the minimum quality standard, the quality level of the equity assets of the Funds shall be increased to the required level as soon as is practicable and prudent: and 
  

	 	(2)	assets of the Funds shall not be invested in equity securities if the issuer has a capitalization of less than $100 million. 

  

	 	(c)	Commingled funds. The following guidelines shall apply to the investments made through commingled funds. Examples of commingled funds appropriate for investment by nuclear
decommissioning trust funds include United States equity-indexed funds, actively managed United States equity funds, balanced funds, bond funds, real estate investment trusts, and international funds. 

  

	 	(1)	The commingled funds should be selected consistent with the investment goals specified in subsection 7.(E)(i) and the general requirements in subsection 7.(E)(ii);

  

	 	(2)	in evaluating the appropriateness of a particular commingled fund, the following duties shall be of a continuing nature: 

  

	 	(I)	a duty to determine whether the fund manager’s fee schedule for managing the fund is reasonable, when compared to fee schedules of other such managers;

  

	 	(II)	a duty to investigate and determine whether the past performance of the investment manager in managing the commingled fund has been reasonable relative to prudent investment and
utility decommissioning trust practices and standards; and 

  

	 	(III)	a duty to investigate the reasonableness of the net after-tax return and risk of the commingled fund relative to similar funds, and the appropriateness of the commingled fund within
all of the assets of the Funds; 

  

	 	(3)	the payment of load fees shall be avoided; and 

  

	 	(4)	commingled funds focused on specific market sectors or concentrated in a few holdings shall be used only as necessary to balance the Funds’ overall investment portfolio mix.

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 Notwithstanding any other provision of this Section 7, nothing in this Section 7 shall be
construed to permit any investment otherwise prohibited by any other provision of this Agreement, Applicable Law, or Applicable Tax Law. This Agreement and the investments of the Funds shall be interpreted and construed in a manner consistent with
the parties’ intention that this Agreement and the Funds at all times comply with all requirements of the Nuclear Regulatory Commission and other applicable governmental regulations and rules, including without limitation the rules of the PUCT,
the NMPRC, and the Federal Energy Regulatory Commission, including but not limited to the “Final Rule” regarding the formation, organization and purposes of nuclear plant decommissioning trust funds and for fund investments issued
June 16, 1995, as may be amended from time to time. 
 SECTION 8. Expenses; Indemnification. El Paso shall pay all Expenses and,
subject to Section 9.(D), may direct Decommissioning Trustee, in writing, to pay specified Expenses of a Fund from such Fund. El Paso shall certify in writing to Decommissioning Trustee whether and the extent to which an item is an Expense of a
specified Fund and whether Applicable Tax Law permits its payment out of the assets of the Fund; and Decommissioning Trustee may, unless it has actual knowledge to the contrary, rely upon such certification without further inquiry or verification.

 Except to the extent Decommissioning Trustee has actual knowledge to the contrary, Decommissioning Trustee shall be fully protected in
relying upon the existence of any fact or state of facts represented to it in writing by El Paso or a duly appointed Fiduciary Investment Manager. 
 Except with respect to liability or fiduciary responsibility for any error or loss that may result by reason of the exercise or non-exercise of the duties, obligations, and/or fiduciary responsibility which are allocated to Decommissioning
Trustee herein which is determined to be the result of Decommissioning Trustee’s own negligence or willful misconduct, El Paso shall indemnify Decommissioning Trustee, directly from El Paso’s own assets (including the proceeds of any
insurance policy the premiums of which are paid from El Paso’s own assets), from and against any and all claims, demands, losses, damages, expenses (including, by way of illustration and not limitation, reasonable attorneys’ fees and other
legal and litigation costs), judgments, and liabilities arising from, out of, or in connection with the administration or investment of the Funds. Decommissioning Trustee shall not be liable for any action taken by Decommissioning Trustee or any
failure to act by Decommissioning Trustee if the action taken or the failure to act was directed by El Paso or a Fiduciary Investment Manager, if Decommissioning Trustee reasonably relied on such direction. This Section 8 shall survive the
termination of this Agreement. 
 SECTION 9. Payments and Distributions from the Funds. 
 (A) Subject to the other provisions of this Section 9, Decommissioning Trustee shall make payments out of the Funds upon presentation by El Paso of
(A) a certificate signed by El Paso (i) instructing Decommissioning Trustee to disburse amounts in the Funds in a manner designated in such certificate for purposes of paying for Decommissioning and (ii) certifying that disbursements,
if any, directed to be made from assets of the Decommissioning Trust Fund are for payment of only those costs, liabilities, and expenses of Decommissioning that qualify as “nuclear decommissioning costs” under Applicable Tax law, and
(B) documentation reasonably 
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acceptable to Decommissioning Trustee that such payment for Decommissioning is due and payable. 
 (B) Upon termination of the Decommissioning Trust Fund under Applicable Tax Law, El Paso may direct Decommissioning Trustee to transfer all property
remaining in the Decommissioning Trust Fund to El Paso for disbursement or distribution as may then be provided by law. In addition, upon its receipt of a certificate signed by El Paso certifying that Decommissioning has been completed under
Applicable Law and all costs of Decommissioning have been paid in full, all property then held in both Funds shall be paid by Decommissioning Trustee to El Paso for disbursement or distribution as may then be provided by law and the Funds shall
terminate. 
 (C) At any time and from time to time El Paso may direct Decommissioning Trustee in writing to, and upon receipt of such
direction Decommissioning Trustee shall, subject to the applicable provisions of Section 9.(D), distribute to El Paso for disbursement or distribution as then may be provided or permitted by law or transfer from the Decommissioning Trust Fund
to the Second Fund any: 
 (i) Deemed Distribution Amount that El Paso certifies in writing is deemed distributed under
Applicable Tax Law; 
 (ii) Excess Contribution that El Paso certifies in writing (a) has occurred under Applicable Tax
Law, and (b) is being transferred within the time permitted for withdrawal or transfer of such Excess Contribution by Applicable Tax Law; and 
 (iii) amount that El Paso certifies in writing may be transferred to the Second Fund in accordance with Applicable Law and Applicable Tax Law by reason of the disposition of all or a part of El Paso’s interest in
or license to possess Unit 3. 
 (D) Notwithstanding any other provision in this Agreement, except for (i) payments made under
Section 8 for Expenses, (ii) to the extent allowed by Applicable Law, Deemed Distribution Amounts and Excess Contributions transferred to the Second Fund or distributed to El Paso under Section 9.(C), and (iii) withdrawals made
pursuant to 10 C.F.R. 50.82(a)(8) no disbursement or payment from the Funds shall be made unless (a) thirty (30) business days prior written notice of the intention to make such disbursement or payment has been given to the Director,
Office of Nuclear Reactor Regulation, and the Director, Office of Nuclear Material Safety and Safeguards, and (b) Decommissioning Trustee has not received written notice of an objection during such thirty (30) day period from the Director,
Office of Nuclear Reactor Regulation, or the Director, Office of Nuclear Material Safety and Safeguards,. The notices required by this Section 9.(D) may be made by or on behalf of Decommissioning Trustee. 
 (E) Unless Decommissioning Trustee has actual knowledge to the contrary, Decommissioning Trustee shall be fully protected in relying upon any certificate
described in Section 9 without further inquiry or verification. 
 SECTION 10. Further Assurances. El Paso agrees that it will,
at its sole expense, do all such further acts and things and execute and deliver all such additional conveyances, assignments, agreements, and instruments, as may be necessary or desirable or as 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 13 

 Decommissioning Trustee may at any time reasonably request in connection with the administration and enforcement of this
Agreement, or relative to the Funds or any part thereof, or in order to assure and confirm unto Decommissioning Trustee its rights, powers, and remedies hereunder. 
 El Paso may provide general investment policies in writing to Decommissioning Trustee or a Fiduciary Investment Manager, but may not engage in the day-to-day management of the Funds or mandate, or itself make,
individual investment decisions except to the extent that El Paso retains the right under this Agreement to approve investments in time deposits, demand deposits, or money market accounts of Decommissioning Trustee, in mutual funds that contain
securities issued by Decommissioning Trustee (subject to the limitations elsewhere herein set forth), or in mutual funds that contain securities issued by El Paso, its subsidiaries or affiliates or their successors or assigns (subject to the
limitations elsewhere herein set forth). 
 El Paso will regularly supply to Decommissioning Trustee and to each Fiduciary Investment
Manager, and regularly update, essential information about Unit 3, including its description, useful life, the Decommissioning plan that El Paso intends to follow, El Paso’s anticipated liquidity needs once Decommissioning begins, and any other
information that Decommissioning Trustee and a Fiduciary Investment Manager need to construct and maintain, over time, a sound investment plan for the Funds. El Paso will monitor the performance of the Decommissioning Trustee and each Fiduciary
Investment Manager and, if necessary, replace them if they are not properly performing assigned responsibilities 
 SECTION 11.
Irrevocability and Modification. This Agreement is irrevocable and may not be amended or modified except by a writing signed by the parties hereto and approved, to the extent required by Applicable Law, by applicable regulatory authority(s). The
parties agree that they will execute any amendments requested by El Paso that are necessary to secure and maintain the qualification of the Decommissioning Trust Fund as a “Nuclear Decommissioning Reserve Fund” under Applicable Tax Law and
the deduction of contributions to such Fund as provided by such law, or to comply with Applicable Law. 
 Not in limitation of the foregoing,
if and to the extent that, now or in the future, federal tax law may extend certain tax benefits to a trust fund or funds that are created and maintained by El Paso for creation of a reserve or funds for costs associated with Decommissioning
(hereinafter in this Section 11 referred to as such “other trusts”) which such other trusts would qualify as a “Nuclear Decommissioning Reserve Fund” under Applicable Tax Law, including without limitation, Internal
Revenue Code section 468A, only if established and maintained pursuant to a single trust agreement for a particular nuclear power plant, the parties hereto, upon the creation of such other trusts may amend this Agreement by attaching hereto as an
allonge the governing instruments by which such other trusts may be created. In such event, such other trusts shall be administered under the terms of this Agreement to the extent not inconsistent with the governing instruments by which such other
trusts may be created and such other trusts shall thereafter be administered as separate funds under the terms of this Agreement. 
 SECTION 12. Obligation for Decommissioning. Nothing in this Agreement and no act or omission relating to the Funds shall be read, construed, understood, or interpreted to place any obligation whatsoever on Decommissioning Trustee or
a Fiduciary Investment Manager 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 14 

 relating to Decommissioning or any Decommissioning Cost, all of which shall at all times remain the sole obligation of El
Paso. 
 SECTION 13. Governing Law. This Agreement shall be deemed to be a contract made in Texas for all purposes and shall be
construed in accordance with and governed by the laws of such State, including the provisions of the Texas Trust Code, with respect to all matters of construction, validity, and performance. 
 SECTION 14. Resignation and Replacement of Decommissioning Trustee or Fiduciary Investment Manager. 
 (A) Decommissioning Trustee may resign at any time without cause by giving at least 30 days prior written notice to El Paso, and El Paso may remove
Decommissioning Trustee at any time with or without cause by giving written notice to Decommissioning Trustee, such resignation or removal to be effective on the acceptance of appointment by a successor Decommissioning Trustee under this
Section 14. In case of the resignation or removal of Decommissioning Trustee, El Paso may appoint a successor Decommissioning Trustee by an instrument signed by El Paso. If a successor Decommissioning Trustee shall not have been appointed by El
Paso within 30 days after the giving of such written notice of resignation or removal, Decommissioning Trustee or El Paso may apply to any court of competent jurisdiction to appoint a successor Decommissioning Trustee to act until such time, if any,
as a successor Decommissioning Trustee shall have been appointed by El Paso and shall have accepted its appointment under this Section 14. Any successor Decommissioning Trustee so appointed by such court shall immediately and without further
act be superseded by any successor Decommissioning Trustee appointed by El Paso as provided above. 
 (i) In appointing a
Decommissioning Trustee, El Paso shall have the following duties which will be of a continuing nature: 
  

	 	(a)	a duty to determine whether Decommissioning Trustee’s fee schedule for administering the trust is reasonable when compared to other institutional trustees rendering similar
services; 

  

	 	(b)	a duty to investigate and determine whether the past administration of trusts by Decommissioning Trustee has been reasonable; 

  

	 	(c)	a duty to investigate and determine whether the financial stability and strength of Decommissioning Trustee is adequate; 

  

	 	(d)	a duty to investigate and determine whether Decommissioning Trustee is in compliance with the requirements of this Agreement; and 

  

	 	(e)	a duty to investigate any other factors which may bear on whether Decommissioning Trustee is suitable. 

 (ii) Any successor Decommissioning Trustee, however appointed, shall execute and deliver to the predecessor Decommissioning Trustee an
instrument accepting such appointment, and thereupon such successor Decommissioning Trustee, without 
 Palo Verde Unit 3 Nuclear Decommissioning Trust

  

 15 

 further act, shall become vested with all the estates, properties, rights, powers, duties, and trusts of
the predecessor Decommissioning Trustee with like effect as if originally named as Decommissioning Trustee herein; and such predecessor Decommissioning Trustee shall duly assign, transfer, deliver, and pay over to such successor Decommissioning
Trustee all moneys or other property then held by such predecessor Decommissioning Trustee upon the trusts expressed in this Agreement, shall do all acts necessary to vest title of record in such successor Decommissioning Trustee, and shall transfer
and deliver to such successor Decommissioning Trustee copies of all records pertaining to the Funds and this Agreement. In addition, upon the written request of such successor Decommissioning Trustee, such predecessor Decommissioning Trustee shall
execute and deliver to such successor Decommissioning Trustee an instrument transferring to such successor Decommissioning Trustee, upon the trusts expressed in this Agreement, all the estates, properties, rights, power, duties, and trusts of such
predecessor Decommissioning Trustee. 
 (iii) Any successor Decommissioning Trustee, however appointed, shall be a bank or
trust company with trust powers incorporated and doing business in the United States of America and having net worth of at least $150,000,000, if there be such an institution willing, able and legally qualified to perform the duties of
Decommissioning Trustee hereunder upon reasonable or customary terms; provided however, that in calculating the $150,000,000 net worth requirement, the net worth of the Decommissioning Trustee’s parent corporation and/or affiliates may be taken
into account only if such entities guarantee Decommissioning Trustee’s responsibilities to the Funds. 
 (iv) Any
corporation into which Decommissioning Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which Decommissioning Trustee shall be a party, or any
corporation to which substantially all the corporate trust business of Decommissioning Trustee may be transferred, shall, subject to the terms of subsection 14(A)(iii), be Decommissioning Trustee under this Agreement without further act. 

(v) No successor Decommissioning Trustee (other than a successor by reason of an event described in Section l4(A)(iv)) shall be liable
for any act, omission or breach of trust by a predecessor Decommissioning Trustee, whether or not such successor Decommissioning Trustee knows or should have known of such act, omission, or breach of trust, and shall have no duty to compel redress
of any breach of trust by a predecessor Decommissioning Trustee. 
 (B) If a Fiduciary Investment Manager is appointed by El Paso hereunder,
such appointment shall be made in writing; however, El Paso may not serve as a Fiduciary Investment Manager. A Fiduciary Investment Manager may resign at any time without cause by giving at least thirty (30) days prior written notice to El
Paso, and El Paso may remove a Fiduciary Investment Manager at any time with or without cause by giving written notice to such Fiduciary Investment Manager. The resignation or removal of a Fiduciary Investment Manager is not conditioned on the
acceptance of appointment by a successor Fiduciary Investment Manager under this Section 14; provided, however, that if a Fiduciary Investment Manager other than the Decommissioning Trustee resigns or is removed and is not replaced by El Paso,

 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 16 

 Decommissioning Trustee shall, at that time, assume all investment responsibilities of such Fiduciary Investment Manager.

 (i) In appointing a Fiduciary Investment Manager, El Paso shall have the following duties which will be of a continuing
nature: 
  

	 	(a)	a duty to determine whether such Fiduciary Investment Manager’s fee schedule for investment management services is reasonable when compared to other such managers;

  

	 	(b)	a duty to investigate and determine whether the past performance of such Fiduciary Investment Manager in managing investments has been reasonable; 

  

	 	(c)	a duty to investigate and determine whether the financial stability and strength of such Fiduciary Investment Manager is adequate for purposes of liability;

  

	 	(d)	a duty to investigate and determine whether such Fiduciary Investment Manager is in compliance with the requirements of its investment management agreement and this Agreement as it
relates to investments and to such Fiduciary Investment Manager; and 

  

	 	(e)	a duty to investigate any other factors which may bear on whether such Fiduciary Investment Manager is suitable. 

 SECTION 15. Successors and Assigns; Additional Parties. This Agreement shall be binding upon and inure to the benefit of each party and its
successors and permitted assigns. 
 SECTION 16. Termination of Funds. If not otherwise terminated sooner in accordance with the terms
of this Agreement, each Fund shall end on the earlier of (A) the date specified in a written agreement between El Paso and Decommissioning Trustee and (B) the date that is twenty-one (21) years less one day after the death of the last
survivor of the descendants of Joseph P. Kennedy, the father of President John F. Kennedy, that were living on April 1, 1986. Upon such termination, all of the assets of the Funds shall be distributed to El Paso. Notwithstanding the foregoing
provisions of this Section 16, if one or both of the Funds shall be or become valid under Applicable Law for a period subsequent to the date set out in Section 16(B) (or, without limiting the generality of the foregoing, if legislation
shall become effective providing for the validity or permitting the creation of such a fund for a period in gross exceeding the period for which such Fund is hereinabove stated to extend and be valid), then such Fund shall not terminate as aforesaid
but shall extend to and continue in effect until (but only if such nontermination and extension shall then be valid under Applicable Law) such time as such Fund shall, under Applicable Law, cease to be valid. 
 SECTION 17. Accountings; Tax Returns and Reports; Audits. Decommissioning Trustee shall keep accurate and detailed records and accounts of all
investments, receipts, disbursements and other transactions of the Funds. All accounts, books, and records relating to the Funds shall be open to inspection and audit at all reasonable times by El Paso, its designee or an applicable governmental
agency having jurisdiction over the Funds. 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 17 

 Within thirty (30) business days after the end of each calendar month and within thirty
(30) business days after the close of each annual accounting period of each Fund, and as soon as reasonably practicable after the resignation or removal of a Decommissioning Trustee has become effective, Decommissioning Trustee shall furnish to
El Paso a written account setting forth all (A) investments, receipts, disbursements, and other transactions effected by it during such month or year, as applicable, or during the part of the month or year to the date any such resignation or
removal is effective, as applicable, and containing a description of all assets, including but not limited to all securities, purchased and sold (the description of the securities purchased must state the price at which each individual security was
purchased), the cost or net proceeds of sale, and the securities and investments held at the end of such period, (B) the gains or losses realized by each Fund upon sales or other disposition of its assets, (C) the increase or decrease in
the value of each Fund, (D) the fair market values of each Fund, and (E) the liabilities (excluding liability for Decommissioning) of the Funds incurred or unpaid at the end of such period. Within three (3) business days after the end
of each calendar month and within three (3) business days after the close of each annual accounting period of each Fund, and as soon as reasonably practicable after the resignation or removal of a Decommissioning Trustee has become effective,
Decommissioning Trustee shall also provide El Paso secured web-based access to the information described in clauses (A) – (E) of this Section 17. The accounting shall also furnish El Paso such other information as Decommissioning
Trustee may possess and as may be necessary for El Paso, Decommissioning Trustee and/or a Fiduciary Investment Manager to comply with any reporting requirements applicable to any of such parties and/or the Funds. If the fair market value of an asset
in a Fund is not available, when necessary for accounting or reporting purposes the fair market value of the asset shall be determined in good faith by Decommissioning Trustee, assuming an orderly liquidation at the time of such determination. In
addition, upon the written request of El Paso, which may be at any time and from time to time, Decommissioning Trustee shall provide El Paso the fair market value of the assets in a Fund as of a date other than the last day of a month or an annual
accounting period of a Fund. If there is a disagreement between the Decommissioning Trustee, a Fiduciary Investment Manager and/or any other party as to any act or transaction reported in an accounting, Decommissioning Trustee or the Fiduciary
Investment Manager, as applicable, shall have the right to have such disagreement settled by a court of competent jurisdiction. Decommissioning Trustee shall make such other reports as may be agreed upon in writing with El Paso. 
 Decommissioning Trustee shall retain its records and accountings related to the Funds as long as necessary for the proper administration thereof and at
least for any period required by any applicable law, but with respect to each record and account for not less than six (6) years following the creation thereof. 
 El Paso shall have the right to cause the books, records, and accounts of Decommissioning Trustee that relate to the Funds to be examined and audited by independent auditors designated by El Paso at such times as El
Paso may determine, and Decommissioning Trustee shall make such books, records, and accounts available for such purposes at all reasonable times. 
 El Paso shall, with the cooperation of Decommissioning Trustee, prepare or, upon agreement of Decommissioning Trustee, authorize Decommissioning Trustee to prepare, such tax returns and other reports for or with respect to each Fund as may
be required from time to time by Applicable Law. 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 18 

 SECTION 18. Rights of Decommissioning Trustee. 
 (A) Decommissioning Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Agreement or required by the
Texas Trust Code, and no implied duties or obligations shall be read into this Agreement against Decommissioning Trustee except such as are required by the Texas Trust Code. 
 (B) Decommissioning Trustee shall not have any obligation to invest, manage, control, make any payment from, or otherwise deal with, the Funds except as
expressly provided herein or in written guidelines or instructions received pursuant to the terms hereof. 
 (C) Decommissioning Trustee may
rely and shall be protected in acting upon any certificate, statement, notice, or other writing believed by it to be genuine and to have been signed or presented by the proper party or parties, and unless it has actual knowledge to the contrary,
Decommissioning Trustee shall not be bound to make any investigation into the facts or matters stated in any certificate, statement, notice, or other writing received by it. 
 (D) In the administration of the Funds hereunder, Decommissioning Trustee may execute any of the trusts or powers hereof and perform its powers and
duties hereunder directly or through agents or attorneys and may consult with counsel, accountants and other skilled persons to be selected and employed by it, and Decommissioning Trustee shall not be liable for anything done or omitted by it in
accordance with the advice or opinion of any such counsel, accountants or other skilled persons to the extent permitted by law and to the extent no such action or omission constitutes negligence or willful misconduct by Decommissioning Trustee.

 (E) With respect to any obligation of El Paso hereunder to indemnify Decommissioning Trustee, Decommissioning Trustee shall look solely to
El Paso and shall not have any lien upon the assets of the Funds to secure such obligation. 
 SECTION 19. Notices. 
 (A) Except as otherwise provided in this Agreement, all notices under this Agreement shall be in writing and be effective upon receipt if delivered by
(1) hand, (2) certified or registered United States Mail postage prepaid, or (3) facsimile, provided that service by facsimile after 5:00 p.m. local time of the recipient shall be deemed delivered on the following business day, as
follows: 
 If notice is to the Trustee: 
 Wells Fargo Bank 
 Attention Luke Provenzano, Vice-President 
 MAC T5002-061 
 1000 Louisiana, Suite 630 
 Houston, Texas 77002-5025 
 Facsimile (713)739-1071 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 19 

 If notice is to the Grantor: 
 El Paso Electric Company 
 Attention Controller 
 123 W. Mills Avenue 
 El Paso, Texas 79901 
 Facsimile (915) 521-4772 
 and, if the notice is sent for the purposes described in
Sections 5, 14(A), 14(B), and 19(B), with a copy to: 
 El Paso Electric Company 
 Office of the General Counsel 
 123 W. Mills Avenue 
 El Paso, Texas 79901 
 Facsimile (915) 521-4747 
 (B) Each person may change its address for purposes of notice under this Agreement by notice complying with Section 20(A). 
 Any notice required under this Agreement may be waived in writing by the party entitled thereto. 
 SECTION 20. Counterpart Execution. This Agreement may be executed in any number of counterparts and by each of the parties hereto on separate counterparts; all such counterparts shall together constitute but one and the same
instrument. 
 SECTION 21. Effective Date. This Agreement shall become effective on the “Effective Date” as defined herein.

 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 20 

 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as of
the day and year above written. 
  

			
	EL PASO:
	
	EL PASO ELECTRIC COMPANY
		
	By:	 	 /s/  Gary R. Hedrick

	Title:	 	 CEO & President

		
	By:	 	 /s/  David G. Carpenter

	Title:	 	 VP - Corporate Planning & Controller

	
	DECOMMISSIONING TRUSTEE:
	
	WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
		
	By:	 	 /s/  Luke Provenzano

	Title:	 	 Vice President

 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 21 

			
	 STATE OF TEXAS
	  	§
		  	§
	 COUNTY OF EL PASO
	  	§

 The foregoing instrument was acknowledged before me this 6 day of March, 2006
by Gary R. Hedrick, CEO & President of EL PASO ELECTRIC COMPANY, a Texas corporation, on behalf of said corporation. 
  

			
		
		 	 /s/  Carolina Pena

		 	 Notary Public

		
		 	 My commission expires: 3/24/2007

  

			
	 STATE OF TEXAS
	  	§
		  	§
	 COUNTY OF EL PASO
	  	§

 The foregoing instrument was acknowledged before me this 6 day of March, 2006
by David G. Carpenter, VP of EL PASO ELECTRIC COMPANY, a Texas corporation, on behalf of said corporation. 
  

			
		
		 	 /s/  Carolina Pena

		 	 Notary Public

		
		 	 My commission expires: 3/24/2007

  

			
	 STATE OF TEXAS
	  	§
		  	§
	 COUNTY OF HARRIS
	  	§

 The foregoing instrument was acknowledged before me this 8 day of March, 2006
by Luke Provenzano, V.P. of Wells Fargo Bank, National Association, a national banking association, on behalf of said association. 
  

			
		
		 	 /s/  Pamela J. Saucer

		 	 Notary Public

		
		 	 My commission expires: Oct. 18, 2006

 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 22 

 Appendix A 
 to 
 Decommissioning Trust Agreement 
 for Palo Verde Nuclear Generating Station 
 Unit 3 
 DEFINITION OF TERMS 
 ANPP Participation
Agreement shall mean the Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended, among Arizona Public Service Company, Salt River Project Agricultural Improvement and Power District, Southern
California Edison Company, Public Service Company of New Mexico, Southern California Public Power Authority, Department of Water and Power of The City of Los Angeles, and El Paso. 
 Applicable Law shall mean all applicable laws, statutes, treaties, rules, codes, ordinances, regulations, permits, certificates, orders,
interpretations, licenses, and permits of any federal, state, county, municipal, foreign, international, regional, or other governmental authority, agency, board, body, instrumentality, or court, and judgments, decrees, injunctions, writs, orders or
like action of any court, arbitrator, or other judicial or quasi-judicial tribunal (including those pertaining to health, safety, the environment, or otherwise). 
 Applicable Tax Law shall mean Code Section 468A, any comparable subsequent provisions of the Code, the United States Treasury regulations promulgated under such section or provisions, and other provisions
of the Code relating to the federal taxation of the Funds. 
 Code shall mean the Internal Revenue Code of 1986, as amended, or any
successor law. 
 Decommissioning shall mean the decommissioning and retirement from service of Unit 3, and the related possession,
maintenance, and disposal of material, radioactive or otherwise used in or produced by or relating to Unit l, including, without limitation: (i) placement and maintenance in a state of protective storage; (ii) in-place entombment and
maintenance; (iii) dismantlement; (iv) removal, decontamination and disposition of equipment and fixtures; (v) razing; (vi) removal and disposition of debris related to Unit 3 from the PVNGS Site; (vii) restoration of the
PVNGS Site related to Unit 3 for unrestricted use; (viii) any other actions relating to decommissioning and retirement from service of Unit 3 required by the NRC; and (ix) all activities undertaken incident to the implementation thereof.

 Decommissioning Cost shall mean El Paso’s pro-rata share, under the ANPP Participation Agreement, of the greater of
(i) the latest estimate of Termination Costs (as that term is defined by the ANPP Participation Agreement) for Unit 3 or (ii) the minimum amount required by the NRC to be funded for the decommissioning of Unit 3. 
 Deemed Distribution Amount shall mean an amount in the Decommissioning Trust Fund that is treated by Applicable Tax Law as having been distributed
by reason of the disqualification of all or a part of such Fund. 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 A-1 

 Excess Contribution shall mean the amount by which cash payments made (or deemed made) by El Paso
into the Decommissioning Trust Fund during any taxable year of El Paso exceeds the payment limitation imposed by Applicable Tax Law. 
 Expenses shall mean: (a) in the case of the Decommissioning Trust Fund, (i) the tax imposed by Code Section 468A(e)(2); (ii) any state or local tax imposed on the income or the assets of such Fund; and
(iii) legal, accounting, and actuarial fees and expenses, trustee’s fees and expenses, and all other ordinary administrative costs and incidental expenses, incurred by Decommissioning Trustee, a Fiduciary Investment Manager, or El Paso in
connection with the operation of such Fund, but in each case only to the extent permitted by Code Section 468A(e)(4)(B) or other Applicable Tax Law to be paid from the assets of a “Nuclear Decommissioning Reserve Fund,” as that term
is used in Applicable Tax Law; and (b) in the case of the Second Fund, (i) any federal, state, or local tax actually paid by El Paso with respect to the income or the assets of such Fund including a payment to El Paso of the federal income
tax (at the statutory rate) with respect to the taxable income of such Fund required to be included on El Paso’s federal income tax return; and (ii) legal, accounting and actuarial expenses, trustee’s fees and expenses, and all other
ordinary administrative costs and incidental expenses, incurred by Decommissioning Trustee, a Fiduciary Investment Manager, or El Paso in connection with the operation of such Fund; provided, however, Expenses shall not include taxes on or with
respect to fees paid to Decommissioning Trustee or a Fiduciary Investment Manager and taxes that Code Section 4951 requires be paid by Decommissioning Trustee. 
 Fiduciary Investment Manager shall mean any institution or professional appointed by El Paso, other than Decommissioning Trustee, who is responsible for the investment and reinvestment of the Funds. 

License shall mean NRC Facility Operating License No. NPF-41, issued December 31, 1984, as the same may be amended, modified, extended,
renewed or superseded from time to time. 
 NRC shall mean the Nuclear Regulatory Commission of the United States of America or any
successor agency. 
 PVNGS shall mean the Palo Verde Nuclear Generating Station, which is located on the PVNGS Site. 
 PVNGS Site shall mean the real property located in Maricopa County, Arizona, approximately 36 miles west of the City of Phoenix, Arizona and
approximately 16 miles west of the City of Buckeye, Arizona, which legal description is contained in Appendix B to the ANPP Participation Agreement. 
 Qualified Investments shall mean investments that meet the intent, standards, liabilities, and general and specific requirements and conditions on investments as set forth in Section 7 herein. 

Unit 3 shall mean the 1270 megawatt unit, commonly known as Unit3, at PVNGS. 
 Palo Verde Unit 3 Nuclear Decommissioning Trust 
  

 A-2Commitment to Pay Project Costs

 Exhibit 10.6 
 COMMITMENT TO PAY PROJECT COSTS 
 THIS COMMITMENT TO PAY PROJECT COSTS, dated as of March 31,
2006 (this “Commitment”), is made by WYNN RESORTS, LIMITED, a Nevada corporation (“WRL”), in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, as the administrative agent acting on behalf of itself and the Bank Lenders
pursuant to the Bank Credit Agreement (together with its successors and assigns in such capacity, the “Bank Agent”), U.S. BANK NATIONAL ASSOCIATION, in its capacity as trustee under the 2014 Notes Indenture (together with its
successors and assigns in such capacity, the “2014 Notes Indenture Trustee”), each other Agent Beneficiary (as defined below) from time to time party to the Intercreditor Agreement. This Commitment is made and delivered pursuant to
the Master Disbursement Agreement (as amended, modified, supplemented or amended and restated from time to time, the “Disbursement Agreement”), dated as of December 14, 2004 among Wynn Las Vegas, LLC, a Nevada limited liability
company (the “Company”), the Bank Agent, the 2014 Notes Indenture Trustee and Deutsche Bank Trust Company Americas, as the disbursement agent (together with its successors and assigns in such capacity, the “Disbursement
Agent”). The Bank Agent, the 2014 Notes Indenture Trustee, the Bank Lenders, and the 2014 Noteholders under their respective “Facility Agreements” (such term as used in this Commitment having the meaning given in the Intercreditor
Agreement), together with any “Project Credit Parties” that are from time to time parties to the Intercreditor Agreement pursuant to Section 10.15 thereof and any “First Lien Secured Party” or “Second Lien Secured
Party” represented by any such “Project Credit Party” (each such term as used in this Commitment having the meaning given in the Intercreditor Agreement), are hereinafter referred to as the “Lender Beneficiaries”. The
Bank Agent, the 2014 Notes Indenture Trustee and any other “Project Credit Parties” as provided in the foregoing sentence are hereinafter referred to as the “Agent Beneficiaries”. Except as otherwise specified in this
Commitment, capitalized terms used but not defined herein shall have the respective meanings given them in Exhibit A to the Disbursement Agreement, and the Rules of Interpretation contained in said Exhibit A shall apply hereto. 
 RECITALS 
 A. Phase I Project.
The Company has constructed and now owns and operates Wynn Las Vegas, an approximately 2,700-room hotel, casino, golf course and entertainment complex with related ancillary facilities, located on the site of the former Desert Inn Resort &
Casino (the “Phase I Project”). 
 B. Phase II Project. The Company intends to develop, construct, own and operate an
expansion of the Phase I Project, consisting of a 2,054-suite hotel tower, additional casino space and additional restaurants, a spa, swimming pools, and retail and convention space with related ancillary facilities, located on approximately 20
acres of land adjacent to the Phase I Project, tentatively named “Encore at Wynn Las Vegas” (the “Phase II Project” and, collectively with the Phase I Project, the “Projects”). 
 C. 2014 Notes Indenture. The Company, Wynn Las Vegas Capital Corp., a Nevada corporation (“Capital Corp.”), certain guarantors
party thereto and the 2014 Notes Indenture Trustee have entered into the First Mortgage Notes Indenture (as amended, amended and restated, supplemented or otherwise modified from time to time, including any permitted refinancings thereof, the
“2014 Notes Indenture”), pursuant to which the Company and Capital Corp. have issued the 2014 Notes and may issue Additional Notes, as more particularly described therein. 
 D. Bank Credit Facility. The Company, the Bank Agent, the Bank Lenders and the other parties thereto have entered into the Credit Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to time, including any permitted refinancings thereof, the “Bank Credit Agreement”), pursuant to which the Bank Lenders have agreed, subject to the terms
thereof, to provide 

 the Bank Credit Facility to the Company to finance a portion of the costs related to the Projects and for working capital
and general corporate purposes, as more particularly described therein. 
 E. Disbursement Agreement. The Company, the Bank Agent, the
2014 Notes Indenture Trustee and the Disbursement Agent have entered into the Disbursement Agreement in order to set forth, among other things, (a) the mechanics for and allocation of the Company’s request for advances under the various
Facilities and from the Company’s Funds Account and (b) the conditions precedent to the Closing Date, to the initial advance and to subsequent advances. This Commitment is being entered into to document WRL’s commitment to contribute
funds to the Company as contemplated in the definition of the term “Available Funds” under the Disbursement Agreement. 
 F.
Benefit to WRL. The Company is a wholly owned subsidiary of WRL and acknowledges that it will benefit, directly and indirectly by the increase in the Available Funds that will occur under the Disbursement Agreement by reason of this
Commitment. 
 COMMITMENT 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, WRL hereby consents and agrees (and each of the other parties hereto agrees and accepts) as follows: 
 1. Commitment. 
 (a) The undersigned
WRL, as primary obligor and not merely as surety, unconditionally and irrevocably guarantees to each of the Bank Agent, the 2014 Notes Indenture Trustee and any other Agent Beneficiary the performance by the Company of its obligation under the
Disbursement Agreement to pay Project Costs as the same become due and payable together with all reasonable expenses incurred by the Disbursement Agent or the Lender Beneficiaries in enforcing such obligations or the terms hereof, including, without
limitation, reasonable fees and expenses of legal counsel (collectively, the “Obligations”), and agrees that if for any reason the Company shall at any time, not have sufficient funds to pay Project Costs as and when they are due,
WRL will pay the same forthwith. Notwithstanding any other provision hereof, WRL’s aggregate liability under this Section 1(a), excluding any amounts payable under Section 16 below shall in no event exceed the
“Liability Cap.” As used herein, the term “Liability Cap” shall mean Two Hundred Fifteen Million Three Hundred Thousand Dollars ($215,300,000); provided, however, that at any time and from time to time, if any
category of Available Funds has increased from the amount set forth on Appendix VIII to the Company’s Phase II Approval Date Request dated March 14, 2006, then WRL shall be entitled to submit to the Disbursement Agent a certificate
evidencing such increase, and upon written confirmation by the Disbursement Agent of the same (not to be unreasonably withheld), the Liability Cap shall be reduced by the amount of such increase in Available Funds; provided, further,
however, that in no event shall the Liability Cap be reduced if as a result of such reduction the Company shall cease to be In Balance under the Disbursement Agreement. At such time as the Liability Cap equals zero (0), then this Commitment
shall terminate and be of no further force or effect. WRL waives notice of acceptance of this Commitment and of any obligation to which it applies or may apply under the terms hereof, and waives diligence, presentment, demand of payment, notice of
dishonor or non-payment, protest, notice of protest, of any such obligations, suit or taking other action by the Disbursement Agent or any Lender Beneficiary against, and giving any notice of default or other notice to, or making any demand on, any
party liable thereon (including WRL). 
  

 2 

 (b) This Commitment is an absolute, unconditional, continuing and irrevocable guaranty of payment and
not of collectibility and is in no way conditioned on or contingent upon any attempt to enforce in whole or in part the Company’s obligations to the Lender Beneficiaries and the Disbursement Agent. Subject to the Liability Cap set forth in
Section 1(a) above, if the Company shall at any time, not have sufficient funds to pay Project Costs, as and when they are due, WRL shall forthwith pay such Obligations in immediately available funds. Each failure by the Company to pay
any Obligations shall give rise to a separate cause of action herewith, and separate suits may be brought hereunder as each cause of action arises. 
 (c) Any Lender Beneficiary may, in accordance with the Financing Agreements or any other Facility Agreement, at any time and from time to time (whether or not after revocation or termination of this Commitment)
without the consent of or notice to WRL, except such notice as may be required by the Financing Agreements or any other Facility Agreement or applicable law which cannot be waived, without incurring responsibility to WRL, without impairing or
releasing the obligations of WRL hereunder, upon or without any terms or conditions and in whole or in part, (i) change the manner, place and terms of payment or change or extend the time of payment of, renew, or alter any Obligation, or any
obligations and liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof or in any manner modify, amend or supplement the terms of any Facility Agreement or any other Facility Agreement, the
Disbursement Agreement or any documents, instruments or agreements executed in connection therewith (in each case, with the consent of the Company if required by such documents) and the guaranty herein made shall apply to the Obligations as so
changed, extended, renewed, modified, amended, supplemented or altered in any manner; (ii) exercise or refrain from exercising any rights against the Company or others (including WRL) or otherwise act or refrain from acting; (iii) add or
release any other guarantor from its obligations without affecting or impairing the obligations of WRL hereunder; (iv) settle or compromise any Obligations and/or any obligations and liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part hereof to the payment of any obligations and liabilities which may be due to any Lender Beneficiary or others; (v) sell, exchange, release,
surrender, realize upon or otherwise deal with in any manner or in any order any property by whomsoever pledged or mortgaged to secure or howsoever securing the Obligations or any liabilities or obligations (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof and/or any offset thereagainst; (vi) apply any sums by whomsoever paid or howsoever realized to any obligations and liabilities of the Company and the other Loan Parties to the Lender
Beneficiaries under any of the Financing Agreements or any other Facility Agreement in the manner provided therein regardless of what obligations and liabilities remain unpaid; (vii) consent to or waive any breach of, or any act, omission or
default under, any Financing Agreement or any other Facility Agreement (including the obligation to achieve Final Completion with respect to either Project) or otherwise amend, modify or supplement (with the consent of the Company or other Loan
Parties, if required by such documents) any Financing Agreement or any other Facility Agreement (including the obligation to achieve Final Completion with respect to either Project) or any of such other instruments or agreements; and/or
(viii) act or fail to act in any manner referred to in this Commitment which may deprive WRL of any right to subrogation which WRL may, notwithstanding the provisions of Section 7, have against the Company or the other Loan Parties
to recover full indemnity for any payments made pursuant to this Commitment or of any right of contribution which WRL may have against any other party. 
 (d) No invalidity, irregularity or unenforceability of the Obligations shall affect, impair, or be a defense to the guaranty set forth herein, which is a primary obligation of WRL. 
 (e) This is a continuing guaranty and all obligations to which it applies or may apply under the terms hereof shall be conclusively presumed to have
been created in reliance hereon. 

  

 3 

 
In the event that, notwithstanding the provisions of Section 1(a) hereof, the guaranty set forth herein shall be deemed revocable in accordance
with applicable law, then any such revocation shall become effective only upon receipt by each Agent Beneficiary and the Disbursement Agent of written notice of revocation signed by WRL. No revocation or termination hereof shall affect in any manner
rights arising under this Commitment with respect to Obligations (i) arising prior to receipt by each Agent Beneficiary and the Disbursement Agent of written notice of such revocation or termination and the sole effect of revocation and
termination hereof shall be to exclude from this Commitment any Obligations thereafter arising which are unconnected with Obligations theretofore arising or transactions theretofore entered into or (ii) arising as a result of an Event of
Default under the Disbursement Agreement occurring by reason of the revocation or termination of this Commitment. 
 2. Representations
and Warranties. WRL makes the representations and warranties set forth below to the Funding Agents and the Disbursement Agent as of the date hereof: 
 (a) WRL is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite corporate power and authority to (i) carry on its business as now
conducted, (ii) own and operate the properties it purports to own, (iii) incur indebtedness and (iv) execute, deliver and perform under this Commitment. 
 (b) WRL has duly authorized, executed and delivered this Commitment and neither the execution and delivery hereof nor the consummation of the transactions contemplated hereby nor the compliance with the terms hereof
(i) contravenes the formation documents or any other Legal Requirement applicable to or binding on WRL, (ii) contravenes or results in any breach or constitutes any default under, or results in or requires the creation of any Lien upon any
of WRL’s properties or under any agreement or instrument to which WRL is a party or by which it or any of its properties may be bound, or (c) does or will require the consent or approval of any Person which has not previously been
obtained. 
 (c) All governmental authorizations and actions necessary to be obtained, made or taken by WRL in connection with the execution
and delivery by WRL of this Commitment and the performance of its Obligations hereunder have been obtained or performed and are valid and in full force and effect. 
 (d) This Commitment constitutes the legal, valid and binding obligation of WRL, enforceable against WRL in accordance with the terms of this Commitment, subject to applicable bankruptcy, insolvency, moratorium and
other similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (whether enforcement is sought by proceedings in equity or law). 
 (e) There is no pending or, to the best of WRL’s knowledge, threatened action or proceeding affecting WRL before any court, governmental agency or
arbitrator, which might reasonably be expected to materially and adversely affect the financial condition, results of operations, business or prospects of WRL or the ability of WRL to perform its obligations under this Commitment. 
 (f) WRL possesses all franchises, certificates, licenses, permits and other governmental authorizations and approvals necessary for it to perform its
obligations under this Commitment. 
 (g) WRL has established adequate means of obtaining financial and other information pertaining to the
businesses, operations and condition (financial and otherwise) of the Company, and WRL now is and hereafter will be familiar with the businesses, operations and condition (financial and otherwise) of the Company. 
  

 4 

 (h) WRL is not an investment company within the meaning of the Investment Company Act of 1940.

 (i) WRL is, and immediately after giving effect to the incurrence of its obligations under this Commitment will be, Solvent (as defined
in the Credit Agreement in effect on the date hereof). 
 3. Covenants. So long as this Commitment is in effect, WRL agrees that:

 (a) it will preserve, renew and keep in full force and effect its corporate existence and it will not amend, revise or modify its
organizational documents; 
 (b) it will maintain in full force and effect all consents of any governmental or other authority that are
required to be obtained by it for it to perform its obligations under this Commitment and will obtain any such consent that may become necessary in the future; 
 (c) it will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Commitment;

 (d) promptly, and in any event within thirty (30) Banking Days after obtaining knowledge thereof, WRL will give to each Agent
Beneficiary and the Disbursement Agent notice of the occurrence of any litigation or governmental proceeding (i) pending against WRL which, if adversely determined, has a reasonable possibility of adversely affecting WRL’s ability to
comply with this Commitment or (ii) which relates to this Commitment; and 
 (e) it will deliver such other documents and other
information reasonably requested by any Agent Beneficiary or the Disbursement Agent. 
 4. Waiver. To the fullest extent permitted by
law, WRL hereby waives and relinquishes all rights and remedies accorded by applicable law to sureties or WRLs and agrees not to assert or take advantage of any such rights or remedies, including without limitation (a) any right to require any
Lender Beneficiary or the Disbursement Agent to proceed against the Company or any other person or to proceed against or exhaust any security held by any Lender Beneficiary or the Disbursement Agent at any time or to pursue any other remedy in the
power of any Lender Beneficiary or the Disbursement Agent before proceeding against WRL (including any right or claim of right to cause a marshalling of a debtor’s assets or to proceed against WRL, any debtor or any other WRL of any
debtor’s obligations in any particular order, including, without limitation, any right arising under Nevada Revised Statutes Section 40.430 to the fullest extent permitted by Nevada Revised Statutes 40.495(2)), (b) any defense that
may arise by reason of the incapacity, lack of power or authority, death, dissolution, merger, termination or disability of the Company or any other Person or the failure of any Lender Beneficiary or the Disbursement Agent to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of the Company or any other Person, (c) demand, presentment, protest and notice of any kind, including without limitation notice of the existence, creation or incurring
of any new or additional indebtedness or obligation or of any action or non-action on the part of the Company, any Lender Beneficiary, the Disbursement Agent, any endorser or creditor of the Company or WRL or on the part of any other person under
this or any other instrument in connection with any obligation or evidence 

  

 5 

 
of indebtedness held by any Lender Beneficiary, or the Disbursement Agent as collateral or in connection with any Obligations, (d) any defense based
upon an election of remedies by any Lender Beneficiary, the Collateral Agent or any collateral agent on their behalf, or the Disbursement Agent, including without limitation an election to proceed by non-judicial rather than judicial foreclosure,
which destroys or otherwise impairs any subrogation rights which WRL may, notwithstanding the provisions of Sections 5 and 6, have against the Company, any right which WRL may, notwithstanding the provisions of Sections 5 and
6, have to proceed against the Company for reimbursement, or both, (e) any defense based on any offset against any amounts which may be owed by any Person to WRL for any reason whatsoever, (f) any defense based on any act, failure
to act, delay or omission whatsoever on the part of the Company or the failure by the Company to do any act or thing or to observe or perform any covenant, condition or agreement to be observed or performed by it under the Financing Agreements or
any other Facility Agreement, (g) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal provided, that,
upon payment in full of the Obligations, this Commitment shall no longer be of any force or effect, (h) any defense, setoff or counterclaim which may at any time be available to or asserted by the Company against any Lender Beneficiary, the
Disbursement Agent, the Construction Consultant or any other Person under any of the Financing Agreements or any other Facility Agreement, including in connection with the exercise of any judgment by the Disbursement Agent, the Construction
Consultant or any other Person under the Disbursement Agreement or by reason of the delay or failure by the Disbursement Agent or the Construction Consultant or any other Person to perform their duties thereunder, (i) any duty on the part of
any Lender Beneficiary or the Disbursement Agent to disclose to WRL any facts any such Person may now or hereafter know about the Company, regardless of whether such person has reason to believe that any such facts materially increase the risk
beyond that which WRL intends to assume, or have reason to believe that such facts are unknown to WRL, or have a reasonable opportunity to communicate such facts to WRL, and WRL acknowledges that it is fully responsible for being and keeping
informed of the financial condition of the Company and the other Loan Parties and of all circumstances bearing on the risk of non-payment of any obligations and liabilities hereby guaranteed, (j) the fact that WRL may at any time in the future
no longer be a parent company of the Company, (k) any defense based on any change in the time, manner or place of any payment under, or in any other term of, the Disbursement Agreement, any other Facility Agreement or any other amendment,
renewal, extension, acceleration, compromise or waiver of or any consent or departure from the terms of the Disbursement Agreement, any other Financing Agreement or any other Facility Agreement, (l) any defense arising because of any Lender
Beneficiary’s or the Disbursement Agent’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, and (m) any defense based upon any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. 
 5. Subordination. Any obligation of the Company to repay or
reimburse WRL for amounts paid hereunder is hereby subordinated to all obligations and liabilities of all kinds and nature (including the “Obligations” (as defined in the Disbursement Agreement)) of the Company to the Lender Beneficiaries.
Without the prior written consent of the Bank Agent, such repayment or reimbursement obligations shall not be paid or withdrawn in whole or in part, nor shall WRL accept any payment of or on account of any such amounts until all the Obligations have
been repaid in full. At the Bank Agent’s request, if an Event of Default under the Disbursement Agreement has occurred and is continuing, WRL shall cause Company to pay to the Collateral Agent for the benefit of the “First Lien Secured
Parties” (as defined in the Intercreditor Agreement) all or any part of such repayment or reimbursement obligations. Any payment by Company or any other Loan Party in violation of this Commitment shall be received by WRL in trust for Lender
Beneficiaries, and WRL shall cause the same to be paid to Lender Beneficiaries immediately upon demand by the Bank Agent on account of Company’s obligations thereto. WRL shall not assign all or any portion of any such repayment or reimbursement
rights while this Commitment remains in effect and any attempted assignment thereof in violation of the provisions of this Commitment shall be void. 
  

 6 

 6. Subrogation. Until all Obligations have been paid in full, (a) WRL shall not have any
right of subrogation and waives all rights to enforce any remedy which the Lender Beneficiaries or the Disbursement Agent now have or may hereafter have against the Company and the other Loan Parties, and waives the benefit of, and all rights to
participate in, any security now or hereafter held by the Lender Beneficiaries or the Disbursement Agent from the Company or the other Loan Parties and (b) WRL waives any claim, right or remedy which WRL may now have or hereafter acquire
against the Company or the other Loan Parties that arises hereunder and/or from the performance by WRL hereunder including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or
participation in any claim, right or remedy of the Lender Beneficiaries or the Disbursement Agent against the Company or the other Loan Parties, or any security which the Lender Beneficiaries or the Disbursement Agent now have or hereafter acquire,
whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise. 
 7.
Bankruptcy. 
 (a) So long as any of the Obligations are owed to any Lender Beneficiaries, WRL shall not commence, or join with any
other Person in commencing, any bankruptcy, reorganization, or insolvency proceeding against the Company or any other Loan Party. The obligations of WRL under this Commitment shall not be altered, limited or affected by any proceeding, voluntary or
involuntary, involving the bankruptcy, reorganization, insolvency, receivership, liquidation or arrangement of the Company or any other Loan Party, or by any defense which the Company or any other Loan Party may have by reason of any order, decree
or decision of any court or administrative body resulting from any such proceeding. 
 (b) So long as any Obligations are owed to any Lender
Beneficiaries, to the extent of such Obligations, WRL shall file, in any bankruptcy or other proceeding of or against the Company or any other Loan Party in which the filing of proofs of claims is required or permitted by law, all claims which WRL
may have against the Company or any other Loan Party (but only to the extent) relating to any indebtedness of the Company or such other Loan Party to WRL, and hereby assigns to the Agent Beneficiaries all rights of WRL thereunder. If WRL does not
file any such claim, each of the Agent Beneficiaries as attorney-in-fact for WRL is hereby authorized to do so in the name of WRL or, in the discretion of any such Agent Beneficiary, to assign the claim to a nominee and to cause proofs of claim to
be filed in the name of such nominee. The foregoing power of attorney is coupled with an interest and cannot be revoked. The Agent Beneficiary nominees shall have the sole right to accept or reject any plan proposed in any such proceeding and to
take any other action which a party filing a claim is entitled to take. In all such cases, whether in administration, bankruptcy or otherwise, the person authorized to pay such a claim shall pay the same to the Agent Beneficiaries to the extent of
any Obligations which then remain unpaid, and, to the full extent necessary for that purpose, WRL hereby assigns to the Agent Beneficiaries all of WRL’s rights to all such payments or distributions to which WRL would otherwise be entitled;
provided, however, that WRL’s obligations hereunder shall not be satisfied except to the extent that the Agent Beneficiaries (or the Collateral Agent on their behalf) receive cash by reason of any such payment or distribution. If the Agent
Beneficiaries (or the Collateral Agent on their behalf) receive anything hereunder other than cash, the same shall be held as collateral for amounts due under this Commitment. 
  

 7 

 8. Successions or Assignments. 
 (a) This Commitment shall inure to the benefit of the successors or assigns of the Lender Beneficiaries who shall have, to the extent of their interest,
the rights of the Lender Beneficiaries hereunder. 
 (b) This Commitment is binding upon WRL and its successors. WRL is not entitled to
assign its obligations hereunder to any other person or entity, and any purported assignment in violation of this provision shall be void. 
 9. Waivers. 
 (a) No delay on the part of any Lender Beneficiary or the Disbursement Agent in exercising any of its rights
(including those hereunder) and no partial or single exercise thereof and no action or non-action by any Lender Beneficiary or the Disbursement Agent, with or without notice to WRL or anyone else, shall constitute a waiver of any rights or shall
affect or impair this Commitment. 
 (b) EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS COMMITMENT OR RELATING TO THE SUBJECT MATTER OF THIS COMMITMENT AND THE RELATIONSHIP BETWEEN WRL AND THE LENDER BENEFICIARIES AND THE DISBURSEMENT AGENT THAT IS BEING ESTABLISHED. EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THE PARTIES HERETO HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS COMMITMENT, AND THAT EACH OF THE PARTIES HERETO WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. 
 10. Interpretation. The section headings in this Commitment are for the convenience of reference
only and shall not affect the meaning or construction of any provision hereof. 
 11. Notices. All notices in connection with this
Commitment shall be given by notice in writing hand-delivered or sent by facsimile transmission or by certified mail return-receipt requested (airmail, if overseas), postage prepaid. All such notices shall be sent to the appropriate telecopier
number or address, as the case may be, set forth in Section 15 below or to such other number or address as shall have been subsequently specified by written notice to the other party, and shall be sent with copies, if any, as indicated
below. All such notices shall be effective upon receipt, and confirmation by answerback of any such notice so sent by telecopier shall be sufficient evidence of receipt thereof. 
 12. Amendments. This Commitment may be amended only with the written consent of the parties hereto. 
 13. Jurisdiction; Governing Law. 
 (a) Any action or proceeding relating in any way to this Commitment may be brought and enforced in the courts of the State of New York in Manhattan or of the United States for the Southern District of New York. Any such process or summons
in connection with any such action or proceeding may be served by mailing a copy thereof by certified or registered mail, or any substantially similar form of mail, addressed to WRL as provided for notices hereunder. 
  

 8 

 (b) This Commitment and the rights and obligations of WRL, the Agent Beneficiaries and the Disbursement
Agent hereunder shall be governed by and construed in accordance with the law of the State of New York without reference to principles of conflicts of laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law). 

14. Integration of Terms. This Commitment contains the entire agreement between WRL, the Agent Beneficiaries and the Disbursement Agent
relating to the subject matter hereof and supersedes all oral statements and prior writing with respect hereto. 
 15. Addresses.

  

	 	(a)	The address of WRL for notices is: 

 Wynn
Resorts, Limited 
 3131 Las Vegas Boulevard South 
 Las Vegas, Nevada 89109 
 Attn: President 
 Facsimile Number: (702) 770-1100 
 with a copy to: 
 Skadden, Arps, Slate, Meagher & Flom LLP 
 300 South Grand Avenue, Suite 3400 
 Los Angeles, CA 90071-3144 
 Attn: Jerome L. Coben 
 Facsimile Number: (213) 687-5600 
  

	 	(b)	The address of the Bank Agent for notices as: 

 Deutsche Bank Trust Company Americas 
 c/o Deutsche Bank Securities Inc. 
 200 Crescent Court, Suite 550 
 Dallas, Texas 75201 
 Attn: Gerard Dupont 
 Facsimile Number: (214) 740-7910 
  

	 	(c)	The address of the 2014 Notes Indenture Trustee for notices is: 

 U.S. Bank National Association 
 Corporate Trust Services 
 60 Livingston Avenue 
 St. Paul, MN 55107 
 Attn: Lori Rosenberg 
 Facsimile No.: (651) 495-8097 
  

	 	(d)	The address of the Disbursement Agent for notices is: 

 Deutsche Bank Trust Company Americas 
 60 Wall Street, 11th Floor 
 New York, New York 10005 
 Attention: Amy Sinensky 
 Facsimile Number: (212) 797-4885 
  

 9 

 16. Collection Expenses. If any Agent Beneficiary (or the Collateral Agent or the Disbursement
Agent on behalf of any of them) is required to pursue any remedy against WRL hereunder, WRL shall pay to the Agent Beneficiaries, the Collateral Agent or the Disbursement Agent, as the case may be, upon demand, all reasonable attorneys’ fees
and expenses all other reasonable costs and expenses incurred by the Agent Beneficiaries, the Collateral Agent or the Disbursement Agent in enforcing this Commitment. 
 17. Reinstatement of Agreement. This Commitment shall continue to be effective or be reinstated, as the case may be, if at any time any payment to or on behalf of the Company or by the Company under the
Financing Agreements or any other Facility Agreement or by WRL hereunder is rescinded or must otherwise be returned by the Agent Beneficiaries (or the Collateral Agent or the Disbursement Agent on behalf of any of them) upon the insolvency,
bankruptcy, reorganization, dissolution or liquidation of the Company or otherwise, all as though such payment had not been made. 
 18.
Counterparts. The Commitment may be executed in one or more duplicate counterparts, and when executed and delivered by all of the parties listed below shall constitute a single binding agreement. 
 19. Agents. 
 (a) The Agent
Beneficiaries may appoint or designate the Collateral Agent and/or the Disbursement Agent to exercise or enforce their rights and remedies under this Commitment and to otherwise act on their behalf in all matters related hereto. WRL shall respect
and treat any and all actions so taken by the Collateral Agent and/or the Disbursement Agent as if taken by the Agent Beneficiaries. 
 (b)
All references in this Commitment to the Disbursement Agent shall mean and be construed as the Disbursement Agent acting pursuant to the Disbursement Agreement. All references in this Commitment to the Collateral Agent shall mean and be construed as
the Collateral Agent acting pursuant to the Intercreditor Agreement. 
 20. No Benefit to the Company. This Commitment is for the
benefit of only the Lender Beneficiaries and is not for the benefit of the Company or the other Loan Parties. This Commitment shall not be deemed to be a contract to make a loan, or extend other debt financing or financial accommodation, for the
benefit of the Company or the other Loan Parties, in each case within the meaning of Section 365(e) of the Bankruptcy Code. 
 21.
Intercreditor Agreement. All rights and remedies of any “Project Credit Parties” on behalf of any “Second Lien Secured Parties” (as each such term is defined in the Intercreditor Agreement) hereunder are, as among the
Agent Beneficiaries, subject to the terms of the Intercreditor Agreement. This provision is for the benefit of, and may be enforced exclusively by, the Agent Beneficiaries which are “First Lien Secured Parties” (as defined in the
Intercreditor Agreement) or their representatives only. For the avoidance of doubt, this provision is not for the benefit of WRL and may not, under any circumstances, be enforced by WRL. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 10 

 IN WITNESS WHEREOF, WRL has caused this Commitment to be duly executed and delivered as of the day and
year first written above. 
  

			
	WYNN RESORTS, LIMITED
	 a Nevada corporation,

	 as WRL

		
	 By:
	 	 /s/ Ronald J. Kramer

		 	Name: Ronald J. Kramer
		 	Title: President

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