Exhibit 10.2
[EXECUTION COPY]

        

GUARANTY AGREEMENT
This GUARANTY AGREEMENT, dated as of February 1, 2016 (this “Guaranty”), is made
by PNM RESOURCES, INC., a New Mexico corporation (the “Guarantor”), in favor of
the Lenders (as defined in the Loan Agreement referred to below) and THE BANK OF
TOKYO-MITSUBISHI UFJ, LTD., as administrative agent (in such capacity, together
with its successors and assigns in such capacity, the “Administrative Agent”)
for the Lenders (the Lenders and the Administrative Agent being referred to
herein, collectively, as the “Beneficiaries” and, individually, as a
“Beneficiary”).
PRELIMINARY STATEMENTS
1.    NM Capital Utility Corporation, a Delaware corporation (the “Borrower”), a
wholly-owned subsidiary of the Guarantor, is party to a Term Loan Agreement,
dated as of February 1, 2016 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”; the capitalized
terms defined therein and not otherwise defined herein being used herein as
therein defined), with the Beneficiaries. Pursuant to the Loan Agreement, the
Lenders have agreed to make certain Loans available to the Borrower on the terms
and conditions set forth therein.
2.    The obligation of the Lenders to make Loans to the Borrower pursuant to
the Loan Agreement is conditioned upon, among other things, the execution and
delivery of this Guaranty by the Guarantor. This Guaranty is referred to as the
“Parent Guaranty” in the Loan Agreement.
3.    The Guarantor will derive substantial direct and indirect benefits from
the transactions contemplated by the Loan Agreement. The Guarantor is willing to
guarantee the Borrower Obligations under the Loan Agreement and the other Loan
Documents as hereinafter provided to obtain such benefits.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Loans under the Loan Agreement and to induce the Beneficiaries
to otherwise satisfy their obligations under the Loan Agreement, the Guarantor
hereby agrees as follows:
SECTION 1.    Guaranty; Limitation of Liability.
(a)    The Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise (in
each case as provided in the Loan Agreement and the other Loan Documents), of
all Borrower Obligations now or hereafter existing under or in respect of the
Loan Agreement and the other Loan Documents (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Borrower Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, reimbursement obligations,
premiums, fees, indemnities,

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contract causes of action, costs, expenses or otherwise, including, without
limitation, the obligation of the Borrower to pay principal, interest, charges,
expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts
payable by the Borrower under any Loan Document (all of the foregoing
obligations, collectively, the “Guaranteed Obligations”), and agrees to pay any
and all expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by any Beneficiary in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor’s
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to any Beneficiary under or in
respect of the Loan Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower. The Guarantor further agrees that its
guaranty hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Beneficiary to any of the security held for
payment of the Guaranteed Obligations or to any balance of any deposit account
or credit on the books of the Administrative Agent or any other Beneficiary in
favor of the Borrower or any other Person.
(b)    The Guarantor and, by its acceptance of this Guaranty, each Beneficiary
hereby confirms that it is the intention of all such Persons that this Guaranty
and the Guaranteed Obligations of the Guarantor hereunder shall not constitute a
fraudulent transfer or fraudulent conveyance for purposes of the Federal
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law to the extent applicable to this Guaranty and the
Guaranteed Obligations. To effectuate the foregoing intention, the Beneficiaries
and the Guarantor hereby irrevocably agree that the Guaranteed Obligations at
any time as to the Guarantor shall be limited to the maximum amount as will
result in the Guaranteed Obligations not constituting a fraudulent transfer or
fraudulent conveyance as to the Guarantor.
SECTION 2.    Guaranty Absolute.
The Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Beneficiary with respect thereto. The
obligations of the Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other obligations of the
Borrower under or in respect of the Loan Documents, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower or
whether the Borrower is joined in any such action or actions. The liability of
the Guarantor under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and the Guarantor hereby irrevocably waives any
defenses it may now have or hereafter acquire in any way relating to, any or all
of the following:
(a)    any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b)    any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations or any other obligations of
the Borrower

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or any other guarantor or surety under or in respect of the Loan Documents, or
any other amendment or waiver of or any consent to departure from any Loan
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to the Borrower or
otherwise;
(c)    any taking, exchange, release or non-perfection of any collateral, or any
taking, release or amendment or waiver of, or consent to departure from, any
other guaranty, for all or any of the Guaranteed Obligations;
(d)    any manner of application of any collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Guaranteed Obligations or any other
assets of the Borrower or any of its Affiliates;
(e)    any change, restructuring or termination of the corporate, limited
liability company or other entity structure or existence of the Borrower or any
of its Affiliates;
(f)    any failure of any Beneficiary to disclose to the Guarantor any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower or any of its
Affiliates now or hereafter known to such Beneficiary (the Guarantor waiving any
duty on the part of Beneficiaries to disclose such information);
(g)    the failure of any other Person to execute or deliver this Guaranty or
any other guaranty or agreement or the release or reduction of liability of the
Guarantor or any other guarantor or surety with respect to the Guaranteed
Obligations; or
(h)    any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Beneficiary that might otherwise constitute a defense available to, or a
discharge of, the Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Beneficiary or any other Person upon the
insolvency, bankruptcy or reorganization of the Guarantor, the Borrower or
otherwise, all as though such payment had not been made.
SECTION 3.    Waivers and Acknowledgments.
(a)    The Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that any Beneficiary protect, secure, perfect or insure any Lien or
any property subject thereto or exhaust any right or take any action against the
Borrower or any other Person or any collateral.

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(b)    The Guarantor hereby unconditionally and irrevocably waives any right to
revoke this Guaranty and acknowledges that this Guaranty is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.
(c)    The Guarantor hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by any Beneficiary that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of the Guarantor or other rights of the
Guarantor to proceed against the Borrower or any other Person or any collateral
and (ii) any defense based on any right of set-off or counterclaim against or in
respect of the Guaranteed Obligations.
(d)    The Guarantor hereby unconditionally and irrevocably waives any duty on
the part of any Beneficiary to disclose to the Guarantor any matter, fact or
thing relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or any of its Affiliates
now or hereafter known by such Beneficiary.
(e)    The Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.
SECTION 4.    Subrogation.
The Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against the Borrower that arise
from the existence, payment, performance or enforcement of the Guaranteed
Obligations under or in respect of this Guaranty, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of any
Beneficiary against the Borrower, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash. If any amount shall be paid to
the Guarantor in violation of the immediately preceding sentence at any time
prior to the later of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, and (b) the
termination of all Commitments in accordance with the Loan Agreement, such
amount shall be received and held in trust for the benefit of the Beneficiaries,
shall be segregated from other property and funds of the Guarantor and shall
forthwith be paid or delivered to the Administrative Agent in the same form as
so received (with any necessary endorsement or assignment) to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) the Guarantor
shall make payment to any Beneficiary of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in

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cash, and (iii) the termination of all Commitments in accordance with the Loan
Agreement shall have occurred, the Beneficiaries will, at the Guarantor’s
request and expense, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by the Guarantor pursuant to this
Guaranty.
SECTION 5.    Payments Free and Clear of Taxes, Etc.
(a)    Section 3.13 of the Loan Agreement is incorporated herein by reference as
if set forth at length in this Guaranty, mutatis mutandis, provided that each
reference to the term “Borrower” shall be deemed to be a reference to the
Guarantor.
(b)    Without prejudice to the survival of any other agreement of the Guarantor
hereunder, the agreements and obligations of the Guarantor contained in this
Section 5 shall survive the payment in full or termination of the Guaranteed
Obligations.
SECTION 6.    Representations and Warranties.

(a)    The Guarantor hereby makes for the benefit of the Beneficiaries all of
the representations and warranties contained in Section 6 of that certain Third
Amended and Restated Term Loan Agreement, dated as of December 21, 2015 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “PNMR Loan Agreement”), among the Guarantor, in its capacity as
borrower, the lenders party thereto from time to time and JPMorgan Chase Bank,
N.A., as administrative agent (in the form of such representations and
warranties (and all defined terms used therein) as they exist on the date of
this Guaranty and as they may hereafter be amended from time to time, but only
to the extent that the incorporation of any such amendments into this Guaranty
has been consented to in accordance with Section 9 hereof), which
representations and warranties (and all defined terms used therein) are
incorporated herein by reference as if set forth at length in this Guaranty,
mutatis mutandis; provided, that each reference to the term “this Loan
Agreement” shall be deemed to be a reference to this Guaranty; each reference to
the term “Loan Documents” shall be deemed to be a reference to this Guaranty and
each other Loan Document (as defined in the Loan Agreement) to which the
Guarantor is a party, if any; each reference to the term “Borrower” shall be
deemed to be a reference to the Guarantor; and each reference to the term
“Administrative Agent” or “Lender” shall be deemed to be a reference to the
Beneficiaries; provided, further, that the defined terms contained in the PNMR
Loan Agreement that are incorporated by reference in this Section 6(a) (as
modified by the foregoing proviso) apply only to the representations and
warranties incorporated herein by reference.

(b)    The Guarantor hereby makes for the benefit of the Beneficiaries each of
the following additional representations and warranties:
(i)    There are no conditions precedent to the effectiveness of this Guaranty
that have not been satisfied or waived.

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(ii)    The Guarantor has, independently and without reliance upon any
Beneficiary and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party, and
the Guarantor has established adequate means of obtaining from the Borrower on a
continuing basis information pertaining to, and is now and on a continuing basis
will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of the Borrower.
SECTION 7.     Covenants.

(a)    PNMR Loan Agreement. So long as any Commitment is in effect or any
portion of the Guaranteed Obligations shall remain unpaid, the Guarantor shall
observe and perform all of the covenants contained in Section 7 and Section 8
(other than Section 7.2 and the first sentence of Section 7.9 thereof) of the
PNMR Loan Agreement (in the form of such covenants (and all defined terms used
therein) as they exist as of the date of this Guaranty and as they may hereafter
be amended from time to time, but only to the extent that the incorporation of
any such amendments into this Guaranty has been consented to in accordance with
Section 9), and all such covenants (and all defined terms used therein) are
hereby incorporated and made applicable by reference as if set forth at length
in this Guaranty, mutatis mutandis; provided, that each reference to the term
“Borrower” shall be deemed to be a reference to the Guarantor; each reference to
the term “Administrative Agent”, “Lender” and “Required Lenders” shall be deemed
to have the meanings assigned to such terms in the Loan Agreement; and each
reference to “Exhibit 7.1(c)” of the PNMR Loan Agreement shall be deemed to be a
reference to Exhibit 7.1(c) attached to this Guaranty; provided, further, that
the defined terms contained in the PNMR Loan Agreement that are incorporated by
reference in this Section 7(a) (as modified by the foregoing proviso) apply only
to the covenants incorporated herein by reference.

(b)    Financial Covenant. So long as any Commitment is in effect or any portion
of the Guaranteed Obligations shall remain unpaid, the Guarantor shall maintain
a ratio of (i) Consolidated Indebtedness to (ii) Consolidated Capitalization
that is less than or equal to 0.65 to 1.0. For purposes of such calculation the
portion of Consolidated Indebtedness attributable to obligations under Material
Leases shall be the net present value (using (A) the discount rate (1) set forth
in Schedule 6.19 of the PNMR Loan Agreement (as such Schedule 6.19 is in effect
on the date hereof and as hereafter amended from time to time, but only to the
extent that any such amendments have been consented to in accordance with
Section 9), so long as such Schedule 6.19 specifies the same relevant discount
rate as is used in calculating such net present value provided to Moody’s and
S&P or (2) used in calculating such net present value provided to Moody’s and
S&P or (B) any such other discount rate as shall be proposed by the Guarantor
(and agreed upon by the Required Lenders)) of all amounts payable under the
Material Leases. As used in this subsection (b), the terms “Consolidated
Capitalization”, “Consolidated Indebtedness”, “Material Leases”, “Moody’s” and
“S&P” shall have the meanings assigned to such terms in the PNMR Loan Agreement
(as such terms, and all related defined terms, exist as of the date of this
Guaranty and as they may hereafter be amended from time to time, but only to the
extent that the incorporation of any such amendments into this Guaranty has been
consented to in accordance with Section 9), and such terms (and all related
defined terms) and Schedule 6.19 of the PNMR Loan Agreement are hereby
incorporated and made applicable by reference as

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if set forth at length in this Guaranty, mutatis mutandis; provided, that each
reference to the term “Borrower” shall be deemed to be a reference to the
Guarantor; provided, further, that the defined terms contained in the PNMR Loan
Agreement that are incorporated by reference in this Section 7(b) (as modified
by the foregoing proviso) apply only to the financial covenant set forth in this
Section 7(b).
    
(c)    Loan Agreement Covenants. The Guarantor covenants and agrees that, so
long as any Commitment is in effect or any portion of the Guaranteed Obligations
shall remain unpaid, it will cause the Borrower to perform and observe all of
the terms, covenants and agreements set forth in the Loan Agreement on the
Borrower’s part to be performed or observed.
(d)    Acknowledgement. Sections 7(a), 7(b) and 7(c) hereof contain (or
incorporate by reference) affirmative and negative covenants applicable to the
Guarantor. The Beneficiaries acknowledge and agree that any such covenants that
require the Guarantor to cause any of its Subsidiaries to take or to refrain
from taking specified actions will be enforceable unless prohibited by
applicable law or regulatory requirement.
SECTION 8.    Notice of Defaults.

(a)The Administrative Agent hereby agrees to (i) provide written notice to the
Guarantor promptly after the Administrative Agent obtains knowledge of the
occurrence of any Event of Default, and (ii) provide written notice to the
Guarantor (an “Acceleration Notice”) promptly after the acceleration of the
outstanding principal amount of the Loans pursuant to Section 9.2 of the Loan
Agreement.

(b)The Guarantor hereby agrees within two (2) Business Days after its receipt of
an Acceleration Notice, to pay to the Administrative Agent (for the benefit of
the Beneficiaries) the outstanding amount of the Guaranteed Obligations due and
payable at such time and all other amounts due and payable by the Guarantor
under this Guaranty.
SECTION 9.    Amendments, Etc.
No amendment or waiver of any provision of this Guaranty and no consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Beneficiaries, (a)
reduce or limit the obligations of the Guarantor hereunder, release the
Guarantor hereunder or otherwise limit the Guarantor’s liability with respect to
the Borrower Obligations owing to the Beneficiaries under or in respect of the
Loan Documents, (b) postpone any date fixed for payment hereunder or (c) change
the number of Beneficiaries or the percentage of (x) the Commitments, or (y) the
aggregate unpaid principal amount of the Loans that, in each case, shall be
required for the Beneficiaries or any of them to take any action hereunder; and
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent
under this Guaranty.

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SECTION 10.    Notices, Etc.
(a)    Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i)    if to the Guarantor, to the address, telecopier number, electronic mail
address or telephone number listed below the Guarantor’s name on the signature
pages hereto, and if to the Administrative Agent, to the address, telecopier
number, electronic mail address or telephone number specified on Schedule 11.1
of the Loan Agreement; and

(ii)    if to any other Lender, to the address, telecopier number, electronic
mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through Electronic Systems to the extent provided
in subsection (b) below, shall be effective as provided in such subsection (b).
(b)    Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by using Electronic Systems
pursuant to procedures approved by the Administrative Agent. The Administrative
Agent or the Guarantor may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(a)    Electronic Systems.

(i)    The Guarantor agrees that the Administrative Agent may, but shall not be
obligated to, make Communications (as defined below) available to the Lenders by

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posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a
substantially similar Electronic System.
(ii)    Any Electronic System used by the Administrative Agent is provided “as
is” and “as available.” The Agent Parties (as defined below) do not warrant the
adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or
statutory, including any warranty of merchantability, fitness for a particular
purpose, non-infringement of third-party rights or freedom from viruses or other
code defects, is made by any Agent Party in connection with the Communications
or any Electronic System. In no event shall the Administrative Agent or any of
its Related Parties (collectively, the “Agent Parties”) have any liability to
the Guarantor, any Lender or any other Person or entity for damages of any kind,
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of the
Guarantor’s or the Administrative Agent’s transmission of Communications through
an Electronic System. “Communications” means, collectively, any notice, demand,
communication, information, document or other material provided by or on behalf
of the Guarantor pursuant to any Loan Document or the transactions contemplated
therein which is distributed by the Administrative Agent or any Lender by means
of electronic communications pursuant to this Section, including through an
Electronic System.

(b)    Change of Address, Etc. Each of the Guarantor and the Administrative
Agent may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Guarantor and the Administrative
Agent.
SECTION 11.    No Waiver, Remedies.
No failure on the part of any Beneficiary to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 12.    Right of Set-off.

In addition to any rights now or hereafter granted under applicable Law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default and the commencement of remedies described in Section 9.2
of the Loan Agreement, each Lender is authorized at any time and from time to
time, without presentment, demand, protest or other notice of any kind (all of
which rights being hereby expressly waived), to set‑off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Lender (including, without limitation, branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of the Guarantor against obligations and liabilities of the
Guarantor to the Lenders hereunder, under the other Loan Documents or otherwise,
irrespective of whether the Administrative Agent or the Lenders shall have made
any demand hereunder and although such obligations, liabilities or claims, or
any of them, may be contingent or

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unmatured, and any such set‑off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto. The Guarantor hereby
agrees that any Person purchasing a participation in the Loans and Commitments
pursuant to Section 3.8 or 11.3(d) of the Loan Agreement may exercise all rights
of set‑off with respect to its participation interest as fully as if such Person
were a Lender thereunder.
SECTION 13.    Indemnification.
(a)    Without limitation of any other Guaranteed Obligations of the Guarantor
or remedies of the Beneficiaries under this Guaranty, the Guarantor shall, to
the fullest extent permitted by law, indemnify, defend and save and hold
harmless each Beneficiary and each of its Affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified
Party”) from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms.
(b)    THE GUARANTOR HEREBY ALSO AGREES THAT NONE OF THE INDEMNIFIED PARTIES
SHALL HAVE ANY LIABILITY (WHETHER DIRECT OR INDIRECT, IN CONTRACT, TORT OR
OTHERWISE) TO THE GUARANTOR OR ANY OF ITS RESPECTIVE AFFILIATES OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ADVISORS, AND THE
GUARANTOR HEREBY AGREES NOT TO ASSERT ANY CLAIM AGAINST ANY INDEMNIFIED PARTY ON
ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES IN CONNECTION WITH, ARISING OUT OF, OR OTHERWISE RELATING TO THIS
GUARANTY, ANY OTHER LOAN DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN
OR THEREIN, OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS
CONSTITUTING GUARANTEED OBLIGATIONS.
(c)    Without prejudice to the survival of any of the other agreements of the
Guarantor under this Guaranty or any of the other Loan Documents, the agreements
and obligations of the Guarantor contained in Section 1(a) (with respect to
enforcement expenses), the last sentence of Section 2, Section 5 and this
Section 13 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.
SECTION 14.    Subordination.
If any Specified Default (as defined below) shall have occurred and be
continuing, the Guarantor agrees to subordinate any and all debts, liabilities
and other obligations owed to the Guarantor by the Borrower (the “Subordinated
Obligations”) to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section 14:

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(a)    Prohibited Payments, Etc. After the occurrence and during the continuance
of any Specified Default (including, without limitation, the commencement and
continuation of any proceeding under any Debtor Relief Law relating to the
Borrower), unless the Administrative Agent otherwise agrees, the Guarantor shall
not demand, accept or take any action to collect any payment on account of the
Subordinated Obligations.
(b)    Prior Payment of Guaranteed Obligations. In any proceeding under any
Debtor Relief Law relating to the Borrower, the Guarantor agrees that the
Beneficiaries shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including, without limitation, all interest and expenses
accruing after the commencement of a proceeding under any Debtor Relief Law,
whether or not constituting an allowed claim in such proceeding (“Post Petition
Interest”)) before the Guarantor receives payment of any Subordinated
Obligations.
(c)    Turn-Over. After the occurrence and during the continuance of any
Specified Default (including, without limitation, the commencement and
continuation of any proceeding under any Debtor Relief Law relating to the
Borrower), the Guarantor shall, if the Administrative Agent so requests,
collect, enforce and receive payments on account of the Subordinated Obligations
as trustee for the Beneficiaries and deliver such payments to the Administrative
Agent on account of the Guaranteed Obligations (including, without limitation,
all Post Petition Interest), together with any necessary endorsements or other
instruments of transfer, but without reducing or affecting in any manner the
liability of the Guarantor under the other provisions of this Guaranty.
(d)    Administrative Agent Authorization. After the occurrence and during the
continuance of any Specified Default (including, without limitation, the
commencement and continuation of any proceeding under any Debtor Relief Law
relating to the Borrower), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name of the
Guarantor, to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including, without limitation, any and all Post Petition
Interest), and (ii) to require the Guarantor (A) to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and (B) to pay any amounts
received on such obligations to the Administrative Agent for application to the
Guaranteed Obligations (including, without limitation, any and all Post Petition
Interest).
(e)    Specified Default. As used in this Section 14, the term “Specified
Default” means (i) any Default pursuant to Section 9.1(a) or Section 9.1(e) of
the Loan Agreement or (ii) any Event of Default.
SECTION 15.    Continuing Guaranty; Assignments under the Loan Agreement.
This Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the later of (i) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, and (ii) the date
of the termination of all Commitments in accordance with the Loan Agreement, (b)
be binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Beneficiaries and their successors,
transferees and assigns. Without limiting the generality of clause (c) of the

11

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immediately preceding sentence, each Lender may assign or otherwise transfer all
or any portion of its rights and obligations under the Loan Agreement
(including, without limitation, all or any portion of its Commitment, the Loans
owing to it and the Note or Notes held by it) to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as and to the
extent provided in Section 11.3 of the Loan Agreement. The Guarantor shall not
have the right to assign or otherwise transfer its rights or obligations
hereunder or any interest herein without the prior written consent of the
Beneficiaries (and any attempted assignment or transfer by the Guarantor without
such consent shall be null and void).
SECTION 16.    Execution in Counterparts.

This Guaranty may be executed in any number of counterparts, each of which when
so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page of this Guaranty by telecopy, e-mailed .pdf or any other
electronic means that reproduces an image of the actual executed signature page
shall be effective as delivery of a manually executed counterpart of this
Guaranty. The words “execution,” “signed,” “signature,” “delivery,” and words of
like import in or relating to any document to be signed in connection with this
Guaranty and the transactions contemplated hereby shall be deemed to include
Electronic Signatures, deliveries or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.
SECTION 17.    Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a)    THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
(b)    The Guarantor hereby irrevocably and unconditionally submits, for itself
and its Property, to the exclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County, New York and of the United States
District Court for the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Guaranty or any of the other Loan Documents to which it is or is to be a party,
or for recognition or enforcement of any judgment, and the Guarantor hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the extent permitted by law, in such Federal court. The Guarantor agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Guaranty or any other Loan Document
shall affect any right that any Beneficiary may otherwise have to bring any
action or proceeding relating to this Guaranty or any other Loan Document
against the Guarantor or its Properties in the courts of any other jurisdiction.

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(c)    The Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or any other Loan Document to which
it is or is to be a party in any court referred to in paragraph (b) of this
Section. The Guarantor hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court. The Guarantor also
irrevocably consents, to the fullest extent permitted by law, to the service of
any and all process in any such suit, action or proceeding in the manner
provided for notices in Section 10. Nothing in this Guaranty or any other Loan
Document will affect the right of any Beneficiary to serve process in any other
manner permitted by law.
(d)    THE GUARANTOR AND EACH BENEFICIARY HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
GUARANTY, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). THE GUARANTOR AND
EACH BENEFICIARY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY TO ANY LOAN DOCUMENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES TO THE LOAN
DOCUMENTS HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 18.     Severability.

If any provision of this Guaranty is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.
SECTION 19.     Captions.

The headings of the sections and subsections hereof are provided for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Guaranty.
SECTION 20.     Entire Agreement.

This Guaranty together with the other Loan Documents represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Loan Documents or the transactions contemplated
herein and therein.
SECTION 21.     Regulatory Statement.

Pursuant to the terms of an order issued by the New Mexico Public Regulation
Commission and a stipulation that has been approved by the New Mexico Public
Regulation

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Commission, the Guarantor is required to include the following separateness
covenants in any debt instrument:

The Guarantor and PSNM are being operated as separate corporate and legal
entities. In agreeing to make loans to the Borrower, the Lenders are relying
solely on the creditworthiness of the Loan Parties based on the assets owned by
the Loan Parties, and the repayment of the loan will be made solely from the
assets of the Loan Parties and not from any assets of PSNM; and the Lenders will
not take any steps for the purpose of procuring the appointment of an
administrative receiver or the making of an administrative order for instituting
any bankruptcy, reorganization, insolvency, wind up or liquidation or any like
proceeding under applicable law in respect of PSNM.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.
GUARANTOR
PNM RESOURCES, INC.
By:    /s/ Charles N. Eldred                
Name:    Charles N. Eldred
Title:
Executive Vice President and Chief Financial Officer

Address:    414 Silver Ave. SW, MS0905
Albuquerque, NM 87102-3289
Attention:     Elisabeth Eden, Treasurer
Telephone No.:     (505) 241-2691
Telecopier No.:     (505) 241-4386
E-mail:     Elisabeth.Eden@pnmresources.com

S-1

Signature Page to Guaranty

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AGREED AND ACCEPTED:

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Administrative Agent

By:    /s/ Chi-Cheng Chen        
Name:    Chi-Cheng Chen
Title:    Director

S-2

Signature Page to Guaranty

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EXHIBIT 7.1(c)
FORM OF
COMPLIANCE CERTIFICATE
TO:
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Administrative Agent

RE:
Guaranty, dated as of February 1, 2016 (as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Guaranty”),
made by PNM Resources, Inc. (the “Guarantor”) in favor of the Beneficiaries (as
defined below), to guaranty the obligations of NM Capital Utility Corporation, a
Delaware corporation (the “Borrower”), arising under a Term Loan Agreement,
dated as of February 1, 2016, among the Borrower, The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (together with its successors and assigns, the “Administrative
Agent”), and the Lenders identified therein (such Lenders together with the
Administrative Agent, the “Beneficiaries”).

DATE:
________________, 201__

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Pursuant to the terms of the Guaranty, I, ________________, [Title of Financial
Officer] of the Guarantor, hereby certify on behalf of the Guarantor that, as of
the [Fiscal Quarter] [Fiscal Year] ending ______, 201__, the statements below
are accurate and complete in all respects (all capitalized terms used below
shall have the meanings assigned thereto in the Guaranty):
a.    Attached hereto as Schedule 1 are calculations (calculated as of the date
of the annual financial statements delivered in accordance with Section 7(a) of
the Guaranty or as of the date of the quarterly financial statements referred to
in paragraph c. below) demonstrating compliance by the Guarantor with the
financial covenant set forth in Section 7(b) of the Guaranty.
b.    No Default or Event of Default exists with respect to the Guarantor,
except as indicated on a separate page attached hereto, together with an
explanation of the action taken or proposed to be taken by the Guarantor with
respect thereto.
c.    [Attached hereto as Schedule 2 are the [quarterly][annual] financial
statements for the fiscal [quarter][year] ended __________, 201__ and such
[quarterly][annual] financial statements] [The [quarterly][annual] financial
statements for the fiscal [quarter][year] ended _______, 201_, delivered
electronically pursuant to the last paragraph of Section 7.1 of the PNMR Loan
Agreement, as incorporated by reference in Section 7(a) of the Guaranty,]1
fairly present in all material respects the financial condition of the Guarantor
and its Subsidiaries and have been prepared in accordance with GAAP[, subject to
changes resulting from audit and

__________________________
1 Use the first bracketed language when delivering paper copies of financial
statements and the second bracketed language when delivering financial
statements electronically.

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normal year-end audit adjustments and except that the quarterly financial
statements have fewer footnotes than annual statements]2.
[signature page follows]

__________________________
2 Include when delivering quarterly financial statements.

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PNM RESOURCES, INC.,
a New Mexico corporation
By:            
Name:        
Title:            

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SCHEDULE 1
TO EXHIBIT 7.1(c)
FINANCIAL COVENANT CALCULATIONS
A.    Debt Capitalization
1.
Consolidated Indebtedness of the Guarantor3
$ ___________________
2.
Consolidated Capitalization of the Guarantor
$ ___________________
3.
Debt to Capitalization Ratio (Line A1 ÷ A2)
____________to 1.0
Maximum Permitted
0.65 to 1.0

___________________________

3 For purposes of such calculation, the portion of Consolidated Indebtedness
attributable to obligations under Material Leases shall be the net present value
(using (i) the discount rate (A) set forth in Schedule 6.19 of the PNMR Loan
Agreement (as such Schedule 6.19 is in effect on the date of the Guaranty and as
thereafter amended from time to time, but only to the extent that any such
amendments have been consented to in accordance with Section 9 of the Guaranty),
so long as such Schedule 6.19 specifies the same relevant discount rate as is
used in calculating such net present value provided to Moody's and S&P or (B)
used in calculating such net present value provided to Moody's and S&P or (ii)
any such other discount rate as shall be proposed by the Guarantor (and agreed
upon by the Required Lenders)) of all amounts payable under the Material Leases.

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SCHEDULE 2
TO EXHIBIT 7.1(c)

[QUARTERLY][ANNUAL] FINANCIAL STATEMENTS
[Attached]