Exhibit 10.1
Public Service Company of New Mexico
 
Charles N. Eldred
 
Corporate Headquarters
 
Executive Vice President
 
MS-1235
 
Chief Financial Officer
 
Albuquerque, NM 87102
 
 
 
Charles.Eldred@pnmresources.com
 
 
 
505-241-4691
 
 
 

    

February 25, 2014
CGI Capital, Inc.
c/o Citigroup
390 Greenwich Street, 1st Floor
New York, New York 10013
Attention: Brian Whalen

Re:
Agreement on Fair Market Sales Value (“FMSV”) pursuant to Section 13(a) of that
certain Facility Lease, dated as of August 12, 1986, as amended (the “Facility
Lease”), between Public Service Company of New Mexico (the “Lessee”) and U.S.
Bank National Association (successor to State Street Bank and Trust Company,
successor to The First National Bank of Boston) as Lessor under the Facility
Lease and as Owner Trustee for CGI Capital, Inc. (the “Owner Participant”) under
that certain Trust Agreement, dated as of August 12, 1986.

Dear Mr. Whalen:
By letter dated January 13, 2014, the Lessee provided notice of its irrevocable
election to purchase (the “Notice of Option Exercise”) the Undivided Interest
and the Real Property Interest (the “Option Property”) pursuant to Section 13(a)
of the Facility Lease. Following delivery of the Notice of Option Exercise,
Section 13(a) of the Facility Lease requires that the Lessee and the Owner
Participant promptly agree upon the FMSV of the Option Property to be paid by
the Lessee on January 15, 2016 (the “Purchase Date”), following the expiration
of the Basic Lease Term on January 15, 2016. In addition, the scheduled Basic
Rent amount will be paid on January 15, 2016. Capitalized terms used herein but
not defined herein shall have their respective meanings specified in the
Facility Lease.
This letter agreement serves to memorialize the parties’ binding agreement with
respect to the FMSV of the Option Property to be paid by the Lessee on the
Purchase Date in connection with consummating the Lessee’s irrevocable Purchase
Option contemplated by Section 13(b) of the Facility Lease (the “Transaction”)
and, in accordance with the requirements of Section 13(a) of the Facility Lease,
the Lessee and the Owner Participant do hereby agree that the FMSV of (i) the
Undivided Interest to be purchased on the Purchase Date, is $78,097,847 and (ii)
the Real Property Interest to be purchased on the Purchase Date, is $25,653.

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The parties further acknowledge and agree to work together in good faith to
enter into a definitive Purchase and Sale Agreement, Assignment and Assumption
Agreement, Bill of Sale and/or such other documentation (collectively, the
“Purchase Documentation”) and to take such further actions, as may be required
to effectuate the Transaction on or prior to the Purchase Date, and that the
foregoing documentation shall contain reasonable and customary terms and
conditions; provided, that, in accordance with Section 13(a) of the Facility
Lease, the Lessee’s irrevocable Notice of Option Exercise shall not be binding
on the Lessor (or the Owner Participant) if an Event of Default shall have
occurred and be continuing or an Event of Loss or a Deemed Event of Loss shall
have occurred. PNM will provide the initial draft of the Purchase Documentation.
This letter agreement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single agreement. This letter agreement shall be effective as of the date
hereof. Delivery of an executed counterpart of a signature page to this letter
agreement by telecopy or portable document format (“PDF”) shall be effective as
delivery of a manually executed counterpart of this letter agreement. As and to
the extent required by Sections 14(b) and 14(c) of the Participation Agreement,
the Lessee shall be responsible for all fees, costs, disbursements and expenses
(including legal and other professional fees and expenses) incurred by the Owner
Trustee and/or the Owner Participant in connection with the proposed
Transaction. The terms of the Transaction Documents shall continue in full force
and effect and nothing herein shall be interpreted or construed to limit or
otherwise waive the rights or obligations of the parties set forth therein.
This letter agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
If the Owner Participant is in agreement with the terms set forth herein, please
acknowledge our agreement in the space provided below and return a copy of this
letter to me by facsimile transmission or in PDF. By executing this letter, the
Owner Participant hereby instructs the Lessor to agree, and the Lessor hereby
agrees, in its capacity as Owner Trustee and Lessor, to the terms set forth
herein and to acknowledge agreement in the space provided below and return a
copy of this letter to the Lessee by facsimile transmission or in PDF.

[Remainder of Page Intentionally Left Blank]

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PUBLIC SERVICE COMPANY OF NEW MEXICO

By:     /s/ Charles N. Eldred    
Name: Charles N. Eldred
Title: Executive Vice President and Chief
Financial Officer
    

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Acknowledged and Agreed:
CGI CAPITAL, INC.

By:    /s/ Brian J. Whalen            
Name: Brian J. Whalen
Title: Vice President

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Acknowledged and Agreed:
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity, but solely as Owner Trustee

By:    /s/ Todd R. DiNezza            
Name: Todd R. DiNezza
Title: Assistant Vice President

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