Exhibit 10.4
FIRST AMENDMENT
TO THE REIMBURSEMENT AGREEMENT
This First Amendment to the Reimbursement Agreement (this “Amendment”) dated as
of August 7, 2008, is among PUBLIC SERVICE COMPANY OF NEW MEXICO (the
“Borrower”), the lenders party hereto and DEUTSCHE BANK AG NEW YORK BRANCH, as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns, the “Administrative Agent”).
PRELIMINARY STATEMENT
WHEREAS, the Borrower, the Administrative Agent and the financial institutions
party from time to time thereto, as lenders (together with their successors and
permitted assigns, the “Lenders”), have entered into that certain Reimbursement
Agreement dated as of May 8, 2008 (as amended, restated, modified or
supplemented from time to time, the “Reimbursement Agreement”); and
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders amend the definition of “Consolidated EBITDA” in Section 1.1 of the
Reimbursement Agreement to address non-cash losses and non-cash gains as set
forth herein, and the Administrative Agent and the Lenders party hereto are
willing to amend such definition as set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements set
forth herein, the parties agree as follows:
Section 1. Definitions. Unless otherwise defined in this Amendment, each
capitalized term used in this Amendment has the meaning assigned to such term in
the Reimbursement Agreement.
Section 2. Amendment to Reimbursement Agreement. The Reimbursement Agreement is
hereby amended as follows:
(a) The definition of “Consolidated EBITDA” in Section 1.1 of the Reimbursement
Agreement is hereby amended as follows:
“ “Consolidated EBITDA” means, with respect to the Borrower and its Subsidiaries
for any fiscal period, the sum of (a) operating income from continuing
operations and from discontinued operations (but expressly excluding any
extraordinary gains and extraordinary losses), (b) depreciation and amortization
expense, (c) net unrealized losses under any derivatives (to the extent such
amounts are included in operating income), (d) impairments of utility plant (to
the extent such amounts are included in operating income), (e) impairments of
regulatory assets and regulatory disallowances (to the extent such amounts are
included in operating income) and (f) other charges, losses or writedowns that
do not represent a cash item in such period or any future period (to the extent
such amounts are included in operating income), less (g) net unrealized gains
under any derivatives and other gains that do not represent a cash item in such
period or any future period (to the extent such amounts are included in
operating income), in each case, determined in accordance with GAAP and
consistent with the preparation and presentation of the Borrower’s financial
statements delivered pursuant to Section 4.1(d). For illustrative purposes,
Schedule 1.1(b) sets forth a calculation of Consolidated EBITDA for the period
ended March 31, 2008, in accordance with the foregoing.”

 

 

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(b) The Reimbursement Agreement is hereby amended by (i) deleting the existing
Schedule 1.1(b) to the Reimbursement Agreement and inserting in its place the
text contained in Attachment 1 attached to this Amendment as the new
Schedule 1.1(b) to the Reimbursement Agreement and (ii) making the corresponding
changes to Section B to Schedule 1 to Exhibit 7.1(c).
Section 3. Ratification. The Borrower hereby ratifies and confirms all of the
Borrower Obligations under the Reimbursement Agreement and the other Credit
Documents.
Section 4. Effectiveness. This Amendment shall become effective on the first
date on which each of the conditions set forth in this Section 4 is satisfied:
(a) The Administrative Agent shall have received duly executed counterparts of
this Amendment from the Borrower, the Administrative Agent and from Lenders
representing not less than the Required Lenders; and
(b) The Administrative Agent shall be reasonably satisfied that the requisite
parties to that certain Delayed Draw Term Loan Agreement dated as of May 5,
2008, among Borrower, as borrower, Merrill Lynch Capital Corporation, as
administrative agent, and the other lenders party thereto (the “Merrill Lynch
Loan Agreement”), shall have amended, otherwise modified or consented to the
incorporation by reference of changes to the Merrill Lynch Loan Agreement to
address non-cash charges, losses or gains, including, without limitation, those
caused by a writedown of the Borrower’s goodwill, in a manner substantially
similar to this Amendment, as determined by the Administrative Agent in its sole
discretion; and
(c) The Borrower shall have confirmed and acknowledged to the Administrative
Agent and the Lenders, and by its execution and delivery of this Amendment the
Borrower does hereby confirm and acknowledge to the Administrative Agent and the
Lenders, that (i) the execution, delivery and performance of this Amendment has
been duly authorized by all requisite corporate action on the part of the
Borrower; (ii) the Reimbursement Agreement and each other Credit Document to
which it is a party constitute valid and legally binding agreements enforceable
against the Borrower in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or affecting
the enforcement of creditors’ rights generally and by general principles of
equity; (iii) the representations and warranties by the Borrower contained in
the Reimbursement Agreement and in the other Credit Documents are true and
correct on and as of the date hereof in all material respects as though made as
of the date hereof, except to the extent they expressly and exclusively relate
to an earlier date; and (iv) no Default or Event of Default exists under the
Reimbursement Agreement or any of the other Credit Documents.

 

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Section 5. Governing Law. THIS AMENDMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).
Section 6. Miscellaneous. (a) On and after the effectiveness of this Amendment,
each reference in each Credit Document to “this Agreement”, “this Note”, “this
Letter of Credit”, “hereunder”, “hereof” or words of like import, referring to
such Credit Document, and each reference in each other Credit Document to “the
Reimbursement Agreement”, “the Notes”, “the Letters of Credit”, “thereunder”,
“thereof” or words of like import referring to the Reimbursement Agreement, the
Notes, the Letters of Credit or any of them, shall mean and be a reference to
such Credit Document, the Reimbursement Agreement, the Notes, the Letters of
Credit or any of them, as amended or otherwise modified by this Amendment;
(b) the execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any default of the
Borrower or any right, power or remedy of the Administrative Agent or the
Lenders under any of the Credit Documents, nor constitute a waiver of any
provision of any of the Credit Documents; (c) this Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement; and
(d) delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
Section 7. Final Agreement. THE REIMBURSEMENT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS, INCLUDING THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN
THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
executed by its officer(s) thereunto duly authorized as of the date first above
written.

              BORROWER:
 
            PUBLIC SERVICE COMPANY OF NEW MEXICO,     a New Mexico corporation
 
       
 
  By:   /s/ Terry Horn
 
       
 
  Name:   Terry Horn
 
  Title:   Vice President and Treasurer
 
            ADMINISTRATIVE AGENT AND LENDERS:
 
            DEUTSCHE BANK AG NEW YORK BRANCH,     as Administrative Agent and a
Lender
 
       
 
  By:   /s/ Marcus Tarkington
 
       
 
  Name:   Marcus Tarkington
 
  Title:   Director
 
       
 
  and    
 
       
 
  By:   /s/ Yvonne Tilden
 
       
 
  Name:   Yvonne Tilden
 
  Title:   Director
 
            ROYAL BANK OF CANADA     as a Lender
 
       
 
  By:   /s/ Jay T. Sartain
 
       
 
  Name:   Jay T. Sartain
 
  Title:   Authorized Signatory

 

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Attachment 1

B.   Interest Coverage:

  1.   Consolidated EBITDA of the Borrower

     
(a) operating income from continuing operations and from discontinued operations
(but expressly excluding any extraordinary gains and extraordinary losses)
  $                    
 
   
(c) depreciation and amortization expense
  $                    
 
   
(c) net unrealized losses under any derivatives (to the extent such amounts are
included in operating income)
  $                    
 
   
(d) impairments of utility plant (to the extent such amounts are included in
operating income)
  $                    
 
   
(e) impairments of regulatory assets and regulatory disallowances (to the extent
such amounts are included in operating income)
  $                    
 
   
(f) other charges, losses or writedowns that do not represent a cash item in
such period or any future period (to the extent such amounts are included in
operating income)
  $                    
 
   
Sum (a) through (f)
  $                    
 
   
(g) net unrealized gains under any derivatives and other gains that do not
represent a cash item in such period or any future period (to the extent such
amounts are included in operating income)
  $                    
 
   
Consolidated EBITDA (Sum of (a) through (f) minus (g)):
  $                    

  2.   Consolidated Interest Expense of the Borrower

     
(a) total interest charges included in the calculation of income from continuing
operations
  $                    
 
   
(b) total interest charges included in the calculation of income from
discontinued operations, in each case, including all interest, premium payments,
debt discount, fees, charges and related expenses in connection with borrowed
money (including capitalized interest), the deferred purchase price of assets,
and the portion of rent expense under capitalized leases that is treated as
interest.
  $                    
 
   
Sum of (a) and (b)
  $                    

                 
 
    3.     Interest Coverage Ratio (Line B1 ÷ B2)   X.XX to 1.0
 
          Minimum Permitted:   X.XX to 1.0