Exhibit 10.2

EXECUTION VERSION

GUARANTY
This GUARANTY (this “Guaranty”), dated as of November 26, 2018, is executed and
delivered by PNM RESOURCES, INC., a New Mexico corporation (the “Parent
Guarantor”), in favor of KEYBANK NATIONAL ASSOCIATION, as Administrative Agent
(in such capacity, together with its successors and assigns, if any, in such
capacity, the “Administrative Agent”), in light of the following:
WHEREAS, PNMR Development and Management Corporation, a New Mexico corporation
(“Borrower”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and the
Administrative Agent are, contemporaneously herewith, entering into that certain
Term Loan Credit Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the “Credit Agreement”);
WHEREAS, in order to induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and the other Credit Documents and to induce the
Lenders to extend the loans and other financial accommodations to the Borrower
pursuant to the Credit Documents, and in consideration thereof, and in
consideration of any loans or other financial accommodations heretofore or
hereafter extended by the Lenders to the Borrower pursuant to the Credit
Documents, the Parent Guarantor has agreed to guarantee the Borrower Obligations
under the Credit Agreement and the other Credit Documents; and
WHEREAS, the Parent Guarantor directly owns 100% of the equity interests in the
Borrower and, in consideration of (i) the direct and indirect financial and
other support and benefits that the Borrower has provided, and such direct and
indirect financial and other support and benefits as the Borrower may in the
future provide, to the Parent Guarantor and (ii) the ability to receive funds,
through distributions, intercompany advances or otherwise, from funds provided
to the Borrower pursuant to the Credit Agreement and the flexibility provided by
the Credit Agreement for the Parent Guarantor to do so, which significantly
facilitates the business operations of the Borrower and the Parent Guarantor,
the Parent Guarantor is willing to guarantee the below defined Guaranteed
Obligations;
NOW, THEREFORE, in consideration of the foregoing, the Parent Guarantor hereby
agrees as follows:
1.Definitions and Construction.
(a)    Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Credit Agreement. The
following terms, as used in this Guaranty, shall have the following meanings:
“Administrative Agent” has the meaning set forth in the preamble to this
Guaranty.
“Borrower” has the meaning set forth in the recitals to this Guaranty.
“Credit Agreement” has the meaning set forth in the recitals to this Guaranty.
“Guaranteed Obligations” means all of the Borrower Obligations now or hereafter
existing, whether for principal, interest (including any interest that accrues
after the commencement of a Bankruptcy Event of the Borrower, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Bankruptcy Event), fees, costs and expenses incurred by the Administrative
Agent, Arranger and the Lenders pursuant to the Credit Documents (including any
fees or expenses that accrue

 

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after the commencement of a Bankruptcy Event of the Borrower, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Bankruptcy Event), or otherwise, and any and all expenses (including reasonable
counsel fees and expenses) incurred by the Administrative Agent, Arranger and
the Lenders (or any of them) in enforcing any rights under this Guaranty.
Without limiting the generality of the foregoing, Guaranteed Obligations shall
include all amounts that constitute part of the Guaranteed Obligations and would
be owed by the Borrower to the Administrative Agent, Arranger or any Lender, but
for the fact that they are unenforceable or not allowable, including due to the
existence of a bankruptcy, reorganization, other Bankruptcy Event or similar
proceeding involving the Borrower or the Parent Guarantor.
“Guaranty” has the meaning set forth in the preamble to this Guaranty.
“Parent Guarantor” has the meaning set forth in the preamble to this Guaranty.
“Record” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.
“Voidable Transfer” has the meaning set forth in Section 12 of this Guaranty.
(b)    Construction. Unless the context of this Guaranty clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and other similar terms in this Guaranty refer to this
Guaranty as a whole and not to any particular provision of this Guaranty.
Section, subsection, clause, schedule, and exhibit references herein are to this
Guaranty unless otherwise specified. Any reference in this Guaranty to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts, and contract
rights. This Guaranty has been reviewed by all parties and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of the Parent Guarantor and the
Administrative Agent. Any reference herein to the satisfaction, repayment, or
payment in full of the Guaranteed Obligations shall mean the repayment in full
in cash or immediately available funds of all of the Guaranteed Obligations
other than contingent indemnification obligations which are not yet due and
payable. Any reference herein to any Person shall be construed to include such
Person’s successors and assigns. Any requirement of a writing contained herein
shall be satisfied by the transmission of a Record. The captions and headings
are for convenience of reference only and shall not affect the construction of
this Guaranty.
2.    [Reserved.]
3.    Guaranteed Obligations. The Parent Guarantor hereby irrevocably and
unconditionally guaranties to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, as and for its own debt, until the final
payment in full thereof, in cash, has been made, (a) the due and punctual
payment of the Guaranteed Obligations, when and as the same shall become due and
payable, whether at maturity, by acceleration, or otherwise; it being the intent
of the Parent Guarantor that the guaranty set forth herein shall be a guaranty
of payment and not a guaranty of collection; and (b) the punctual and faithful
performance, keeping, observance, and fulfillment by the Borrower of all of the

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agreements, conditions, covenants, and obligations of the Borrower contained in
the Credit Agreement and each of the other Credit Documents. The Parent
Guarantor hereby agrees that this Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and is not a guaranty of collection.
4.    Continuing Guaranty; Discharge Only Upon Payment in Full. The Parent
Guarantor’s obligations hereunder shall constitute a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations shall have been
paid in full in cash and the Commitments under the Credit Agreement shall have
terminated, at which time, subject to all the foregoing conditions, the
guaranties made hereunder shall automatically terminate. This Guaranty includes
Guaranteed Obligations arising under successive transactions continuing,
compromising, extending, increasing, modifying, releasing, or renewing the
Guaranteed Obligations, changing the interest rate, payment terms, or other
terms and conditions thereof, or creating new or additional Guaranteed
Obligations after prior Guaranteed Obligations have been satisfied in whole or
in part. To the maximum extent permitted by law, the Parent Guarantor hereby
waives any right to revoke this Guaranty as to future Guaranteed Obligations. If
such a revocation is effective notwithstanding the foregoing waiver, the Parent
Guarantor acknowledges and agrees that (a) no such revocation shall be effective
until written notice thereof has been received by the Administrative Agent,
(b) no such revocation shall apply to any Guaranteed Obligations in existence on
the date of receipt by the Administrative Agent of such written notice
(including any subsequent continuation, extension, or renewal thereof, or change
in the interest rate, payment terms, or other terms and conditions thereof),
(c) no such revocation shall apply to any Guaranteed Obligations made or created
after such date to the extent made or created pursuant to a legally binding
commitment of any Lender in existence on the date of such revocation, (d) no
payment by the Parent Guarantor, the Borrower, or from any other source, prior
to the date of the Administrative Agent’s receipt of written notice of such
revocation shall reduce the maximum obligation of the Parent Guarantor
hereunder, and (e) any payment by the Borrower or from any source other than the
Parent Guarantor subsequent to the date of such revocation shall first be
applied to that portion of the Guaranteed Obligations as to which the revocation
is effective and which are not, therefore, guaranteed hereunder, and to the
extent so applied shall not reduce the maximum obligation of the Parent
Guarantor hereunder.
5.    Performance Under this Guaranty. In the event that the Borrower fails to
make any payment of any Guaranteed Obligations, on or prior to the due date
thereof, or if the Borrower shall fail to perform, keep, observe, or fulfill any
other obligation referred to in clause (b) of Section 3 of this Guaranty in the
manner provided in the Credit Agreement and the other Credit Documents, the
Parent Guarantor immediately shall cause, as applicable, such payment in respect
of the Guaranteed Obligations to be made or such obligation to be performed,
kept, observed, or fulfilled.
6.    Primary Obligations.
(a)    This Guaranty is a primary and original obligation of the Parent
Guarantor, is not merely the creation of a surety relationship, and is an
absolute, unconditional, and continuing guaranty of payment and performance
which shall remain in full force and effect without respect to future changes in
conditions. The Parent Guarantor hereby agrees that it is directly, jointly and
severally with any other guarantor of the Guaranteed Obligations, liable to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, that its obligations hereunder are independent of the obligations of
the Borrower or any other guarantor, and that a separate action may be brought
against the Parent Guarantor, whether such action is brought against the
Borrower or any other guarantor or whether the Borrower or any other guarantor
is joined in such action. The Parent Guarantor hereby agrees that its liability
hereunder shall be immediate and shall not be contingent upon the exercise or
enforcement by the Administrative Agent or any Lender of whatever remedies they
may have against the Borrower or any other guarantor, or the enforcement of any
lien or realization upon any security by the Administrative

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Agent or any Lender. The Parent Guarantor hereby agrees that any release which
may be given by the Administrative Agent to the Borrower or any other guarantor
(other than a release in connection with the payment in full of all Guaranteed
Obligations) shall not release the Parent Guarantor. The Parent Guarantor
consents and agrees that neither the Administrative Agent nor any Lender shall
be under any obligation to marshal any property or assets of the Borrower or any
other guarantor in favor of the Parent Guarantor, or against or in payment of
any or all of the Guaranteed Obligations.
(b)    Without limiting the generality of the foregoing clause (a), the
obligations of the Parent Guarantor hereunder shall not be released, discharged
or otherwise affected by:
(i)    any change in the corporate, partnership, limited liability company or
other existence, structure or ownership of the Borrower or any other guarantor
of any of the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower or any other
guarantor of the Guaranteed Obligations, or any of their respective assets or
any resulting release or discharge of any obligation of the Borrower or any
other guarantor of any of the Guaranteed Obligations;
(ii)    the existence of any claim, set-off or other rights which the Parent
Guarantor may have at any time against the Borrower, any other guarantor of any
of the Guaranteed Obligations, the Administrative Agent, any Lender or any other
Person, whether in connection herewith or in connection with any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(iii)    the enforceability or validity of the Guaranteed Obligations or any
part thereof or the genuineness, enforceability or validity of any agreement
relating thereto or any part thereof, or any other invalidity or
unenforceability relating to or against the Borrower or any other guarantor of
any of the Guaranteed Obligations, for any reason related to the Credit
Agreement or any other Credit Document, or any provision of applicable law,
decree, order or regulation purporting to prohibit the payment by the Borrower
or any other guarantor of the Guaranteed Obligations, of any of the Guaranteed
Obligations or otherwise affecting any term of any of the Guaranteed
Obligations;
(iv)    the election by, or on behalf of, the Administrative Agent or any
Lender, in any proceeding instituted under Chapter 11 of Title 11 of the United
States Code (11 U.S.C. 101 et seq.) (or any successor statute, the “Bankruptcy
Code”), of the application of Section 1111(b)(2) of the Bankruptcy Code or any
other applicable federal, state, provincial, municipal, local or foreign law
relating to such matters;
(v)    any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code or any other
applicable federal, state, provincial, municipal, local or foreign law relating
to such matters;
(vi)    the disallowance, under Section 502 of the Bankruptcy Code or any other
applicable federal, state, provincial, municipal, local or foreign law relating
to such matters, of all or any portion of the claims of the Administrative Agent
and the Lenders for repayment of all or any part of the Guaranteed Obligations;
or
(vii)    any other act or omission to act or delay of any kind by the Borrower,
any other guarantor of the Guaranteed Obligations, the Administrative Agent, any
Lender or any other Person or any other circumstance whatsoever which might, but
for the provisions of this Section 6(b), constitute a legal or equitable
discharge of the Parent Guarantor’s obligations hereunder or otherwise

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reduce, release, prejudice or extinguish its liability under this Guaranty other
than a payment in full of all Guaranteed Obligations (subject to Section 12
below).
7.    Waivers.
(a)    To the fullest extent permitted by applicable law, the Parent Guarantor
hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or
other financial accommodations made or extended under the Credit Agreement, or
the creation or existence of any Guaranteed Obligations; (iii) notice of the
amount of the Guaranteed Obligations, subject, however, to its right to make
inquiry of the Administrative Agent to ascertain the amount of the Guaranteed
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of the Borrower or of any other fact that might increase its
risk hereunder; (v) notice of presentment for payment, intent to accelerate,
acceleration, demand, protest, and notice thereof as to any instrument among the
Credit Documents; (vi) notice of any Default or Event of Default under any of
the Credit Documents; and (vii) all other notices (except if such notice is
specifically required to be given to the Parent Guarantor under this Guaranty or
any other Credit Documents to which it is a party) and demands to which it might
otherwise be entitled.
(b)    To the fullest extent permitted by applicable law, the Parent Guarantor
hereby waives the right by statute or otherwise to require the Administrative
Agent or any Lender to institute suit against the Borrower or any other
guarantor or to exhaust any rights and remedies which the Administrative Agent
or any Lender has or may have against the Borrower or any other guarantor. In
this regard, the Parent Guarantor agrees that it is bound to the payment of each
and all Guaranteed Obligations, whether now existing or hereafter arising, as
fully as if the Guaranteed Obligations were directly owing to the Administrative
Agent or the Lenders, as applicable, by the Parent Guarantor. The Parent
Guarantor further waives any defense arising by reason of any disability or
other defense (other than the defense that the Guaranteed Obligations shall have
been fully and finally performed and indefeasibly paid in full in cash, to the
extent of any such payment) of the Borrower or by reason of the cessation from
any cause whatsoever of the liability of the Borrower in respect thereof.
(c)    To the fullest extent permitted by applicable law, the Parent Guarantor
hereby waives: (A) any right to assert against the Administrative Agent or any
Lender any defense (legal or equitable), set-off, counterclaim, or claim which
it may now or at any time hereafter have against the Borrower or any other party
liable to the Administrative Agent or any Lender; (B) any defense, set-off,
counterclaim, or claim, of any kind or nature, arising directly or indirectly
from the present or future lack of perfection, sufficiency, validity, or
enforceability of the Guaranteed Obligations or any security therefor; (C) any
right or defense arising by reason of any claim or defense based upon an
election of remedies by the Administrative Agent or any Lender, including any
defense based upon an impairment or elimination of its rights of subrogation,
reimbursement, contribution, or indemnity against the Borrower or other
guarantors or sureties; (D) the benefit of any statute of limitations affecting
its liability hereunder or the enforcement thereof, and any act which shall
defer or delay the operation of any statute of limitations applicable to the
Guaranteed Obligations shall similarly operate to defer or delay the operation
of such statute of limitations applicable to its liability hereunder and (E) any
election by the Administrative Agent or the Lenders under the Bankruptcy Code to
limit the amount of, or any collateral securing, its claim against the Parent
Guarantor.
(d)    The Parent Guarantor will not exercise any rights that it may now or
hereafter acquire against any other guarantor that arise from the existence,
payment, performance or enforcement of its obligations under this Guaranty,
including any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any Lender against any other guarantor, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including the right to take or receive from any other

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guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely 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 and all of the
Commitments have been terminated. If any amount shall be paid to the Parent
Guarantor in violation of the immediately preceding sentence, such amount shall
be held in trust for the benefit of the Administrative Agent and the Lenders,
and shall forthwith be paid to the Administrative Agent 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
Credit Agreement.
(e)    If any of the Guaranteed Obligations or the obligations of the Parent
Guarantor under this Guaranty at any time are secured by a mortgage or deed of
trust upon real property, the Administrative Agent or any Lender may elect, in
its sole discretion, upon a default with respect to the Guaranteed Obligations
or its obligations under this Guaranty, to foreclose such mortgage or deed of
trust judicially or nonjudicially in any manner permitted by law, before or
after enforcing this Guaranty, without diminishing or affecting the liability of
the Parent Guarantor hereunder. The Parent Guarantor understands that (a) by
virtue of the operation of antideficiency law applicable to nonjudicial
foreclosures, an election by the Administrative Agent or any Lender to
nonjudicially foreclose on such a mortgage or deed of trust probably would have
the effect of impairing or destroying its rights of subrogation, reimbursement,
contribution, or indemnity against the Borrower or other guarantors or sureties,
and (b) absent the waiver given by the Parent Guarantor herein, such an election
would estop the Administrative Agent or any Lender from enforcing this Guaranty
against the Parent Guarantor. Understanding the foregoing, and understanding
that the Parent Guarantor is hereby relinquishing a defense to the
enforceability of this Guaranty, the Parent Guarantor hereby waives any right to
assert against the Administrative Agent or any Lender any defense to the
enforcement of this Guaranty, whether denominated “estoppel” or otherwise, based
on or arising from an election by the Administrative Agent or any Lender to
nonjudicially foreclose on any such mortgage or deed of trust or as a result of
any other exercise of remedies, whether under a mortgage or deed of trust or
under any personal property security agreement. The Parent Guarantor understands
that the effect of the foregoing waiver may be that the Parent Guarantor may
have liability hereunder for amounts with respect to which it may be left
without rights of subrogation, reimbursement, contribution, or indemnity against
the Borrower or other guarantors or sureties.
(f)    The Parent Guarantor waives any defense arising by reason of or deriving
from (i) any claim or defense based upon an election of remedies by the
Administrative Agent or the Lenders; or (b) any election by the Administrative
Agent or the Lenders under the Bankruptcy Code, to limit the amount of, or any
collateral securing, its claim against the Parent Guarantor.
8.    Releases. The Parent Guarantor consents and agrees that, without notice to
or by the Parent Guarantor and without affecting or impairing its obligations
hereunder, the Administrative Agent or any Lender may, by action or inaction,
compromise or settle, shorten or extend the Maturity Date or any other period of
duration or the time for the payment of the Borrower Obligations, or discharge
the performance of the Borrower Obligations, or may refuse to enforce the
Borrower Obligations, or otherwise elect not to enforce the Borrower
Obligations, or may, by action or inaction, release all or any one or more
parties to, any one or more of the terms and provisions of the Credit Agreement
or any of the other Credit Documents, or may grant other indulgences to the
Borrower or any other guarantor in respect thereof, or may amend or modify in
any manner and at any time (or from time to time) any one or more of the
Borrower Obligations, the Credit Agreement, or any other Credit Document
(including any increase or decrease in the principal amount of any Borrower
Obligations or the interest, fees or other amounts that may accrue from time to
time in respect thereof), or may, by action or inaction, release or substitute
the Borrower or any guarantor, if any, of the Guaranteed Obligations, or may
enforce, exchange, release, or

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waive, by action or inaction, any security for the Guaranteed Obligations or any
other guaranty of the Guaranteed Obligations, or any portion thereof.
9.    Subordination of Intercompany Indebtedness. The Parent Guarantor agrees
that any and all of its claims against the Borrower with respect to any
“Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or
any other guarantor of all or any part of the Guaranteed Obligations, or against
any of its properties, shall be subordinate and subject in right of payment to
the prior payment, in full and in cash, of all Guaranteed Obligations; provided
that, as long as no Event of Default has occurred and is continuing, the Parent
Guarantor may receive payments of principal and interest from the Borrower with
respect to Intercompany Indebtedness without limitation. Notwithstanding any
right of the Parent Guarantor to ask, demand, sue for, take or receive any
payment from the Borrower, all rights, liens and security interests of the
Parent Guarantor, whether now or hereafter arising and howsoever existing, in
any assets of the Borrower shall be and are subordinated to the rights of the
Administrative Agent and the Lenders in those assets. The Parent Guarantor shall
not have any right to possession of any such asset or to foreclose upon any such
asset, whether by judicial action or otherwise, unless and until all of the
Guaranteed Obligations shall have been fully paid and satisfied (in cash) and
all financing arrangements pursuant to any Credit Document have been terminated;
provided that, as long as no Event of Default has occurred and is continuing,
nothing contained herein shall prevent or limit any distribution or other
transfer of any assets from the Borrower to the Parent Guarantor. If all or any
part of the assets of the Borrower, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of the Borrower, whether
partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of the
Borrower is dissolved or if substantially all of the assets of the Borrower are
sold, then, and in any such event (such events being herein referred to as an
“Insolvency Event”), any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of the Borrower to the
Parent Guarantor (“Intercompany Indebtedness”) shall be paid or delivered
directly to the Administrative Agent for application on any of the Guaranteed
Obligations, due or to become due, until such Guaranteed Obligations shall have
first been fully paid and satisfied (in cash). Should any payment, distribution,
security or instrument or proceeds thereof be received by the Parent Guarantor
upon or with respect to the Intercompany Indebtedness after any Insolvency Event
and prior to the satisfaction of all of the Guaranteed Obligations, the Parent
Guarantor shall receive and hold the same in trust, as trustee, for the benefit
of the Administrative Agent and the Lenders and shall forthwith deliver the same
to the Administrative Agent, for the benefit of the Lenders, in precisely the
form received (except for the endorsement or assignment of the Parent Guarantor
where necessary), for application to any of the Guaranteed Obligations, due or
not due, and, until so delivered, the same shall be held in trust by the Parent
Guarantor as the property of the Administrative Agent and the Lenders. If the
Parent Guarantor fails to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its officers or
employees is irrevocably authorized to make the same. The Parent Guarantor
agrees that until the Guaranteed Obligations have been paid in full (in cash)
and satisfied and all financing arrangements pursuant to any Credit Document
among the Borrower, the Administrative Agent and the Lenders have been
terminated, it will not assign or transfer to any Person (other than the
Administrative Agent) any claim it has or may have against the Borrower.
10.    Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Borrower under the Credit Agreement or any other Credit
Document is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower or any of its Affiliates, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement or any other Credit
Document shall nonetheless be payable by the Parent Guarantor hereunder
forthwith on demand by the Administrative Agent.

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11.    No Election. The Lenders shall have the right to seek recourse against
the Parent Guarantor to the fullest extent provided for herein and no election
by any Lender to proceed in one form of action or proceeding, or against any
party, or on any obligation, shall constitute a waiver of the Administrative
Agent’s or the Lenders’ right to proceed in any other form of action or
proceeding or against other parties unless the Administrative Agent, on behalf
of itself and the Lenders, has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by the Administrative Agent or the Lenders under any document or
instrument evidencing the Guaranteed Obligations shall serve to diminish the
liability of the Parent Guarantor under this Guaranty except to the extent that
the Administrative Agent and the Lenders finally and unconditionally shall have
realized indefeasible payment in full of the Guaranteed Obligations by such
action or proceeding.
12.    Revival and Reinstatement. If the incurrence or payment of the Guaranteed
Obligations or the obligations of the Parent Guarantor under this Guaranty by
the Parent Guarantor or the transfer by the Parent Guarantor to the
Administrative Agent of any property of the Parent Guarantor should for any
reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors’ rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences, or other
voidable or recoverable payments of money or transfers of property (including
pursuant to any settlement entered into by the Administrative Agent or any
Lender in its discretion) (collectively, a “Voidable Transfer”), and if the
Administrative Agent or any Lender is required to repay or restore, in whole or
in part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of its counsel that the Administrative Agent or such Lender shall be
required to repay or restore, in whole or in part, any such Voidable Transfer,
then, as to any such Voidable Transfer, or the amount thereof that the
Administrative Agent or the Lenders are required or elect to repay or restore,
and as to all reasonable costs, expenses, and attorneys’ fees of the
Administrative Agent and the Lenders related thereto, the liability of the
Parent Guarantor automatically shall be revived, reinstated, and restored and
shall exist as though such Voidable Transfer had never been made.
13.    Financial Condition. The Parent Guarantor represents and warrants to the
Administrative Agent and the Lenders that it is currently informed of the
financial condition of the Borrower and any and all endorsers and/or other
guarantors of all or any part of the Guaranteed Obligations, and of all other
circumstances which a diligent inquiry would reveal and which bear upon the risk
of nonpayment of the Guaranteed Obligations. The Parent Guarantor further
represents and warrants to the Administrative Agent and the Lenders that it has
read and understands the terms and conditions of the Credit Agreement and each
other Credit Document. The Parent Guarantor hereby covenants that it will
continue to keep itself informed of the Borrower’s financial condition, the
financial condition of other guarantors, if any, and of all other circumstances
which bear upon the risk of nonpayment or nonperformance of the Guaranteed
Obligations. The Parent Guarantor hereby agrees that neither the Administrative
Agent nor any Lender shall have any duty to advise the Parent Guarantor of
information known to any of them regarding such condition or any such
circumstances. In the event the Administrative Agent or any Lender, in its sole
discretion, undertakes at any time or from time to time to provide any such
information to the Parent Guarantor, any other Lender or the Administrative
Agent shall be under no obligation (i) to undertake any investigation not a part
of its regular business routine, (ii) to disclose any information which such
Lender or the Administrative Agent, pursuant to accepted or reasonable
commercial finance or banking practices, wishes to maintain confidential or
(iii) to make any other or future disclosures of such information or any other
information to the Parent Guarantor.
14.    Payments; Application. All payments to be made hereunder by the Parent
Guarantor shall be made in Dollars, in immediately available funds, and without
deduction (except as otherwise required by applicable law) or offset and shall
be applied to the Guaranteed Obligations in accordance with the terms of the
Credit Agreement.

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15.    Taxes; Fees and Costs.
(a)    Taxes. Section 3.13 of the Credit Agreement shall be applicable, mutatis
mutandis, to all payments required to be made by the Parent Guarantor under this
Guaranty.
(b)    Fees and Costs. The Parent Guarantor agrees to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Guaranty or the other Credit Documents (including
all such costs and expenses incurred during any “workout” or restructuring in
respect of the Guaranteed Obligations and during any legal proceeding, including
any proceeding under any Debtor Relief Law), including all reasonable fees and
expenses of legal counsel. The foregoing costs and expenses shall include all
search, filing, recording, and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Administrative Agent
and the Arranger and the cost of independent public accountants and other
outside experts retained by the Administrative Agent, the Arranger or any
Lender. The agreements in this Section 15 shall survive the termination of the
Commitments and repayment of all of the Guaranteed Obligations.
16.    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 and continuation
of remedies described in Section 9.2 of the Credit 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 Parent Guarantor
against any of and all the Guaranteed Obligations, 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 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 rights of
each Lender under this Section 16 are in addition to other rights and remedies
(including other rights of set-off) which such Lender may have.
17.    Notices. All notices and other communications hereunder to the
Administrative Agent shall be in writing and shall be mailed, sent, or delivered
in accordance with Section 11.1(a) of the Credit Agreement. All notices and
other communications hereunder to the Parent Guarantor shall be in writing and
shall be mailed, sent, or delivered in accordance with the following:
PNM Resources, Inc.
414 Silver Ave, SW MS0905
Albuquerque, New Mexico 87102-3289
Attention: Joseph D. Tarry
Vice President, Controller and Treasurer
Telephone: 505.241.4672
Telecopier: 505.241.4314
Electronic Mail: cashdesk@pnmresources.com
Website Address: www.pnmresources.com

18.    No Waiver; Cumulative Remedies. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower or the Parent Guarantor, on the one hand, and the Administrative
Agent or any Lender, on the other hand, shall operate as a waiver

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thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Administrative Agent or
any Lender would otherwise have. No notice to or demand on the Borrower in any
case shall entitle the Borrower or the Parent Guarantor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
19.    Severability of Provisions. 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.
20.    Entire Agreement; Amendments. This Guaranty represents the entire
agreement of the parties hereto, and supersede all prior agreements and
understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents or the transactions contemplated
herein and therein. No amendment or waiver of any provision of this Guaranty,
and no consent to any departure by the Parent Guarantor therefrom, shall be
effective unless in writing signed by the Required Lenders and the Parent
Guarantor and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
21.    Successors and Assigns. The provisions of this Guaranty shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Parent Guarantor may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender,
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of Section 11.3 of the Credit Agreement, (ii) by way of
participation in accordance with the provisions of subsection (d) of Section
11.3 of the Credit Agreement, (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of Section 11.3 of the
Credit Agreement, or (iv) to an SPC in accordance with the provisions of
subsection (h) of Section 11.3 of the Credit Agreement (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Guaranty, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
Section 11.3 of the Credit Agreement and, to the extent expressly contemplated
by the Credit Agreement, the Agent-Related Persons of each of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Guaranty.
22.    No Third Party Beneficiary. This Guaranty is solely for the benefit of
each Lender and each of their successors and assigns and may not be relied on by
any other Person.
23.    Service of Process; Choice of Law and Venue; Jury Trial Waiver.
(a)    The Parent Guarantor irrevocably consents to the service of process in
any action or proceeding with respect to this Guaranty or any other Credit
Document by mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 17 of this
Guaranty, such service to become effective ten days after such mailing. Nothing
in this Guaranty or any other Credit Document shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by Law.

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(b)    The provisions regarding choice of law and venue and jury trial waiver
set forth in Sections 11.10 and 11.11 of the Credit Agreement are applicable to
the Parent Guarantor fully as though the Parent Guarantor were a party thereto,
and such provisions are hereby incorporated herein by reference, mutatis
mutandis.
24.    Counterparts; Electronic Execution. 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 signature page of this Guaranty by facsimile
transmission or other secure electronic format (.pdf) shall be effective as
delivery of a manually executed counterpart hereof.
25.    Interpretation. Neither this Guaranty nor any uncertainty or ambiguity
herein shall be construed against the Administrative Agent or any Lender or the
Parent Guarantor, whether under any rule of construction or otherwise. On the
contrary, this Guaranty has been reviewed by all parties and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
26.    Agreement to be Bound. The Parent Guarantor hereby acknowledges that it
has received a copy of the Credit Agreement and agrees to be bound by each and
all of the terms and provisions of the Credit Agreement applicable to the Parent
Guarantor. Without limiting the generality of the foregoing, by its execution
and delivery of this Guaranty, the Parent Guarantor hereby makes to the
Administrative Agent and the Lenders each of the representations and warranties
set forth in the Credit Agreement applicable to the Parent Guarantor, and agrees
to be bound by the covenants set forth in the Credit Agreement, including,
without limitations, Sections 6, 7 and 8 of the Credit Agreement applicable to
the Parent Guarantor, fully as though the Parent Guarantor were a party thereto,
and such representations and warranties and covenants are incorporated herein by
this reference, mutatis mutandis. In addition to the foregoing, the Parent
Guarantor covenants that, so long as any Lender has any Commitment outstanding
under the Credit Agreement or any amount payable under the Credit Agreement or
any other Borrower Obligations (other than contingent indemnification
obligations which are not yet due and payable) shall remain unpaid, it will,
and, if necessary, will cause the Borrower to fully comply with those covenants
and agreements of the Borrower applicable to the Parent Guarantor set forth in
the Credit Agreement.
27.    Conflict. In the event of a conflict of the terms or provisions of this
Guaranty and the Credit Agreement, the terms and provisions of the Credit
Agreement shall govern.
28.    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 Commission, the Parent Guarantor is required to
include the following separateness covenants in any debt instrument:
The Parent Guarantor and Public Service Company of New Mexico, a New Mexico
corporation (“PSNM”) are being operated as separate corporate and legal
entities. In agreeing to make loans to the Parent Guarantor, the Parent
Guarantor’s lenders are relying solely on the creditworthiness of the Parent
Guarantor based on the assets owned by the Parent Guarantor, and the repayment
of the loan will be made solely from the assets of the Parent Guarantor and not
from any assets of PSNM; and the Parent Guarantor’s 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.

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[Signature page to follow]

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Guaranty as
of the date first written above.

PNM RESOURCES, INC.,
a New Mexico corporation, as Parent Guarantor

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

AGREED AND ACCEPTED:

KEYBANK NATIONAL ASSOCIATION
as Administrative Agent
 
 
 
 
By:
/s/ Keven D Smith
 
Name:
Keven D Smith
 
Title:
Senior Vice President
 

[Signature Page to Guaranty]