EXHIBIT 10.10

EXECUTION VERSION

INCREMENTAL FACILITY ASSUMPTION AGREEMENT dated as of July 12, 2007 (this
“Assumption Agreement”), related to the CREDIT AGREEMENT dated as of April 11,
2006 (the “Credit Agreement”), among El Paso Electric Company, a Texas
corporation (“El Paso”), The Bank of New York Trust Company, National
Association, not in its individual capacity, but solely in its capacity as
trustee of the Rio Grande Resources Trust II (as successor to JPMorgan Chase
Bank, N.A. in such capacity, the “Trustee”), the lenders from time to time party
thereto (the “Lenders”), and JPMorgan Chase Bank, N.A., as issuing bank and as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).

A. Pursuant to Section 2.21 of the Credit Agreement, El Paso has requested that
(i) the Total Commitment be increased by the full Incremental Facility Amount,
such that the Total Commitment will increase from $150,000,000 to $200,000,000,
and (ii) the full Incremental Facility Amount be made available to El Paso
and/or the Trustee, such that the sum of (x) the aggregate principal amount of
Loans outstanding to the Trustee and (y) the Trustee L/C Exposure at any time
may equal up to, but not exceed, $120,000,000.

B. In connection with the foregoing, El Paso has requested that each person set
forth on Schedule I hereto (the “Incremental Lenders”), severally and not
jointly, commit to provide that portion of the Incremental Facility Amount set
forth opposite its name on such Schedule I. The commitments to provide the
Incremental Facility Amount are referred to herein as the “Incremental
Commitments”.

C. The Incremental Lenders are willing to provide the Incremental Commitments on
the Incremental Facility Effective Date (as defined below), on the terms and
subject to the conditions set forth herein and in the Credit Agreement.

Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms; Interpretation; Etc. Capitalized terms used and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The rules of construction set forth in Section 1.02 of the Credit
Agreement shall apply equally to this Assumption Agreement. This Assumption
Agreement shall be a “Loan Document”.

SECTION 2. Incremental Commitments; Participation Fees. (a) Each Incremental
Lender, effective upon the Incremental Facility Effective Date, hereby agrees
that (i) in respect of each Incremental Lender that is a Lender immediately
prior to the Incremental Facility Effective Date, such Lender’s Commitment in
effect immediately prior to the Incremental Facility Effective Date shall be
increased by the amount set forth next to such Lender’s name on Schedule I
hereto and (ii) in respect of each Incremental Lender that is not a Lender
immediately prior to the Incremental Facility Effective Date, such Incremental
Lender’s Commitment shall be the amount set forth next to such Incremental
Lender’s name on Schedule I hereto. All such Incremental Commitments shall
constitute “Commitments” and all Incremental Lenders shall constitute “Lenders”,
in each case for all purposes of the Credit Agreement and the other Loan
Documents.

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(b) In order to effectuate the increase in the Total Commitment contemplated
hereby, each of the parties hereto hereby agrees that the Administrative Agent
may take any and all actions as may be reasonably necessary to ensure that,
after giving effect to any such increase in the Total Commitment, the
outstanding Loans (if any) are held by the Lenders in accordance with their new
Applicable Percentages. This may be accomplished at the discretion of the
Administrative Agent, following consultation with El Paso, (i) by requiring the
outstanding Loans to be prepaid with the proceeds of a new Borrowing, (ii) by
permitting the Borrowings outstanding immediately before the Incremental
Facility Effective Date to remain outstanding until the last day of the
respective Interest Periods therefor, even though the Lenders would hold the
Loans comprising such Borrowings other than in accordance with their new
Applicable Percentages or (iii) by any combination of the foregoing. Any
prepayment described in this paragraph (b) shall be subject to Section 2.14 of
the Credit Agreement, but shall otherwise be without premium or penalty.

(c) As consideration for the Incremental Commitments hereunder, El Paso agrees
to pay to each Incremental Lender, through the Administrative Agent, a
participation fee (collectively, the “Participation Fees”) equal to .050% of the
aggregate amount of the Incremental Commitments of such Incremental Lender on
the Incremental Facility Effective Date. The Participation Fees shall be payable
in full in immediately available funds on the Incremental Facility Effective
Date. Once paid, the Participation Fees shall not be refundable, in whole or in
part.

SECTION 3. Effectiveness; Conditions Precedent to Incremental Commitments. This
Assumption Agreement shall become effective as of the date (the “Incremental
Facility Effective Date”) that the Administrative Agent shall have received
counterparts of this Assumption Agreement that, when taken together, bear the
signatures of the Borrowers and each Incremental Lender. The obligation of the
Incremental Lenders to provide Incremental Commitments hereunder shall be
subject to the satisfaction of the following conditions precedent:

(a) The representations and warranties set forth in the Credit Agreement and in
the other Loan Documents shall be true and correct in all material respects on
and as of the Incremental Facility Effective Date with the same effect as though
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.

(b) Each Borrower shall be in compliance with all the terms and provisions set
forth in the Credit Agreement and in each other Loan Document on its part to be
observed or performed, and at the time of and immediately after the Incremental
Facility Effective Date, no Event of Default or Default shall have occurred and
be continuing.

(c) The Administrative Agent shall have received a certificate dated the
Incremental Facility Effective Date and executed by a Financial Officer of
El Paso, confirming compliance with the conditions precedent set forth in
Section 3(a) and (b) above.

(d) The Administrative Agent shall have received such legal opinions, board
resolutions and other closing certificates and documentation as shall be
reasonably required by the Incremental Lenders, in each case consistent with
those delivered on the Closing Date under clauses (a) and (b) of Section 4.02 of
the Credit Agreement.

 

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(e) All requisite Governmental Authorities shall have approved or consented to
the increase in the Total Commitment to the extent required (and such approvals
shall be in full force and effect).

(f) The Administrative Agent shall have received the Participation Fees and all
other amounts due and payable on or prior to the Incremental Facility Effective
Date, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder or under any other Loan Document.

SECTION 4. Effect of Assumption Agreement. Except as expressly set forth herein,
this Assumption Agreement shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Administrative Agent or the Borrowers under the Credit Agreement or
any other Loan Document, and shall not alter, modify, amend or in any way affect
any of the terms, conditions, obligations, covenants or agreements contained in
the Credit Agreement or any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle any Loan Party to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or different circumstances. After the date
hereof, any reference to the Credit Agreement shall mean the Credit Agreement,
as modified hereby.

SECTION 5. Expenses. El Paso agrees to reimburse the Administrative Agent for
all reasonable out-of-pocket expenses incurred in connection with this
Assumption Agreement in accordance with the Credit Agreement, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent.

SECTION 6. Counterparts. This Assumption Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same contract.
Delivery of an executed counterpart of a signature page of this Assumption
Agreement by facsimile or electronic transmission shall be as effective as
delivery of a manually executed counterpart hereof.

SECTION 7. Applicable Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 8. Headings. The headings of this Assumption Agreement are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assumption Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

 

EL PASO ELECTRIC COMPANY, by       /s/ Steven P. Busser   Name:   Steven P.
Busser   Title:  

Vice President, Treasurer and

Chief Risk Officer

THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual
capacity, but solely in its capacity as trustee of the Rio Grande Resources
Trust II, by           Name:     Title:   JPMORGAN CHASE BANK, N.A.,
individually and as Administrative Agent and Issuing Bank, by           Name:  
  Title:  

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assumption Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

 

EL PASO ELECTRIC COMPANY, by           Name:     Title:   THE BANK OF NEW YORK
TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely
in its capacity as trustee of the Rio Grande Resources Trust II, by       /s/
Kathryn M. Houston   Name:   Kathryn M. Houston   Title:   Vice President
JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and Issuing
Bank, by           Name:     Title:  

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assumption Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

 

EL PASO ELECTRIC COMPANY, by           Name:     Title:   THE BANK OF NEW YORK
TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely
in its capacity as trustee of the Rio Grande Resources Trust II, by          
Name:     Title:   JPMORGAN CHASE BANK, N.A., individually and as Administrative
Agent and Issuing Bank, by       /s/ Paul S. Condie   Name:   Paul S. Condie  
Title:   SVP

 

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SIGNATURE PAGE TO

INCREMENTAL FACILITY

ASSUMPTION AGREEMENT

DATED AS OF JULY 12, 2007 TO

THE CREDIT AGREEMENT

 

Name of Incremental Lender:

       JPMorgan Chase Bank, N.A.     

by

       /s/ Paul S. Condie   Name:    Paul S. Condie  

Title:

   SVP

 

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SIGNATURE PAGE TO

INCREMENTAL FACILITY

ASSUMPTION AGREEMENT

DATED AS OF JULY 12, 2007 TO

THE CREDIT AGREEMENT

 

Name of Incremental Lender:

       Union Bank of California, N.A.     

by

       /s/ Dennis G. Blank   Name:    Dennis G. Blank  

Title:

   Vice President

 

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SIGNATURE PAGE TO

INCREMENTAL FACILITY

ASSUMPTION AGREEMENT

DATED AS OF JULY 12, 2007 TO

THE CREDIT AGREEMENT

 

Name of Incremental Lender:

       Citicorp North America, Inc.     

by

       /s/ David E. Hunt   Name:    David E. Hunt  

Title:

   Managing Director

 

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SIGNATURE PAGE TO

INCREMENTAL FACILITY

ASSUMPTION AGREEMENT

DATED AS OF JULY 12, 2007 TO

THE CREDIT AGREEMENT

 

Name of Incremental Lender:

       U.S. Bank National Association     

by

       /s/ Kevin S. McFadden   Name:    Kevin S. McFadden  

Title:

  

Vice President

612-303-3755

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SCHEDULE I

Incremental Commitments

 

 

Incremental Lender

   Commitment Amount

JPMorgan Chase Bank, N.A.

   $ 12,500,000

Union Bank of California, N.A.

   $ 12,500,000

Citicorp North America, Inc.

   $ 10,000,000

U.S. Bank National Association

   $ 15,000,000       

TOTAL COMMITMENT

   $ 50,000,000