Exhibit



Exhibit 10.5
EXECUTION COPY







 


FIRST AMENDMENT TO CREDIT AGREEMENT


THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of November 3, 2016 and is effective as of November 3, 2016 among PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the “Borrower”), the Lenders party hereto and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).


R E C I T A L S


WHEREAS, the Borrower, the Lenders party thereto and the Administrative Agent are parties to that certain Credit Agreement, dated as of January 8, 2014 (as amended or modified from time to time, the “Credit Agreement”);


WHEREAS, the Borrower has requested a modification to the Credit Agreement as described below; and


WHEREAS, the Administrative Agent and the Lenders party hereto are willing to agree to such modification, subject to the terms set forth herein as more fully set forth below.


NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


A G R E E M E N T


1.Amendments to Credit Agreement.  


(a)    The definition of “Material Lease” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety. 
(b)    The following definition in Section 1.1 of the Credit Agreement is amended and restated in its entirety to read as follows:
“Indebtedness” means, with respect to any Person (without duplication), (a) all indebtedness and obligations of such Person for borrowed money or in respect of loans or advances of any kind, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, (c) all reimbursement obligations of such Person with respect to surety bonds, letters of credit and bankers’ acceptances (in each case, whether or not drawn or matured and in the stated amount thereof), (d) all obligations of such Person  to  pay  the  deferred  purchase  price  of  property  or  services,  (e)  all  indebtedness


PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT







created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (f) all obligations of such Person as lessee under leases that are or are required to be, in accordance with GAAP, recorded as capital leases, to the extent such obligations are required to be so recorded, (g) the net termination obligations of such Person under any Hedging Agreements, calculated as of any date as if such agreement or arrangement were terminated as of such date in accordance with the applicable rules under GAAP, (h) all Contingent Obligations of such Person, (i) all obligations and liabilities of such Person incurred in connection with any transaction or series of transactions providing for the financing of assets through one or more securitizations or in connection with, or pursuant to, any synthetic lease or similar off-balance sheet financing, (j) the aggregate amount of uncollected accounts receivable of such Person subject at the time of determination to a sale of receivables (or similar transaction) to the extent such transaction is effected with recourse to such Person (whether or not such transaction would be reflected on the balance sheet of such Person in accordance with GAAP) and (k) all indebtedness referred to in clauses (a) through (j) above secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person.


(c)    The following definitions are hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order: 
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.


“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.


“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.


“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.


“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.




PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT







“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.


“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.


(d)    Clause (d) in the definition of “Defaulting Lender” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:     
(d) has become or is insolvent or has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment, or has become the subject of a Bail-in Action.


(e)    Section 6.18 and Section 6.19 of the Credit Agreement are hereby deleted in their entirety and replaced with the following: 
6.18    [Reserved].


6.19    [Reserved].


(f)    Section 7.2 of the Credit Agreement is amended and restated in its entirety to read as follows:
7.2     Financial Covenant.


The ratio of (a) Consolidated Indebtedness to (b) Consolidated Capitalization shall be less than or equal to 0.65 to 1.0 as of the last day of any Fiscal Quarter.


(g)    Clause (o) of Section 8.5 of the Credit Agreement is amended to read as follows:
(o) Liens on Property that is subject to a lease that is classified as an operating lease as of the Closing Date but which is subsequently converted to a capital lease,
(h)    A new Section 11.22 is hereby added to the Credit Agreement to read as follows: 
11.22    Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  


Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising 


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FIRST AMENDMENT TO CREDIT AGREEMENT







under any Credit Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:


(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and


(b)    the effects of any Bail-in Action on any such liability, including, if applicable:


(i)    a reduction in full or in part or cancellation of any such liability;


(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or


(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.


(i)     Schedule 6.18 and Schedule 6.19 to the Credit Agreement are hereby deleted in their entirety. 
(j)    Footnote 2 in Schedule 1 to Exhibit 7.1(c) to the Credit Agreement is hereby deleted.
2.Effectiveness.  This Amendment shall be effective as of November 3, 2016; provided that on or before such date the Administrative Agent shall have received (i) copies of this Amendment duly executed by the Borrower, the Administrative Agent and the Required Lenders and (ii) the Administrative Agent’s and its affiliates’ fees and expenses (including fees and expenses of counsel for the Administrative Agent) in connection with this Amendment.
 
3.Ratification of Credit Agreement.  The term “Credit Agreement” as used in each of the Credit Documents shall hereafter mean the Credit Agreement as amended and modified by this Amendment and as amended and modified from time to time hereafter.  Except as herein specifically agreed, the Credit Agreement, as amended by this Amendment, is hereby ratified and confirmed and shall remain in full force and effect according to its terms.  Each party hereto acknowledges and consents to the modifications set forth herein and agrees that, other than as explicitly set forth in Section 1 above, this Amendment does not impair, reduce or limit any of its obligations under the Credit Documents (including, without limitation, the indemnity obligations 


PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT







set forth therein) and that, after the date hereof, this Amendment shall constitute a Credit Document.
 
4.Authority/Enforceability.  The Borrower represents and warrants as follows:


(a)    It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(b)    This Amendment has been duly executed and delivered by the Borrower and constitutes the Borrower’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws or similar laws affecting creditors’ rights generally or by general principles of equity.
(c)    Other than the filing of annual short-term financing plans with the New Mexico Public Regulation Commission in the normal course of business, and such Commission’s actions thereon, no consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance by the Borrower of this Amendment that has not been obtained or completed.


5.Representations and Warranties.  The Borrower represents and warrants to the Lenders that (a) the representations and warranties of the Borrower set forth in Section 6 of the Credit Agreement are true and correct as of the date hereof, unless they specifically refer to an earlier date and except that, for purposes of the foregoing, the references to “December 31, 2012” in Section 6.7 of the Credit Agreement are hereby amended to “December 31, 2015,” (b) no event has occurred and is continuing which constitutes a Default or an Event of Default, and (c) it has no claims, counterclaims, offsets, credits or defenses to its obligations under the Credit Documents, or to the extent it has any, they are hereby released in consideration of the Lenders party hereto entering into this Amendment.


6.No Conflicts.  The Borrower represents and warrants that the execution and delivery of this Amendment, the consummation of the transactions contemplated herein and in the Credit Agreement (before and after giving effect to this Amendment), and the performance of and compliance with the terms and provisions hereof by the Borrower will not (a) violate, contravene or conflict with any provision of its articles or certificate of incorporation, bylaws or other organizational or governing document, (b) violate, contravene or conflict with any law, rule, regulation (including, without limitation, Regulation U and Regulation X), order, writ, judgment, injunction, decree or permit applicable to the Borrower, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties may be bound, the violation of which would have or would be reasonably expected to have a Material Adverse Effect or (d) result in or require the creation of any Lien upon or with respect to the Borrower’s properties.


7.Counterparts/Telecopy.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which 


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FIRST AMENDMENT TO CREDIT AGREEMENT







shall constitute one and the same instrument.  Delivery of executed counterparts by telecopy or by electronic format (.pdf) shall be effective as an original.


8.GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.




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PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT







Each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.




BORROWER:
 
PUBLIC SERVICE COMPANY OF NEW MEXICO,
a New Mexico corporation


By:    /s/ Elisabeth Eden            
Name:    Elisabeth Eden            
Title:    Vice President and Treasurer        




PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









ADMINISTRATIVE AGENT:
 


U.S. BANK NATIONAL ASSOCIATION,
individually in its capacity as a Lender and in its capacity as Administrative Agent
 


By:    /s/ Raymond J. Palmer            
Name:    Raymond J. Palmer                
Title:    Sr. Vice President                
 






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT







LENDERS:






BOKF, NA DBA BANK OF ALBUQUERQUE,
as a Lender 




By:    /s/ John Valentine            
Name:    John Valentine                
Title:    SVP                    






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









BANK OF THE WEST,
as a Lender 




By:    /s/ Philip Garlinghouse            
Name:    Philip Garlinghouse            
Title:    Vice President                






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









WASHINGTON FEDERAL N.A.,
as a Lender 




By:    /s/ Joshua Smith            
Name:    Joshua Smith                
Title:    V.P.                    






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









FIRST NATIONAL BANK OF SANTA FE,
as a Lender 




By:    /s/ Michael L. Roach            
Name:    Michael L. Roach            
Title:    Senior Vice President            






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









SOUTHWEST CAPITAL BANK,
as a Lender 




By:    /s/ Katja A. Fitz            
Name:    Katja A. Fitz                
Title:    Asst. Vice President            






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









NEW MEXICO BANK & TRUST,
as a Lender




By:    /s/ Robert W. Eaton            
Name:    Robert W. Eaton            
Title:    Executive VP                






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT







FOUR CORNERS COMMUNITY BANK,
as a Lender




By:    /s/ Roger LaHart            
Name:    Roger LaHart                
Title:    Chief Lending Officer            








PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT









WESTERN COMMERCE BANK,  
CARLSBAD, NEW MEXICO,
as a Lender




By:    /s/ Mike Hoyl                
Name:    Mike Hoyl                
Title:    Executive Vice President        






PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT