exh10-1_031609.htm


    Exhibit
10.1

    


    THIRD
AMENDMENT TO CREDIT AGREEMENT

    


    


    THIS THIRD AMENDMENT TO CREDIT
AGREEMENT (this "Amendment") is
entered into as of March __, 2009 among PNM RESOURCES, INC., a New Mexico
corporation (the "Company"), FIRST
CHOICE POWER, L.P., a Texas limited partnership ("FCP", collectively
with the Company, the "Borrowers"), the
Lenders party hereto, and BANK OF AMERICA, N.A., 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 Borrowers, the Lenders
party thereto and the Administrative Agent are parties to that certain Amended
and Restated Credit Agreement, dated as of August  15, 2005 (as amended or
modified from time to time, the "Credit
Agreement");

    


    WHEREAS, Texas-New Mexico Power Company
("TNMP"), a
Subsidiary of the Company, wishes to incur certain secured Indebtedness;
and

    


    WHEREAS, the Borrowers have requested
that the Administrative Agent and Lenders agree to certain changes to the Credit
Agreement to accommodate the incurrence of such secured
Indebtedness.

    


    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.

    


    (a)           Section
1.1.  The following new definition "TNMP First Mortgage
Bonds" is hereby added to Section 1.1 of the Credit Agreement in the
appropriate alphabetical order:

    


    "TNMP First Mortgage
Bonds" means those certain first mortgage bonds issued pursuant to the
First Mortgage Indenture substantially in the form of the draft dated March 4,
2009 and dated on or before April 1, 2009, between TNMP and The Bank of New York
Mellon Trust Company, N.A., as trustee thereunder, as it may be
supplemented and
amended from time
to time so long as such supplements or amendments do not cause a Default under
this Agreement.

    


    (b)           Section
8.5.  Section 8.5 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

    


         8.5      Liens.

    


    Such Borrower will not (nor will it
permit its Subsidiaries to) contract, create, incur, assume or permit to exist
any Lien with respect to any of its property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    hereafter
acquired, securing any Indebtedness other than the following: (a) Liens securing
Borrower Obligations, (b) Liens for taxes not yet due or Liens for taxes
being contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and as to
which the property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof), (c) Liens in respect of property imposed
by law arising in the ordinary course of business such as materialmen's,
mechanics', warehousemen's, carrier's, landlords' and other nonconsensual
statutory Liens which are not yet due and payable, which have been in existence
less than 90 days or which are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof), (d) pledges
or deposits made in the ordinary course of business to secure payment of
worker's compensation insurance, unemployment insurance, pensions or social
security programs, (e) Liens arising from good faith deposits in connection
with or to secure performance of tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (other than obligations in respect of the
payment of borrowed money), (f) Liens arising from good faith deposits in
connection with or to secure performance of statutory obligations and surety and
appeal bonds, (g) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered property for its intended purposes, (h) judgment Liens that
would not constitute an Event of Default, (i) Liens arising by virtue of
any statutory or common law provision relating to banker's liens, rights of
setoff or similar rights as to deposit accounts or other funds maintained with a
creditor depository institution, (j) any Lien created or arising over any
property which is acquired, constructed or created by such Borrower or its
Subsidiaries, but only if (i) such Lien secures only principal amounts (not
exceeding the cost of such acquisition, construction or creation) raised for the
purposes of such acquisition, construction or creation, together with any costs,
expenses, interest and fees incurred in relation thereto or a guarantee given in
respect thereof, (ii) such Lien is created or arises on or before 180 days
after the completion of such acquisition, construction or creation,
(iii) such Lien is confined solely to the property so acquired, constructed
or created and any improvements thereto and (iv) the aggregate principal amount
of all Indebtedness at any one time outstanding that is secured by such Liens
shall not exceed (A) in the case of the Company and its Subsidiaries,
$50,000,000 and (B) in the case of any other Borrower and its Subsidiaries,
$25,000,000, (k) any Lien on Margin Stock, (l)  Liens with respect to
the Indebtedness evidenced by the FMB Indenture, but only to the extent of the
Insured Series First Mortgage Bonds, and the "permitted encumbrances" under
the FMB Indenture, (m) with respect to the Company and PSNM, the assignment
of, or Liens on, accounts receivable in connection with PSNM Accounts Receivable
Securitization and the filing of related financing statements under the Uniform
Commercial Code of the applicable jurisdictions, (n) with respect to First
Choice, (i) the assignment of, or Liens on, accounts receivable in connection
with First Choice Securitization and the filing of related financing statements
under the Uniform Commercial Code of the applicable jurisdictions and (ii) other
Liens in connection with the Constellation Agreement, (o) the assignment
of, or Liens on, demand, energy or wheeling revenues, or on capacity reservation
or option fees, payable to such Borrower or any of its Subsidiaries with respect
to any wholesale electric service or transmission agreements, the assignment of,
or Liens on, revenues from energy services contracts, and the assignment of, or
Liens on, 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    capacity
reservation or option fees payable to such Borrower or such Subsidiary with
respect to asset sales permitted herein, (p) Liens on assets of TNMP securing
the TNMP First Mortgage Bonds in an aggregate principal amount not to exceed
$400,000,000 at any
one time, (q) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any Liens
referred to in the foregoing clauses (a) through (p), for amounts not
exceeding the principal amount of the Indebtedness secured by the Lien so
extended, renewed or replaced, provided that such extension, renewal or
replacement Lien is limited to all or a part of the same property or assets that
were covered by the Lien extended, renewed or replaced (plus improvements on
such property or assets), (r) Liens on Property that is subject to a Material
Lease that is classified as an operating lease as of the Closing Date but which
is subsequently converted into a capital lease, (s) Liens securing obligations
under Hedging Agreements entered into in the ordinary course of business and not
for speculative purposes, (t) Liens granted by bankruptcy-remote special purpose
Subsidiaries to secure stranded cost securitization bonds, and (u) Liens on
Property, in addition to those otherwise permitted by clauses (a) through
(t) above, securing, directly or indirectly, Indebtedness or obligations of such
Borrower and its Subsidiaries arising pursuant to other agreements entered into
in the ordinary course of business which do not exceed, in the aggregate at any
one time outstanding, (i) in the case of the Company and its Subsidiaries,
$50,000,000 and (ii) in the case of any other Borrower and its Subsidiaries,
$25,000,000.

    


    2.           Conditions
Precedent.  This Amendment shall be effective upon satisfaction
of the following conditions precedent:

    


    (a)           Receipt
by the Administrative Agent of documentation evidencing the TNMP First Mortgage
Bonds on terms satisfactory to the Administrative Agent;

    


    (b)           Receipt
by the Administrative Agent of copies of this Amendment duly executed by each
Borrower and the Required Lenders; and

    


    (c)           Payment
to each Lender (other than a Defaulting Lender) executing this Amendment on or
prior to March 3, 2009 of an amendment fee equal to .10% of such Lender's
Commitment.

    


    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 by this
Amendment.  Except as herein specifically agreed, the Credit Agreement
is hereby ratified and confirmed and shall remain in full force and effect
according to its terms.

    


    4.           Authority/Enforceability.  Each
Borrower represents and warrants as follows:

    


    (a)           It
has taken all necessary action to authorize (i) the execution, delivery and
performance of this Amendment and (ii) the incurrence of the Indebtedness
evidenced by the TNMP First Mortgage Bonds.

    


    (b)           This
Amendment has been duly executed and delivered by such Person and constitutes
such Person's legal, valid and binding obligations, enforceable in accordance
with its terms, except as such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    generally
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).

    


    (c)           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 such
Person of this Amendment.

    


    5.           Representations and
Warranties.  Each Borrower represents and warrants to the
Lenders that (a) the representations and warranties of such 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, (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 entering into this
Amendment.

    


    6.           No
Conflicts.  Neither the execution and delivery of this
Amendment, nor the consummation of the transactions contemplated herein, nor
performance of and compliance with the terms and provisions hereof by any
Borrower will (a) violate, contravene or conflict with any provision of its
respective articles or certificate of incorporation, bylaws or other
organizational or governing document, (b) violate, contravene or conflict
with any law, rule, regulation, order, writ, judgment, injunction, decree or
permit applicable to a 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 a Borrower is a party or by which it or its properties may
be bound or (d) result in or require the creation of any Lien upon or with
respect to a 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 shall constitute
one and the same instrument.  Delivery of executed counterparts by
telecopy 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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    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.

    


    


    BORROWERS:                                                      
    PNM RESOURCES, INC.,

    a New
Mexico corporation

    


    


    By:           /s/ Terry R.
Horn                                                                

    Name:      Terry R.
Horn                                                                

    Title:        Vice President and
Treasurer

    


    


    FIRST CHOICE POWER,
L.P.,

    a Texas
limited partnership

    By: First
Choice Power GP, LLC,

    its
general partner

    


    


    By:           /s/ Terry R.
Horn                                                                

    Name:      Terry R.
Horn                                                                

    Title:        Vice President and
Treasurer

    


    


    


    


    ADMINISTRATIVE

    AGENT:                                                                   
     BANK OF AMERICA,
N.A.,

    as
Administrative Agent

    


    


    By:           /s/ Richard L.
Stein                                                                

    Name:      Richard L.
Stein                                                                

    Title:        Senior Vice
President                                                                


    
      
        
           

          PNM
RESOURCES, INC.

          THIRD
AMENDMENT TO CREDIT AGREEMENT

        

         


      

      
         


        
          

        

      

      
         


      

    


    LENDERS:                                                                 
   BANK OF
AMERICA, N.A.,

    as a
Lender and L/C Issuer

    


    


    By:           /s/ Richard L.
Stein                                                                

    Name:      Richard L.
Stein                                                                

    Title:        Senior Vice
President                                                                

    


    


    WACHOVIA BANK, NATIONAL
ASSOCIATION,

    as a
Lender and L/C Issuer

    


    


    By:           /s/ Frederick W.
Price                                                                

    Name:      Frederick W.
Price                                                                

    Title:        Managing
Director                                                                

    


    


    UNION
BANK OF CALIFORNIA, N.A.

    


    


    By:           /s/ Efrain
Soto                                                                

    Name:      Efrain
Soto                                                                

    Title:        Vice
President                                                                

    


    


    JPMORGAN
CHASE BANK, N.A.

    


    


    By:           /s/ Helen D.
Davis                                                                

    Name:      Helen D.
Davis                                                                

    Title:        Vice
President                                                                

    


    


    CITIBANK,
N.A.

    


    


    By:           /s/ Todd C.
Davis                                                                

    Name:      Todd C.
Davis                                                                

    Title:        Director, Global
Power

    


    


    WELLS
FARGO BANK, N.A.

    


    


    By:           /s/ Yann
Blindert                                                                           

    Name:      Yann
Blindert                                                                

    Title:        Assistant Vice
President

    


    


    
      
        
           

          PNM
RESOURCES, INC.

          THIRD
AMENDMENT TO CREDIT AGREEMENT

        

      

      
         

        
          

        

      

      
         

      

    

    MERRILL
LYNCH BANK USA

    


    


    By:           /s/ Louis
Adler                                                                

    Name:      Louis
Adler                                                                

    Title:        First Vice
President                                                                

    


    


    MORGAN
STANLEY BANK

    


    


    By:           /s/ Melissa
James                                                                

    Name:      Melissa
James                                                                

    Title:        Authorized
Signatory                                                                

    


    


    UBS
LOAN FINANCE LLC

    


    


    By:           /s/ Irja R.
Otsa               /s/
Mary E.
Evans                                                                           

    Name:      Irja R. Otsa                     Mary E.
Evans      

    Title:       
Associate
Director      Associate
Director

    


    


    LEHMAN
BROTHERS BANK, FSB

    


    


    By:          ________________________________                                                      

    Name:     ________________________________                                                                      

    Title:       ________________________________                                                                   

    


    


    WILLIAM
STREET COMMITMENT CORPORATION

    


    


    By:           /s/ Mark
Walton                                                                

    Name:      Mark
Walton                                                                

    Title:        Assistant Vice
President

    


    


    CREDIT
SUISSE, CAYMAN ISLANDS BRANCH

    


    


    By:           /s/ James
Moran          /s/ Nupur
Kumar                                                                           

    Name:      James
Moran            
   Nupur Kumar      

    Title:       
Managing
Director      Vice President   


    


    


    


    
      
        
           

          PNM
RESOURCES, INC.

          THIRD
AMENDMENT TO CREDIT AGREEMENT

        

      

      
         

        
          

        

      

      
         

      

    

    


    


    U
S BANK NATIONAL ASSOCIATION

    


    


    By:          ______________________________                                                      

    Name:     ______________________________                                                                      

    Title:       ______________________________                                                                    

    


    


    HSBC
BANK USA, NATIONAL ASSOCIATION

    


    


    By:          ______________________________                                                      

    Name:     ______________________________                                                                     

    Title:       ______________________________                                                                    

    


    


    THE
BANK OF NEW YORK MELLON

    


    


    By:           /s/ Mark W.
Rogers                                                                

    Name:      Mark  W.
Rogers                                                                

    Title:        Vice
President                                                                

    


    


    ROYAL
BANK OF CANADA

    


    


    By:         ______________________________                                                       

    Name:    ______________________________                                                                       

    Title:      ______________________________                                                                     

    


    


    COMPASS
BANK

    


    


    By:     
   ______________________________                                                        

    Name:    ______________________________                                                                       

    Title:      ______________________________                                                                     

    


    


    SOUTHWEST
SECURITIES BANK

    


    


    By:           /s/ Lonnie
Warren                                                                

    Name:      Lonnie
Warren                                                                

    Title:        Regional
President                                                                


    
      
        
           

          PNM
RESOURCES, INC.

          THIRD
AMENDMENT TO CREDIT AGREEMENT

        

         


      

      
         


        
          

        

      

      
         


      

    


    BANK
OF ALBUQUERQUE, N.A.

    


    


    By:       
 _____________________________                                                           

    Name:  
 _____________________________                                                                         

    Title:     
_____________________________                                                                       

    


    BANK
HAPOALIM BM

    


    By:        ______________________________                                                        

    Name:   ______________________________                                                                        

    Title:     ______________________________                                                                      

    


    


    


    


    


    



    
      
        
           

          PNM
RESOURCES, INC.

          THIRD
AMENDMENT TO CREDIT AGREEMENT