Exhibit 10.4


    
      

    

    

      EXECUTION
        COPY

      


      EXHIBIT
        10.4



    $480,000,000

    


    TERM
      LOAN AGREEMENT

    


    among

    


    PNM
      RESOURCES, INC.,

    as
      the
      Borrower,

    


    THE
      LENDERS IDENTIFIED HEREIN,

    


    AND

    


    LEHMAN
      COMMERCIAL PAPER INC.,

    


    as
      Administrative Agent

    


    DATED
      AS
      OF APRIL 18, 2006

    


    


    


    


    LEHMAN
      BROTHERS INC.,

    as
      Sole
      Lead Arranger and Sole Book Manager

    


    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

      Table
        of Contents

       

       

      
        	 	
                Page

              
	
                    SECTION
                  1 DEFINITIONS AND ACCOUNTING TERMS

              	
                1

              
	
                1.1

              	
                Definitions.

              	
                1

              
	
                1.2

              	
                Computation
                  of Time Periods and Other Definitional Provisions.

              	
                14

              
	
                1.3

              	
                Accounting
                  Terms/Calculation of Financial Covenants.

              	
                14

              
	
                1.4

              	
                Time.

              	
                14

              
	
                1.5

              	
                Rounding
                  of Financial Covenants.

              	
                14

              
	
                1.6

              	
                References
                  to Agreements and Requirement of Laws.

              	
                14

              


      

       

      
        	
                    SECTION
                  2 TERM LOAN

              	
                15

              
	
                2.1

              	
                Term
                  Loan Commitments.

              	
                15

              
	
                2.2

              	
                Procedure
                  for Term Loan Borrowing.

              	
                15

              
	
                2.3

              	
                Repayment
                  of Term Loans.

              	
                15

              
	
                2.4

              	
                Continuations
                  and Conversions.

              	
                15

              
	
                2.5

              	
                Minimum
                  Amounts.

              	
                16

              
	
                2.6

              	
                Evidence
                  of Debt.

              	
                16

              


      

       

      
        	
                    SECTION
                  3 GENERAL PROVISIONS APPLICABLE TO TERM LOANS

              	
                16

              
	
                3.1

              	
                Interest.

              	
                16

              
	
                3.2

              	
                Payments
                  Generally.

              	
                17

              
	
                3.3

              	
                Prepayments.

              	
                17

              
	
                3.4

              	
                Fees.

              	
                18

              
	
                3.5

              	
                Payment
                  in full at Maturity.

              	
                18

              
	
                3.6

              	
                Computations
                  of Interest and Fees.

              	
                18

              
	
                3.7

              	
                Pro
                  Rata Treatment.

              	
                19

              
	
                3.8

              	
                Sharing
                  of Payments.

              	
                19

              
	
                3.9

              	
                Capital
                  Adequacy.

              	
                20

              
	
                3.10

              	
                Eurodollar
                  Provisions.

              	
                20

              
	
                3.11

              	
                Illegality.

              	
                20

              
	
                3.12

              	
                Requirements
                  of Law; Reserves on Eurodollar Loans.

              	
                21

              
	
                3.13

              	
                Taxes.

              	
                21

              
	
                3.14

              	
                Compensation.

              	
                24

              
	
                3.15

              	
                Determination
                  and Survival of Provisions.

              	
                24

              


      

       

      
        	
                    SECTION
                  4 CONDITIONS PRECEDENT TO CLOSING

              	
                24

              
	
                4.1

              	
                Closing
                  Conditions.

              	
                24

              


      

       

      
        	
                    SECTION
                  5 REPRESENTATIONS AND WARRANTIES

              	
                27

              
	
                5.1

              	
                Organization
                  and Good Standing.

              	
                27

              
	
                5.2

              	
                Due
                  Authorization.

              	
                27

              
	
                5.3

              	
                No
                  Conflicts.

              	
                27

              
	
                5.4

              	
                Consents.

              	
                27

              
	
                5.5

              	
                Enforceable
                  Obligations.

              	
                27

              
	
                5.6

              	
                Financial
                  Condition.

              	
                28

              
	
                5.7

              	
                No
                  Material Change.

              	
                28

              
	
                5.8

              	
                No
                  Default.

              	
                28

              
	
                5.9

              	
                Litigation.

              	
                28

              
	
                5.10

              	
                Taxes.

              	
                28

              


      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                5.11

              	
                Compliance
                  with Law.

              	
                29

              
	
                5.12

              	
                ERISA.

              	
                29

              
	
                5.13

              	
                Use
                  of Proceeds; Margin Stock.

              	
                30

              
	
                5.14

              	
                Government
                  Regulation.

              	
                30

              
	
                5.15

              	
                Solvency.

              	
                30

              
	
                5.16

              	
                Disclosure.

              	
                30

              
	
                5.17

              	
                Environmental
                  Matters.

              	
                30

              
	
                5.18

              	
                Material
                  Leases.

              	
                30

              
	
                5.19

              	
                Material
                  Lease Interest Payments and Discount Rate.

              	
                31

              
	
                5.20

              	
                Certain
                  Documents.

              	
                31

              


      

       

      
        	
                    SECTION
                  6 AFFIRMATIVE COVENANTS

              	
                31

              
	
                6.1

              	
                Information
                  Covenants.

              	
                31

              
	
                6.2

              	
                Financial
                  Covenants.

              	
                33

              
	
                6.3

              	
                Preservation
                  of Existence and Franchises.

              	
                33

              
	
                6.4

              	
                Books
                  and Records.

              	
                34

              
	
                6.5

              	
                Compliance
                  with Law.

              	
                34

              
	
                6.6

              	
                Payment
                  of Taxes and Other Indebtedness.

              	
                34

              
	
                6.7

              	
                Insurance.

              	
                34

              
	
                6.8

              	
                Performance
                  of Obligations.

              	
                34

              
	
                6.9

              	
                Use
                  of Proceeds.

              	
                34

              
	
                6.10

              	
                Audits/Inspections.

              	
                34

              
	
                6.11

              	
                Ownership
                  of Certain Subsidiaries.

              	
                35

              


      

       

      
        	
                    SECTION
                  7 NEGATIVE COVENANTS

              	
                35

              
	
                7.1

              	
                Nature
                  of Business.

              	
                35

              
	
                7.2

              	
                Consolidation
                  and Merger.

              	
                35

              
	
                7.3

              	
                Sale
                  or Lease of Assets.

              	
                35

              
	
                7.4

              	
                Affiliate
                  Transactions.

              	
                36

              
	
                7.5

              	
                Liens.

              	
                36

              
	
                7.6

              	
                Accounting
                  Changes.

              	
                37

              
	
                7.7

              	
                Burdensome
                  Agreements.

              	
                37

              


      

       

      
        	
                    SECTION
                  8 EVENTS OF DEFAULT

              	
                37

              
	
                8.1

              	
                Events
                  of Default.

              	
                37

              
	
                8.2

              	
                Acceleration;
                  Remedies.

              	
                39

              
	
                8.3

              	
                Allocation
                  of Payments After Event of Default.

              	
                40

              


      

       

      
        	
                    SECTION
                  9 AGENCY PROVISIONS

              	
                41

              
	
                9.1

              	
                Appointment
                  and Authority.

              	
                41

              
	
                9.2

              	
                Rights
                  as a Lender.

              	
                41

              
	
                9.3

              	
                Exculpatory
                  Provisions.

              	
                41

              
	
                9.4

              	
                Reliance
                  by Administrative Agent.

              	
                42

              
	
                9.5

              	
                Delegation
                  of Duties.

              	
                42

              
	
                9.6

              	
                Resignation
                  of Administrative Agent.

              	
                42

              
	
                9.7

              	
                Non-Reliance
                  on Administrative Agent and Other Lenders.

              	
                43

              
	
                9.8

              	
                No
                  Other Duties, Etc.

              	
                43

              
	
                9.9

              	
                Administrative
                  Agent May File Proofs of Claim.

              	
                43

              


      

       

      
        	
                    SECTION
                  10 MISCELLANEOUS

              	
                44

              
	
                10.1

              	
                Notices;
                  Effectiveness; Electronic Communication.

              	
                44

              


      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                10.2

              	
                Right
                  of Set-Off.

              	
                46

              
	
                10.3

              	
                Successors
                  and Assigns.

              	
                46

              
	
                10.4

              	
                No
                  Waiver; Remedies Cumulative.

              	
                49

              
	
                10.5

              	
                Attorney
                  Costs, Expenses, Taxes and Indemnification by Borrowers.

              	
                49

              
	
                10.6

              	
                Amendments,
                  Etc.

              	
                50

              
	
                10.7

              	
                Counterparts.

              	
                51

              
	
                10.8

              	
                Headings.

              	
                51

              
	
                10.9

              	
                Survival
                  of Indemnification and Representations and Warranties.

              	
                51

              
	
                10.10

              	
                Governing
                  Law; Venue; Service.

              	
                52

              
	
                10.11

              	
                Waiver
                  of Jury Trial; Waiver of Consequential Damages.

              	
                52

              
	
                10.12

              	
                Severability.

              	
                52

              
	
                10.13

              	
                Further
                  Assurances.

              	
                53

              
	
                10.14

              	
                Confidentiality.

              	
                53

              
	
                10.15

              	
                Entirety.

              	
                53

              
	
                10.16

              	
                Binding
                  Effect; Continuing Agreement.

              	
                53

              
	
                10.17

              	
                Regulatory
                  Statement.

              	
                54

              
	
                10.18

              	
                USA
                  Patriot Act Notice.

              	
                54

              
	
                10.19

              	
                Acknowledgment.

              	
                54

              
	
                10.20

              	
                Replacement
                  of Lenders.

              	
                54

              



    

     

    
 

    
      
         

        
        

      

      
        iii

        
          

        

      

      
        
        

      

    


    


    

      SCHEDULES

      


      
        	
                Schedule
                  1.1

              	
                Commitments

              
	
                Schedule
                  5.18

              	
                Material
                  Leases

              
	
                Schedule
                  5.19

              	
                Material
                  Lease Interest Payments and Discount Rate

              
	
                Schedule
                  10.1

              	
                Notices

              
	
                Schedule
                  10.3

              	
                Processing
                  and Recording Fees

              


      

      


      


      EXHIBITS

      


      
        	
                Exhibit
                  2.6(b)

              	
                Form
                  of Note

              
	
                Exhibit
                  2.4

              	
                Form
                  of Notice of Continuation/Conversion

              
	
                Exhibit
                  6.1(c)

              	
                Form
                  of Compliance Certificate

              
	
                Exhibit
                  10.3(b)

              	
                Form
                  of Assignment and Assumption

              


      

      


    

    



    
      
        
           

        

        
        

      

      
        iv

        
          

        

      

      
        
        

        
        

      

    


    EXECUTION
      COPY

    


    EXHIBIT
      10.4


    TERM
      LOAN AGREEMENT

     

    


    THIS
      TERM
      LOAN AGREEMENT (this “Credit
      Agreement”)
      is
      entered into as of April 18, 2006 among PNM RESOURCES, INC., a New Mexico
      corporation (the “Borrower”),
      the
      Lenders party hereto, LEHMAN
      COMMERCIAL PAPER INC.,
      as
      administrative agent (in such capacity, the “Administrative
      Agent”),
      and
      LEHMAN BROTHERS INC., as sole lead arranger and sole book-manager (in such
      capacity, the “Arranger”).

     

    RECITALS

     

    WHEREAS,
      the
      Borrower will enter into a transaction whereby, through a subsidiary, it will
      acquire all or substantially all of the assets of Twin Oaks Power and Twin
      Oaks
      Power III (as defined herein) (collectively, the “Acquired
      Business”;
      such
      transaction, the “Acquisition”).

     

    WHEREAS,
      for the
      purposes of financing the Acquisition and the payment of related fees and
      expenses, the Borrower has requested that the Lenders provide a term loan
      facility in an aggregate principal amount of $480,000,000; and

     

    WHEREAS,
      the
      Lenders party hereto are willing to make such term loan facility available
      upon
      and subject to the terms and conditions set forth herein;

     

    NOW,
      THEREFORE, IN CONSIDERATION of
      the
      premises and other good and valuable consideration, the receipt and sufficiency
      of which is hereby acknowledged, the parties hereto agree as
      follows:

     

    SECTION
      1

     

    DEFINITIONS
      AND ACCOUNTING TERMS

     

    1.1  Definitions.

     

    The
      following terms shall have the meanings specified herein unless the context
      otherwise requires. Defined terms herein shall include in the singular number
      the plural and in the plural the singular:

     

    “Acquired
      Business”
has
      the
      meaning set forth in the recitals hereto. 

     

    “Acquisition”
has
      the
      meaning set forth in the recitals hereto.

     

    “Acquisition
      Agreement”
means
      the Purchase and Sale Agreement dated as of January 14, 2006, by and among
      Twin
      Oaks Power, LP, Twin Oaks Power III, LP, Sempra Energy, Altura Power, L.P.
      and
      PNM Resources, Inc.

     

    “Acquisition
      Documentation”
means
      collectively, the Acquisition Agreement and all schedules, exhibits, annexes
      and
      amendments thereto and all side letters and agreements affecting the terms
      thereof or entered into in connection therewith, in each case, as amended,
      supplemented or otherwise modified from time to time.

     

    “Adjusted
      Eurodollar Rate”
means
      the Eurodollar Rate plus the Applicable Percentage.

     

     

    
      
        1

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Administrative
      Agent”
means
      LCPI or any successor administrative agent appointed pursuant to Section
      9.6.

     

    “Administrative
      Agent’s Office”
means
      the Administrative Agent’s address and, as appropriate, account as set forth on
Schedule
      10.1
      or such
      other address or account as the Administrative Agent may from time to time
      notify the Borrower and the Lenders.

     

    “Administrative
      Questionnaire”
means
      an Administrative Questionnaire in a form supplied by the Administrative
      Agent.

     

    “Affiliate”
means,
      with respect to any Person, any other Person directly or indirectly controlling
      (including but not limited to all directors and officers of such Person),
      controlled by or under direct or indirect common control with such Person.
      A
      Person shall be deemed to control a corporation if such Person possesses,
      directly or indirectly, the power (a) to vote 10% or more of the securities
      having ordinary voting power for the election of directors of such corporation
      or (b) to direct or cause direction of the management and policies of such
      corporation, whether through the ownership of voting securities, by contract
      or
      otherwise.

     

    “Agent-Related
      Persons”
means
      the Administrative Agent, together with its Affiliates and the officers,
      directors, employees, agents and attorneys-in-fact of the Administrative Agent
      and its Affiliates.

     

    “Applicable
      Percentage”
means
      0.625%; provided, that if at any time the Borrower shall fail to maintain a
      Debt
      Rating of at least BBB- from S&P and of at least a Baa3 from Moody’s, the
      Applicable Percentage shall equal 0.875%. 

     

    “Approved
      Fund”
means
      any Fund that is administered or managed by (a) a
      Lender,
      (b) an
      Affiliate of a Lender or (c) an
      entity
      or an Affiliate of an entity that administers or manages a Lender.

     

    “Arranger”
has
      the
      meaning set forth in the preamble hereto. 

     

    “Assignee
      Group”
means
      two or more Eligible Assignees that are Affiliates of one another or two or
      more
      Approved Funds managed by the same investment advisor.

     

    “Assignment
      and Assumption”
means
      an assignment and assumption substantially in the form of Exhibit
      10.3(b).

     

    “Authorized
      Officer”
means
      any of the president, chief executive officer, chief financial officer or
      officer of treasury of the Borrower.

     

    “Bankruptcy
      Code”
means
      the Bankruptcy Code in Title 11 of the United States Code, as amended, modified,
      succeeded or replaced from time to time.

     

    “Base
      Rate”
means
      for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16
      of 1%) equal to the greater of (a) the Prime Rate in effect on such day and
      (b) the Federal Funds Rate in effect on such day plus1⁄2
of
      1%.
      For purposes hereof: “Prime
      Rate”
shall
      mean the prime lending rate as set forth on the British Banking Association
      Telerate Page 5 (or such other comparable publicly available page as may,
      in the reasonable opinion of the Administrative Agent after notice to the
      Borrower, replace such page for the purpose of displaying such rate if such
      rate
      no longer appears on the British Bankers Association Telerate page 5), as
      in effect from time to time. The Prime Rate is a reference rate and does not
      necessarily represent the lowest or best rate actually available. Any change
      in
      the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall
      be effective as of the opening of business on the effective day of such change
      in the Prime Rate or the Federal Funds Rate, respectively.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Base
      Rate Loan”
means
      any Term Loan bearing interest at a rate determined by reference to the Base
      Rate.

     

    “Borrower”
has
      the
      meaning set forth in the preamble hereto. 

     

    “Borrower
      Obligations”
means,
      without duplication, all of the obligations of the Borrower to the Lenders
      and
      the Administrative Agent, whenever arising, under this Credit Agreement, the
      Notes, or any of the other Credit Documents.

     

    “Business
      Day”
means
      any day other than a Saturday, a Sunday, a legal holiday or a day on which
      banking institutions are authorized or required by Law or other governmental
      action to close in New York, New York; provided
      that in
      the case of Eurodollar Loans such day is also a day on which dealings are
      conducted by and between banks in the London interbank market.

     

    “Capital
      Stock”
means
      (a) in the case of a corporation, all classes of capital stock of such
      corporation, (b) in the case of a partnership, partnership interests (whether
      general or limited), (c) in the case of a limited liability company, membership
      interests and (d) any other interest or participation that confers on a Person
      the right to receive a share of the profits and losses of, or distributions
      of
      assets of, the issuing Person; including, in each case, all warrants, rights
      or
      options to purchase any of the foregoing.

     

    “Change
      of Control”
means
      the occurrence of any of the following: (a) any “person” or “group” (as such
      terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
      1934, but excluding any employee benefit plan of such person or its
      subsidiaries, and any person or entity acting in its capacity as trustee, agent
      or other fiduciary or administrator of any such plan) becomes the “beneficial
      owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
      1934, except that a person or group shall be deemed to have “beneficial
      ownership” of all Capital Stock that such person or group has the right to
      acquire (such right, an “option
      right”),
      whether such right is exercisable immediately or only after the passage of
      time), directly or indirectly, of twenty-five (25%) of the Capital Stock of
      the
      Borrower entitled to vote for members of the board of directors or equivalent
      governing body of the Borrower on a fully diluted basis (and taking into account
      all such securities that such person or group has the right to acquire pursuant
      to any option right); (b) during any period of 24 consecutive months, a majority
      of the members of the board of directors or other equivalent governing body
      of
      the Borrower cease to be composed of individuals (i) who were members of that
      board or equivalent governing body on the first day of such period, (ii) whose
      election or nomination to that board or equivalent governing body was approved
      by individuals referred to in clause (i) above constituting at the time of
      such
      election or nomination at least a majority of that board or equivalent governing
      body or (iii) whose election or nomination to that board or other equivalent
      governing body was approved by individuals referred to in clauses (i) and (ii)
      above constituting at the time of such election or nomination at least a
      majority of that board or equivalent governing body (excluding, in the case
      of
      both clause (ii) and clause (iii), any individual whose initial nomination
      for,
      or assumption of office as, a member of that board or equivalent governing
      body
      occurs as a result of an actual or threatened solicitation of proxies or
      consents for the election or removal of one or more directors by any person
      or
      group other than a solicitation for the election of one or more directors by
      or
      on behalf of the board of directors); or (c) any Person or two or more Persons
      acting in concert shall have acquired by contract or otherwise, or shall have
      entered into a contract or arrangement that, upon consummation thereof, will
      result in its or their acquisition of the power to exercise, directly or
      indirectly, a controlling influence over the management or policies of the
      Borrower, or control over the Voting Stock of the Borrower on a fully-diluted
      basis (and taking into account all such Voting Stock that such Person or group
      has the right to acquire pursuant to any option right) representing twenty-five
      (25%) or more of the combined voting power of such Voting Stock. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Closing
      Date”
means
      the date of this Credit Agreement, which is the first date all the conditions
      precedent in Section 5.1 are satisfied or waived in accordance with Section
      5.1.

     

    “Code”
means
      the Internal Revenue Code of 1986 and the rules and regulations promulgated
      thereunder, as amended, modified, succeeded or replaced from time to
      time.

     

    “Compliance
      Certificate”
means
      a
      fully completed and duly executed officer’s certificate in the form of
Exhibit
      6.1(c),
      together with a Covenant Compliance Worksheet.

     

    “Consolidated
      Capitalization”
means,
      with respect to any Person, the sum of (a) all of the shareholders’ equity or
      net worth of such Person and its Subsidiaries, as determined in accordance
      with
      GAAP plus (b) Consolidated Indebtedness of such Person and its Subsidiaries
      plus
      (c) the outstanding principal amount of Preferred Stock plus (d) 75% of the
      outstanding principal amount of Specified Securities of such Person and its
      Subsidiaries.

     

    “Consolidated
      Indebtedness”
means,
      as of any date of determination, with respect to any Person and its Subsidiaries
      on a consolidated basis, an amount equal to (a) all Indebtedness of such Person
      and its Subsidiaries as of such date minus (b) the
      outstanding principal amount of stranded cost securitization bonds of such
      Person and its Subsidiaries minus (c) an amount equal to the lesser of (i)
      75%
      of the outstanding principal amount of Specified Securities of such Person
      and
      its Subsidiaries or (ii) 10% of Consolidated Capitalization (calculated assuming
      clause (i) above is applicable).

     

    “Consolidated
      Interest Expense”
means,
      for any period, with respect to any Person and its Subsidiaries on a
      consolidated basis, an amount equal to total interest expense of such Person
      and
      its Subsidiaries for such period (including, without limitation, all such
      interest expense accrued or capitalized during such period, whether or not
      actually paid during such period), as determined in accordance with GAAP.


     

    “Consolidated
      Net Income”
means,
      with respect to any Person, the consolidated net income of such Person and
      its
      Subsidiaries, as determined in accordance with GAAP.

     

    “Constellation
      Agreement”
means
      that certain Power Supply and Service Agreement dated December 22, 2003 between
      First Choice and Constellation Energy, as amended, and any future amendments,
      replacements or extensions thereof (so long as such amendments, replacements
      or
      extensions are not materially less favorable to the Borrower and its
      Subsidiaries). 

     

    “Contingent
      Obligation”
means,
      with respect to any Person, any direct or indirect liability of such Person
      with
      respect to any Indebtedness, liability or other obligation (the “primary
      obligation”) of another Person (the “primary obligor”), whether or not
      contingent, (a) to purchase, repurchase or otherwise acquire such primary
      obligation or any property constituting direct or indirect security therefor,
      (b) to advance or provide funds (i) for the payment or discharge of any such
      primary obligation or (ii) to maintain working capital or equity capital of
      the
      primary obligor or otherwise to maintain the net worth or solvency or any
      balance sheet item, level of income or financial condition of the primary
      obligor, (c) to purchase property, securities or services primarily for the
      purpose of assuring the owner of any such primary obligation of the ability
      of
      the primary obligor in respect thereof to make payment of such primary
      obligation or (d) otherwise to assure or hold harmless the owner of any such
      primary obligation 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    against
      loss or failure or inability to perform in respect thereof; provided,
      however,
      that,
      with respect to the Borrower and its Subsidiaries, the term Contingent
      Obligation shall not include endorsements for collection or deposit in the
      ordinary course of business. The amount of any Contingent Obligation of any
      Person shall be deemed to be an amount equal to the maximum amount of such
      Person’s liability with respect to the stated or determinable amount of the
      primary obligation for which such Contingent Obligation is incurred or, if
      not
      stated or determinable, the maximum reasonably anticipated liability in respect
      thereof (assuming such Person is required to perform thereunder).

     

    “Covenant
      Compliance Worksheet”
shall
      mean a fully completed worksheet in the form of Schedule I to Exhibit
      6.1(c).

     

    “Credit
      Agreement”
has
      the
      meaning set forth in the Preamble hereof.

     

    “Credit
      Documents”
means
      this Credit Agreement, the Notes, any Notice of Continuation/Conversion, and
      any
      other document, agreement or instrument entered into or executed in connection
      with the foregoing.

     

    “Debt
      Rating”
means
      the long term unsecured senior non-credit enhanced debt rating of the Borrower
      by S&P and Moody’s.

     

    “Debtor
      Relief Laws”
means
      the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy,
      assignment for the benefit of creditors, moratorium, rearrangement,
      receivership, insolvency, reorganization, or similar debtor relief Laws of
      the
      United States or other applicable jurisdictions from time to time in effect
      and
      affecting the rights of creditors generally.

     

    “Default”
means
      any event, act or condition which with notice or lapse of time, or both, would
      constitute an Event of Default.

     

    “Default
      Rate”
means
      an interest rate equal to two percent (2%) plus the rate that otherwise would
      be
      applicable (or if no rate is applicable, the Base Rate plus two percent (2%)
      per
      annum).

     

    “Dollars”
and
      “$”
means
      dollars in lawful currency of the United States of America.

     

    “Eligible
      Assignee”
means
      (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any
      other Person (other than a natural person) approved by the Administrative Agent
      and the Borrower (such approval not to be unreasonably withheld or delayed);
      provided
      that (i)
      the Borrower’s consent is not required during the existence and continuation of
      a Default or an Event of Default, (ii) approval by the Borrower shall be deemed
      given if no objection is received by the assigning Lender and the Administrative
      Agent from the Borrower within five Business Days after notice of such proposed
      assignment has been delivered to the Borrower and (iii) neither the Borrower
      nor
      any Subsidiary or Affiliate of the Borrower shall qualify as an Eligible
      Assignee.

     

    “Environmental
      Claims”
means
      any and all administrative, regulatory or judicial actions, suits, demands,
      demand letters, claims, liens, accusations, allegations, notices of
      noncompliance or violation, investigations (other than internal reports prepared
      by any Person in the ordinary course of its business and not in response to
      any
      third party action or request of any kind) or proceedings relating in any way
      to
      any actual or alleged violation of or liability under any Environmental Law
      or
      relating to any permit issued, or any approval given, under any such
      Environmental Law (collectively, “Claims”),
      including, without limitation, (a) any and all Claims by Governmental
      Authorities for enforcement, cleanup, removal, response, remedial or other
      actions or damages pursuant to any applicable Environmental
      Law and (b) any and all Claims by any third party seeking damages, contribution,
      indemnification, cost recovery, compensation or injunctive relief resulting
      from
      Hazardous Substances or arising from alleged injury or threat of injury to
      human
      health or the environment.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Environmental
      Laws”
shall
      mean any and all federal, state and local laws, statutes, ordinances, rules,
      regulations, permits, licenses, approvals, rules of common law and orders of
      courts or Governmental Authorities, relating to the protection of human health
      or occupational safety or the environment, now or hereafter in effect and in
      each case as amended from time to time, including, without limitation,
      requirements pertaining to the manufacture, processing, distribution, use,
      treatment, storage, disposal, transportation, handling, reporting, licensing,
      permitting, investigation or remediation of Hazardous Substances.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and any successor statute, and all rules and regulations from time to
      time
      promulgated thereunder.

     

    “ERISA
      Affiliate”
means
      any Person (including any trade or business, whether or not incorporated) that
      would be deemed to be under “common control” with, or a member of the same
“controlled group” as, the Borrower or any of its Subsidiaries, within the
      meaning of Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of
      ERISA.

     

    “ERISA
      Event”
means
      (a) a Reportable Event with respect to a Plan or a Multiemployer Plan, (b)
      a
      complete or partial withdrawal by the Borrower, any of its Subsidiaries or
      any
      ERISA Affiliate from a Multiemployer Plan, or the receipt by the Borrower,
      any
      of its Subsidiaries or any ERISA Affiliate of notice from a Multiemployer Plan
      that it is in reorganization or insolvency pursuant to Section 4241 or 4245
      of
      ERISA or that it intends to terminate or has terminated under Section 4041A
      of
      ERISA, (c) the distribution by the Borrower, any of its Subsidiaries or any
      ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent
      to
      terminate any Plan or the taking of any action to terminate any Plan, (d) the
      commencement of proceedings by the PBGC under Section 4042 of ERISA for the
      termination of, or the appointment of a trustee to administer, any Plan, or
      the
      receipt by the Borrower, any of its Subsidiaries or any ERISA Affiliate of
      a
      notice from any Multiemployer Plan that such action has been taken by the PBGC
      with respect to such Multiemployer Plan, (e) the institution of a proceeding
      by
      any fiduciary of any Multiemployer Plan against the Borrower, any of its
      Subsidiaries or any ERISA Affiliate to enforce Section 515 of ERISA, which
      is
      not dismissed within thirty (30) days, (f) the imposition upon the Borrower,
      any
      of its Subsidiaries or any ERISA Affiliate of any liability under Title IV
      of
      ERISA, other than for PBGC premiums due but not delinquent under Section 4007
      of
      ERISA, or the imposition or threatened imposition of any Lien upon any assets
      of
      the Borrower, any of its Subsidiaries or any ERISA Affiliate as a result of
      any
      alleged failure to comply with the Code or ERISA in respect of any Plan, (g)
      the
      engaging in or otherwise becoming liable for a nonexempt Prohibited Transaction
      by the Borrower, any of its Subsidiaries or any ERISA Affiliate, (h) a violation
      of the applicable requirements of Section 404 or 405 of ERISA or the exclusive
      benefit rule under Section 401(a) of the Code by any fiduciary of any Plan
      for
      which the Borrower, any of its Subsidiaries or any ERISA Affiliate may be
      directly or indirectly liable, (i) the adoption of an amendment to any Plan
      that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would
      result in the loss of tax-exempt status of the trust of which such Plan is
      a
      part if the Borrower, any of its Subsidiaries or any ERISA Affiliate fails
      to
      timely provide security to such Plan in accordance with the provisions of such
      sections or (j) the withdrawal of the Borrower, any of its Subsidiaries or
      any ERISA Affiliate from a Multiple Employer Plan during a play year in which
      it
      was a substantial employer (as such term is defined in Section 4001(a)(2)
      of ERISA), or the termination of a Multiple Employer Plan.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Eurodollar
      Loan”
means
      a
      Term Loan bearing interest based at a rate determined by reference to the
      Adjusted Eurodollar Rate. 

     

    “Eurodollar
      Rate”
means,
      for any Interest Period with respect to a Eurodollar Loan, the rate per annum
      equal to the British Bankers Association LIBOR Rate (“BBA
      LIBOR”),
      as
      published by Reuters (or other commercially available source providing
      quotations of BBA LIBOR as designated by the Administrative Agent from time
      to
      time) at approximately 11:00 a.m., London time, two Business Days prior to
      the commencement of such Interest Period, for Dollar deposits (for delivery
      on
      the first day of such Interest Period) with a term equivalent to such Interest
      Period. If such rate is not available at such time for any reason, then the
      “Eurodollar Rate” for such Interest Period shall be the rate per annum
      determined by reference to such other comparable publicly available services
      for
      displaying eurodollar rates as may be reasonably selected by the Administrative
      Agent. 

     

    “Event
      of Default”
has
      the
      meaning set forth in Section 8.1.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, and the rules and regulations promulgated
      thereunder, as amended, modified, succeeded or replaced from time to
      time.

     

    “Existing
      Credit Agreement”
means
      the Amended and Restated Credit Agreement, dated as of August 15, 2005, among
      the Borrower, First Choice Power, L.P., the lenders and financial institutions
      party thereto, Bank of America, N.A., as administrative agent, and Wachovia
      Bank, National Association, as syndication agent, and Citibank, N.A., JPMorgan
      Chase Bank, N.A. and Union Bank of California, N.A., as co-documentation
      agents.

     

    “Federal
      Funds Rate”
means,
      for any day, the rate per annum equal to the weighted average (rounded upward,
      if necessary, to a whole multiple of 1/100 of 1%) of the rates on overnight
      Federal funds transactions with members of the Federal Reserve System arranged
      by Federal funds brokers on such day, as published by the Federal Reserve Bank
      on the Business Day next succeeding such day; provided
      that (a)
      if such day is not a Business Day, the Federal Funds Rate for such day shall
      be
      such rate on such transactions on the next preceding Business Day as so
      published on the next succeeding Business Day, and (b) if no such rate is so
      published on such next succeeding Business Day, the Federal Funds Rate for
      such
      day shall be the average of the quotations for the day of such transactions
      received by the Administrative Agent from three federal funds brokers of
      recognized standing selected by it (rounded upward, if necessary, to a whole
      multiple of 1/100 of 1%).

     

    “Fee
      Letters”
means
      (a) the credit facility fee letter, dated January 17, 2006, among the Borrower,
      LCPI and Lehman Brothers Inc., as amended, modified, supplemented or restated
      from time to time and (b) the administrative agent fee letter, dated April
      142006, among the Borrower and LCPI, as amended, modified, supplemented or
      restated from time to time. 

     

    “Financial
      Officer”
means
      the chief financial officer, vice president-finance, principal accounting
      officer or officer of treasury of the Borrower.

     

    “First
      Choice”
means
      First Choice Power Special Purpose, L.P., a Texas limited partnership, and
      its
      successors.

     

    “First
      Choice Securitization”
means
      the accounts receivable securitization effected by the Constellation Agreement,
      and any replacements or extensions thereof (so long as such replacements or
      extensions are not materially less favorable to the Borrower and its
      Subsidiaries).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “First
      Mortgage Bonds”
means
      those first mortgage bonds issued pursuant to the FMB Indenture.

     

    “Fiscal
      Quarter”
means
      each of the calendar quarters ending as of the last day of each March, June,
      September and December.

     

    “Fiscal
      Year”
means
      the calendar year ending December 31.

     

    “FMB
      Indenture”
means
      the Indenture of Mortgage and Deed of Trust, dated as of June 1, 1947,
      between PSNM and The Bank of New York (formerly Irving Trust Company), as
      trustee thereunder, as supplemented and amended.

     

    “Foreign
      Lender”
has
      the
      meaning set forth in Section 3.13(f).

     

    “Fund”
means
      any Person (other than a natural person) that is (or will be) engaged in making,
      purchasing, holding or otherwise investing in commercial loans and similar
      extensions of credit in the ordinary course of its business.

     

    “GAAP”
means
      generally accepted accounting principles in the United States set forth in
      the
      opinions and pronouncements of the Accounting Principles Board and the American
      Institute of Certified Public Accountants and statements and pronouncements
      of
      the Financial Accounting Standards Board (or agencies with similar functions
      of
      comparable stature and authority within the U.S. accounting profession) or
      that
      are promulgated by any Governmental Authority having appropriate
      jurisdiction.

     

    “Governmental
      Authority”
means
      any domestic or foreign nation or government, any state or other political
      subdivision thereof and any central bank thereof, any municipal, local, city
      or
      county government, and any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to government
      (including, without limitation, any state dental board) and any corporation
      or
      other entity owned or controlled, through stock or capital ownership or
      otherwise, by any of the foregoing.

     

    “Hazardous
      Substances”
means
      any substances or materials (a) that are or become defined as hazardous wastes,
      hazardous substances, pollutants, contaminants or toxic substances under any
      Environmental Law, (b) that are defined by any Environmental Law as toxic,
      explosive, corrosive, ignitable, infectious, radioactive, mutagenic or otherwise
      hazardous, (c) the presence of which require investigation or response under
      any
      Environmental Law, (d) that constitute a nuisance, trespass or health or safety
      hazard to Persons or neighboring properties, (e) that consist of underground
      or
      aboveground storage tanks, whether empty, filled or partially filled with any
      substance, or (f) that contain, without limitation, asbestos, polychlorinated
      biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
      derived substances or wastes, crude oil, nuclear fuel, natural gas or synthetic
      gas.

     

    “Hedging
      Agreements”
means,
      collectively, interest rate protection agreements, equity index agreements,
      foreign currency exchange agreements, option agreements or other interest or
      exchange rate or commodity price hedging agreements (other than forward
      contracts for the delivery of power or gas written by the Borrower to its
      jurisdictional and wholesale customers in the ordinary course of
      business).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “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 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), (k)
      all
      obligations, contingent or otherwise, under the Material Leases, (l) all
      Specified Securities and (m) all indebtedness referred to in clauses (a) through
      (l) 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.

     

    “Indemnified
      Liabilities”
has
      the
      meaning set forth in Section 10.5(b).

     

    “Indemnitees”
has
      the
      meaning set forth in Section 10.5(b).

     

    “Insured
      Series First Mortgage Bonds”
means
      First Mortgage Bonds in the aggregate principal amount of $65,000,000 pledged
      by
      PSNM to secure guarantees of $65,000,000 principal amount of pollution control
      revenue bonds issued by the City of Farmington, New Mexico, for the benefit
      of
      PSNM, which pollution control revenue bonds are also supported by a municipal
      bond insurance policy issued by AMBAC Indemnity Corporation.

     

    “Interest
      Payment Date”
means,
      (a) as to any Eurodollar Loan, the last day of each Interest Period applicable
      to such Eurodollar Loan and the Maturity Date; provided,
      however,
      that if
      any Interest Period for a Eurodollar Loan exceeds three months, the respective
      dates that fall every three months after the beginning of such Interest Period
      shall also be Interest Payment Dates and (b) as to any Base Rate Loan, the
      last
      Business Day of each Fiscal Quarter and the Maturity Date.

     

    “Interest
      Period”
means,
      as to each Eurodollar Loan, the period commencing on the date such Eurodollar
      Loan is disbursed or converted to or continued as a Eurodollar Loan and ending
      on the date one, two, three or six months thereafter, as selected by the
      Borrower on the Closing Date or in any Notice of Continuation/Conversion;
provided
      that:

     

    (a) any
      Interest Period that would otherwise end on a day that is not a Business Day
      shall be extended to the next succeeding Business Day unless such Business
      Day
      falls in another calendar month, in which case such Interest Period shall end
      on
      the next preceding Business Day;

     

    (b) any
      Interest Period that begins on the last Business Day of a calendar month (or
      on
      a day for which there is no numerically corresponding day in the calendar month
      at the end of such Interest Period) shall end on the last Business Day of the
      calendar month at the end of such Interest Period; and

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (c) no
      Interest Period shall extend beyond the Maturity Date.

     

    “Laws”
means,
      collectively, all international, foreign, federal, state and local statutes,
      treaties, rules, guidelines, regulations, ordinances, codes and administrative
      or judicial precedents or authorities, including the interpretation or
      administration thereof by any Governmental Authority charged with the
      enforcement, interpretation or administration thereof, and all applicable
      administrative orders, directed duties, requests, licenses, authorizations
      and
      permits of, and agreements with, any Governmental Authority, in each case
      whether or not having the force of law.

     

    “LCPI”
means
      Lehman Commercial Paper Inc., together with its successors and
      assigns.

     

    “Lender”
means
      any of the Persons identified as a “Lender” on the signature pages hereto and
      any Eligible Assignee which may become a Lender by way of assignment in
      accordance with the terms hereof, together with their successors and permitted
      assigns.

     

    “Lending
      Office”
means,
      as to any Lender, the office or offices of such Lender described as such in
      such
      Lender’s Administrative Questionnaire, or such other office or offices as a
      Lender may from time to time notify the Borrower and the Administrative
      Agent.

     

    “Lien”
means
      any mortgage, pledge, hypothecation, assignment, security interest, lien
      (statutory or otherwise), preference, priority, charge or other encumbrance
      of
      any nature, whether voluntary or involuntary, including, without limitation,
      the
      interest of any vendor or lessor under any conditional sale agreement, title
      retention agreement, capital lease or any other lease or arrangement having
      substantially the same effect as any of the foregoing.

     

    “Margin
      Stock”
has
      the
      meaning ascribed to such term in Regulation U.

     

    “Material
      Adverse Change”
means
      a
      material adverse change in the condition (financial or otherwise), operations,
      business, performance, properties or assets of the Borrower and its
      Subsidiaries, taken as a whole.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect upon (a) the ability of the Borrower to complete the
      Acquisition, (b) the business, assets, liabilities (actual or contingent),
      operations, condition (financial or otherwise) or prospects of the Borrower
      and
      its Subsidiaries, taken as a whole, (c) the ability of the Borrower or any
      of
      its Subsidiaries to perform its obligations under this Credit Agreement or
      any
      of the other Credit Documents or (d) the legality, validity or enforceability
      of
      this Credit Agreement or any of the other Credit Documents or the rights and
      remedies of the Administrative Agent and the Lenders hereunder and
      thereunder.

     

    “Material
      Lease”
means
      any lease by PSNM of its leasehold interests in (i) Unit 1 or Unit 2, and
      related common facilities, of the Palo Verde Nuclear Generating Station or
      (ii)
      the electric transmission line, and related facilities, known as the Eastern
      Interconnection Project, including, without limitation, any lease set forth
      on
Schedule
      5.18
      hereto.


     

    “Maturity
      Date”
means
      April 17, 2007. 

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. and its successors.

     

    “Multiemployer
      Plan”
means
      any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA
      to which the Borrower, any of its Subsidiaries or any ERISA Affiliate makes,
      is
      making or is obligated to make contributions or has made or been obligated
      to
      make contributions.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    “Multiple
      Employer Plan”
means
      a
      Single Employer Plan to which the Borrower, any of its Subsidiaries or any
      ERISA
      Affiliate and at least one employer other than the Borrower, any of its
      Subsidiaries or any ERISA Affiliate are contributing sponsors.

     

    “Net
      Cash Proceeds”
means,
      in connection with any issuance or sale of equity securities or debt securities
      or instruments or the incurrence of loans, the cash proceeds received from
      such
      issuance or incurrence, net of attorneys’ fees, investment banking fees,
      accountants’ fees, underwriting discounts and commissions and other customary
      fees and expenses actually incurred in connection therewith. 

     

    “Note”
has
      the
      meaning set forth in Section 2.6 (b).

     

    “Notice
      of Continuation/Conversion”
means
      a
      request by the Borrower to continue an existing Eurodollar Loan to a new
      Interest Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
      Rate Loan to a Eurodollar Loan, in the form of Exhibit
      2.4.

     

    “Other
      Taxes”
has
      the
      meaning set forth in Section 3.13(b).

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation and any successor thereto.

     

    “Participant”
has
      the
      meaning set forth in Section 10.3(d).

     

    “Participation
      Interest”
means
      the purchase by a Lender of a participation in any Term Loan as provided in
      Section 3.8.

     

    “Person”
means
      any individual, partnership, joint venture, firm, corporation, limited liability
      company, association, trust or other enterprise (whether or not incorporated),
      or any Governmental Authority.

     

    “Plan”
means
      any “employee benefit plan” (within the meaning of Section 3(3) of ERISA) which
      is covered by ERISA and with respect to which the Borrower, any of its
      Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated at
      such
      time, would under Section 4069 of ERISA be deemed to be) an “employer”
within the meaning of Section 3(5) of ERISA.

     

    “Preferred
      Stock”
means,
      with respect to any Person, all preferred Capital Stock issued by such Person
      in
      which the terms thereof do not require such Capital Stock to be redeemed or
      to
      make mandatory sinking fund payments.

     

    “Prime
      Rate”
has
      the
      meaning set forth in the definition of Base Rate in this
      Section 1.1.

     

    “Pro
      Rata Share”
means
      as to any Lender at any time, the percentage which the unpaid principal amount
      of such Lender’s Term Loans then constitutes of the aggregate unpaid principal
      amount of the Term Loans then outstanding. 

     

    “Prohibited
      Transaction”
means
      any transaction described in (a) Section 406 of ERISA that is not exempt by
      reason of Section 408 of ERISA or by reason of a Department of Labor prohibited
      transaction individual or class exemption or (b) Section 4975(c) of the Code
      that is not exempt by reason of Section 4975(c)(2) or 4975(d) of the
      Code.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    “Property”
means
      any right, title or interest in or to any property or asset of any kind
      whatsoever, whether real, personal or mixed and whether tangible or
      intangible.

     

    “PSNM”
means
      Public Service Company of New Mexico, a New Mexico corporation.

     

    “Register”
has
      the
      meaning set forth in Section 10.3(c).

     

    “Regulations
      T, U and X”
means
      Regulations T, U and X, respectively, of the Federal Reserve Board, and any
      successor regulations.

     

    “Reportable
      Event”
means
      (a) any “reportable event” within the meaning of Section 4043(c) of ERISA for
      which the notice under Section 4043(a) of ERISA has not been waived by the
      PBGC
      (including any failure to meet the minimum funding standard of, or timely make
      any required installment under, Section 412 of the Code or Section 302 of ERISA,
      regardless of the issuance of any waivers in accordance with Section 412(d)
      of
      the Code), (b) any such “reportable event” subject to advance notice to the PBGC
      under Section 4043(b)(3) of ERISA, (c) any application for a funding waiver
      or
      an extension of any amortization period pursuant to Section 412 of the Code,
      and
      (d) a cessation of operations described in Section 4062(e) of
      ERISA.

     

    “Required
      Lenders”
means
      at any time, the holders of more than 50% of the aggregate unpaid principal
      amount of the Term Loans then outstanding.

     

    “Requirement
      of Law”
means,
      with respect to any Person, the organizational documents of such Person and
      any
      Law applicable to or binding upon such Person or any of its property or to
      which
      such Person or any of its property is subject or otherwise pertaining to any
      or
      all of the transactions contemplated by this Credit Agreement and the other
      Credit Documents.

     

    “Responsible
      Officer”
means
      the president, the chief executive officer, the co-chief executive officer,
      the
      chief financial officer, any executive officer, vice president-finance,
      principal accounting officer or officer of treasury of the Borrower, and any
      other officer or similar official thereof responsible for the administration
      of
      the obligations of the Borrower in respect of this Credit Agreement and the
      other Credit Documents.

     

    “Restricted
      Payment”
means,
      with respect to any Person, any dividend or other distribution (whether in
      cash,
      securities or other property) with respect to any Capital Stock of such
      Person.

     

    “S&P”
means
      Standard & Poor’s Rating Service, a division of The McGraw-Hill Companies,
      Inc. and its successors.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Single
      Employer Plan”
means
      any Plan which is covered by Title IV of ERISA, but which is not a
      Multiemployer Plan or Multiple Employer Plan.

     

    “Solvent”
means,
      with respect to any Person as of a particular date, that on such date (a) such
      Person is able to pay its debts and other liabilities, Contingent Obligations
      and other commitments as they mature in the normal course of business, (b)
      such
      Person does not intend to, and does not believe that it will, incur debts or
      liabilities beyond such Person’s ability to pay as such debts and liabilities
      mature in their ordinary course, (c) such Person is not engaged in a business
      or
      a transaction, and is not about to 

     

    
      
        
        

      

      
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    engage
      in
      a business or a transaction, for which such Person’s assets would constitute
      unreasonably small capital after giving due consideration to the prevailing
      practice in the industry in which such Person is engaged or is to engage, (d)
      the fair value of the assets of such Person is greater than the total amount
      of
      liabilities, including, without limitation, Contingent Obligations, of such
      Person and (e) the present fair saleable value of the assets of such Person
      is
      not less than the amount that will be required to pay the probable liability
      of
      such Person on its debts as they become absolute and matured.

     

    “Specified
      Securities”
means,
      with respect to any Person, (a) all preferred Capital Stock issued by such
      Person and required by the terms thereof to be redeemed or for which mandatory
      sinking fund payments are due, (b) all securities issued by such Person that
      contain two distinct components, typically medium-term debt and a forward
      contract for the issuance of common stock prior to the debt maturity, including
      such securities commonly referred to by their tradenames as “FELINE PRIDES”,
“PEPS”, “HITS”, “SPACES” and “DECS” and generally referred to as “equity units”
and (c) all other securities issued by such Person that are similar to those
      described in the forgoing clauses (a) and (b).

     

    “Subsidiary”
means,
      as to any Person, (a) any corporation more than 50% of whose stock of any class
      or classes having by the terms thereof ordinary voting power to elect a majority
      of the directors of such corporation (irrespective of whether or not at the
      time, any class or classes of such corporation shall have or might have voting
      power by reason of the happening of any contingency) is at the time owned by
      such Person directly or indirectly through Subsidiaries, and (b) any
      partnership, association, joint venture or other entity in which such person
      directly or indirectly through Subsidiaries has more than a 50% equity interest
      at any time. Any reference to Subsidiary herein, unless otherwise identified,
      shall mean a Subsidiary, direct or indirect, of the Borrower. Any reference
      to a
      Subsidiary of the Borrower herein shall not include any Subsidiary that is
      inactive, has minimal or no assets and does not generate revenues.

     

    “Taxes”
has
      the
      meaning set forth in Section 3.13(a).

     

    “Term
      Loan”
has
      the
      meaning set forth in Section 2.1.

     

    “Term
      Loan Commitment”
means
      as to any Lender, the obligation of such Lender, if any, to make a Term Loan
      to
      the Borrower hereunder in a principal amount not to exceed the amount set forth
      under the heading “Commitment” opposite such Lender’s name on Schedule 1.1
      hereto, or, as the case may be, in the Assignment and Acceptance pursuant to
      which such Lender became a party hereto, as the same may be changed from time
      to
      time pursuant to the terms hereof. The original aggregate amount of the Term
      Loan Commitment is $480,000,000.

     

    “TNMP”
means
      Texas-New Mexico Power Company, a Texas corporation.

     

    “Total
      Assets”
means
      all assets of the Borrower and its Subsidiaries as shown on its most recent
      quarterly consolidated balance sheet, as determined in accordance with
      GAAP.

     

    “Twin
      Oaks Power”
means
      Twin Oaks Power, LP, a Texas limited partnership.

     

    “Twin
      Oaks Power III”
means
      Twin Oaks Power III, LP, a Texas limited partnership. 

     

    “Type”
means,
      with respect to a Term Loan, its character as a Base Rate Loan or a Eurodollar
      Loan.

     

    “Voting
      Stock”
means
      the Capital Stock of a Person that is then outstanding and normally entitled
      to
      vote in the election of directors and other securities of such Person
      convertible into or exercisable for such Capital Stock (whether or not such
      securities are then currently convertible or exercisable).

     

    
      
        
        

      

      
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    1.2  Computation
      of Time Periods and Other Definitional Provisions.

     

    For
      purposes of computation of periods of time hereunder, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
      excluding.” References in this Credit Agreement to “Articles”, “Sections”,
“Schedules” or “Exhibits” shall be to Articles, Sections, Schedules or Exhibits
      of or to this Credit Agreement unless otherwise specifically
      provided.

     

    1.3  Accounting
      Terms/Calculation of Financial Covenants.

     

    Except
      as
      otherwise expressly provided herein, all accounting terms used herein or
      incorporated herein by reference shall be interpreted, and all financial
      statements and certificates and reports as to financial matters required to
      be
      delivered to the Administrative Agent or the Lenders hereunder shall be
      prepared, in accordance with GAAP applied on a consistent basis. Notwithstanding
      anything to the contrary in this Credit Agreement, for purposes of calculation
      of the financial covenants set forth in Section 6.2, all accounting
      determinations and computations thereunder shall be made in accordance with
      GAAP
      as in effect as of the date of this Credit Agreement applied on a basis
      consistent with the application used in preparing the most recent financial
      statements of the Borrower referred to in Section 4.1(e). In the event that
      any
      changes in GAAP after such date are required to be applied to the Borrower
      and
      would affect the computation of the financial covenants contained in
      Section 6.2, such changes shall be followed only from and after the date
      this Credit Agreement shall have been amended to take into account any such
      changes. 

     

    1.4  Time.

     

    All
      references to time herein shall be references to Central Standard Time or
      Central Daylight Time, as the case may be, unless specified
      otherwise.

     

    1.5  Rounding
      of Financial Covenants.

     

    Any
      financial ratios required to be maintained by the Borrower pursuant to this
      Credit Agreement shall be calculated by dividing the appropriate component
      by
      the other component, carrying the result to one place more than the number
      of
      places by which such ratio is expressed herein and rounding the result up or
      down to the nearest number (with a rounding-up if there is no nearest
      number).

     

    1.6  References
      to Agreements and Requirement of Laws.

     

    Unless
      otherwise expressly provided herein: (a)
      references
      to organization documents, agreements (including the Credit Documents) and
      other
      contractual instruments shall be deemed to include all subsequent amendments,
      restatements, extensions, supplements and other modifications thereto, but
      only
      to the extent that such amendments, restatements, extensions, supplements and
      other modifications are not prohibited by any Credit Document and (b) references
      to any Requirement of Law shall include all statutory and regulatory provisions
      consolidating, amending, replacing, supplementing or interpreting such
      Requirement of Law.

     

    
      
        
        

      

      
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    SECTION
      2

     

    TERM
      LOAN FACILITY

     

    2.1  Term
      Loan Commitments. 

     

    Subject
      to the terms and conditions hereof, the Lenders severally agree to make term
      loans (each, a “Term
      Loan”)
      to the
      Borrower on the Closing Date in an amount for each Lender not to exceed the
      amount of the Term Loan Commitment of such Lender. The Term Loans may from
      time
      to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower
      and notified to the Administrative Agent in accordance with Sections 2.2 and
      2.4. 

     

    2.2  Procedure
      for Term Loan Borrowing.  

     

    The
      Borrower shall deliver to the Administrative Agent a notice (which must be
      received by the Administrative Agent prior to 10:00 A.M., New York City
      time, one Business Day prior to the anticipated Closing Date) requesting that
      the Lenders make the Term Loans on the Closing Date. The Term Loans made on
      the
      Closing Date shall initially be Eurodollar Loans. Upon receipt of such notice
      the Administrative Agent shall promptly notify each Lender thereof. Not later
      than 12:00 Noon, New York City time, on the Closing Date each Lender shall
      make available to the Administrative Agent at the Administrative Agent’s Office
      an amount in immediately available funds equal to the Term Loan to be made
      by
      such Lender. The Administrative Agent shall make available to the Borrower
      the
      aggregate of the amounts made available to the Administrative Agent by the
      Lenders, in like funds as received by the Administrative Agent.

     

    2.3  Repayment
      of Term Loans.  

     

    The
      Term
      Loan of each Lender shall mature on the Maturity Date and the outstanding
      balance of the Term Loans shall be repaid in full on such date. The Borrower
      hereby further agrees to pay interest on the unpaid principal amount of the
      Term
      Loans from time to time outstanding from the date hereof until payment in full
      thereof at the rates per annum and on the dates set forth in Section
      3.1.

     

    2.4  Continuations
      and Conversions.

     

    Subject
      to the terms below, the Borrower shall have the option, on any Business Day
      prior to the Maturity Date, to continue existing Eurodollar Loans for a
      subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans
      or
      to convert Eurodollar Loans into Base Rate Loans. By no later than 11:00 a.m.
      (a) on the date of the requested conversion of a Eurodollar Loan to a Base
      Rate
      Loan and (b) three Business Days prior to the date of the requested continuation
      of a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan,
      the
      Borrower shall provide telephonic notice to the Administrative Agent, followed
      promptly by a written Notice of Continuation/Conversion in the form of
Exhibit
      2.4,
      setting
      forth whether the Borrower wishes to continue or convert such Term Loans.
      Notwithstanding anything herein to the contrary, (A) except as provided in
      Section 3.11, Eurodollar Loans may only be continued or converted into Base
      Rate
      Loans on the last day of the Interest Period applicable thereto, (B) Eurodollar
      Loans may not be continued nor may Base Rate Loans be converted into Eurodollar
      Loans during the existence and continuation of a Default or an Event of Default
      and (C) any request to continue a Eurodollar Loan that fails to comply with
      the
      terms hereof or any failure to request a continuation of a Eurodollar Loan
      at
      the end of an Interest Period shall be deemed a request to convert such
      Eurodollar Loan to a Base Rate Loan on the last day of the applicable Interest
      Period. 

     

    
      
        
        

      

      
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    2.5  Minimum
      Amounts.

     

    Each
      request for a borrowing, conversion or continuation shall be subject to the
      requirements that (a) each Eurodollar Loan shall be in a minimum amount of
      $5,000,000 and in integral multiples of $1,000,000 in excess thereof, (b) each
      Base Rate Loan shall be in a minimum amount of $3,000,000 and in integral
      multiples of $100,000 in excess thereof and (c) no more than five Eurodollar
      Loans shall be outstanding hereunder at any one time. For the purposes of this
      Section 2.5, separate Eurodollar Loans that begin and end on the same date,
      as
      well as Eurodollar Loans that begin and end on different dates, shall all be
      considered as separate Eurodollar Loans.

     

    2.6  Evidence
      of Debt.

     

    (a)  The
      Term
      Loans made by each Lender shall be evidenced by one or more accounts or records
      maintained by such Lender and by the Administrative Agent in the ordinary course
      of business. The accounts or records maintained by the Administrative Agent
      and
      each Lender shall be conclusive absent manifest error of the amount of the
      Term
      Loans made by the Lenders to the Borrower and the interest and payments thereon.
      Any failure to so record or any error in doing so shall not, however, limit
      or
      otherwise affect the obligation of the Borrower hereunder to pay any amount
      owing with respect to its Borrower Obligations. In the event of any conflict
      between the accounts and records maintained by any Lender and the accounts
      and
      records of the Administrative Agent in respect of such matters, the accounts
      and
      records of the Administrative Agent shall control in the absence of manifest
      error.

     

    (b)  The
      Borrower agrees that, upon the request to the Administrative Agent by any
      Lender, the Borrower will promptly execute and deliver to such Lender a
      promissory note of the Borrower evidencing any Term Loans of such Lender,
      substantially in the form of Exhibit 2.6(b)
      (a
“Note”)
      with
      appropriate insertions as to date and principal amount; provided,
      that
      delivery of Notes shall not be a condition precedent to the occurrence of the
      Closing Date.

     

      SECTION
      3 

     

    GENERAL
      PROVISIONS APPLICABLE

     

    TO
      TERM LOANS

     

    3.1  Interest.

     

    (a)  Interest
      Rate.
      Subject
      to Sections 3.1(b), (i) all Base Rate Loans shall accrue interest at the Base
      Rate and (ii) all Eurodollar Loans shall accrue interest at the Adjusted
      Eurodollar Rate.

     

    (b)  Default
      Rate of Interest.
      

     

    (i)  After
      the
      occurrence, and during the continuation, of an Event of Default pursuant to
      Section 8.1(a), the principal of and, to the extent permitted by Law,
      interest on the Term Loans and any other amounts owing hereunder or under the
      other Credit Documents (including without limitation fees and expenses) shall
      bear interest, payable on demand, at the Default Rate.

     

    (ii)  After
      the
      occurrence, and during the continuation, of an Event of Default (other than
      an
      Event of Default pursuant to Section 8.1(a)), at the request of the Required
      Lenders, the principal of and, to the extent permitted by Law, interest on
      the
      Term Loans and any other amounts owing hereunder or under the other Credit
      Documents (including without limitation fees and expenses) shall bear interest,
      payable on demand, at the Default Rate.

     

    
      
        
        

      

      
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    (iii)  Interest
      Payments.
      Interest on Term Loans shall be due and payable in arrears on each Interest
      Payment Date.

     

    3.2  Payments
      Generally.

     

    (a)  No
      Deductions; Place and Time of Payments.
      All
      payments to be made by the Borrower shall be made without condition or deduction
      for any counterclaim, defense, recoupment or setoff. Except as otherwise
      expressly provided herein, all payments by the Borrower hereunder shall be
      made
      to the Administrative Agent, for the account of the respective Lenders to which
      such payment is owed, at the Administrative Agent’s Office in Dollars and in
      immediately available funds not later than 2:00 p.m. on the date specified
      herein. The Administrative Agent will promptly distribute to each Lender its
      Pro
      Rata Share (or other applicable share as provided herein) of such payment in
      like funds as received by wire transfer to such Lender’s Lending Office. All
      payments received by the Administrative Agent after 2:00 p.m. shall be deemed
      received on the next succeeding Business Day and any applicable interest or
      fee
      shall continue to accrue.

     

    (b)  Payment
      Dates.
      Subject
      to the definition of “Interest
      Period,”
if
      any
      payment to be made by the Borrower shall come due on a day other than a Business
      Day, payment shall be made on the next following Business Day, and such
      extension of time shall be reflected in computing interest or fees, as the
      case
      may be.

     

    (c)  Several
      Obligations.
      The
      obligations of the Lenders hereunder to make Term Loans are several and not
      joint. The failure of any Lender to make a Term Loan on the Closing Date shall
      not relieve any other Lender of its corresponding obligation to do so, and
      no
      Lender shall be responsible for the failure of any other Lender to so make
      its
      Term Loan.

     

    (d)  Funding
      Offices.
      Nothing
      herein shall be deemed to obligate any Lender to obtain the funds for any Term
      Loan in any particular place or manner or to constitute a representation by
      any
      Lender that it has obtained or will obtain the funds for any Term Loan in any
      particular place or manner.

     

    3.3  Prepayments.

     

    (a)  Voluntary
      Prepayments.
      The
      Borrower shall have the right to prepay its outstanding Term Loans in whole
      or
      in part from time to time without premium or penalty; provided,
      however,
      that
      (i) all prepayments under this Section 3.3(a) shall be subject to Section 3.14,
      (ii) Eurodollar Loans may only be prepaid on three Business Days’ prior written
      notice to the Administrative Agent, (iii) each such partial prepayment of
      Eurodollar Loans shall be in the minimum principal amount of $5,000,000 and
      integral multiples of $1,000,000 and (iv) each such partial prepayment of Base
      Rate Loans shall be in the minimum principal amount of $500,000 and integral
      multiples of $100,000 or, in the case of clauses (iii) and (iv), if less than
      such minimum amounts, the entire principal amount thereof then outstanding.
      

     

    (b)  Mandatory
      Prepayments.
      If any
      Capital Stock shall be issued (other than issuances pursuant to employee stock
      plans), or Indebtedness incurred (other than under the Existing Credit Agreement
      or pursuant to the issuance of commercial paper in the ordinary course of
      business), by the Borrower or any of its Subsidiaries (other than PSNM and
      TNMP), then on the date of such issuance or incurrence, the Term Loans shall
      be
      prepaid by an amount equal to the amount of the Net Cash Proceeds of such
      issuance or incurrence. 

     

    
      
        
        

      

      
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    3.4  Fees.

     

    (a)  To
      the
      extent that any Term Loans remain outstanding on November 15, 2006, on such
      date
      the Borrower shall pay to the Administrative Agent for the account of each
      Lender a funding fee equal to 0.50% of the outstanding amount of the Term Loan
      of such Lender. 

     

    (b)  The
      Borrower agrees to pay to LCPI and the Arranger, for their own respective
      accounts, the fees in the amounts and on the dates previously agreed to in
      the
      Fee Letters. 

     

    3.5  Payment
      in full at Maturity.

     

    On
      the
      Maturity Date, the entire outstanding principal balance of all Term Loans,
      together with accrued but unpaid interest and all fees and other sums owing
      under the Credit Documents, shall be due and payable in full, unless accelerated
      sooner pursuant to Section 8.2; provided
      that if
      the Maturity Date is not a Business Day, then such principal, interest, fees
      and
      other sums shall be due and payable in full on the next preceding Business
      Day.

     

    3.6  Computations
      of Interest and Fees.

     

    (a)  Calculation
      of Interest and Fees.
      Except
      for Base Rate Loans that are based upon the Prime Rate, in which case interest
      shall be computed on the basis of the actual number of days elapsed over a
      year
      of 365 or 366 days, as the case may be, all computations of interest and fees
      hereunder shall be made on the basis of the actual number of days elapsed over
      a
      year of 360 days. Interest shall accrue from and including the Closing Date
      (or
      continuation or conversion) to but excluding the last day occurring in the
      period for which such interest is payable. Each determination by the
      Administrative Agent of an interest rate or fee hereunder shall be conclusive
      and binding for all purposes, absent manifest error.

     

    (b)  Usury.
      It is
      the intent of the Lenders and the Borrower to conform to and contract in strict
      compliance with applicable usury Law from time to time in effect. All agreements
      between the Lenders and the Borrower are hereby limited by the provisions of
      this subsection which shall override and control all such agreements, whether
      now existing or hereafter arising and whether written or oral. In no way, nor
      in
      any event or contingency (including but not limited to prepayment or
      acceleration of the maturity of the Borrower Obligations), shall the interest
      taken, reserved, contracted for, charged, or received under this Credit
      Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
      permissible under applicable Law. If, from any possible construction of any
      of
      the Credit Documents or any other document, interest would otherwise be payable
      in excess of the maximum nonusurious amount, any such construction shall be
      subject to the provisions of this subsection and such documents shall be
      automatically reduced to the maximum nonusurious amount permitted under
      applicable Law, without the necessity of execution of any amendment or new
      document. If any Lender shall ever receive anything of value which is
      characterized as interest on the Term Loans under applicable Law and which
      would, apart from this provision, be in excess of the maximum nonusurious
      amount, an amount equal to the amount which would have been excessive interest
      shall, without penalty, be applied to the reduction of the principal amount
      owing on the Term Loans and not to the payment of interest, or refunded to
      the
      Borrower or the other payor thereof if and to the extent such amount which
      would
      have been excessive 

     

    
      
        
        

      

      
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    exceeds
      such unpaid principal amount of the Term Loans. The right to demand payment
      of
      the Term Loans or any other Indebtedness evidenced by any of the Credit
      Documents does not include the right to accelerate the payment of any interest
      which has not otherwise accrued on the date of such demand, and the Lenders
      do
      not intend to charge or receive any unearned interest in the event of such
      demand. All interest paid or agreed to be paid to the Lenders with respect
      to
      the Term Loans shall, to the extent permitted by applicable Law, be amortized,
      prorated, allocated, and spread throughout the full stated term (including
      any
      renewal or extension) of the Term Loans so that the amount of interest on
      account of the Term Loans does not exceed the maximum nonusurious amount
      permitted by applicable Law.

     

    3.7  Pro
      Rata Treatment.

     

    Except
      to
      the extent otherwise provided herein, each payment or prepayment of principal
      of
      any Term Loan, each payment of interest and each conversion or continuation
      of
      any Term Loans shall be allocated pro rata among the relevant Lenders in
      accordance with their Pro Rata Shares. In the event any principal, interest,
      fee
      or other amount paid to any Lender pursuant to this Credit Agreement or any
      other Credit Document is rescinded or must otherwise be returned by the
      Administrative Agent, (a) such principal, interest or other amount that had
      been
      satisfied by such payment shall be revived, reinstated and continued in full
      force and effect as if such payment had not occurred and (b) such Lender shall,
      upon the request of the Administrative Agent, repay to the Administrative Agent
      the amount so paid to such Lender, with interest for the period commencing
      on
      the date such payment is returned by the Administrative Agent until the date
      the
      Administrative Agent receives such repayment at a rate per annum equal to the
      Federal Funds Rate if repaid within two (2) Business Days after such request
      and
      thereafter the Base Rate.

     

    3.8  Sharing
      of Payments.

     

    The
      Lenders agree among themselves that, except to the extent otherwise provided
      herein, in the event that any Lender shall obtain payment in respect of any
      Term
      Loan or any other obligation owing to such Lender under this Credit Agreement
      through the exercise of a right of setoff, banker’s lien or counterclaim, or
      pursuant to a secured claim under Section 506 of the Bankruptcy Code or other
      security or interest arising from, or in lieu of, such secured claim, received
      by such Lender under any applicable Debtor Relief Law or other similar Law
      or
      otherwise, or by any other means, in excess of its Pro Rata Share of such
      payment as provided for in this Credit Agreement, such Lender shall promptly
      pay
      in cash or purchase from the other Lenders a participation in such Term Loans
      and other obligations in such amounts, and make such other adjustments from
      time
      to time, as shall be equitable to the end that all Lenders share such payment
      in
      accordance with their Pro Rata Shares. The Lenders further agree among
      themselves that if payment to a Lender obtained by such Lender through the
      exercise of a right of setoff, banker’s lien, counterclaim or other event as
      aforesaid shall be rescinded or must otherwise be returned, each Lender which
      shall have shared the benefit of such payment shall, by payment in cash or
      a
      repurchase of a participation theretofore sold, return its share of that benefit
      (together with its share of any accrued interest payable with respect thereto)
      to each Lender whose payment shall have been rescinded or otherwise returned.
      The Borrower agrees that (a) any Lender so purchasing such a participation
      may,
      to the fullest extent permitted by Law, exercise all rights of payment,
      including setoff, banker’s lien or counterclaim, with respect to such
      participation as fully as if such Lender were a holder of such Term Loan or
      other obligation in the amount of such participation and (b) the Borrower
      Obligations that have been satisfied by a payment that has been rescinded or
      otherwise returned shall be revived, reinstated and continued in full force
      and
      effect as if such payment had not occurred. Except as otherwise expressly
      provided in this Credit Agreement, if any Lender or the Administrative Agent
      shall fail to remit to any other Lender an amount payable by such Lender or
      the
      Administrative Agent to such other Lender pursuant to this Credit Agreement
      on
      the date when such amount is due, such payments shall be made 

     

    
      
        
        

      

      
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    together
      with interest thereon for each date from the date such amount is due until
      the
      date such amount is paid to the Administrative Agent or such other Lender at
      a
      rate per annum equal to the Federal Funds Rate. If under any applicable Debtor
      Relief Law or other similar Law, any Lender receives a secured claim in lieu
      of
      a setoff to which this Section 3.8 applies, such Lender shall, to the extent
      practicable, exercise its rights in respect of such secured claim in a manner
      consistent with the rights of the Lenders under this Section 3.8 to share in
      the
      benefits of any recovery on such secured claim.

     

    3.9  Capital
      Adequacy.

     

    If
      any
      Lender determines that the introduction after the Closing Date of any Law,
      rule
      or regulation or other Requirement of Law regarding capital adequacy or any
      change therein or in the interpretation thereof, or compliance by such Lender
      (or its Lending Office) therewith, has or would have the effect of reducing
      the
      rate of return on the capital or assets of such Lender or any corporation
      controlling such Lender as a consequence of such Lender’s obligations hereunder
      (taking into consideration its policies with respect to capital adequacy and
      such Lender’s desired return on capital), then from time to time upon demand of
      such Lender (with a copy of such demand to the Administrative Agent), the
      Borrower shall pay to such Lender such additional amounts as will compensate
      such Lender for such reduction.

     

    3.10  Eurodollar
      Provisions.

     

    If
      the
      Administrative Agent determines (which determination shall be conclusive and
      binding upon the Borrower) in connection with any request for a Eurodollar
      Loan
      or a conversion to or continuation thereof that (i) deposits in Dollars are
      not
      being offered to banks in the applicable offshore interbank market for the
      applicable amount and Interest Period of such Eurodollar Loan, (ii) adequate
      and
      reasonable means do not exist for determining the Eurodollar Rate for such
      Eurodollar Loan, or (iii) the Eurodollar Rate for such Eurodollar Loan does
      not
      adequately and fairly reflect the cost to the Lenders of funding such Eurodollar
      Loan, the Administrative Agent will promptly notify the Borrower and the
      Lenders. Thereafter, the obligation of the Lenders to make or maintain
      Eurodollar Loans shall be suspended until the Administrative Agent revokes
      such
      notice. Upon receipt of such notice, the Borrower may revoke any pending Notice
      of Continuation/Conversion with respect to Eurodollar Loans or, failing that,
      will be deemed to have converted such request into a request for a conversion
      into a Base Rate Loan in the amount specified therein.

     

    3.11  Illegality.

     

    If
      any
      Lender determines that any Requirement of Law has made it unlawful, or that
      any
      Governmental Authority has asserted that it is unlawful, for any Lender or
      its
      applicable Lending Office to make, maintain or fund Eurodollar Loans, or
      materially restricts the authority of such Lender to purchase or sell, or to
      take deposits of Dollars in the London interbank market, or to determine or
      charge interest rates based upon the Eurodollar Rate, then, on notice thereof
      by
      such Lender to the Borrower through the Administrative Agent, any obligation
      of
      such Lender to make or continue Eurodollar Loans or to convert Base Rate Loans
      to Eurodollar Loans shall be suspended until such Lender notifies the
      Administrative Agent and the Borrower that the circumstances giving rise to
      such
      determination no longer exist. Upon receipt of such notice, the Borrower shall,
      upon demand to the Borrower from such Lender (with a copy to the Administrative
      Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender
      to
      Base Rate Loans, either on the last day of the Interest Period thereof, if
      such
      Lender may lawfully continue to maintain such Eurodollar Loans to such day,
      or
      immediately, if such Lender may not lawfully continue to maintain such
      Eurodollar Loans. Upon any such prepayment or conversion, the Borrower shall
      also pay interest on the amount so prepaid or converted, together with any
      amounts due with respect thereto pursuant to Section
      3.14.

     

    
      
        
        

      

      
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    3.12  Requirements
      of Law; Reserves on Eurodollar Loans.

     

    (a)  Changes
      in Law.
      If any
      Lender determines that as a result of the introduction of or any change in,
      or
      in the interpretation of, any Requirement of Law, or such Lender’s compliance
      therewith, there shall be any increase in the cost to such Lender of agreeing
      to
      make or making, funding or maintaining Eurodollar Loans, or a reduction in
      the
      amount received or receivable by such Lender in connection with any of the
      foregoing (excluding for purposes of this Section 3.12 any such increased costs
      or reduction in amount resulting from (i) Taxes or Other Taxes (as to which
      Section
      3.13
      shall govern) and (ii) reserve requirements contemplated by subsection (b)
      below), then from time to time, upon demand of such Lender (through the
      Administrative Agent), the Borrower shall pay to such Lender such additional
      amounts as will compensate such Lender for such increased cost or reduction
      in
      yield.

     

    (b)  Reserves.
      The
      Borrower shall pay to each Lender (to the extent such Lender has not otherwise
      been compensated therefore hereunder), as long as such Lender shall be required
      to maintain reserves with respect to liabilities or assets consisting of or
      including Eurodollar funds or deposits (currently known as “Eurodollar
      liabilities”), additional interest on the unpaid principal amount of each
      Eurodollar Loan equal to the actual costs of such reserves allocated to such
      Loan by such Lender (as determined by such Lender in good faith, which
      determination shall be conclusive absent demonstrable error), which, shall
      be
      due and payable on each date on which interest is payable on such Loan;
provided
      that the
      Borrower shall have received at least 15 days’ prior notice (with a copy to the
      Administrative Agent) of such additional interest from such Lender. If a Lender
      fails to give notice 15 days prior to the relevant Interest Payment Date, such
      additional interest shall be due and payable 15 days from receipt of such
      notice.

     

    3.13  Taxes.

     

    (a)  Payment
      of Taxes.
      Any and
      all payments by the Borrower to or for the account of the Administrative Agent
      or any Lender under any Credit Document shall be made free and clear of and
      without deduction for any and all present or future income, stamp or other
      taxes, duties, levies, imposts, deductions, assessments, fees, withholdings
      or
      similar charges, and all liabilities with respect thereto, but excluding, in
      the
      case of the Administrative Agent and each Lender, taxes imposed on or measured
      by its net income, and franchise taxes imposed on it (in lieu of net income
      taxes), by the jurisdiction (or any political subdivision thereof) under the
      Laws of which the Administrative Agent or such Lender, as the case may be,
      is
      organized or maintains its Lending Office (all such non-excluded present or
      future income, stamp or other taxes, duties, levies, imposts, deductions,
      assessments, fees, withholdings or similar charges, and liabilities being
      hereinafter referred to as “Taxes”).
      If
      the Borrower shall be required by any Requirement of Law to deduct any Taxes
      from or in respect of any sum payable under any Credit Document to the
      Administrative Agent or any Lender, (i) the sum payable shall be increased
      as
      necessary so that after making all required deductions (including deductions
      applicable to additional sums payable under this Section
      3.13(a)),
      the Administrative Agent or such Lender, as the case may be, receives an amount
      equal to the sum it would have received had no such deductions been made, (ii)
      the Borrower shall make such deductions, (iii) the Borrower shall pay the full
      amount deducted to the relevant taxation authority or other Governmental
      Authority in accordance with applicable Requirements of Law, and (iv) within
      30
      days after the date of such payment, the Borrower shall furnish to the
      Administrative Agent (which shall forward the same to such Lender, if
      applicable) the original or a certified copy of a receipt evidencing payment
      thereof, to the extent such receipt is issued therefor, or other written proof
      of payment thereof that is reasonably satisfactory to the Administrative
      Agent.

     

    
      
        
        

      

      
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    (b)  Additional
      Taxes.
      In
      addition, the Borrower agrees to pay any and all present or future stamp, court
      or documentary taxes and any other excise or property taxes or charges or
      similar levies which arise from any payment made under any Credit Document
      or
      from the execution, delivery, performance, enforcement or registration of,
      or
      otherwise with respect to, any Credit Document (hereinafter referred to as
      “Other
      Taxes”).

     

    (c)  No
      Deduction for Taxes.
      If the
      Borrower shall be required to deduct or pay any Taxes or Other Taxes from or
      in
      respect of any sum payable under any Credit Document to the Administrative
      Agent
      or any Lender, the Borrower shall also pay to the Administrative Agent (for
      the
      account of such Lender) or to such Lender, at the time interest is paid, such
      additional amount that such Lender specifies as necessary to preserve the
      after-tax yield (after factoring in all taxes, including taxes imposed on or
      measured by net income) such Lender would have received if such Taxes or Other
      Taxes had not been imposed.

     

    (d)  Indemnification.
      The
      Borrower agrees to indemnify the Administrative Agent and each Lender for (i)
      the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
      imposed or asserted by any jurisdiction on amounts payable under this
Section
      3.13(d))
      paid by the Administrative Agent and such Lender, and (ii) any liability
      (including penalties, interest and expenses) arising therefrom or with respect
      thereto.

     

    (e)  Exemption
      from Taxes.
      In the
      case of any payment hereunder or under any other Credit Document by or on behalf
      of the Borrower through an account or branch outside the United States, or
      on
      behalf of the Borrower by a payor that is not a United States person, if the
      Borrower determines that no taxes are payable in respect thereof, the Borrower
      shall furnish, or shall cause such payor to furnish, to the Administrative
      Agent, an opinion of counsel reasonably acceptable to the Administrative Agent
      stating that such payment is exempt from Taxes. For purposes of this subsection
      (e), the terms “United States” and “United States person” shall have the
      meanings specified in Section 7701 of the Code.

     

    (f)  Foreign
      Lenders.
      Each
      Lender that is a foreign corporation, foreign partnership or foreign trust
      within the meaning of the Code (a “Foreign
      Lender”)
      shall
      deliver to the Administrative Agent, prior to receipt of any payment subject
      to
      withholding under the Code, two duly signed completed copies of either IRS
      Form
      W-8BEN or any successor thereto (relating to such Lender and entitling it to
      an
      exemption from, or reduction of, withholding tax on all payments to be made
      to
      such Lender by the Borrower pursuant to this Credit Agreement), as appropriate,
      or IRS Form W-8ECI or any successor thereto (relating to all payments to be
      made
      to such Lender by the Borrower pursuant to this Credit Agreement) or such other
      evidence satisfactory to the Borrower and the Administrative Agent that such
      Lender is entitled to an exemption from, or reduction of, United States
      withholding tax. Thereafter and from time to time, each such Lender shall (i)
      promptly submit to the Administrative Agent such additional duly completed
      and
      signed copies of one of such forms (or such successor forms as shall be adopted
      from time to time by the relevant United States taxing authorities), as
      appropriate, as may reasonably be requested by the Borrower or the
      Administrative Agent and then be available under then current United States
      Laws
      and regulations to avoid, or such evidence as is satisfactory to the Borrower
      and the Administrative Agent of any available exemption from or reduction of,
      United States withholding taxes in respect of all payments to be made to such
      Lender by the Borrower pursuant to this Credit Agreement, (ii) promptly notify
      the Administrative Agent of any change in circumstances which would modify
      or
      render invalid any claimed exemption or reduction, and (iii) take such steps
      as
      shall not be materially disadvantageous to it, in the reasonable judgment of
      such Lender, and as may be reasonably necessary (including the re-designation
      of
      its Lending Office) to avoid any Requirement of Law that the Borrower make
      

     

    
      
        
        

      

      
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    any
      deduction or withholding for taxes from amounts payable to such Lender. If
      the
      forms or other evidence provided by such Lender at the time such Lender first
      becomes a party to this Credit Agreement indicate a United States interest
      withholding tax rate in excess of zero, withholding tax at such rate shall
      be
      considered excluded from Taxes unless and until such Lender provides the
      appropriate forms certifying that a lesser rate applies, whereupon withholding
      tax at such lesser rate only shall be considered excluded from Taxes for periods
      governed by such forms; provided, however, that, if at the date of any
      assignment pursuant to which a Lender becomes a party to this Credit Agreement,
      the assignor Lender was entitled to payments under Section
      3.13(a)
      in respect of United States withholding tax with respect to interest paid at
      such date, then, to such extent, the term Taxes shall include (in addition
      to
      withholding taxes that may be imposed in the future or other amounts otherwise
      includable in Taxes) United States withholding tax, if any, applicable with
      respect to the assignee Lender on such date. If such Lender fails to deliver
      the
      above forms or other evidence, then the Administrative Agent may withhold from
      any interest payment to such Lender an amount equal to the applicable
      withholding tax imposed by Sections 1441 and 1442 of the Code, without
      reduction. If any Governmental Authority asserts that the Administrative Agent
      did not properly withhold any tax or other amount from payments made in respect
      of such Lender, such Lender shall indemnify the Administrative Agent therefor,
      including all penalties and interest, any taxes imposed by any jurisdiction
      on
      the amounts payable to the Administrative Agent under this Section
      3.13(f),
      and costs and expenses (including the reasonable fees and expenses of legal
      counsel) of the Administrative Agent. For any period with respect to which
      a
      Lender has failed to provide the Borrower with the above forms or other evidence
      (other than if such failure is due to a change in the applicable Law, or in
      the
      interpretation or application thereof, occurring after the date on which such
      form or other evidence originally was required to be provided or if such form
      or
      other evidence otherwise is not required), such Lender shall not be entitled
      to
      indemnification under subsection
      (a)
      or (c)
      of this Section
      3.13
      with
      respect to Taxes imposed by the United States by reason of such failure;
      provided, however, that should a Lender become subject to Taxes because of
      its
      failure to deliver such form or other evidence required hereunder, the Borrower
      shall take such steps as such Lender shall reasonably request to assist such
      Lender in recovering such Taxes. The obligation of the Lenders under this
Section
      3.13(f)
      shall survive the payment of all Borrower Obligations and the resignation or
      replacement of the Administrative Agent.

     

    (g)  Reimbursement.
      In the
      event that an additional payment is made under Section
      3.13(a)
      or (c) for the account of any Lender and such Lender, in its reasonable
      judgment, determines that it has finally and irrevocably received or been
      granted a credit against or release or remission for, or repayment of, any
      tax
      paid or payable by it in respect of or calculated with reference to the
      deduction or withholding giving rise to such payment, such Lender shall, to
      the
      extent that it determines that it can do so without prejudice to the retention
      of the amount of such credit, relief, remission or repayment, pay to the
      Borrower such amount as such Lender shall, in its reasonable judgment, have
      determined to be attributable to such deduction or withholding and which will
      leave such Lender (after such payment) in no worse position than it would have
      been in if the Borrower had not been required to make such deduction or
      withholding. Nothing herein contained shall interfere with the right of a Lender
      to arrange its tax affairs in whatever manner it thinks fit nor oblige any
      Lender to claim any tax credit or to disclose any information relating to its
      tax affairs or any computations in respect thereof or require any Lender to
      do
      anything that would prejudice its ability to benefit from any other credits,
      reliefs, remissions or repayments to which it may be entitled.

     

    
      
        
        

      

      
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    3.14  Compensation.

     

    Upon
      the
      written demand of any Lender, the Borrower shall promptly compensate such Lender
      for and hold such Lender harmless from any loss, cost or expense incurred by
      it
      as a result of:

     

    (a)  any
      continuation, conversion, payment or prepayment of any Eurodollar Loan of the
      Borrower on a day other than the last day of the Interest Period for such
      Eurodollar Loan (whether voluntary, mandatory, automatic, by reason of
      acceleration, or otherwise); or

     

    (b)  any
      failure by the Borrower (for a reason other than the failure of such Lender
      to
      make a Eurodollar Loan) to prepay, borrow, continue or convert any Eurodollar
      Loan on the date or in the amount previously requested by the
      Borrower.

     

    The
      amount each such Lender shall be compensated pursuant to this Section 3.14
      shall include, without limitation, (i) any loss incurred by such Lender in
      connection with the re-employment of funds prepaid, repaid, not borrowed or
      paid, as the case may be and (ii) any reasonable out-of-pocket expenses
      (including the reasonable fees and expenses of legal counsel) incurred and
      reasonably attributable thereto.

     

    For
      purposes of calculating amounts payable by the Borrower to the Lenders under
      this Section 3.14,
      each Lender
      shall be
      deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate
      for
      such Loan by a matching deposit or other borrowing in the London interbank
      market for a comparable amount and for a comparable period, whether or not
      such
      Eurodollar Loan was in fact so funded.

     

    3.15  Determination
      and Survival of Provisions.

     

    All
      determinations by the Administrative Agent or a Lender of amounts owing under
      Sections 3.9 through 3.14, inclusive, shall, absent manifest error, be
      conclusive and binding on the parties hereto and all amounts owing thereunder
      shall be due and payable within ten Business Days of demand therefor. In
      determining such amount, the Administrative Agent or such Lender may use any
      reasonable averaging and attribution methods. Section
      3.9
      through 3.14, inclusive, shall survive the termination of this Credit Agreement
      and the payment of all Borrower Obligations.

     

      SECTION
      4

     

    CONDITIONS
      PRECEDENT TO CLOSING

     

    4.1  Closing
      Conditions.

     

    The
      obligation of the Lenders to enter into this Credit Agreement and make the
      Term
      Loans is subject to satisfaction of the following conditions:

     

    (a)  Executed
      Credit Documents.
      Receipt
      by the Administrative Agent of duly executed copies of: (i) this Credit
      Agreement, (ii) the requested Notes and (iii) all other Credit Documents, each
      in form and substance reasonably acceptable to the Lenders in their sole
      discretion.

     

    (b)  Acquisition.
      The
      Acquisition shall have been consummated pursuant to the Acquisition
      Documentation in form and substance reasonably satisfactory to the Lenders,
      and
      no provision thereof shall have been waived, amended, supplemented or otherwise
      modified in a manner which adversely affects the Administrative Agent or the
      Lenders without the consent of the Lenders.

     

    
      
        
        

      

      
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    (c)  Authority
      Documents.
      Receipt
      by the Administrative Agent of the following:

     

    (i)  Organizational
      Documents.
      Copies
      of the articles of incorporation of the Borrower, certified to be true and
      complete as of a recent date by the appropriate Governmental Authority of the
      state or other jurisdiction of its formation and copies of the bylaws of the
      Borrower, certified by a secretary or assistant secretary (or the equivalent)
      of
      the Borrower to be true and correct as of the Closing Date.

     

    (ii)  Resolutions.
      Copies
      of resolutions of the board of directors of the Borrower approving and adopting
      this Credit Agreement, the Acquisition Documentation and the other Credit
      Documents to which it is a party, the transactions contemplated herein and
      therein and authorizing execution and delivery hereof and thereof, certified
      by
      a secretary or assistant secretary (or the equivalent) of the Borrower to be
      true and correct and in full force and effect as of the Closing
      Date.

     

    (iii)  Good
      Standing.
      Copies
      of certificates of good standing, existence or its equivalent with respect
      to
      the Borrower certified as of a recent date by the appropriate Governmental
      Authority of the state or other jurisdiction of its formation.

     

    (iv)  Incumbency.
      An
      incumbency certificate of the Borrower and certified by a secretary or assistant
      secretary (or the equivalent) of the Borrower to be true and correct as of
      the
      Closing Date.

     

    (d)  Opinions
      of Counsel.
      Receipt
      by the Administrative Agent of opinions of counsel from outside counsel to
      the
      Borrower, in form and substance acceptable to the Administrative Agent,
      addressed to the Administrative Agent and the Lenders and dated the Closing
      Date.

     

    (e)  Financial
      Statements.
      Receipt
      by the Administrative Agent of a copy of (i) the annual consolidated financial
      statements (including balance sheets, income statements and cash flow
      statements) of the Borrower and its Subsidiaries for Fiscal Years 2004 and
      2005,
      audited by independent public accountants of recognized national standing and
      (ii) such other financial information regarding the Borrower as the
      Administrative Agent may reasonably request.

     

    (f)  
      Material Adverse Effect.
      Since
December
      31,
      2005,
      there shall have been no development or event relating to or affecting the
      Borrower or any of its Subsidiaries that has had or could be reasonably expected
      to have a Material Adverse Effect and no Material Adverse Change in the facts
      and information regarding the Borrower and its Subsidiaries as represented
      to
      date.

     

    (g)  Litigation.
      There
      shall not exist any material order, decree, judgment, ruling or injunction
      or
      any material pending or threatened action, suit, investigation or proceeding
      against the Borrower or any of its Subsidiaries except as represented to date.
      

     

    (h)  Consents.
      All
      consents, approvals, authorizations, orders, filings and other actions by or
      with any Governmental Authority or other Person necessary in connection with
      the
      Acquisition, the financing contemplated hereby, and the continuing operations
      of
      the Borrower and its Subsidiaries and the Acquired Business shall have been
      obtained or made and be in full force and effect. 

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    


    (i)  Officer’s
      Certificates.
      Receipt
      by the Administrative Agent of a certificate or certificates executed by an
      Authorized Officer of the Borrower as of the Closing Date stating that (i)
      the
      Borrower and each of its Subsidiaries are in compliance in all material respects
      with all existing material financial obligations and all material Requirements
      of Law, (ii) there does not
      exist
      any material order, decree, judgment, ruling or injunction or any material
      pending or threatened action, suit, investigation or proceeding against the
      Borrower or any of its Subsidiaries,
      (iii)
      the financial statements and information delivered to the Administrative Agent
      on or before the Closing Date were prepared in good faith and in accordance
      with
      GAAP and
      (iv)
      immediately after giving effect to this Credit Agreement, the other Credit
      Documents, all the transactions contemplated herein or therein to occur on
      such
      date and to the Acquisition, (A) the Borrower is Solvent, (B) no Default or
      Event of Default exists, (C) no default or event of default exists under the
      Existing Credit Agreement or under any other material Indebtedness of the
      Borrower or any of its Subsidiaries, (D) all representations and warranties
      contained herein and in the other Credit Documents are true and correct in
      all
      material respects, (E) since
      December
      31,
      2005,
      there has been no development or event relating to or affecting the Borrower
      or
      any of its Subsidiaries that has had or could be reasonably expected to have
      a
      Material Adverse Effect and there exists no event, condition or state of facts
      that could result in or reasonably be expected to result in a Material Adverse
      Change
      and (F)
      the Borrower is in compliance with each of the financial covenants set forth
      in
      Section 6.2, as of December 31, 2005, as demonstrated in the Covenant Compliance
      Worksheet attached to such certificate.

     

    (j)  Fees
      and Expenses.
      Unless
      waived by the Person entitled thereto, payment by the Borrower of all fees
      and
      expenses owed by the Borrower to the Administrative Agent or the Arranger on
      or
      before the Closing Date, including, without limitation, as set forth in the
      Fee
      Letters.

     

    (k)  Debt
      Rating.
      The
      Borrower’s Debt Rating on the Closing Date shall be BBB- or better by S&P
      and Baa3 or better
      by
      Moody’s.

     

    (l)  PATRIOT
      Act.
      The
      Lenders shall have received, sufficiently in advance of the Closing Date, all
      documentation and other information required by bank regulatory authorities
      under applicable “know your customer” and anti-money laundering rules and
      regulations, including without limitation the United States PATRIOT
      Act.

     

    (m)  Representations
      and Warranties.
      The
      representations and warranties made by the Borrower in any Credit Document
      are
      true and correct in all material respects at and as if made as of such date.
      

     

    (n)  No
      Default.
      There
      shall not exist any Default or Event of Default under this Credit Agreement
      and
      no default or event of default shall exist under the Existing Credit Agreement
      or under any other material indebtedness or agreement of the Borrower, any
      of
      its Subsidiaries or in any way in connection with the Acquired Business.


     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

      SECTION
      5

     

    REPRESENTATIONS
      AND WARRANTIES

     

    To
      induce
      the Administrative Agent and the Lenders to enter into this Credit Agreement
      and
      to induce the Lenders to make the Term Loans, the Borrower represents and
      warrants to the Administrative Agent and the Lenders as follows:

     

    5.1  Organization
      and Good Standing.

     

    Each
      of
      the Borrower and its Subsidiaries (a) is duly organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its organization, (b) is
      duly qualified and in good standing as a foreign entity authorized to do
      business in every other jurisdiction where the failure to so qualify would
      have
      a Material Adverse Effect and (c) has the requisite power and authority to
      own
      its properties and to carry on its business as now conducted and as proposed
      to
      be conducted.

     

    5.2  Due
      Authorization.

     

    The
      Borrower (a) has the requisite power and authority to execute, deliver and
      perform this Credit Agreement and the other Credit Documents to which it is
      a
      party, to incur the obligations herein and therein provided for and to
      consummate the Acquisition and (b) has been authorized by all necessary action
      to execute, deliver and perform this Credit Agreement, the other Credit
      Documents to which it is a party and the Acquisition Documentation.

     

    5.3  No
      Conflicts.

     

    Neither
      the execution and delivery of this Credit Agreement and the other Credit
      Documents, nor the consummation of the financing herein or therein, nor
      performance of and compliance with the terms and provisions hereof and thereof
      by the Borrower, nor the consummation of the Acquisition contemplated by the
      Acquisition Documentation will (a) violate or conflict with any provision of
      its
      organizational documents, (b) violate, contravene or conflict with any law
      (including without limitation, the Federal Power Act, as amended), regulation
      (including without limitation, Regulation U and Regulation X), order, writ,
      judgment, injunction, decree or permit applicable to it, (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 it is a party or by which it 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 its properties.

     

    5.4  Consents.

     

    No
      consent, approval, authorization, order, or filing, registration, qualification
      or other action by or with any court or other Governmental Authority or other
      Person is required in connection with the execution, delivery or performance
      of
      this Credit Agreement, the other Credit Documents or any of the Acquisition
      Documentation that has not been obtained or made and is in full force and
      effect. 

     

    5.5  Enforceable
      Obligations.

     

    This
      Credit Agreement and the other Credit Documents to which it is a party have
      been
      duly executed and delivered and constitute the legal, valid and binding
      obligations of the Borrower enforceable against the Borrower in accordance
      with
      their respective terms, except as may be limited by Debtor Relief Laws or
      similar laws affecting creditors’ rights generally or by general equitable
      principles.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    5.6  Financial
      Condition.

     

    The
      financial statements delivered to the Lenders pursuant to Section 4.1(e)
      and pursuant to Sections 6.1(a) and (b): (i) have been prepared in
      accordance with GAAP except
      that the quarterly financial statements are subject to year-end adjustments
      and
      have fewer footnotes than annual statements
      and (ii)
      present fairly the financial condition, results of operations and cash flows
      of
      the Borrower and its Subsidiaries as of such date and for such periods. No
      opinion provided with respect to the Borrower’s financial statements pursuant to
      Section 6.1 (or as to any prior annual financial statements) has been
      withdrawn.

     

    5.7  No
      Material Change.

     

    (a)  Since
      December 31, 2005, there has been no development or event relating to or
      affecting the Borrower or any of its Subsidiaries which would have or would
      reasonably be expected to have a Material Adverse Effect.

     

    (b)  Since
      December 31, 2005, there has been no sale, transfer or other disposition by
      the
      Borrower or any of its Subsidiaries of any material part of its business or
      property, and no purchase or other acquisition by the Borrower or any of its
      Subsidiaries of any business or property (including the Capital Stock of any
      other Person) material in relation to the financial condition of the Borrower
      or
      any of its Subsidiaries, in each case which is not (i) reflected in the most
      recent financial statements delivered to the Lenders pursuant to
      Section 4.1(e) or 6.1 or in the notes thereto or (ii) otherwise permitted
      by the terms of this Credit Agreement and communicated to the
      Lenders.

     

    5.8  No
      Default.

     

    Neither
      the Borrower nor any of its Subsidiaries is in default in any respect under
      any
      contract, lease, loan agreement, indenture, mortgage, security agreement or
      other agreement or obligation to which it is a party or by which any of its
      properties is bound which default would have or would reasonably be expected
      to
      have a Material Adverse Effect. No Default or Event of Default presently exists
      and is continuing. No default or event of default exists under the Existing
      Credit Agreement or under any material Indebtedness of the Borrower or any
      of
      its Subsidiaries. 

     

    5.9  Litigation.

     

    There
      are
      no actions, suits, investigations or legal, equitable, arbitration or
      administrative proceedings, pending or, to the knowledge of the Borrower,
      threatened against the Borrower or any of its Subsidiaries which would have
      or
      would reasonably be expected to have a Material Adverse Effect.

     

    5.10  Taxes.

     

    Each
      of
      the Borrower and its Subsidiaries has filed, or caused to be filed, all material
      tax returns (federal, state, local and foreign) required to be filed and paid
      all amounts of taxes shown to be due (including interest and penalties) and
      has
      paid all other taxes, fees, assessments and other governmental charges
      (including mortgage recording taxes, documentary stamp taxes and intangibles
      taxes) owed by it, except for such taxes which are not yet delinquent or that
      are being contested in good faith and by proper proceedings, and against which
      adequate reserves are being maintained in accordance with GAAP. 

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    5.11  Compliance
      with Law.

     

    Each
      of
      the Borrower and its Subsidiaries is in compliance with all laws, rules,
      regulations, orders and decrees applicable to it or to its properties, unless
      such failure to comply would not have or would not reasonably be expected to
      have a Material Adverse Effect.

     

    5.12  ERISA.

     

    Except
      as
      would not result or reasonably be expected to result in a Material Adverse
      Effect: 

     

    (a)  During
      the five-year period prior to the date on which this representation is made
      or
      deemed made: (i) no ERISA Event has occurred, and, to the best knowledge of
      the
      Borrower, no event or condition has occurred or exists as a result of which
      any
      ERISA Event would be reasonably expected to occur, with respect to any Plan;
      (ii) no “accumulated funding deficiency,” as such term is defined in Section 302
      of ERISA and Section 412 of the Code, whether or not waived, has occurred with
      respect to any Plan; (iii) each Plan has been maintained, operated, and funded
      in compliance with its own terms and in material compliance with the provisions
      of ERISA, the Code, and any other applicable federal or state laws; and (iv)
      no
      Lien in favor or the PBGC or a Plan has arisen or is reasonably likely to arise
      on account of any Plan.

     

    (b)  The
      actuarial present value of all “benefit liabilities” under each Single Employer
      Plan (determined within the meaning of Section 401(a)(2) of the Code, utilizing
      the actuarial assumptions used to fund such Plans), whether or not vested,
      did
      not, as of the last annual valuation date prior to the date on which this
      representation is made or deemed made, exceed the current value of the assets
      of
      such Plan allocable to such accrued liabilities, except as disclosed in the
      Borrower’s financial statements. 

     

    (c)  Neither
      the Borrower nor any ERISA Affiliate has incurred, or, to the best knowledge
      of
      the Borrower, is reasonably expected to incur, any withdrawal liability under
      ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower
      nor any ERISA Affiliate has received any notification that any Multiemployer
      Plan is in reorganization (within the meaning of Section 4241 of ERISA), is
      insolvent (within the meaning of Section 4245 of ERISA), or has been terminated
      (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to
      the
      best knowledge of the Borrower, reasonably expected to be in reorganization,
      insolvent, or terminated.

     

    (d)  No
      prohibited transaction (within the meaning of Section 406 of ERISA or Section
      4975 of the Code) or breach of fiduciary responsibility has occurred with
      respect to a Plan which has subjected or would be reasonably likely to subject
      the Borrower or any ERISA Affiliate to any liability under Sections 406, 409,
      502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
      or other instrument pursuant to which the Borrower or any ERISA Affiliate has
      agreed or is required to indemnify any person against any such
      liability.

     

    (e)  The
      present value (determined using actuarial and other assumptions which are
      reasonable with respect to the benefits provided and the employees
      participating) of the liability of the Borrower and each ERISA Affiliate for
      post-retirement welfare benefits to be provided to their current and former
      employees under Plans which are welfare benefit plans (as defined in Section
      3(1) of ERISA), net of all assets under all such Plans allocable to such
      benefits, are reflected on the financial statements referenced in Section 6.1
      in
      accordance with FASB 106.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (f)  Each
      Plan
      which is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections
      601-609 of ERISA and Section 4980B of the Code apply has been administered
      in
      compliance in all material respects with such sections.

     

    5.13  Use
      of Proceeds; Margin Stock.

     

    The
      proceeds of the Term Loans will be used solely for the purposes specified in
      Section 6.9. None of such proceeds will be used for the purpose of (a) (i)
      purchasing or carrying any Margin Stock or (ii) reducing or retiring any
      Indebtedness which was originally incurred to purchase or carry Margin Stock,
      or
      (iii) for any other purpose that might constitute this transaction a “purpose
      credit” within the meaning of Regulation U or (b) for the acquisition of another
      Person unless the board of directors (or other comparable governing body) or
      stockholders, as appropriate, of such Person has approved such
      acquisition.

     

    5.14  Investment
      Company Act.

     

    The
      Borrower is not an “investment company” registered or required to be registered
      under the Investment Company Act of 1940, as amended, or controlled by such
      a
      company.

     

    5.15  Solvency.

     

    The
      Borrower is and, after the consummation of the transactions contemplated by
      this
      Credit Agreement and by the Acquisition Documentation, will be
      Solvent.

     

    5.16  Disclosure.

     

    Neither
      this Credit Agreement, the Acquisition Documentation nor any financial
      statements delivered to the Administrative Agent or the Lenders nor any other
      document, certificate or statement furnished to the Administrative Agent or
      the
      Lenders by or on behalf of the Borrower in connection with the transactions
      contemplated hereby contains any untrue statement of a material fact or omits
      to
      state a material fact necessary in order to make the statements contained
      therein or herein, taken as a whole, not misleading.

     

    5.17  Environmental
      Matters.

     

    Except
      as
      would not result or reasonably be expected to result in a Material Adverse
      Effect: (a) each of the properties of the
      Borrower and its Subsidiaries
      (the
“Properties”)
      and
      all operations at the Properties are in substantial compliance with all
      applicable Environmental Laws, (b) there is no undocumented or unreported
      violation of any Environmental Law with respect to the Properties or the
      businesses operated by the
      Borrower and its Subsidiaries
      (the
“Businesses”)
      that
      the Borrower is aware of, and (c) there are no conditions relating to the
      Businesses or Properties that have given rise to or would reasonably be expected
      to give rise to a liability under any applicable Environmental
      Laws.

     

    5.18  Material
      Leases.

     

    Set
      forth
      on Schedule
      5.18
      hereto
      is a complete and accurate list of the Material Leases on the date hereof,
      showing the expiration date and annual rental cost thereof. PSNM is entitled
      to
      exercise all of the rights of lessee purported to be granted to PSNM under
      each
      such Material Lease.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    5.19  Material
      Lease Interest Payments and Discount Rate.

     

    Schedule
      5.19
      hereto,
      as most recently provided to the Administrative Agent, sets forth the same
      (a)
      amounts with respect to the interest portion of payments under the Material
      Leases of PSNM and (b) discount rate used to calculate the net present value
      of
      all amounts payable under the Material Leases as have been most recently
      provided (or that PSNM intends to provide shortly) to Moody’s and S&P or as
      have otherwise been agreed
      to
      by the Required Lenders.

     

    5.20  Certain
      Documents.

     

    The
      Borrower has delivered to the Administrative Agent a complete and correct copy
      of the Acquisition Documentation, including any amendments, supplements or
      modifications with respect thereto.

     

      SECTION
      6

     

    AFFIRMATIVE
      COVENANTS

     

    The
      Borrower covenants and agrees that until the payment in full of all of its
      Borrower Obligations: 

     

    6.1  Information
      Covenants.

     

    The
      Borrower will furnish, or cause to be furnished, to the Lenders:

     

    (a)  Annual
      Financial Statements.
      As soon
      as available, and in any event within 120 days after the close of each Fiscal
      Year of the Borrower, a consolidated balance sheet and income statement of
      the
      Borrower and its Subsidiaries, as of the end of such Fiscal Year, together
      with
      the related consolidated statements of income and of cash flows for such Fiscal
      Year, setting forth in comparative form figures for the preceding Fiscal Year,
      all such financial information described above to be in reasonable form and
      detail and, in each case, audited by independent certified public accountants
      of
      recognized national standing reasonably acceptable to the Required Lenders
      and
      whose opinion shall be furnished to the Lenders, and shall be to the effect
      that
      such financial statements have been prepared in accordance with GAAP (except
      for
      changes with which such accountants concur) and shall not be limited as to
      the
      scope of the audit or qualified in any respect.

     

    (b)  Quarterly
      Financial Statements.
      As soon
      as available, and in any event within 60 days after the close of each Fiscal
      Quarter of the Borrower (other than the fourth Fiscal Quarter), a consolidated
      balance sheet and income statement of the Borrower and its Subsidiaries as
      of
      the end of such Fiscal Quarter, together with the related consolidated statement
      of income for such Fiscal Quarter and a year to date statement of cash flows,
      in
      each case setting forth in comparative form figures for the corresponding period
      of the preceding Fiscal Year, all such financial information described above
      to
      be in reasonable form and detail and reasonably acceptable to the Required
      Lenders, and, in each case, accompanied by a certificate of a Financial Officer
      of the Borrower to the effect that such quarterly financial statements fairly
      present in all material respects the financial condition of such Person and
      have
      been prepared in accordance with GAAP, subject to changes resulting from audit
      and normal year-end audit adjustments and except that the quarterly financial
      statements have fewer footnotes than annual statements.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (c)  Officer’s
      Certificate.
      At the
      time of delivery of the financial statements provided for in
      Sections 6.1(a) and 6.1(b) above, a certificate of a Financial Officer
      substantially in the form of Exhibit 6.1(c):
      (i) setting forth calculations demonstrating compliance by the Borrower
      with the financial covenants set forth in Section 6.2 as of the end of such
      fiscal period and (ii) stating that no Default or Event of Default exists,
      or if any Default or Event of Default does exist, specifying the nature and
      extent thereof and what action the Borrower proposes to take with respect
      thereto.

     

    (d)  Reports.
      Notice
      of the filing by the Borrower of any Form 10-Q, Form 10-K or Form 8-K with
      the
      SEC promptly upon the filing thereof and copies of all financial statements,
      proxy statements, notices and reports as the Borrower shall send to its
      shareholders concurrently with the mailing of any such statements, notices
      or
      reports to its shareholders.

     

    (e)  Notices.
      Upon
      the Borrower obtaining knowledge thereof, the Borrower will give written notice
      to the Administrative Agent within ten days of (i) the occurrence of a Default
      or Event of Default, specifying the nature and extent thereof and what action
      the Borrower proposes to take with respect thereto and (ii) the occurrence
      of
      any of the following with respect to the Borrower or any of its Subsidiaries
      (A)
      the pendency or commencement of any litigation, arbitration or governmental
      proceeding against the Borrower or any of its Subsidiaries which, if adversely
      determined, would have or would reasonably be expected to have a Material
      Adverse Effect, (B) one or more judgments, orders, or decrees shall be entered
      against the Borrower or any of its Subsidiaries involving a liability of
      $5,000,000 or more, in the aggregate or (C) the institution of any proceedings
      against the Borrower or any of its Subsidiaries with respect to, or the receipt
      of notice by such Person of potential liability or responsibility for violation
      or alleged violation of, any federal, state or local law, rule or regulation
      (including, without limitation, any Environmental Law), the violation of which
      would have or would reasonably be expected to have a Material Adverse
      Effect.

     

    (f)  ERISA.
      Upon
      the Borrower or any ERISA Affiliate obtaining knowledge thereof, the Borrower
      will give written notice to the Administrative Agent promptly (and in any event
      within ten days) of any of the following which would result in or reasonably
      would be expected to result in a Material Adverse Effect: (i) any event or
      condition, including, but not limited to, any Reportable Event, that
      constitutes, or would be reasonably expected to lead to, an ERISA Event; (ii)
      with respect to any Multiemployer Plan, the receipt of notice as prescribed
      in
      ERISA or otherwise of any withdrawal liability assessed against the Borrower
      or
      any of its ERISA Affiliates, or of a determination that any Multiemployer Plan
      is in reorganization or insolvent (both within the meaning of Title IV of
      ERISA); (iii) the failure to make full payment on or before the due date
      (including extensions) thereof of all amounts which the Borrower or any of
      its
      Subsidiaries or ERISA Affiliates is required to contribute to each Plan pursuant
      to its terms and as required to meet the minimum funding standard set forth
      in
      ERISA and the Code with respect thereto; or (iv) a change in the funding status
      of any Plan, in each case together with a description of any such event or
      condition or a copy of any such notice and a statement by an officer of the
      Borrower briefly setting forth the details regarding such event, condition,
      or
      notice, and the action, if any, which has been or is being taken or is proposed
      to be taken with respect thereto. Promptly upon request, the Borrower shall
      furnish the Lenders with such additional information concerning any Plan as
      may
      be reasonably requested, including, but not limited to, copies of each annual
      report/return (Form 5500 series), as well as all schedules and attachments
      thereto required to be filed with the Department of Labor and/or the Internal
      Revenue Service pursuant to ERISA and the Code, respectively, for each “plan
      year” (within the meaning of Section 3(39) of ERISA).

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    (g)  Debt
      Ratings.
      Prompt
      notice of any change in the Debt Ratings of the Borrower.

     

    (h)  Other
      Information.
      With
      reasonable promptness upon any such request, such other information regarding
      the business, properties or financial condition of the Borrower as the Lenders
      may reasonably request. 

     

    Documents
      required to be delivered pursuant to Section 6.1(a), (b) or (d) (to the extent
      any such documents are included in materials otherwise filed with the Securities
      and Exchange Commission) may be delivered electronically and if so delivered,
      shall be deemed to have been delivered on the date (i) on which the Borrower
      posts such documents, or provides a link thereto on the Borrower’s website on
      the Internet at the website address listed on Schedule 10.1;
      or (ii)
      on which such documents are posted on the Borrower’s behalf on an Internet or
      intranet website, if any, to which each Lender and the Administrative Agent
      have
      access (whether a commercial, third-party website or whether sponsored by the
      Administrative Agent); provided
      that:
      (A) the Borrower shall deliver paper copies of such documents to the
      Administrative Agent or any Lender that requests the Borrower to deliver such
      paper copies until a written request to cease delivering paper copies is given
      by the Administrative Agent or such Lender and (B) the Borrower shall notify
      the
      Administrative Agent and each Lender (by telecopier or electronic mail) of
      the
      posting of any such documents and provide to the Administrative Agent by
      electronic mail electronic versions (i.e.,
      soft
      copies) of such documents. Notwithstanding anything contained herein, in every
      instance the Borrower shall be required to provide paper copies of the Officer’s
      Certificate required by Section 6.1(c) to the Administrative Agent. Except
      for
      such Officer’s Certificate, the Administrative Agent shall have no obligation to
      request the delivery or to maintain copies of the documents referred to above,
      and in any event shall have no responsibility to monitor compliance by the
      Borrower with any such request for delivery, and each Lender shall be solely
      responsible for requesting delivery to it or maintaining its copies of such
      documents.

     

    6.2  Financial
      Covenants. 

     

    (a)  Debt
      Capitalization .
      At
      all
      times the ratio of (i) Consolidated Indebtedness of the Borrower to
      (ii) Consolidated Capitalization of the Borrower shall be less than or
      equal to 0.65 to 1.0. For purposes of such calculation, the portion of
      Consolidated Indebtedness of the Borrower attributable to obligations under
      Material Leases shall be the net present value (using (i) the discount rate
      (A)
      set forth in Schedule 5.19,
      so long
      as Schedule 5.19
      specifies the same relevant discount rate as is used in calculating such net
      present value provided to Moody’s and S&P or (B) the discount rate used in
      calculating such net present value provided to Moody’s and S&P or (ii) any
      such other rate as shall be proposed by the Borrower (and agreed upon by the
      Required Lenders)) of all amounts payable under the Material Leases.


     

    6.3  Preservation
      of Existence and Franchises.

     

    (a)  Except
      in
      a transaction permitted by Section 7.2, the Borrower will do (and will cause
      each of its Subsidiaries to do) all things necessary to preserve and keep in
      full force and effect its existence and rights, franchises and authority.


     

    (b)  The
      Borrower will maintain (and will cause each of its Subsidiaries to maintain)
      its
      properties in good condition and not waste or otherwise permit such properties
      to deteriorate, reasonable wear and tear excepted.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    6.4  Books
      and Records.

     

    The
      Borrower will keep (and will cause each of its Subsidiaries to keep) complete
      and accurate books and records of its transactions in accordance with good
      accounting practices on the basis of GAAP (including the establishment and
      maintenance of appropriate reserves). 

     

    6.5  Compliance
      with Law.

     

    The
      Borrower will comply (and will cause each of its Subsidiaries to comply) with
      all laws (including, without limitation, all Environmental Laws and ERISA laws),
      rules, regulations and orders, and all applicable restrictions imposed by all
      Governmental Authorities, applicable to it and its properties, if the failure
      to
      comply would have or would reasonably be expected to have a Material Adverse
      Effect. 

     

    6.6  Payment
      of Taxes and Other Indebtedness.

     

    The
      Borrower will (and will cause each of its Subsidiaries to) pay, settle or
      discharge (a) all taxes, assessments and governmental charges or levies imposed
      upon it, or upon its income or profits, or upon any of its properties, before
      they shall become delinquent, (b) all lawful claims (including claims for labor,
      materials and supplies) which, if unpaid, might give rise to a Lien upon any
      of
      its properties, and (c) all of its other Indebtedness as it shall become due
      (to
      the extent such repayment is not otherwise prohibited by this Credit Agreement);
      provided,
      however,
      that
      the Borrower and its Subsidiaries shall not be required to pay any such tax,
      assessment, charge, levy, claim or Indebtedness which is being contested in
      good
      faith by appropriate proceedings and as to which adequate reserves therefor
      have
      been established in accordance with GAAP, unless the failure to make any such
      payment (i) would give rise to an immediate right to foreclose or collect on
      a
      Lien securing such amounts or (ii) would have or would be reasonably expected
      to
      have a Material Adverse Effect.

     

    6.7  Insurance.

     

    The
      Borrower will (and will cause each of its Subsidiaries to) at all times maintain
      in full force and effect insurance (including worker’s compensation insurance
      and general liability insurance) in such amounts, covering such risks and
      liabilities and with such deductibles or self-insurance retentions as are in
      accordance with normal industry practice.

     

    6.8  Performance
      of Obligations.

     

    The
      Borrower will perform (and will cause each of its Subsidiaries to perform)
      in
      all material respects all of its obligations under the terms of all material
      agreements, indentures, mortgages, security agreements or other debt instruments
      to which it is a party or by which it is bound.

     

    6.9  Use
      of Proceeds.

     

    The
      proceeds of the Term Loan may be used solely to finance the Acquisition and
      to
      pay related fees and expenses.

     

    6.10  Audits/Inspections.

     

    Upon
      reasonable notice and during normal business hours, the Borrower will permit
      representatives appointed by the Administrative Agent or the Lenders, including,
      without limitation, independent accountants, agents, attorneys, and appraisers
      to visit and inspect the Borrower’s property, including its books and records,
      its accounts receivable and inventory, the Borrower’s facilities and its


     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    other
      business assets, and to make photocopies or photographs thereof and to write
      down and record any information such representative obtains and shall permit
      the
      Administrative Agent or such Lender or its representatives to investigate and
      verify the accuracy of information provided to it and to discuss all such
      matters with the officers, employees and representatives of the Borrower;
      provided, that an officer or authorized agent of the Borrower shall be present
      during any such discussions between the officers, employees or representatives
      of the Borrower and the representatives of the Administrative Agent or any
      Lender. 

     

    6.11  Ownership
      of Certain Subsidiaries.

     

    The
      Borrower shall (a) at all times, own and control 100% of the Voting Stock of
      PSNM and (b) at all times, own and control, directly or indirectly, 100% of
      the
      Voting Stock of TNMP.

     

      SECTION
      7 

     

    NEGATIVE
      COVENANTS

     

    Unless
      otherwise approved in writing by the Required Lenders, the Borrower covenants
      and agrees that until the payment in full of its Borrower
      Obligations:

     

    7.1  Nature
      of Business.

     

    The
      Borrower will not materially alter the character of its business from that
      conducted as of the Closing Date.

     

    7.2  Consolidation
      and Merger.

     

    The
      Borrower will not (a) enter into any transaction of merger or (b) consolidate,
      liquidate, wind up or dissolve itself (or suffer any liquidation or
      dissolution); provided
      that, so
      long as no Default or Event of Default shall exist or be caused thereby a Person
      may be merged or consolidated with or into the Borrower so long as the Borrower
      shall be the continuing or surviving Person. 

     

    7.3  Sale
      or Lease of Assets.

     

    The
      Borrower will not (nor will it permit its Subsidiaries
      to)
      sell,
      lease, transfer or otherwise dispose of, any of its assets (including, without
      limitation, all or substantially all of its assets, whether in one transaction
      or a series of related transactions) except (a) with respect to the Borrower,
      sales of accounts receivable and energy services contract revenues by PSNM
      in
      connection with sales of accounts receivable and energy services contract
      revenues so long as such other sales are non-recourse to the Borrower and are
      otherwise on customary market terms; (b) with respect to First Choice, the
      sales
      of accounts receivable in connection with the First Choice Securitization,
      (c)
      with respect to the Borrower, transfers of assets to PNMR Services Company,
      a
      wholly-owned operational services Borrower, in the ordinary course of business,
      (d) sales of assets (excluding those permitted in clauses (a), (b) and (c)
      hereof) for fair value, if the aggregate value of all such transactions in
      any
      calendar year, does not exceed 25% of
      the
      book value of Total Assets of the Borrower, as calculated as of the end of
      the
      most recent Fiscal Quarter,
      and (e) sale, lease, transfer or other disposition, at less than fair
      value, of any other assets of the Borrower and its Subsidiaries, provided
      that the
      aggregate book value of such assets shall not exceed $10,000,000 in any calendar
      year.

     

    
      
        
        

      

      
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    7.4  Affiliate
      Transactions.

     

    The
      Borrower will not enter into any transaction or series of transactions, whether
      or not in the ordinary course of business, with any Affiliate other than on
      terms and conditions substantially as favorable as would be obtainable in a
      comparable arm’s-length transaction with a Person other than an
      Affiliate.

     

    7.5  Liens.

     

    The
      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 the 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 $50,000,000 (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
      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, (n) the
      assignment of, or Liens on, demand, energy or wheeling revenues, or on capacity
      reservation or option fees, payable to the 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, capacity reservation or option fees payable to
      the
      Borrower or such Subsidiary with respect to asset sales permitted herein,
      (o) any extension, renewal or replacement 

     

    
      
        
        

      

      
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    (or
      successive extensions, renewals or replacements), as a whole or in part, of
      any
      Liens referred to in the foregoing clauses (a) through (n), 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), (p) 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, (q) Liens securing obligations
      under Hedging Agreements entered into in the ordinary course of business and
      not
      for speculative purposes, (r) Liens granted by bankruptcy-remote special purpose
      Subsidiaries to secure stranded cost securitization bonds, (s) Liens upon any
      property in favor of the administrative agent for the benefit of the lenders
      under the Existing Credit Agreement (as may be amended, supplemented or
      otherwise modified from time to time) securing Indebtedness thereunder and
      (t) Liens on Property, in addition to those otherwise permitted by
      clauses (a) through (s) above, securing, directly or indirectly,
      Indebtedness or obligations of the 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,
      $50,000,000.

     

    7.6  Accounting
      Changes.

     

    The
      Borrower will not (nor will it permit any of its Subsidiaries
      to)
      make
      or permit any change in accounting policies or reporting practices, except
      as
      required by GAAP, or as permitted by GAAP, if the amounts involved are not
      material.

     

    7.7  Burdensome
      Agreements.

     

    The
      Borrower will not (nor will it permit any of its Subsidiaries
      to)
      enter
      into any contractual obligation (other than (i) the Credit Documents, (ii)
      the
      Constellation Agreement and related agreements, (iii) with respect to clause
      (b)
      only, restrictions on pledges of Capital Stock of any utility Subsidiary or
      significant Subsidiary contained in the indentures, if any, executed in
      connection with the issuance of Specified Securities by the Borrower pursuant
      to
      commitments with Cascade Investment, L.L.C. and (iv) the Existing Credit
      Agreement (as may be amended, supplemented or otherwise modified from time
      to
      time)) that limits the ability (a) of any Subsidiary of the Borrower to make
      Restricted Payments to the Borrower or to otherwise transfer property to the
      Borrower or (b) of the Borrower to create, incur, assume or suffer to exist
      Liens on its property in favor of the Administrative Agent, for the benefit
      of
      the Lenders.

     

      SECTION
      8


     

    EVENTS
      OF DEFAULT

     

    8.1  Events
      of Default.

     

    An
      Event
      of Default with respect to the Borrower shall exist upon the occurrence of
      any
      of the following specified events (each an “Event
      of Default”):

     

    (a)  Payment.
      The
      Borrower shall: (i) default in the payment when due of any principal of any
      of
      its Term Loans; or (ii) default, and such default shall continue for three
      or
      more Business Days, in the payment when due of any interest on the Term Loans
      or
      of any fees or other amounts owing by it hereunder, under any of the other
      Credit Documents or in connection herewith or therewith.

     

    (b)  Representations.
      Any
      representation, warranty or statement made or deemed to be made by the Borrower
      herein, in any of the other Credit Documents, or in any statement or certificate
      delivered or required to be delivered pursuant hereto or thereto shall prove
      untrue in any material respect on the date as of which it was deemed to have
      been made.

     

    
      
        
        

      

      
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    (c)  Covenants.
      The
      Borrower shall:

     

    (i)  default
      in the due performance or observance of any term, covenant or agreement
      contained in Sections 6.1(e)(i), 6.2, 6.3(a) (solely with respect to the
      existence of the Borrower), 6.9, 6.10, 6.11 or 7.1 through 7.7, inclusive;
      or

     

    (ii)  default
      in the due performance or observance by it of any term, covenant or agreement
      (other than those referred to in subsections (a), (b) or (c)(i) of this Section
      8.1) contained in this Credit Agreement or any other Credit Document and such
      default shall continue unremedied for a period of at least 10 days after the
      earlier of the Borrower becoming aware of such default or notice thereof given
      by the Administrative Agent.

     

    (d)  Credit
      Documents.
      Any
      Credit Document shall fail to be in force and effect or the Borrower shall
      so
      assert or any Credit Document shall fail to give the Administrative Agent or
      the
      Lenders the rights, powers, liens and privileges purported to be created
      thereby.

     

    (e)  Bankruptcy,
      etc.
      The
      occurrence of any of the following with respect to the Borrower or any of its
      Subsidiaries (i) a court or governmental agency having jurisdiction in the
      premises shall enter a decree or order for relief in respect of the Borrower
      or
      any of its Subsidiaries in an involuntary case under any applicable Debtor
      Relief Law now or hereafter in effect, or appoint a receiver, liquidator,
      assignee, custodian, trustee, sequestrator or similar official of the Borrower
      or any of its Subsidiaries or for any substantial part of their property or
      ordering the winding up or liquidation of its affairs; or (ii) an
      involuntary case under any applicable Debtor Relief Law now or hereafter in
      effect is commenced against the Borrower or any of its Subsidiaries and such
      petition remains unstayed and in effect for a period of 60 consecutive days;
      or
      (iii) the Borrower or any of its Subsidiaries shall commence a voluntary
      case under any applicable Debtor Relief Law now or hereafter in effect, or
      consent to the entry of an order for relief in an involuntary case under any
      such law, or consent to the appointment or taking possession by a receiver,
      liquidator, assignee, custodian, trustee, sequestrator or similar official
      of
      such Person or any substantial part of its property or make any general
      assignment for the benefit of creditors; or (iv) the Borrower or any of its
      Subsidiaries admit in writing its inability to pay its debts generally as they
      become due or any action shall be taken by any Person in furtherance of any
      of
      the aforesaid purposes.

     

    (f)  Defaults
      under Other Agreements.

     

    (i)  The
      Borrower or any of its Subsidiaries shall default in the due performance or
      observance (beyond the applicable grace period with respect thereto) of any
      material obligation or condition of any contract or lease to which it is a
      party, if such default would have or would reasonably be expected to have a
      Material Adverse Effect.

     

    (ii)  With
      respect to any Indebtedness of the Borrower or any of its Subsidiaries (other
      than Indebtedness outstanding under this Credit Agreement) in excess of
      $20,000,000 in
      the
      aggregate (A) the Borrower or any of its Subsidiaries shall (x) default in
      any payment (beyond the applicable grace period with respect thereto, if any)
      with respect to such Indebtedness, or (y) default (after giving effect to any
      applicable grace period) in the observance or performance of any covenant or
      agreement relating to such Indebtedness or contained in any instrument or
      agreement evidencing, securing or 

     

    
      
        
        

      

      
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    relating
      thereto, or any other event or condition shall occur or condition exist, the
      effect of which default or other event or condition is to cause or permit the
      holder or the holders of such Indebtedness (or any trustee or agent on behalf
      of
      such holders) to cause (determined without regard to whether any notice or
      lapse
      of time is required) such Indebtedness to become due prior to its stated
      maturity; or (B) such Indebtedness shall be declared due and payable, or
      required to be prepaid other than by a regularly scheduled required prepayment
      prior to the stated maturity thereof; or (C) such Indebtedness shall mature
      and remain unpaid.

     

    (g)  Judgments.
      Any
      judgment, order or decree involving a liability of $20,000,000 or more, or
      one
      or more judgments, orders, or decrees involving a liability of $40,000,000
      or
      more, in the aggregate, shall be entered against the Borrower or any of its
      Subsidiaries and such judgments, orders or decrees shall continue unsatisfied,
      undischarged and unstayed for a period ending on the first to occur of (i)
      the
      last day on which such judgment, order or decree becomes final and unappealable
      and, where applicable, with the status of a judicial lien or (ii) 60 days;
      provided
      that if
      such judgment, order or decree provides for periodic payments over time then
      the
      Borrower or such Subsidiary shall have a grace period of 30 days with respect
      to
      each such periodic payment.

     

    (h)  ERISA.
      The
      occurrence of any of the following events or conditions if any of the same
      would
      have or would be reasonably expected to have a Material Adverse Effect: (i)
      any
“accumulated funding deficiency,” as such term is defined in Section 302 of
      ERISA and Section 412 of the Code, whether or not waived, shall exist with
      respect to any Plan, or any lien shall arise on the assets of the Borrower
      or
      any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event shall
      occur with respect to a Single Employer Plan which is, in the reasonable opinion
      of the Required Lenders, likely to result in the termination of such Plan for
      purposes of Title IV of ERISA; (iii) an ERISA Event shall occur with respect
      to
      a Multiemployer Plan or Multiple Employer Plan which is, in the reasonable
      opinion of the Required Lenders, likely to result in (A) the termination of
      such
      Plan for purposes of Title IV of ERISA, or (B) the Borrower or any ERISA
      Affiliate incurring any liability in connection with a withdrawal from,
      reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
      (within the meaning of Section 4245 of ERISA) of such Plan; or (iv) any
      prohibited transaction (within the meaning of Section 406 of ERISA or Section
      4975 of the Code) or breach of fiduciary responsibility shall occur which would
      be reasonably expected to subject the Borrower or any ERISA Affiliate to any
      liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975
      of
      the Code, or under any agreement or other instrument pursuant to which the
      Borrower or any ERISA Affiliate has agreed or is required to indemnify any
      person against any such liability.

     

    (i)  Change
      of Control.
      There
      shall occur a Change of Control.

     

    8.2  Acceleration;
      Remedies.

     

    Upon
      the
      occurrence and during the continuation of an Event of Default, the
      Administrative Agent may or, upon the request and direction of the Required
      Lenders, shall take the following actions without prejudice to the rights of
      the
      Administrative Agent or any Lender to enforce its claims against the Borrower,
      except as otherwise specifically provided for herein:

     

    (a)  Acceleration
      of Term Loans.
      Declare
      the unpaid principal of and any accrued interest in respect of all Term Loans
      and any and all other Borrower Obligations of any and every kind owing by the
      Borrower to the Administrative Agent or the Lenders under the Credit Documents
      to be due, whereupon the same shall be immediately due and payable without
      presentment, demand, protest or other notice of any kind, all of which are
      hereby waived by the Borrower.

     

    
      
        
        

      

      
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    (b)  Enforcement
      of Rights.
      To the
      extent permitted by Law enforce any and all rights and interests created and
      existing under applicable Law and under the Credit Documents, including, without
      limitation, all rights of set-off.

     

    Notwithstanding
      the foregoing, if an Event of Default specified in Section 8.1(e) shall occur,
      then all Term Loans, all accrued interest in respect thereof, all accrued and
      unpaid fees and other Borrower Obligations owing to the Administrative Agent
      and
      the Lenders by the Borrower hereunder shall immediately become due and payable
      without the giving of any notice or other action by the Administrative Agent
      or
      the Lenders, which notice or other action is expressly waived by the
      Borrower.

     

    Notwithstanding
      the fact that enforcement
      powers
      reside primarily with the Administrative Agent, each Lender has, to the extent
      permitted by Law, a separate right of payment and shall be considered a separate
      “creditor” holding a separate “claim” within the meaning of Section 101(5) of
      the Bankruptcy Code or any other insolvency statute.

     

    8.3  Allocation
      of Payments After Event of Default.

     

    Notwithstanding
      any other provisions of this Credit Agreement, after the occurrence and during
      the continuation of an Event of Default, all amounts collected or received
      by
      the Administrative Agent or any Lender from the Borrower or any of its
      Subsidiaries on account of amounts outstanding under any of the Credit Documents
      shall be paid over or delivered as follows:

     

    FIRST,
      to
      the payment of all reasonable out-of-pocket costs and expenses (including the
      reasonable fees and expenses of legal counsel) of the Administrative Agent
      or
      any of the Lenders in connection with enforcing the rights of the Administrative
      Agent and the Lenders under the Credit Documents against the Borrower, ratably
      among them in proportion to the amounts described in this clause “FIRST” payable
      to them;

     

    SECOND,
      to payment of any fees owed to the Administrative Agent or any Lender, ratably
      among them in proportion to the amounts described in this clause “SECOND”
payable to them;

     

    THIRD,
      to
      the payment of all accrued interest payable to the Lenders hereunder, ratably
      among them in proportion to the amounts described in this clause “THIRD” payable
      to them;

     

    FOURTH,
      to the payment of the outstanding principal amount of the Term Loans, ratably
      among them in proportion to the amounts described in this clause “FOURTH”
payable to them;

     

    FIFTH,
      to
      all other Borrower Obligations which shall have become due and payable under
      the
      Credit Documents and not repaid pursuant to clauses “FIRST” through “FOURTH”
above, ratably among the holders of the Borrower Obligations in proportion
      to
      the amounts described in this clause “FIFTH” payable to them; and

     

    SIXTH,
      the payment of the surplus, if any, to whomever may be lawfully entitled to
      receive such surplus.

     

    
      
        
        

      

      
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      SECTION
      9

     

    AGENCY
      PROVISIONS

     

    9.1  Appointment
      and Authority.

     

    Each
      of
      the Lenders hereby irrevocably appoints LCPI to act on its behalf as the
      Administrative Agent hereunder and under the other Credit Documents and
      authorizes the Administrative Agent to take such actions on its behalf and
      to
      exercise such powers as are delegated to the Administrative Agent by the terms
      hereof or thereof, together with such actions and powers as are reasonably
      incidental thereto. The provisions of this Section are solely for the
      benefit of the Administrative Agent and the Lenders, and the Borrower shall
      not
      have rights as a third party beneficiary of any of such provisions.

     

    9.2  Rights
      as a Lender.

     

    The
      Person serving as the Administrative Agent hereunder shall have the same rights
      and powers in its capacity as a Lender as any other Lender and may exercise
      the
      same as though it were not the Administrative Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context
      otherwise requires, include the Person serving as the Administrative Agent
      hereunder in its individual capacity. Such Person and its Affiliates may accept
      deposits from, lend money to, act as the financial advisor or in any other
      advisory capacity for and generally engage in any kind of business with the
      Borrower or any Subsidiary or other Affiliate thereof as if such Person were
      not
      the Administrative Agent hereunder and without any duty to account therefor
      to
      the Lenders.

     

    9.3  Exculpatory
      Provisions.

     

    The
      Administrative Agent shall not have any duties or obligations except those
      expressly set forth herein and in the other Credit Documents. Without limiting
      the generality of the foregoing, the Administrative Agent:

     

    (a)  shall
      not
      be subject to any fiduciary or other implied duties, regardless of whether
      a
      Default has occurred and is continuing;

     

    (b)  shall
      not
      have any duty to take any discretionary action or exercise any discretionary
      powers, except discretionary rights and powers expressly contemplated hereby
      or
      by the other Credit Documents that the Administrative Agent is required to
      exercise as directed in writing by the Required Lenders (or such other number
      or
      percentage of the Lenders as shall be expressly provided for herein or in the
      other Credit Documents), provided
      that the
      Administrative Agent shall not be required to take any action that, in its
      opinion or the opinion of its counsel, may expose the Administrative Agent
      to
      liability or that is contrary to any Credit Document or applicable law;
      and

     

    (c)  shall
      not, except as expressly set forth herein and in the other Credit Documents,
      have any duty to disclose, and shall not be liable for the failure to disclose,
      any information relating to the Borrower, its Subsidiaries or any of its
      Affiliates that is communicated to or obtained by the Person serving as the
      Administrative Agent or any of its Affiliates in any capacity.

     

    The
      Administrative Agent shall not be liable for any action taken or not taken
      by it
      (a) with the consent or at the request of the Required Lenders (or such other
      number or percentage of the Lenders as shall be necessary, or as the
      Administrative Agent shall believe in good faith shall be necessary, under
      the

     

    
      
        
        

      

      
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    circumstances
      as provided in Sections 10.6
      and
8.2)
      or (b)
      in the absence of its own gross negligence or willful misconduct. The
      Administrative Agent shall be deemed not to have knowledge of any Default unless
      and until notice describing such Default is given to the Administrative Agent
      by
      the Borrower or a Lender.

     

    The
      Administrative Agent shall not be responsible for or have any duty to ascertain
      or inquire into (i) any statement, warranty or representation made in or in
      connection with this Credit Agreement or any other Credit Document, (ii) the
      contents of any certificate, report or other document delivered hereunder or
      thereunder or in connection herewith or therewith, (iii) the performance or
      observance of any of the covenants, agreements or other terms or conditions
      set
      forth herein or therein or the occurrence of any Default, (iv) the validity,
      enforceability, effectiveness or genuineness of this Agreement, any other Credit
      Document or any other agreement, instrument or document or (v) the satisfaction
      of any condition set forth in Section
      4 or
      elsewhere herein, other than to confirm receipt of items expressly required
      to
      be delivered to the Administrative Agent.

     

    9.4  Reliance
      by Administrative Agent.

     

    The
      Administrative Agent shall be entitled to rely upon, and shall not incur any
      liability for relying upon, any notice, request, certificate, consent,
      statement, instrument, document or other writing (including any electronic
      message, Internet or intranet website posting or other distribution) believed
      by
      it to be genuine and to have been signed, sent or otherwise authenticated by
      the
      proper Person. The Administrative Agent also may rely upon any statement made
      to
      it orally or by telephone and believed by it to have been made by the proper
      Person, and shall not incur any liability for relying thereon. In determining
      compliance with any condition hereunder to the making of a Term Loan that by
      its
      terms must be fulfilled to the satisfaction of a Lender, the Administrative
      Agent may presume that such condition is satisfactory to such Lender unless
      the
      Administrative Agent shall have received notice to the contrary from such Lender
      prior to the making of such Term Loan. The Administrative Agent may consult
      with
      legal counsel (who may be counsel for the Borrower), independent accountants
      and
      other experts selected by it, and shall not be liable for any action taken
      or
      not taken by it in accordance with the advice of any such counsel, accountants
      or experts.

     

    9.5  Delegation
      of Duties.

     

    The
      Administrative Agent may perform any and all of its duties and exercise its
      rights and powers hereunder or under any other Credit Document by or through
      any
      one or more sub-agents appointed by the Administrative Agent. The Administrative
      Agent and any such sub-agent may perform any and all of its duties and exercise
      its rights and powers by or through their respective Agent-Related Persons.
      The
      exculpatory provisions of this Section shall apply to any such sub-agent
      and to the Agent-Related Persons of the Administrative Agent and any such
      sub-agent, and shall apply to their respective activities in connection with
      the
      syndication of the credit facilities provided for herein as well as activities
      as Administrative Agent.

     

    9.6  Resignation
      of Administrative Agent.

     

    The
      Administrative Agent may at any time give notice of its resignation to the
      Lenders and the Borrower. Upon receipt of any such notice of resignation, the
      Required Lenders shall have the right, in consultation with the Borrower, to
      appoint a successor, which shall be a bank with an office in the United States,
      or an Affiliate of any such bank with an office in the United States. If no
      such
      successor shall have been so appointed by the Required Lenders and shall have
      accepted such appointment within 30 days after the retiring Administrative
      Agent gives notice of its resignation, then the retiring Administrative Agent
      may on behalf of the Lenders, appoint a successor Administrative Agent
      meeting

     

    
      
        
        

      

      
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    the
      qualifications set forth above; provided
      that if
      the Administrative Agent shall notify the Borrower and the Lenders that no
      qualifying Person has accepted such appointment, then such resignation shall
      nonetheless become effective in accordance with such notice and (a) the
      retiring Administrative Agent shall be discharged from its duties and
      obligations hereunder and under the other Credit Documents and (b) all
      payments, communications and determinations provided to be made by, to or
      through the Administrative Agent shall instead be made by or to each Lender
      directly, until such time as the Required Lenders appoint a successor
      Administrative Agent as provided for above in this Section. Upon the acceptance
      of a successor’s appointment as Administrative Agent hereunder, such successor
      shall succeed to and become vested with all of the rights, powers, privileges
      and duties of the retiring (or retired) Administrative Agent, and the retiring
      Administrative Agent shall be discharged from all of its duties and obligations
      hereunder or under the other Credit Documents (if not already discharged
      therefrom as provided above in this Section). The fees payable by the Borrower
      to a successor Administrative Agent shall be the same as those payable to its
      predecessor unless otherwise agreed between the Borrower and such successor.
      After the retiring Administrative Agent’s resignation hereunder and under the
      other Credit Documents, the provisions of this Section and Section 10.5
      shall
      continue in effect for the benefit of such retiring Administrative Agent, its
      sub-agents and their respective Agent Related Persons in respect of any actions
      taken or omitted to be taken by any of them while the retiring Administrative
      Agent was acting as Administrative Agent.

     

    9.7  Non-Reliance
      on Administrative Agent and Other Lenders.

     

    Each
      Lender acknowledges that it has, independently and without reliance upon the
      Administrative Agent or any other Lender or any of their Agent-Related Persons
      and based on such documents and information as it has deemed appropriate, made
      its own credit analysis and decision to enter into this Agreement. Each Lender
      also acknowledges that it will, independently and without reliance upon the
      Administrative Agent or any other Lender or any of their Agent-Related Persons
      and based on such documents and information as it shall from time to time deem
      appropriate, continue to make its own decisions in taking or not taking action
      under or based upon this Agreement, any other Credit Document or any related
      agreement or any document furnished hereunder or thereunder.

     

    9.8  No
      Other Duties, Etc.

     

    Anything
      herein to the contrary notwithstanding, none of the bookrunner, arranger or
      agent listed on the cover page hereof shall have any powers, duties or
      responsibilities under this Agreement or any of the other Credit Documents,
      except in its capacity, as applicable, as the Administrative Agent or a Lender
      hereunder.

     

    9.9  Administrative
      Agent May File Proofs of Claim.

     

    In
      case
      of the pendency of any receivership, insolvency, liquidation, bankruptcy,
      reorganization, arrangement, adjustment, composition or other judicial
      proceeding relative to the Borrower, the Administrative Agent (irrespective
      of
      whether the principal of any Term Loan shall then be due and payable as herein
      expressed or by declaration or otherwise and irrespective of whether the
      Administrative Agent shall have made any demand on the Borrower) shall be
      entitled and empowered, by intervention in such proceeding or
      otherwise

     

    (a)  to
      file
      and prove a claim for the whole amount of the principal and interest owing
      and
      unpaid in respect of the Term Loans and all other Borrower Obligations that
      are
      owing and unpaid and to file such other documents as may be necessary or
      advisable in order to have the claims of the Lenders and the Administrative
      Agent (including any claim for the reasonable compensation, expenses,
      disbursements and advances of the Lenders and the Administrative Agent and
      their
      respective agents and counsel and all other amounts due the Lenders and the
      Administrative Agent under Sections 3.4 and 10.5) allowed in such judicial
      proceeding; and

     

    
      
        
        

      

      
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    (b)  to
      collect and receive any monies or other property payable or deliverable on
      any
      such claims and to distribute the same;

     

    and
      any
      custodian, receiver, assignee, trustee, liquidator, sequestrator or other
      similar official in any such judicial proceeding is hereby authorized by each
      Lender to make such payments to the Administrative Agent and, in the event
      that
      the Administrative Agent shall consent to the making of such payments directly
      to the Lenders, to pay to the Administrative Agent any amount due for the
      reasonable compensation, expenses, disbursements and advances of the
      Administrative Agent and its agents and counsel, and any other amounts due
      the
      Administrative Agent under Sections 3.4 and 10.5.

     

    Nothing
      contained herein shall be deemed to authorize the Administrative Agent to
      authorize or consent to or accept or adopt on behalf of any Lender any plan
      of
      reorganization, arrangement, adjustment or composition affecting the Borrower
      Obligations or the rights of any Lender or to authorize the Administrative
      Agent
      to vote in respect of the claim of any Lender in any such
      proceeding.

     

      SECTION
      10

     

    MISCELLANEOUS

     

    10.1  Notices;
      Effectiveness; Electronic Communication.

     

    (a)  Notices
      Generally.
      Except
      in the case of notices and other communications expressly permitted to be given
      by telephone (and except as provided in subsection (b) below), all
      notices and other communications provided for herein shall be in writing and
      shall be delivered by hand or overnight courier service, mailed by certified
      or
      registered mail or sent by telecopier as follows, and all notices and other
      communications expressly permitted hereunder to be given by telephone shall
      be
      made to the applicable telephone number, as follows:

     

    (i)  if
      to the
      Borrower or the Administrative Agent, to the address, telecopier number,
      electronic mail address or telephone number specified for such Person on
Schedule 10.1;
      and

     

    (ii)  if
      to any
      other Lender, to the address, telecopier number, electronic mail address or
      telephone number specified in its Administrative Questionnaire.

     

    Notices
      sent by hand or overnight courier service, or mailed by certified or registered
      mail, shall be deemed to have been given when received; notices sent by
      telecopier shall be deemed to have been given when sent (except that, if not
      given during normal business hours for the recipient, shall be deemed to have
      been given at the opening of business on the next business day for the
      recipient). Notices delivered through electronic communications to the extent
      provided in subsection (b) below, shall be effective as provided in such
      subsection (b).

     

    (b)  Electronic
      Communications.
      Notices
      and other communications to the Lenders hereunder may be delivered or furnished
      by electronic communication (including e-mail and Internet or intranet websites)
      pursuant to procedures approved by the Administrative Agent, provided
      that the
      foregoing shall not apply to notices to any Lender pursuant to Section 2
      if such
      Lender has notified the Administrative Agent that it is incapable of receiving
      notices under such 

     

    
      
        
        

      

      
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    Section by
      electronic communication. The Administrative Agent or the Borrower may, in
      its
      discretion, agree to accept notices and other communications to it hereunder
      by
      electronic communications pursuant to procedures approved by it, provided
      that
      approval of such procedures may be limited to particular notices or
      communications.

     

    Unless
      the Administrative Agent otherwise prescribes, (i) notices and other
      communications sent to an e-mail address shall be deemed received upon the
      sender’s receipt of an acknowledgement from the intended recipient (such as by
      the “return receipt requested” function, as available, return e-mail or other
      written acknowledgement), provided
      that if
      such notice or other communication is not sent during the normal business hours
      of the recipient, such notice or communication shall be deemed to have been
      sent
      at the opening of business on the next business day for the recipient, and
      (ii) notices or communications posted to an Internet or intranet website
      shall be deemed received upon the deemed receipt by the intended recipient
      at
      its e-mail address as described in the foregoing clause (i) of notification
      that such notice or communication is available and identifying the website
      address therefor.

     

    (c)  Borrower
      Materials/The Platform.
      The
      Borrower hereby acknowledges that (i) the Administrative Agent and/or the
      Arranger will make available to the Lenders materials and/or information
      provided by or on behalf of the Borrower hereunder (collectively, “Borrower
      Materials”)
      by
      posting the Borrower Materials on IntraLinks or another similar electronic
      system (the “Platform”).
      THE
      PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED
      BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS
      OR
      THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN
      OR
      OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
      OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
      PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
      VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH
      THE
      BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent
      or any of its Agent-Related Persons (collectively, the “Agent
      Parties”)
      have
      any liability to the Borrower, any Lender or any other Person for losses,
      claims, damages, liabilities or expenses of any kind (whether in tort, contract
      or otherwise) arising out of the Borrower’s or the Administrative Agent’s
      transmission of Borrower Materials through the Internet, except to the extent
      that such losses, claims, damages, liabilities or expenses are determined by
      a
      court of competent jurisdiction by a final and nonappealable judgment to have
      resulted from the gross negligence or willful misconduct of such Agent Party;
      provided,
      however,
      that in
      no event shall any Agent Party have any liability to the Borrower, any Lender
      or
      any other Person for indirect, special, incidental, consequential or punitive
      damages (as opposed to direct or actual damages).

     

    (d)  Change
      of Address, Etc.
      Each of
      the Borrower and the Administrative Agent may change its address, telecopier
      or
      telephone number for notices and other communications hereunder by notice to
      the
      other parties hereto. Each other Lender may change its address, telecopier
      or
      telephone number for notices and other communications hereunder by notice to
      the
      Borrower and the Administrative Agent. In addition, each Lender agrees to notify
      the Administrative Agent from time to time to ensure that the Administrative
      Agent has on record (i) an effective address, contact name, telephone number,
      telecopier number and electronic mail address to which notices and other
      communications may be sent and (ii) accurate wire instructions for such
      Lender.

     

    
      
        
        

      

      
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    (e)  Reliance
      by Administrative Agent and Lenders.
      The
      Administrative Agent and the Lenders shall be entitled to rely and act upon
      any
      notices purportedly given by or on behalf of the Borrower even if (i) such
      notices were not made in a manner specified herein, were incomplete or were
      not
      preceded or followed by any other form of notice specified herein, or (ii)
      the
      terms thereof, as understood by the recipient, varied from any confirmation
      thereof. The Borrower shall indemnify the Administrative Agent, each Lender
      and
      the Agent-Related Persons of each of them from all losses, costs, expenses
      and
      liabilities resulting from the reliance by such Person on each notice
      purportedly given by or on behalf of the Borrower. All telephonic notices to
      and
      other telephonic communications with the Administrative Agent may be recorded
      by
      the Administrative Agent, and each of the parties hereto hereby consents to
      such
      recording.

     

    10.2  Right
      of 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 of remedies described in Section
      8.2, 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 Borrower against obligations and liabilities of the Borrower to the
      Lenders hereunder, under the Notes, the other Credit Documents or otherwise,
      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 Borrower hereby agrees that any Person purchasing a
      participation in the Term Loans hereunder pursuant to Sections 3.8 or 10.3(d)
      may exercise all rights of set-off with respect to its participation interest
      as
      fully as if such Person were a Lender hereunder. 

     

    10.3  Successors
      and Assigns.

     

    (a)  Successors
      and Assigns Generally.
      The
      provisions of this Credit Agreement shall be binding upon and inure to the
      benefit of the parties hereto and their respective successors and assigns
      permitted hereby, except that the Borrower 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 (except as contemplated by Section
      7.2), 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 this Section, (ii) by way of participation
      in accordance with the provisions of subsection (d) of this Section, or
      (iii) by way of pledge or assignment of a security interest subject to the
      restrictions of subsection (f) of this Section. Nothing in this Credit
      Agreement, 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
      this Section and, to the extent expressly contemplated hereby, 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 Credit
      Agreement.

     

    (b)  Assignments
      by Lenders.
      Any
      Lender may at any time assign to one or more Eligible Assignees all or a portion
      of its rights and obligations under this Credit Agreement (including all or
      a
      portion of its Term Loans at the time owing to it); provided
      that

     

    
      
        
        

      

      
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    (i)  except
      in
      the case of an assignment of the entire remaining amount of the assigning
      Lender’s Term Loans at the time owing to it or in the case of an assignment to a
      Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
      the principal outstanding balance of the Loans of the assigning Lender subject
      to each such assignment, determined as of the date the Assignment and Assumption
      with respect to such assignment is delivered to the Administrative Agent or,
      if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
      Date, shall not be less than $5,000,000 unless
      each of the Administrative Agent and, so long as no Event of Default has
      occurred and is continuing, the Borrower otherwise consents (each such consent
      not to be unreasonably withheld or delayed); provided,
      however,
      that
      concurrent assignments to members of an Assignee Group and concurrent
      assignments from members of an Assignee Group to a single Eligible Assignee
      (or
      to an Eligible Assignee and members of its Assignee Group) will be treated
      as a
      single assignment for purposes of determining whether such minimum amount has
      been met;

     

    (ii)  each
      partial assignment shall be made as an assignment of a proportionate part of
      all
      the assigning Lender’s rights and obligations under this Credit Agreement with
      respect to the Term Loans assigned;

     

    (iii)  the
      parties to each assignment shall execute and deliver to the Administrative
      Agent
      an Assignment and Assumption, together with a processing and recordation fee
      in
      the amount, if any, required as set forth in Schedule 10.3,
      and the
      Eligible Assignee, if it shall not be a Lender, shall deliver to the
      Administrative Agent an Administrative Questionnaire.

     

    Subject
      to acceptance and recording thereof by the Administrative Agent pursuant to
      subsection (c) of this Section, from and after the effective date specified
      in each Assignment and Assumption, the Eligible Assignee thereunder shall be
      a
      party to this Credit Agreement and, to the extent of the interest assigned
      by
      such Assignment and Assumption, have the rights and obligations of a Lender
      under this Credit Agreement, and the assigning Lender thereunder shall, to
      the
      extent of the interest assigned by such Assignment and Assumption, be released
      from its obligations under this Credit Agreement (and, in the case of an
      Assignment and Assumption covering all of the assigning Lender’s rights and
      obligations under this Credit Agreement, such Lender shall cease to be a party
      hereto) but shall continue to be entitled to the benefits of Sections 3.9,
      3.12,
      3.13,
      3.14,
      and
10.5(b)
      with
      respect to facts and circumstances occurring prior to the effective date of
      such
      assignment. Upon request, the Borrower (at its expense) shall execute and
      deliver a Note to the assignee Lender. Any assignment or transfer by a Lender
      of
      rights or obligations under this Credit Agreement that does not comply with
      this
      subsection shall be treated for purposes of this Credit Agreement as a sale
      by
      such Lender of a participation in such rights and obligations in accordance
      with
      subsection (d) of this Section.

     

    (c)  Register.
      The
      Administrative Agent, acting solely for this purpose as an agent of the
      Borrower, shall maintain at the Administrative Agent’s Office a copy of each
      Assignment and Assumption delivered to it and a register for the recordation
      of
      the names and addresses of the Lenders and principal amounts of the Term Loans
      owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”).
      The
      entries in the Register shall be conclusive, and the Borrower, the
      Administrative Agent and the Lenders may treat each Person whose name is
      recorded in the Register pursuant to the terms hereof as a Lender hereunder
      for
      all purposes of this Credit Agreement, notwithstanding notice to the contrary.
      The Register shall be available for inspection by the Borrower at any reasonable
      time and from time to time upon reasonable prior notice. In addition, at any
      time that a request for a consent for a material or substantive change to the
      Credit Documents is pending, any Lender may request and receive from the
      Administrative Agent a copy of the Register.

     

    
      
        
        

      

      
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    (d)  Participations.
      Any
      Lender may at any time, without the consent of, or notice to, the Borrower
      or
      the Administrative Agent, sell participations to any Person (other than a
      natural person or the Borrower or any of the Borrower’s Affiliates or
      Subsidiaries) (each, a “Participant”)
      in all
      or a portion of such Lender’s rights and/or obligations under this Credit
      Agreement (including all or a portion of its Term Loans); provided
      that
      (i) such Lender’s obligations under this Credit Agreement shall remain
      unchanged, (ii) such Lender shall remain solely responsible to the other
      parties hereto for the performance of such obligations and (iii) the
      Borrower, the Administrative Agent and the Lenders shall continue to deal solely
      and directly with such Lender in connection with such Lender’s rights and
      obligations under this Credit Agreement.

     

    Any
      agreement or instrument pursuant to which a Lender sells such a participation
      shall provide that such Lender shall retain the sole right to enforce this
      Credit Agreement and to approve any amendment, modification or waiver of any
      provision of this Credit Agreement; provided
      that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, waiver or other modification
      described in the first proviso to Section 10.6
      that
      affects such Participant. Subject to subsection (e) of this Section, the
      Borrower agrees that each Participant shall be entitled to the benefits of
      Sections 3.9,
      3.12 3.13
      and
3.14 to
      the
      same extent as if it were a Lender and had acquired its interest by assignment
      pursuant to subsection (b) of this Section. To the extent permitted by Law,
      each Participant also shall be entitled to the benefits of Section 3.7 as
      though
      it were a Lender, provided
      such
      Participant agrees to be subject to Section 3.8
      as
      though it were a Lender.

     

    (e)  Limitations
      upon Participant Rights.
      A
      Participant shall not be entitled to receive any greater payment under
Section 3.9,
      3.12,
      3.13,
      or
3.14 than
      the
      applicable Lender would have been entitled to receive with respect to the
      participation sold to such Participant, unless the sale of the participation
      to
      such Participant is made with the Borrower’s prior written consent. A
      Participant that would be a Foreign Lender if it were a Lender shall not be
      entitled to the benefits of Section 3.13
      unless
      the Borrower is notified of the participation sold to such Participant and
      such
      Participant agrees, for the benefit of the Borrower, to comply with Section 3.13(f)
      as
      though it were a Lender.

     

    (f)  Certain
      Pledges.
      Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Credit Agreement (including under its Note,
      if
      any) to secure obligations of such Lender, including any pledge or assignment
      to
      secure obligations to a Federal Reserve Bank; provided
      that no
      such pledge or assignment shall release such Lender from any of its obligations
      hereunder or substitute any such pledgee or assignee for such Lender as a party
      hereto.

     

    (g)  Electronic
      Execution of Assignments.
      The
      words “execution,” “signed,” “signature,” and words of like import in any
      Assignment and Assumption shall be deemed to include electronic signatures
      or
      the keeping of records in electronic form, each of which shall be of the same
      legal effect, validity or enforceability as a manually executed signature or
      the
      use of a paper-based recordkeeping system, as the case may be, to the extent
      and
      as provided for in any applicable law, including the Federal Electronic
      Signatures in Global and National Commerce Act, the New York State Electronic
      Signatures and Records Act, or any other similar state laws based on the Uniform
      Electronic Transactions Act.

     

    
      
        
        

      

      
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    10.4  No
      Waiver; Remedies Cumulative.

     

    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 and the Administrative
      Agent or any Lender shall operate as a waiver 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
      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.

    


    10.5  Attorney
      Costs, Expenses, Taxes and Indemnification by Borrowers.

     

    (a)  The
      Borrower agrees (i) to pay or reimburse the Administrative Agent and the
      Arranger for all costs and expenses incurred in connection with the development,
      preparation, negotiation and execution of this Credit Agreement and the other
      Credit Documents and any amendment, waiver, consent or other modification of
      the
      provisions hereof and thereof (whether or not the transactions contemplated
      hereby or thereby are consummated), and the consummation and administration
      of
      the transactions contemplated hereby and thereby, including all reasonable
      fees
      and expenses of legal counsel and all charges of Intralinks, and (ii) 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 Credit Agreement or the other
      Credit Documents (including all such costs and expenses incurred during any
      “workout” or restructuring in respect of the Borrower 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. Other than costs and expenses payable in connection
      with
      the closing of the transactions contemplated by this Credit Agreement pursuant
      to Section 10.5(a) (which shall be payable on the Closing Date unless otherwise
      agreed by the Administrative Agent and the Arranger), all amounts due under
      this
      Section 10.5 shall be payable within ten Business Days after demand therefor.
      The agreements in this Section shall survive the repayment of all Borrower
      Obligations.

     

    (b)  Whether
      or not the transactions contemplated hereby are consummated, the Borrower shall
      indemnify and hold harmless each Agent-Related Person, each Lender and their
      respective Affiliates, directors, officers, employees, counsel, agents and
      attorneys-in-fact (collectively the “Indemnitees”)
      from
      and against any and all liabilities, obligations, losses, damages, penalties,
      claims, demands, actions, judgments, suits, costs, expenses and disbursements
      (including the reasonable fees and expenses of legal counsel) of any kind or
      nature whatsoever which may at any time be imposed on, incurred by or asserted
      against any such Indemnitee in any way relating to or arising out of or in
      connection with (i) the execution, delivery, enforcement, performance or
      administration of any Credit Document or any other agreement, letter or
      instrument delivered in connection with the transactions contemplated thereby
      or
      the consummation of the transactions contemplated thereby or in connection
      with
      the Acquisition, (ii) any Term Loan Commitment, Term Loan or the use of the
      proceeds therefrom, or (iii) any actual or alleged presence or release of
      Hazardous Substances on or from any property 

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    currently
      or formerly owned or operated by the Borrower, any Subsidiary of the Borrower,
      or any Environmental Claim related in any way to the Borrower or any Subsidiary
      of the Borrower, (iv) any actual or prospective claim, litigation, investigation
      or proceeding relating to any of the foregoing, whether based on contract,
      tort
      or any other theory (including any investigation of, preparation for, or defense
      of any pending or threatened claim, investigation, litigation or proceeding)
      and
      regardless of whether any Indemnitee is a party thereto or (v) any civil penalty
      or fine assessed by the Office of Foreign Assets Control (the “OFAC”)
      against, and all reasonable costs and expenses (including counsel fees and
      disbursements) incurred in connection with defense thereof, by the
      Administrative Agent or any Lender as a result of conduct of the Borrower that
      violates a sanction enforced by OFAC (all the foregoing, collectively, the
      “Indemnified
      Liabilities”),
      in
      all cases, whether or not caused by or arising, in whole or in part, out of
      the
      negligence of the Indemnitee; provided
      that
      such indemnity shall not, as to any Indemnitee, be available to the extent
      that
      such liabilities, obligations, losses, damages, penalties, claims, demands,
      actions, judgments, suits, costs, expenses or disbursements are determined
      by a
      court of competent jurisdiction by final and nonappealable judgment to have
      resulted from the gross negligence or willful misconduct of such Indemnitee.
      No
      Indemnitee shall be liable for any damages arising from the use by others of
      any
      information or other materials obtained through IntraLinks or other similar
      information transmission systems in connection with this Credit Agreement,
      nor
      shall any Indemnitee have any liability for any indirect or consequential
      damages relating to this Credit Agreement or any other Credit Document or
      arising out of its activities in connection herewith or therewith (whether
      before or after the Closing Date). 

     

    (c)  To
      the
      extent that the Borrower for any reason fails to indefeasibly pay any amount
      required under subsection (a) or (b) of this Section to be paid
      by it to the Administrative Agent (or any sub-agent thereof) or any
      Agent-Related Persons of any of the foregoing, each Lender severally agrees
      to
      pay to the Administrative Agent (or any such sub-agent) or such Agent-Related
      Persons, as the case may be, such Lender’s Pro
      Rata
      Share (determined as of the time that the applicable unreimbursed expense or
      indemnity payment is sought) of such unpaid amount; provided
      that the
      unreimbursed expense or indemnified loss, claim, damage, liability or related
      expense, as the case may be, was incurred by or asserted against the
      Administrative Agent (or any such sub-agent) in its capacity as such, or against
      any Agent-Related Persons of any of the foregoing acting for the Administrative
      Agent (or any such sub-agent). 

     

    All
      amounts due under this Section 10.5 shall be payable within ten Business Days
      after demand therefor. The agreements in this Section shall survive the
      resignation of the Administrative Agent, the replacement of any Lender and
      the
      repayment, satisfaction or discharge of all the Borrower
      Obligations.

     

    10.6  Amendments,
      Etc.

     

    No
      amendment or waiver of any provision of this Credit Agreement or any other
      Credit Document, and no consent to any departure by the Borrower therefrom,
      shall be effective unless in writing signed by the Required Lenders and the
      Borrower, 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; provided,
      however,
      that no
      such amendment, waiver or consent shall:

     

    (a)  waive
      any
      condition set forth in Section 4.1
      without
      the written consent of each Lender;

     

    (b)  extend
      or
      increase the Term Loan Commitment of any Lender without the written consent
      of
      such Lender;

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    (c)  postpone
      any date fixed by this Credit Agreement or any other Credit Document for any
      payment (excluding mandatory prepayments) of principal, interest or fees or
      other amounts due to the Lenders (or any of them) hereunder or under any other
      Credit Document without the written consent of each Lender directly affected
      thereby;

     

    (d)  reduce
      the principal of, or the rate of interest specified herein on, any Term Loans
      or
      (subject to clause (iv) of the second proviso to this Section 10.6)
      any
      fees or other amounts payable hereunder or under any other Credit Document
      without the written consent of each Lender directly affected thereby;
provided,
      however,
      that
      only the consent of the Required Lenders shall be necessary to amend the
      definition of “Default Rate” or to waive any obligation to pay interest at the
      Default Rate;

     

    (e)  change
      Section 3.8
      or
Section 8.3
      in a
      manner that would alter the pro rata sharing of payments required thereby
      without the written consent of each Lender; 

     

    (f)  change
      any provision of this Section or the definition of “Required Lenders” or
      any other provision hereof specifying the number or percentage of Lenders
      required to amend, waive or otherwise modify any rights hereunder or make any
      determination or grant any consent hereunder without the written consent of
      each
      Lender;

     

    (g)  change
      Section 10.3 in any manner without the written consent of each Lender;
      or

     

    (h)  release
      the Borrower from its obligations, or consent to the assignment or transfer
      by
      the Borrower of any of its rights and obligations under (or in respect of)
      the
      Credit Documents without the written consent of each Lender. 

     

     

    and,
      provided further,
      that
      (i) no amendment, waiver or consent shall, unless in writing and signed by
      the
      Administrative Agent in addition to the Lenders required above, affect the
      rights or duties of the Administrative Agent under this Credit Agreement or
      any
      other Credit Document and (ii) the Fee Letters may be amended, or rights or
      privileges thereunder waived, in a writing executed only by the parties thereto.
      

     

    10.7  Counterparts.

     

    This
      Credit Agreement 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. 

     

    10.8  Headings.

     

    The
      headings of the sections and subsections hereof are provided for convenience
      only and shall not in any way affect the meaning or construction of any
      provision of this Credit Agreement.

     

    10.9  Survival
      of Indemnification and Representations and Warranties.

     

    (a)  Survival
      of Indemnification.
      All
      indemnities set forth herein shall survive the execution and delivery of this
      Credit Agreement and the making of any Term Loans and the repayment of the
      Term
      Loans and other Borrower Obligations. 

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    (b)  Survival
      of Representations and Warranties.
      All
      representations and warranties made hereunder and in any other Credit Document
      or other document delivered pursuant hereto or thereto or in connection herewith
      or therewith shall survive the execution and delivery hereof and thereof. Such
      representations and warranties have been or will be relied upon by the
      Administrative Agent and each Lender, regardless of any investigation made
      by
      the Administrative Agent or any Lender or on their behalf and notwithstanding
      that the Administrative Agent or any Lender may have had notice or knowledge
      of
      any Default or Event of Default at the time of any Term Loans, and shall
      continue in full force and effect as long as any Term Loan or any other Borrower
      Obligation hereunder shall remain unpaid or unsatisfied.

     

    10.10  Governing
      Law; Venue; Service.

     

    (a)  THIS
      CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
      OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
      AND
      INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING
      SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). Any legal
      action or proceeding with respect to this Credit Agreement or any other Credit
      Document may be brought in the courts of the State of New York or of the United
      States for the Southern District of New York, and, by execution and delivery
      of
      this Credit Agreement, the Borrower hereby irrevocably accepts for itself and
      in
      respect of its Property, generally and unconditionally, the jurisdiction of
      such
      courts.

     

    (b)  The
      Borrower irrevocably consents to the service of process in any action or
      proceeding with respect to this Credit Agreement or any other Credit Document
      by
      the mailing of copies thereof by registered or certified mail, postage prepaid,
      to it at the address for notices pursuant to Section 10.1, such service to
      become effective ten days after such mailing. Nothing herein shall affect the
      right of a Lender to serve process in any other manner permitted by Law.


     

    10.11  Waiver
      of Jury Trial; Waiver of Consequential Damages.

     

    EACH
      OF
      THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
      TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
      RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
      TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. Each of the parties to this Credit
      Agreement agrees not to assert any claim against any other party hereto,
      Administrative Agent, any Lender, any of their Affiliates, or any of their
      respective directors, officers, employees, attorneys or agents, on any theory
      of
      liability, for special, indirect, consequential or punitive damages arising
      out
      of or otherwise relating to any of the transactions contemplated herein and
      in
      the other Credit Documents.

     

    10.12  Severability.

     

    If
      any
      provision of any of the Credit Documents 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.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    10.13  Further
      Assurances.

     

    The
      Borrower agrees, upon the request of the Administrative Agent, to promptly
      take
      such actions, as reasonably requested, as is necessary to carry out the intent
      of this Credit Agreement and the other Credit Documents.

     

    10.14  Confidentiality.

     

    Each
      of
      the Administrative Agent and the Lenders agrees to maintain the confidentiality
      of the Information (as defined below), except that Information may be disclosed
      (a) to its Affiliates and to its and its Affiliates’ respective partners,
      directors, officers, employees, agents, advisors and representatives (it being
      understood that the Persons to whom such disclosure is made will be informed
      of
      the confidential nature of such Information and instructed to keep such
      Information confidential), (b) to the extent requested by any regulatory
      authority purporting to have jurisdiction over it (including any self-regulatory
      authority, such as the National Association of Insurance Commissioners),
      (c) to the extent required by applicable laws or regulations or by any
      subpoena or similar legal process, (d) to any other party hereto,
      (e) in connection with the exercise of any remedies hereunder or under any
      other Credit Document or any action or proceeding relating to this Credit
      Agreement or any other Credit Document or the enforcement of rights hereunder
      or
      thereunder, (f) subject to an agreement containing provisions substantially
      the same as those of this Section, to (i) any assignee of or Participant
      in, or any prospective assignee of or Participant in, any of its rights or
      obligations under this Credit Agreement or (ii) any actual or prospective
      counterparty (or its advisors) to any swap or derivative transaction relating
      to
      the Borrower and its obligations, (g) with the consent of the Borrower or
      (h) to the extent such Information (x) becomes publicly available
      other than as a result of a breach of this Section or (y) becomes available
      to the Administrative Agent, any Lender, or any of their respective Affiliates
      on a nonconfidential basis from a source other than the Borrower.

     

    For
      purposes of this Section, “Information”
means
      all information received from the Borrower or any Subsidiary or any of their
      respective businesses, other than any such information that is available to
      the
      Administrative Agent or any Lender on a nonconfidential basis prior to
      disclosure by the Borrower or any Subsidiary, provided
      that, in
      the case of information received from the Borrower or any Subsidiary after
      the
      date hereof, such information is clearly identified at the time of delivery
      as
      confidential. Any Person required to maintain the confidentiality of Information
      as provided in this Section shall be considered to have complied with its
      obligation to do so if such Person has exercised the same degree of care to
      maintain the confidentiality of such Information as such Person would accord
      to
      its own confidential information.

     

    10.15  Entirety.

     

    This
      Credit Agreement together with the other Credit Documents and the Fee Letters
      represent the entire agreement of the parties hereto and thereto, 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.

     

    10.16  Binding
      Effect; Continuing Agreement.

     

    (a)  This
      Credit Agreement shall become effective at such time when all of the conditions
      set forth in Section 4.1 have been satisfied or waived by the Lenders and it
      shall have been executed by the Borrower and
      the
      Administrative Agent, and the Administrative Agent shall have received copies
      hereof (telefaxed or otherwise) which, when taken together, bear the signatures
      of each Lender, and thereafter this Credit Agreement shall be binding upon
      and
      inure to the benefit of the Borrower, the
      Administrative Agent
      and each
      Lender and their respective successors and assigns.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    (b)  This
      Credit Agreement shall be a continuing agreement and shall remain in full force
      and effect until all Term Loans, interest, fees and other Borrower Obligations
      have been paid in full. Upon termination, the Borrower shall have no further
      obligations (other than the indemnification provisions and other provisions
      that
      by their terms survive) under the Credit Documents; provided
      that
      should any payment, in whole or in part, of the Borrower Obligations be
      rescinded or otherwise required to be restored or returned by the Administrative
      Agent or any Lender, whether as a result of any proceedings in bankruptcy or
      reorganization or otherwise, then the Credit Documents shall automatically
      be
      reinstated and all amounts required to be restored or returned and all costs
      and
      expenses incurred by the Administrative Agent or any Lender in connection
      therewith shall be deemed included as part of the Borrower
      Obligations.

     

    10.17  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 Borrower is required to include the following separateness
      covenants in any debt instrument:

     

    The
      Borrower, PSNM and TNMP are being operated as separate corporate and legal
      entities. In agreeing to make loans to the Borrower, the Borrower’s
      lenders are
      relying solely on the creditworthiness of the Borrower based on the assets
      owned
      by the Borrower, and the repayment of the loan will be made solely from the
      assets of the Borrower and not from any assets of PSNM or TNMP; and the
      Borrower’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 or TNMP.

     

    10.18  USA
      Patriot Act Notice. 

     

    Each
      Lender and the Administrative Agent (for itself and
      not on behalf of any Lender) hereby notifies the Borrower that pursuant to
      the
      requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
      law October 26, 2001)) (the “Act”),
      it is
      required to obtain, verify and record information that identifies the Borrower,
      which information includes the name and address of the Borrower and other
      information that will allow such Lender or the Administrative Agent, as
      applicable, to identify the Borrower in accordance with the
      Act.

     

    10.19  Acknowledgment. 

     

    Section
      6
      and Section 7
      of this
      Credit Agreement contain affirmative and negative covenants applicable to the
      Borrower. Each
      of
      the parties to this Credit Agreement acknowledges and agrees that any such
      covenants that require the Borrower to cause any of its Subsidiaries to take
      or
      to refrain from taking specified actions will be enforceable unless prohibited
      by applicable law or regulatory requirement.

     

    10.20  Replacement
      of Lenders. 

     

    If
      (a)
      any Lender requests compensation under Section 3.12, (b) the Borrower is
      required to pay any additional amount to any Lender or any Governmental
      Authority for the account of any Lender pursuant to Section 3.13 or (c) a Lender
      (a “Non-Consenting Lender”) does not consent to a proposed change, waiver,
      discharge or termination with respect to any Credit Document that has been
      approved by 

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    the
      Required Lenders as provided in Section 10.6 but requires unanimous consent
      of
      all Lenders or all Lenders directly affected thereby (as applicable), then
      the
      Borrower may, at its sole expense and effort, upon notice to such Lender and
      the
      Administrative Agent, require such Lender to assign and delegate, without
      recourse (in accordance with and subject to the restrictions contained in,
      and
      consents required by, Section 10.3), all of its interests, rights and
      obligations under this Agreement and the related Credit Documents to an assignee
      that shall assume such obligations (which assignee may be another Lender, if
      a
      Lender accepts such assignment), provided that:

     

    (i)  the
      Borrower shall have paid to the Administrative Agent the assignment fee
      specified in Section 10.3(b);

     

    (ii)  such
      Lender shall have received payment of an amount equal to the outstanding
      principal of its Term Loans, accrued interest thereon, accrued fees and all
      other amounts payable to it hereunder and under the other Credit Documents
      (including any amounts under Section 3.14) from the assignee (to the extent
      of
      such outstanding principal and accrued interest and fees) or the Borrower (in
      the case of all other amounts);

     

    (iii)  in
      the
      case of any such assignment resulting from a claim for compensation under
      Section 3.12 or payments required to be made pursuant to Section 3.13, such
      assignment will result in a reduction in such compensation or payments
      thereafter; 

     

    (iv)  such
      assignment does not conflict with applicable Laws; and

     

    (v)  in
      the
      case of any such assignment resulting from a Non-Consenting Lender’s failure to
      consent to a proposed change, waiver, discharge or termination with respect
      to
      any Credit Document, the applicable replacement bank, financial institution
      or
      Fund consents to the proposed change, waiver, discharge or termination; provided
      that the failure by such Non-Consenting Lender to execute and deliver an
      Assignment and Assumption shall not impair the validity of the removal of such
      Non-Consenting Lender and the mandatory assignment of such Non-Consenting
      Lender’s outstanding Term Loans pursuant to this Section shall nevertheless be
      effective without the execution by such Non-Consenting Lender of an Assignment
      and Assumption.

     

    A
      Lender
      shall not be required to make any such assignment or delegation if, prior
      thereto, as a result of a waiver by such Lender or otherwise, the circumstances
      entitling the Borrower to require such assignment and delegation cease to
      apply.

     

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    



    
      
        
           

        

        
        

      

      
        55

        
          

        

      

      
        
        

        
          


        

      

    



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

     

    BORROWER:

    


    PNM
      RESOURCES, INC.

    a
      New
      Mexico corporation

    


    


    By: /s/
      Wendy A. Carlson   

    Name:
      Wendy A. Carlson

    Title:
      Vice President, Treasury and Taxation

    


    


    


    



    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

        Signature
          Page to Amended and Restated Credit Agreement

        PNM
          Resources, Inc.

        


        


      

    


    LENDERS:

    


    


    LEHMAN
      COMMERCIAL PAPER INC.,

    individually
      in its capacity as a Lender and in capacity as Administrative Agent

    


    


    By: /s/
      Janine M. Shugan   

    Name:
      Janine M. Shugan

    Title:
      Authorized Signatory

    


    



    
      
         

         

        
        

      

      
        S-2

        
          

        

      

      
        
        

        Signature
          Page to Amended and Restated Credit Agreement

        PNM
          Resources, Inc.

        


        


      

    


    LENDERS:

    


    


    BANK
      OF AMERICA, N.A.

    As
      a
      Lender

    


    


    By: /s/
      Kevin P. Bertelsen  

    Name:
      Kevin P. Bertelsen

    Title:
      Senior Vice President

    



    
      
         

         

        
        

      

      
        S-3

        
          

        

      

      
        
        

        Signature
          Page to Amended and Restated Credit Agreement

        PNM
          Resources, Inc.

        


        


      

    


    LENDERS:

    


    


    CITICORP
      NORTH AMERICA, INC.

    As
      a
      Lender

    


    


    By: /s/
      Stuart J. Gleu   

    Name:
      Stuart J. Gleu

    Title:
      Director


    
      
         

         

        
        

      

      
        S-4

        
          

        

      

      
        
        

        Signature
          Page to Amended and Restated Credit Agreement

        PNM
          Resources, Inc.

        


        


      

    


    LENDERS:

    


    


    MERRILL
      LUNCH BANK USA,

    As
      a
      Lender

    


    


    By: /s/
      Louis Alder   

    Name:
      Louis Alder

    Title:
      Director

    



    
      
         

         

        
        

      

      
        S-5

        
          

        

      

      
        
        

        Signature
          Page to Amended and Restated Credit Agreement

        PNM
          Resources, Inc.

        


        


      

    


    LENDERS:

    


    


    MORGAN
      STANLEY BANK.

    As
      a
      Lender

    


    


    By: /s/
      Daniel Twenge  

    Name:
      Daniel Twenge

    Title:
      Vice President

     

    


    
      
        
          S-6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      SCHEDULE
        1.1 (a)

       

      COMMITMENTS

       

      
        	
                Lender

                 

              	
                Commitment

                 

              
	
                Lehman
                  Commercial Paper Inc.

              	
                $160,000,000.00

              
	
                Bank
                  of America, N.A.

              	
                $
                  80,000,000.00

              
	
                Citigroup
                  Global Markets, Inc.

              	
                $
                  80,000,000.00

              
	
                Merrill
                  Lynch Bank USA

              	
                $
                  80,000,000.00

              
	
                Morgan
                  Stanley Bank 

              	
                $
                  80,000,000.00

              
	
                Total

                 

              	
                $480,000,000.00

                 

              


      

      


      


      



      
        
          
          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      SCHEDULE
        5.18

      


      MATERIAL
        LEASES

       

       

      Description         
          
          Expiration
          Annual
        Rent

      


      Palo
        Verde Unit 1

       

      Facility
        Lease dated as of December 16, 1985 between  
        1/15/2015  
        $
        5,580,122.54

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of December 16, 1985, with MFS 

      Leasing
        Corp. as Owner Participant, as amended.

      


      Facility
        Lease dated as of December 16, 1985 between  
        1/15/2015  
        $
        15,693,862.76

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of December 16, 1985, with Daimler

      Chrysler
        Services North America LLC (as successor to Chrysler 

      Financial
        Corporation), as Owner Participant, as amended.

      


      Facility
        Lease dated as of December 15, 1986 between  
        1/15/2015  
        $
        4,757,769.00

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of December 15, 1986, with Palo

      Verde
        1-
        PNM [December 75] Corporation (successor-in-interest 

      to
        Chase
        Manhattan Realty Leasing Corporation), as Owner 

      Participant
        (Unit 1), as amended.

      


      Facility
        Lease dated as of July 31, 1986 between  
 
        1/15/2015  
        $
        6,974,313.00

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of July 31, 1986, with Palo

      Verde
        1-
        PNM [August 50] Corporation (successor-in-interest 

      to
        Chase
        Manhattan Realty Leasing Corporation), as Owner 

      Participant
        (Unit 1), as amended.

      


      


      Total
        -
        Unit 1       
  
        $
        33,006.067.10


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      Description    
  Expiration
          Annual
        Rent

      


      Palo
        Verde Unit 2

      


      Facility
        Lease dated as of August 12, 1986 between    
        1/15/2016  
        $ 5,742,
        060.00

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of August 12, 1986, with MFS 

      Leasing
        Corp. as Owner Participant, as amended.

      


      Facility
        Lease dated as of August 12, 1986 between    
        1/15/2016  
        $
        9,958,478.04

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of August 12, 1986, with CGI

      Capital,
        Inc., as Owner Participant, as amended.

      


      Facility
        Lease dated as of August 12, 1986 between    
        1/15/2016  
        $
        9,569,653.00

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of August 12, 1986, with Palo Verde

      Leasing
        Corporation (successor-in-interest to First Chicago Lease

      Holdings,
        Inc.) as Owner Participant, as amended.

      


      Facility
        Lease dated as of August 12, 1986 between    
        1/15/2016  
        $
        4,743,012.00

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of August 12, 1986, with MFS Leasing 

      Corp.
        (successor-in-interest to Beneficial Leasing Group, Inc.),

      as
        Owner
        Participant, as amended.

      


      Facility
        Lease dated as of December 15, 1986 between    
 1/15/2016  
        $
        3,272,560.40

      PNM
        and
        U.S. Bank National Association (successor to

      State
        Street Bank and Trust Company, successor

      to
        The
        First National Bank of Boston), as Owner Trustee under

      a
        Trust
        Agreement dated as of December 15, 1986, with Palo

      Verde
        2-
        PNM [December 35] Corporation (successor-in-interest 

      to
        Chase
        Manhattan Realty Leasing Corporation), as Owner 

      Participant
        (Unit 2), as amended.

      


      


      Total
        -
        Unit 2          
        $
        33,285.763.44


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      Description                     Expiration
          Annual
        Rent

      


      Eastern
        Interconnection Project (EIP)

      


      Amended
        and Restated Lease dated as of September 1,  4/1/2015   
  $
        2,675,739.30*

      1993,
        between PNM as Lessee, and U.S. Bank National     $
        2,844,913.50

      Association
        (successor to State Street Bank  

      and
        Trust
        Company,( as successor to The First National

      Bank
        of
        Boston), as Owner Trustee under a Trust 

      Agreement
        dated as of January 2, 1985, with General

      Foods
        Credit Corporation, as Lessor.

      


      Total
        EIP              $
        2,675,739.30*

                                      $
        2,844,913.50

                                                          *
        1994
        Only

      


       

      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

       

      
        SCHEDULE
          5.19

        


        MATERIAL
          LEASE INTEREST PAYMENTS AND DISCOUNT RATE

        


        Schedule
          5.19

        Material
          Lease Interest Payments and Discount Rates

        (Numbers
          in $000)

        


        EIP
          (Discount Rate 12.85%)

        


        
          	
                  Date

                	
                  Total
                    Payment

                	
                  Interest
                    Payment

                	
                  Principal
                    Payment

                	
                  Loan
                    Balance EoY

                
	
                  2005

                	
                  1,299,597

                	
                  328,435

                	
                  971,162

                	
                  1,890,229

                
	
                  2006

                	
                  608,408

                	
                  231,380

                	
                  377,028

                	
                  1,513,201

                
	
                  2007

                	
                  642,648

                	
                  180,402

                	
                  462,245

                	
                  1,050,955

                
	
                  2008

                	
                  683,422

                	
                  117,815

                	
                  565,607

                	
                  485,348

                
	
                  2009

                	
                  58,795

                	
                  62,474

                	
                  -3,678

                	
                  489,027

                
	
                  2010

                	
                  112,898

                	
                  62,962

                	
                  49,936

                	
                  439,091

                
	
                  2011

                	
                  53,990

                	
                  56,485

                	
                  -2,495

                	
                  441,586

                
	
                  2012

                	
                  498,398

                	
                  56,811

                	
                  441,586

                	
                  0

                
	
                  2013

                	 	 	 	 
	
                  2014

                	 	 	 	 
	
                  2015

                	 	 	 	 
	
                  2016

                	 	 	 	 
	
                  2017

                	 	 	 	 
	
                  2018

                	 	 	 	 
	
                  2019

                	 	 	 	 
	
                  Total

                	
                  3,958,155

                	
                  1,096,764

                	
                  2,861,390

                	 


        

        


        


        PVNGS
          (Discount Rate 10.25%)

        


        
          	
                  Date

                	
                  Total
                    Payment

                	
                  Interest
                    Payment

                	
                  Principal
                    Payment

                	
                  Loan
                    Balance EoY

                
	
                  2005

                	
                  14,380,430

                	
                  12,148,338

                	
                  2,232,092

                	
                  116,288,282

                
	
                  2006

                	
                  15,239,058

                	
                  11,919,549

                	
                  3,319,509

                	
                  112,968,773

                
	
                  2007

                	
                  16,147,881

                	
                  11,579,299

                	
                  4,568,582

                	
                  108,400,191

                
	
                  2008

                	
                  17,117,049

                	
                  11,111,020

                	
                  6,006,029

                	
                  102,394,162

                
	
                  2009

                	
                  14,895,517

                	
                  10,495,402

                	
                  4,400,115

                	
                  97,994,046

                
	
                  2010

                	
                  13,670,429

                	
                  10,044,390

                	
                  3,626,039

                	
                  94,368,007

                
	
                  2011

                	
                  14,513,604

                	
                  9,672,721

                	
                  4,840,883

                	
                  89,527,124

                
	
                  2012

                	
                  26,655,935

                	
                  9,176,530

                	
                  17,479,405

                	
                  72,047,719

                
	
                  2013

                	
                  29,233,436

                	
                  7,384,891

                	
                  21,848,545

                	
                  50,199,174

                
	
                  2014

                	
                  34,358,781

                	
                  5,145,415

                	
                  29,213,366

                	
                  20,985,809

                
	
                  2015

                	
                  19,428,445

                	
                  2,151,045

                	
                  17,277,400

                	
                  3,708,409

                
	
                  2016

                	
                  4,088,521

                	
                  380,112

                	
                  3,708,409

                	
                  0

                
	
                  2017

                	 	 	 	 
	
                  2018

                	 	 	 	 
	
                  2019

                	 	 	 	 
	
                  Total

                	
                  219,729,086

                	
                  101,208,712

                	
                  118,520,374

                	 


        

         

      

       

      
        
          
          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      SCHEDULE
        10.1

       

      NOTICES

       

      COMPANY:

       

      PNM
        Resources, Inc.

      Alvarado
        Square

      Albuquerque,
        NM 87158

      Attention:
        Wendy Carlson, Treasurer

      Telephone:
        505.241.2215

      Telecopier:
        505.241.2369

      Electronic
        Mail:
        wendy.carlson@pnmresources.com

      Website
        Address: www.pnmresouces.com

       

      ADMINISTRATIVE
        AGENT:

       

      Administrative
        Agent’s Office

      (for
        payments and Requests for Credit Extensions):

       

      Lehman
        Brothers, Inc..

      745
        7th
        Avenue, 5th Floor

      New
        York,
        NY

      Mail
        Code: 10019

      Attention:
        Michelle Rosolinsky

      Telephone:
        212-526-6590

      Telecopier:
        646-758-5015 

      Electronic
        Mail:
        mrosolin@lehman.com

      ABA#:
        021-0000-89

      A/C#:
        30434141

      A/C
        Name:
        LCPI Bank Loans Agency

      Ref:
        PNM
        Resources

      


      Other
        Notices as Administrative Agent:

       

      Lehman
        Commercial Paper Inc.

      745
        7th
        Avenue, 5th Floor

      New
        York,
        NY

      Mail
        Code: 10019 

      Attention:
        Maria A. McClain

      Telephone:
        212-526-0859

      Telecopier:
        917-522-0592

      Electronic
        Mail:
        adelagar@lehman.com

      


       

      
        
          
          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      


       

      SCHEDULE
        10.3

       

      PROCESSING
        AND RECORDING FEES

       

      The
        Administrative Agent will charge a processing and recordation fee (an
“Assignment
        Fee”)
        in the
        amount of $2,500 for each assignment; provided,
        however,
        that in
        the event of two or more concurrent assignments to members of the same Assignee
        Group (which may be effected by a suballocation of an assigned amount among
        members of such Assignee Group) or two or more concurrent assignments by
        members
        of the same Assignee Group to a single Eligible Assignee (or to an Eligible
        Assignee and members of its Assignee Group), the Assignment Fee will be $2,500
        plus the amount set forth below:

       

      
        	
                Transaction

                 

              	
                Assignment
                  Fee

                 

              
	
                First
                  four concurrent assignments or suballocations to members of an
                  Assignee
                  Group (or from members of an Assignee Group, as applicable)

                 

              	
                -0-

                 

              
	
                Each
                  additional concurrent assignment or suballocation to a member of
                  such
                  Assignee Group (or from a member of such Assignee Group, as
                  applicable)

                 

              	
                $500

                 

              


      

      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    

      EXHIBIT
        2.6(b)

       

      FORM
        OF NOTE

       

      


       

      Lender:
        __________________________,
        200_

       

      FOR
        VALUE
        RECEIVED, PNM RESOURCES, INC., a New Mexico corporation (the “Borrower”),
        hereby promises to pay to the order of the Lender referenced above (the
“Lender”),
        at
        the Administrative Agent’s Office set forth in that certain Term Loan Agreement
        dated as of April 18, 2006 (as amended, modified, extended or restated from
        time
        to time, the “Credit
        Agreement”)
        among
        the Borrower, the Lenders party thereto (including the Lender), Lehman Brothers
        Inc. as sole lead arranger and sole book-manager and Lehman Commercial Paper
        Inc., as administrative agent (the “Administrative
        Agent”)
        (or at
        such other place or places as the holder of this Note may designate), the
        aggregate unpaid principal amount of the Term Loan made by the Lender to
        the
        Borrower under the Credit Agreement, in lawful money and in immediately
        available funds, on the dates and in the principal amounts provided in the
        Credit Agreement, and to pay interest on the unpaid principal amount of each
        Term Loan made by the Lender to the Borrower, at such office, in like money
        and
        funds, at the rates per annum and on the dates provided in the Credit
        Agreement.

       

      This
        Note
        is one of the Notes referred to in the Credit Agreement and evidences the
        Term
        Loans made by the Lender to the Borrower thereunder. Capitalized terms used
        in
        this Note have the respective meanings assigned to them in the Credit Agreement
        and the terms and conditions of the Credit Agreement are expressly incorporated
        herein and made a part hereof.

       

      The
        Credit Agreement provides for the acceleration of the maturity of the Term
        Loans
        evidenced by this Note upon the occurrence of certain events (and for payment
        of
        collection costs in connection therewith) and for prepayments of Term Loans
        upon
        the terms and conditions specified therein. In the event this Note is not
        paid
        when due at any stated or accelerated maturity, the Borrower agrees to pay,
        in
        addition to principal and interest, all costs of collection, including
        reasonable attorney fees.

       

      The
        date,
        amount, type, interest rate and duration of Interest Period (if applicable)
        of
        the Term Loan made by the Lender to the Borrower, and each payment made on
        account of the principal thereof, shall be recorded by the Lender on its
        books;
provided
        that the
        failure of the Lender to make any such recordation or endorsement shall not
        affect the obligations of the Borrower to make a payment when due of any
        amount
        owing under the Credit Agreement or under this Note in respect of the Term
        Loan
        to be evidenced by this Note, and each such recordation or endorsement shall
        be
        prima facie evidence of such information, absent manifest error.

       

      Except
        as
        permitted by Section 10.3(b) of the Credit Agreement, this Note may not be
        assigned by the Lender to any other Person.

       

      THIS
        NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
        THE
        STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
        OBLIGATIONS LAW.) 

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      IN
        WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the
        date
        first above written.

       

      


       

      PNM
        RESOURCES, INC.

      


      


      By:
         

      Name:
         

      Title:
         

      


       


      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      EXHIBIT
        2.4

       

      FORM
        OF

      NOTICE
        OF CONTINUATION/CONVERSION

       

      


       

      TO:     LEHMAN
        COMMERCIAL PAPER INC., as Administrative Agent

       

      RE:       Term
        Loan
        Agreement dated as of April 18, 2006 among PNM Resources, Inc. (the
“Borrower”),
        Lehman Commercial Paper Inc., as Administrative Agent, the Lenders named
        therein
        and Lehman Brothers Inc. as sole lead arranger and sole book-manager (as
        the
        same may be amended, modified, extended or restated from time to time, the
        “Credit
        Agreement”)

       

      DATE:  ___________,
        200_

       

      


      	1.  	
              This
                Notice of Continuation/Conversion is made pursuant to the terms of
                the
                Credit Agreement. All capitalized terms used herein unless otherwise
                defined shall have the meanings set forth in the Credit
                Agreement.

            


       

      	2.  	
              Please
                be advised that Borrower is requesting that a portion of the current
                outstanding Term Loans advanced to it in the amount of $___________,
                currently accruing interest at ____________, be extended or converted
                as
                of ________, 200__ at the interest rate option set forth in paragraph
                3
                below.

            


       

      	3.  	
              The
                interest rate option applicable to the extension or conversion of
                all or
                part of the existing Term Loans referenced above shall
                be:

            


       

      	a.  	
              ________the
                Base Rate

            


       

      	b.  	
              ________the
                Adjusted Eurodollar Rate for an Interest Period
                of:

            


       

      ________
        one month

      ________
        two months

      ________
        three months

      ________
        six months

       

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	4.  	
              As
                of the date hereof, no Default or Event of Default has occurred and
                is
                continuing.

            


       

      PNM
        RESOURCES, INC.

      


      


      By:
         

      Name:
         

      Title:
         

      


       


      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      EXHIBIT
        6.1(c)

       

      FORM
        OF

       

      COMPLIANCE
        CERTIFICATE

       

      TO:      LEHMAN
        COMMERCIAL PAPER INC., as Administrative Agent

       

      RE:        Term
        Loan
        Agreement dated as of April 18, 2006 among PNM Resources, Inc. (the
“Borrower”),
        Lehman Commercial Paper Inc., as Administrative Agent, the Lenders named
        therein
        and Lehman Brothers Inc. as sole lead arranger and sole book-manager (as
        the
        same may be amended, modified, extended or restated from time to time, the
        “Credit
        Agreement”)

       

      DATE:
         _____________,
        200__

       

      


      Pursuant
        to the terms of the Credit Agreement, I, ________________, a Financial Officer
        of the Borrower hereby certify on behalf of the Borrower that, as of the
        quarter
        ending ___________, 200__, the statements below are accurate and complete
        in all
        respects (all capitalized terms used below shall have the meanings set forth
        in
        the Credit Agreement):

       

      	a.  	
              Attached
                hereto as Schedule
                1
                are calculations (calculated as of the date of the financial statements
                referred to in paragraph c. below) demonstrating compliance by the
                Borrower with the financial covenants contained in Section 6.2 of
                the
                Credit Agreement. 

            


       

      	b.  	
              No
                Default or Event of Default exists under the Credit Agreement, except
                as
                indicated on a separate page attached hereto, together with an explanation
                of the action taken or proposed to be taken by the Borrower with
                respect
                thereto.

            


       

      	c.  	
              The
                quarterly/annual financial statements for the fiscal quarter/year
                ended
                ___________, 200_ which accompany this certificate fairly present
                in all
                material respects the financial condition of the Borrower and its
                Subsidiaries and have been prepared in accordance with GAAP, subject
                to
                changes resulting from normal year-end audit adjustments and except
                that
                the quarterly financial statements have fewer footnotes than annual
                statements.

            


       

      PNM
        RESOURCES, INC.

      


      


      By:
         

      Name:
         

      Title:
         

      


       


      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      SCHEDULE
        1

       

      TO
        EXHIBIT 6.1(c)

       

      


       

      FINANCIAL
        COVENANT CALCULATIONS

       

      	A.  	
              Debt
                Capitalization

            


       

      
        	
                1.  Consolidated
                  Indebtedness of the Borrower*

              	
                $ 

              
	
                2.  Consolidated
                  Capitalization of the Borrower

              	
                $ 

              
	
                3.  Debt
                  to Capitalization Ratio (Line A1  ̧
                  A2)

              	
                ___________
                  to 1.0

              
	
                Maximum
                  Permitted

              	
                .65
                  to 1.0

              


      

      


      


       

      


       

      

        

        
          *     For
            purposes of such calculation, the portion of Consolidated Indebtedness
            attributable to obligations under Material Leases shall be the net present
            value
            (using (i) the discount rate (A) set forth in Schedule
            5.19
            of the
            Credit Agreement, so long as such Schedule
            5.19
            specifies the same relevant discount rate as is used in calculating such
            net
            present value provided to Moody’s and S&P or (B) the discount rate used in
            calculating such net present value provided to Moody’s and S&P or (ii) any
            such other rate as shall be proposed by the Borrower (and agreed upon
            by the
            Required Lenders) of all amounts payable under the Material Leases.

           

        

      


      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      EXHIBIT
        10.3(b)

       

      FORM
        OF

       

      ASSIGNMENT
        AND ASSUMPTION

       

      


       

      This
        Assignment and Assumption (the “Assignment
        and Assumption”)
        is
        dated as of the Effective Date set forth below and is entered into by and
        between ____________ (the “Assignor”)
        and
        _________________ (the “Assignee”).
        Capitalized terms used but not defined herein shall have the meanings given
        to
        them in the Credit Agreement identified below (as amended, the “Credit
        Agreement”),
        receipt of a copy of which is hereby acknowledged by the Assignee. The Standard
        Terms and Conditions set forth in Schedule 1 attached hereto (the “Standard
        Terms and Conditions”)
        are
        hereby agreed to and incorporated herein by reference and made a part of
        this
        Assignment and Assumption as if set forth herein in full.

       

      For
        an
        agreed consideration, the Assignor hereby irrevocably sells and assigns to
        the
        Assignee, and the Assignee hereby irrevocably purchases and assumes from
        the
        Assignor, subject to and in accordance with the Standard Terms and Conditions
        and the Credit Agreement, as of the Effective Date inserted by the
        Administrative Agent as contemplated below (a) all of the Assignor’s rights and
        obligations in its capacity as a Lender under the Credit Agreement and any
        other
        documents or instruments delivered pursuant thereto to the extent related
        to the
        amount and percentage interest identified below of all of such outstanding
        rights and obligations of the Assignor under the respective facilities
        identified below (including, without limitation, any Letters of Credit,
        guarantees, and swingline loans included in such facilities) and (b) to the
        extent permitted to be assigned under applicable law, all claims, suits,
        causes
        of action and any other right of the Assignor (in its capacity as a Lender)
        against any Person, whether known or unknown, arising under or in connection
        with the Credit Agreement, any other documents or instruments delivered pursuant
        thereto or the loan transactions governed thereby or in any way based on
        or
        related to any of the foregoing, including, but not limited to, contract
        claims,
        tort claims, malpractice claims, statutory claims and all other claims at
        law or
        in equity related to the rights and obligations sold and assigned pursuant
        to
        clause (a) above (the rights and obligations sold and assigned pursuant to
        clauses (a) and (b) above being referred to herein collectively as, the
“Assigned
        Interest”).
        Such
        sale and assignment is without recourse to the Assignor and, except as expressly
        provided in this Assignment and Assumption, without representation or warranty
        by the Assignor.

       

      
        	
                1.  Assignor:

                 

              	 __________________________________
	
                2.  Assignee:

                 

              	
                ___________________________________

                and
                  is an Affiliate/Approved Fund of __________________

              
	
                3.  Borrower:

                 

              	
                PNM
                  Resources, Inc.

                 

              
	
                4.  Administrative
                  Agent:

                 

              	
                Lehman
                  Commercial Paper Inc. as the Administrative Agent under the Credit
                  Agreement

                 

              


      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                5.  Credit
                  Agreement:

                 

              	
                Term
                  Loan Agreement dated as of April 18,
                  2006 among the Borrower, the Lenders party thereto, Lehman Brothers
                  Inc.
                  as sole lead arranger and sole book-manager and the Administrative
                  Agent.

                 

              


      

      6.  Assigned
        Interest:

       

      
        	
                Aggregate
                  Amount of

                Term
                  Loans for

                all
                  Lenders

              	
                Amount
                  of

                Term
                  Loans

                Assigned

              	
                Percentage
                  Assigned of

                Term
                  Loans

              
	
                $

              	
                $

              	
                %

              


      

      


       

      7.  After
        giving effect to the foregoing assignment, the Assignor and the Assignee
        shall
        have the following Pro Rata Shares and outstanding Loans:

       

      
        	 	
                Pro
                  Rata Share

              	
                Outstanding
                  Term Loans

              
	
                Assignor

              	 	 
	
                Assignee

              	 	 


      

      


      8.  Trade
        Date: ______________

       

      Effective
        Date: __________ __, 200__

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      The
        terms
        set forth in this Assignment and Assumption are hereby agreed to:

       

      ASSIGNOR

      


      [NAME
        OF
        ASSIGNOR]

      


      By:
         

      Name:
         

      Title:
         

      


      ASSIGNEE

      


      [NAME
        OF
        ASSIGNEE]

      


      By:
         

      Name:
         

      Title:
         

      


      


      Consented
        to and Accepted if applicable:

       

      LEHMAN
        COMMERCIAL PAPER INC.,

       

      as
        Administrative Agent 

       

      By:
         

       

      Name:
         

       

      Title:
         

       

      Consented
        to if applicable:

       

      PNM
        RESOURCES, INC.

       

      By:
         

       

      Name:
         

       

      Title:
         

       

       


      
        
          
          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      SCHEDULE
        1

      TO
        EXHIBIT 10.3(b)

       

      TERMS
        AND
        CONDITIONS FOR

      ASSIGNMENT
        AND ASSUMPTION

       

      1.  Representations
        and Warranties.

       

      1.1.  Assignor.
        The
        Assignor (a) represents and warrants that (i) it is the legal and beneficial
        owner of the Assigned Interest, (ii) the Assigned Interest is free and clear
        of
        any lien, encumbrance or other adverse claim and (iii) it has full power
        and
        authority, and has taken all action necessary, to execute and deliver this
        Assignment and Assumption and to consummate the transactions contemplated
        hereby; and (b) assumes no responsibility with respect to (i) any statements,
        warranties or representations made in or in connection with the Credit Agreement
        or any other Credit Document, (ii) the execution, legality, validity,
        enforceability, genuineness, sufficiency or value of the Credit Documents
        or any
        collateral thereunder, (iii) the financial condition of the Borrower, any
        of its
        Subsidiaries or Affiliates or any other Person obligated in respect of any
        Credit Document or (iv) the performance or observance by the Borrower, any
        of
        its Subsidiaries or Affiliates or any other Person of any of their respective
        obligations under any Credit Document.

       

      1.2.  Assignee.
        The
        Assignee (a) represents and warrants that (i) it has full power and authority,
        and has taken all action necessary, to execute and deliver this Assignment
        and
        Assumption and to consummate the transactions contemplated hereby and to
        become
        a Lender under the Credit Agreement, (ii) it meets all requirements of an
        Eligible Assignee under the Credit Agreement (subject to receipt of such
        consents as may be required under the Credit Agreement), (iii) from and after
        the Effective Date, it shall be bound by the provisions of the Credit Agreement
        as a Lender thereunder and, to the extent of the Assigned Interest, shall
        have
        the obligations of a Lender thereunder, (iv) it has received a copy of the
        Credit Agreement, together with copies of the most recent financial statements
        delivered pursuant to Section 6.1 thereof, as applicable, and such other
        documents and information as it has deemed appropriate to make its own credit
        analysis and decision to enter into this Assignment and Assumption and to
        purchase the Assigned Interest on the basis of which it has made such analysis
        and decision independently and without reliance on the Administrative Agent
        or
        any other Lender, and (v) if it is a foreign lender, attached to the Assignment
        and Assumption is any documentation required to be delivered by it pursuant
        to
        the terms of the Credit Agreement, duly completed and executed by the Assignee;
        and (b) agrees that (i) it will, independently and without reliance on the
        Administrative Agent, the Assignor or any other Lender, and based on such
        documents and information as it shall deem appropriate at the time, continue
        to
        make its own credit decisions in taking or not taking action under the Credit
        Documents, and (ii) it will perform in accordance with their terms all of
        the
        obligations which by the terms of the Credit Documents are required to be
        performed by it as a Lender.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2.  Payments.
        From
        and after the Effective Date, the Administrative Agent shall make all payments
        in respect of the Assigned Interest (including payments of principal, interest,
        fees and other amounts) to the Assignor for amounts which have accrued to
        but
        excluding the Effective Date and to the Assignee for amounts which have accrued
        from and after the Effective Date.

       

      3.  General
        Provisions.
        This
        Assignment and Assumption shall be binding upon, and inure to the benefit
        of,
        the parties hereto and their respective successors and assigns. This Assignment
        and Assumption may be executed in any number of counterparts, which together
        shall constitute one instrument. Delivery of an executed counterpart of a
        signature page of this Assignment and Assumption by telecopy shall be effective
        as delivery of a manually executed counterpart of this Assignment and
        Assumption. This Assignment and Assumption shall be governed by, and construed
        in accordance with, the law of the State of New York.