Document:

<PAGE>

                                                                 Exhibit 4.05-01

                           El Paso Electric Company
                                 P.O. Box 982
                             El Paso, Texas 79960

                                                                 August 16, 2000

Salomon Smith Barney Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013

               Re:  Maricopa County, Arizona Pollution Control Corporation
                    Pollution Control Refunding Revenue Bonds, 1985 Series A (El
                    Paso Electric Company Palo Verde Project) (the "1985 Series
                    A Bonds")

                    Maricopa County, Arizona Pollution Control Corporation
                    Adjustable Tender Pollution Control Revenue Bonds, 1994
                    Series A (El Paso Electric Company Palo Verde Project) (the
                    "1994 Series A Bonds")

                    City of Farmington, New Mexico ("Farmington") Adjustable
                    Tender Pollution Control Revenue Refunding Bonds, 1994
                    Series A (El Paso Electric Company Four Corners Project)
                    (the "Farmington Bonds" and, collectively with the 1985
                    Series A Bonds and the 1994 Series A Bonds, the "Bonds")

Ladies and Gentlemen:

     Reference is made to the Trust Indenture, dated as of August 1, 1985, as
amended and supplemented (the "1985 Series A Indenture"), by and between
Maricopa County, Arizona Pollution Control Corporation (the "Pollution Control
Corporation") and The Chase Manhattan Bank, as successor trustee (the
"Trustee"), pursuant to which the 1985 Series A Bonds were issued, and the
Remarketing Agent Agreement, dated as of February 12, 1996 (the "1985 Series A
Remarketing Agreement"), between El Paso Electric Company, a Texas corporation
(the "Company"), and you, as, remarketing agent (the "Remarketing Agent").

     Reference is made to the Indenture of Trust, dated as of July 1, 1994, as
amended and supplemented (the "1994 Series A Indenture"), by and between the
Pollution Control Corporation and the Trustee, pursuant to which the 1994 Series
A Bonds were issued, and the Remarketing Agreement, dated as of July 1, 1994
(the "1994 Series A Remarketing Agreement"), between the Company and the
Remarketing Agent.
<PAGE>

     Reference is made to Ordinance No. 94-1018 adopted by Farmington on October
18, 1994 and accepted by the Trustee, as amended and supplemented (the
"Ordinance" and, together with the 1985 Series A Indenture and the 1994 Series A
Indenture, the "Indentures"), pursuant to which the Farmington Bonds were
issued, and the Remarketing Agreement, dated as of November 1, 1994 (the
"Farmington Remarketing Agreement" and, together with the 1985 Series A
Remarketing Agreement and the 1994 Series A Remarketing Agreement, the
"Remarketing Agreements"), between the Company and the Remarketing Agent.

     Pursuant to the relevant provisions of the 1985 Series A Indenture, the
Company has notified the Pollution Control Corporation and the Trustee of its
election to convert the 1985 Series A Bonds to bear interest at a Long-Term
Interest Rate for a Long-Term Interest Rate Period beginning on August 24, 2000
(the "Remarketing Date") and ending on July 31, 2005 and the Trustee has
notified the owners of the 1985 Series A Bonds that such Bonds are subject to
mandatory tender on the Remarketing Date.

     Pursuant to the relevant provisions of the 1994 Series A Indenture; the
Company has notified the Pollution Control Corporation and the Trustee of its
election to convert the 1994 Series A Bonds to bear interest at a Long-Term
Interest Rate for a Long-Term Interest Rate Period beginning on the Remarketing
Date and ending on July 31, 2005 and the Trustee has notified the owners of the
1994 Series A Bonds that such Bonds are subject to mandatory tender on the
Remarketing Date.

     Pursuant to the relevant provisions of the Ordinance, the Company has
notified Farmington and the Trustee of its election to convert the Farmington
Bonds to bear interest at a Long-Term Interest Rate for a Long-Term Interest
Rate Period beginning on the Remarketing Date and ending on July 31, 2002 and
the Trustee has notified the owners of the Farmington Bonds that such Bonds are
subject to mandatory tender on the Remarketing Date.

     Pursuant to each Indenture and each Remarketing Agreement, the Remarketing
Agent shall offer for sale and use its best efforts to sell the Bonds, any such
sale to be made on the Remarketing Date at the best price available in the
marketplace.

     The Company and the Remarketing Agent agree that each Remarketing
Agreement, as applicable, shall be amended and supplemented (this "Remarketing
Agreement Amendment") as follows:

     1.   With respect to the 1985 Series A Bonds, (a) as contemplated by
Section 6 of the 1985 Series A Remarketing Agreement, in consideration for the
Remarketing Agent's best efforts to remarket the 1985 Series A Bonds in
accordance with the terms and provisions of the 1985 Series A Indenture and the
1985 Series A Remarketing Agreement, the Company agrees (i) to pay the
Remarketing Agent on the Remarketing Date a fee equal to .685% of the principal
amount of the 1985 Series A Bonds by wire transfer of immediately available
funds to an account designated by the Remarketing Agent and (ii) to reimburse
the Remarketing Agent for all direct,

                                       2
<PAGE>

out-of-pocket expenses incurred by it as Remarketing Agent with respect to the
1985 Series A Bonds, including reasonable counsel fees and disbursements and (b)
the Company agrees and acknowledges that, for purposes of clause (iii) of
Section 7(a) of the 1985 Series A Remarketing Agreement, the term "Disclosure
Statement," as defined therein, shall be deemed to include (i) the preliminary
remarketing statement relating to the Bonds dated July 28, 2000 (including the
appendices thereto and the documents incorporated by reference therein, the
"Preliminary Remarketing Statement"), (ii) the final remarketing statement
relating to the Bonds dated the date hereof (including the appendices thereto
and the documents incorporated by reference therein, the "Remarketing
Statement") and any amendment thereof or supplement thereto (including, for
these purposes, any document filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of 1934
(the "Exchange Act's after the date hereof and incorporated by reference into
the Remarketing Statement) or (iii) any other disclosure document that may be
used from time to time in connection with a remarketing of the 1985 Series A
Bonds by the Remarketing Agent pursuant to the 1985 Series A Remarketing
Agreement.

     2.   With respect to the 1994 Series A Bonds, (a) as contemplated by
Section 6 of the 1994 Series A Remarketing Agreement, in consideration for the
Remarketing Agent's best efforts to remarket the 1994 Series A Bonds in
accordance with the terms and provisions of the 1994 Series A Indenture and the
1994 Series A Remarketing Agreement, the Company agrees (i) to pay the
Remarketing Agent on the Remarketing Date a fee equal to .685% of the principal
amount of the 1994 Series A Bonds by wire transfer of immediately available
funds to an account designated by the Remarketing Agent and (ii) to reimburse
the Remarketing Agent for all direct, out-of-pocket expenses incurred by it as
Remarketing Agent with respect to the 1994 Series A Bonds, including reasonable
counsel fees and disbursements and (b) the Company agrees and acknowledges that,
for purposes of clause (iii) of Section 7(a) of the 1994 Series A Remarketing
Agreement, the term "Disclosure Statement," as defined therein, shall be deemed
to include (i) the Preliminary Remarketing Statement, (ii) the Remarketing
Statement and any amendment thereof or supplement thereto (including, for these
purposes, any document filed by the Company with the Commission under the
Exchange Act after the date hereof and incorporated by reference into the
Remarketing Statement) or (iii) any other disclosure document that may be used
from time to time in connection with a remarketing of the 1994 Series A Bonds by
the Remarketing Agent pursuant to the 1994 Series A Remarketing Agreement.

     3.   With respect to the Farmington Bonds, (a) as contemplated by Section 6
of the Farmington Remarketing Agreement, in consideration for the Remarketing
Agent's best efforts to remarket the Farmington Bonds in accordance with the
terms and provisions of the Ordinance and the Farmington Remarketing Agreement,
the Company agrees (i) to pay the Remarketing Agent on the Remarketing Date a
fee equal to .685% of the principal amount of the Farmington Bonds by wire
transfer of immediately available funds to an account designated by the
Remarketing Agent and (ii) to reimburse the Remarketing Agent for all direct,
out-of-pocket expenses incurred by it as Remarketing Agent with respect to the
Farmington Bonds, including reasonable counsel

                                       3
<PAGE>

fees and disbursements and (b) the Company agrees and acknowledges that, for
purposes of clause (iii) of Section 7(a) of the Farmington Remarketing
Agreement, the term "Disclosure Statement," as defined therein, shall be deemed
to include (i) the Preliminary Remarketing Statement, (ii) the Remarketing
Statement and any amendment thereof or supplement thereto (including, for these
purposes, any document filed by the Company with the Commission under the
Exchange Act after the date hereof and incorporated by reference into the
Remarketing Statement) or (iii) any other disclosure document that may be used
from time to time in connection with a remarketing of the Farmington Bonds by
the Remarketing Agent pursuant to the Farmington Remarketing Agreement.

     4.   In addition to the conditions to the Remarketing Agent's obligations
set forth in Section 4 of each Remarketing Agreement, the obligations of the
Remarketing Agent under each Remarketing Agreement to remarket the Bonds on the
Remarketing Date are also subject, in the discretion of the Remarketing Agent,
to the conditions that (i) there shall not have occurred any material adverse
change in the properties, business, condition (financial or other) or results of
operations of the Company since the date of the Remarketing Statement and (ii)
the Remarketing Agent shall have received such certificates, accountants'
letters and opinions of counsel as it shall reasonably request.

     5.   In addition to the representations, warranties, covenants and
agreements set forth in Section 3 of each Remarketing Agreement, the Company
represents and warrants to, and covenants and agrees with, the Remarketing Agent
as follows:

     (i)   This Remarketing Agreement Amendment has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or other laws, judicial decisions or principles of equity relating to or
affecting the enforcement of creditors' rights or contractual obligations
generally.

     (ii)  The continuing disclosure agreements relating to the Bonds between
the Company and the Trustee each to be dated as of the Remarketing Date
(collectively, the "Continuing Disclosure Agreements") have been duly authorized
by the Company, on, the Remarketing Date, will be duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or other
laws, judicial decisions or principles of equity relating to or affecting the
enforcement of creditors' rights or contractual obligations generally.

     (iii) No other consent, approval, authorization or order of any regulatory
body or administrative agency or other governmental body relating to the Company
is legally required for the execution and delivery of this Remarketing Agreement
Amendment Or

                                       4
<PAGE>

the Continuing Disclosure Agreements or fulfillment of the terms hereof or
thereof except such as have been obtained.

     (iv)  The execution and delivery of this Remarketing Agreement Amendment
and the Continuing Disclosure Agreements by the Company does not, and
fulfillment of the terms hereof or thereof will not, result in a breach of any
of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party, or the Restated Articles of Incorporation or Bylaws of the Company, or
any order, rule or regulation applicable to the Company of any court or of any
Federal or state regulatory body or administrative agency or other governmental
body having jurisdiction over the Company or over any of its properties, or any
statute of any jurisdiction applicable to the Company.

     (v)   The Remarketing Statement does not, as of the date hereof, and, as it
may be amended or supplemented (including by way of any document incorporated by
reference therein), will not, as of the Remarketing Date, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.

     6.   Except as expressly set forth in this Remarketing Agreement Amendment,
all terms and provisions of the Remarketing Agreements are, and shall continue
to be, in full force and effect.

     7.   This Remarketing Agreement Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York without
reference to the choice of law provisions thereof.

     8.   This Remarketing Agreement Amendment shall be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.

                                       5
<PAGE>

     If the foregoing is acceptable to the Remarketing Agent, please sign and
return to the Company a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement between the Remarketing Agent
and the Company in accordance with its terms.

                                    Very truly yours,

                                    EL PASO ELECTRIC COMPANY

                                    By: /s/ GARY R. HEDRICK
                                       -----------------------
                                       Name: Gary R. Hedrick
                                       Title: CFO
Agreed and acknowledged by:

SALOMON SMITH BARNEY INC.,
as Remarketing Agent

By: /s/ JAMES A. BRODT
   --------------------------
   Name:  James A. Brodt
   Title

                                       6<PAGE>

                                                                 Exhibit 4.17-01
                           El Paso Electric Company
                                 P.O. Box 982
                             El Paso, Texas 79960

                                                                 August 16, 2000

Salomon Smith Barney Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013

               Re:  Maricopa County, Arizona Pollution Control Corporation
                    Pollution Control Refunding Revenue Bonds, 1984 Series E (El
                    Paso Electric Company Palo Verde Project) (the "Bonds")

Ladies and Gentlemen:

          Reference is made to the Trust Indenture, dated as of December 1,
1984, as amended and supplemented (the "Indenture"), by and between Maricopa
County, Arizona Pollution Control Corporation (the "Pollution Control
Corporation") and The Chase Manhattan Bank, as successor trustee (the
"Trustee"), pursuant to which the Bonds were issued, and the Remarketing Agent
Agreement, dated as of December 1, 1984 (the "Remarketing Agreement"), by and
between El Paso Electric Company, a Texas corporation (the "Company"), and you,
as remarketing agent (the "Remarketing Agent").

          Pursuant to the relevant provisions of the Indenture, the Company has
notified the Pollution Control Corporation and the Trustee of its election to
convert the Bonds to bear interest at a Term Interest Rate for a Term Interest
Rate Period beginning on August 24, 2000 (the "Remarketing Date") and ending on
July 31, 2002 and the Trustee has notified the owners of the Bonds that such
Bonds are subject to mandatory tender on the Remarketing Date.

          Pursuant to the Indenture and the Remarketing Agreement, the
Remarketing Agent shall offer for sale and use its best efforts to sell the
Bonds, any such sale to be made on the Remarketing Date at the best price
available in the marketplace.

          The Company and the Remarketing Agent agree that the Remarketing
Agreement shall be amended and supplemented (this "Remarketing Agreement
Amendment") as follows:

     1.   Pursuant to Sections 3.01(a) and Section 3.03 of the Remarketing
Agreement, in consideration for the Remarketing Agent's best efforts to remarket
the Bonds in accordance with the terms and provisions of the Indenture and the
Remarketing Agreement, the Company agrees (i) to pay the Remarketing Agent on
the
<PAGE>

Remarketing Date a fee equal to .685% of the principal amount of the Bonds by
wire transfer of immediately available funds to an account designated by the
Remarketing Agent and (ii) to reimburse the Remarketing Agent for all direct,
out-of-pocket expenses incurred by it as Remarketing Agent with respect to the
Bonds, including reasonable counsel fees and disbursements.

     2.   Section 3.01(b) of the Remarketing Agreement shall be amended and
restated in its entirety as follows:

          "(1) The Company agrees to indemnify and hold harmless the Remarketing
     Agent and each of its officers, directors and employees and each person who
     controls the Remarketing Agent within the meaning of Section 15 of the
     Securities Act of 1933, as amended (the "Act") (collectively, the
     "Indemnified Person") from and against any losses, claims, damages or
     liabilities to which any Indemnified Person may become subject under any
     statute or at law or in equity or otherwise, and shall reimburse any such
     Indemnified Person for any legal or other expenses incurred by it in
     connection with investigating any claim against it and defending any
     action, but only to the extent that such losses, claims, damages or
     liabilities (or actions in respect thereof) arise out of, or are based
     upon, (i) an allegation or determination that the First Series Bonds or the
     obligations of the Company under the Agreement or this Agreement should
     have been registered under the Act or the Indenture should have been
     qualified under the Trust Indenture Act of 1939, as amended, (ii) an
     allegation or determination of negligence or wrongdoing in connection with
     the Remarketing Agent's performance of its duties under this Agreement or
     the Indenture, or (iii) any untrue statement or alleged untrue statement of
     a material fact contained in (x) the preliminary remarketing statement
     relating to the First Series Bonds dated July 28, 2000 (including the
     appendices thereto and the documents incorporated by reference therein, the
     "Preliminary Remarketing Statement"), (y) the final remarketing statement
     relating to the First Series Bonds dated August 16, 2000 (including the
     appendices thereto and the documents incorporated by reference therein, the
     "Remarketing Statement") and any amendment thereof or supplement thereto
     (including, for these purposes, any document filed by the Company with the
     Securities and Exchange Commission under the Securities Exchange Act of
     1934 after the date of the Remarketing Statement and incorporated by
     reference therein) or (z) any other disclosure document that may be used
     from time to time in connection with a remarketing of the First Series
     Bonds by the Remarketing Agent pursuant to this Agreement, or the omission
     or alleged omission to state therein a material fact necessary to make the
     statements therein not misleading, provided, however, the indemnity of the
     Company provided by this Section 3.01(b) shall not extend to or cover, and
     the Company shall not be liable in any such case to the extent that any
     such loss, claim, damage or liability arises out of, or is based upon, any
     untrue statement or alleged untrue statement or omission or alleged
     omission made therein in reliance upon and in conformity with written
     information furnished to the Company by the Remarketing Agent specifically
     for inclusion therein. The

                                       2
<PAGE>

     Company shall not be liable under clause (ii) of the preceding sentence for
     the Remarketing Agent's gross negligence or willful misconduct.

          (2) An Indemnified Person shall, promptly after the receipt of notice
     of the commencement of any action against such Indemnified Person in
     respect of which indemnification may be sought against the Remarketing
     Agent or the Company, as the case may be (in either case the "Indemnifying
     Person"), notify the Indemnifying Person in writing of the commencement
     thereof.  In case any such action shall be brought against any Indemnified
     Person, and such Indemnified Person shall notify the Indemnifying Person,
     the Indemnifying Person may, or if so requested by such Indemnified Person
     shall, participate in or assume the defense thereof, with counsel
     reasonably satisfactory to such Indemnified Person, and after notice from
     the Indemnifying Person to such Indemnified Person of its election so to
     assume the defense thereof, such Indemnified Person shall reasonably
     cooperate in the defense thereof, including without limitation, the
     settlement of outstanding claims, and the Indemnifying Person shall not be
     liable to such Indemnified Person under this Section 3.01(b) for any legal
     or other expenses subsequently incurred by such Indemnified Person in
     connection with the defense thereof other than reasonable costs of any
     investigation; provided, however, that if the named parties to any such
     action (including any impleaded parties) include both an Indemnified Person
     and the Company, and the Indemnified Person shall have reasonably concluded
     that there may be one or more legal defenses available to it which are
     different from or additional to and conflict with those available to the
     Company, the Indemnified Person shall have the right to select separate
     counsel to assume such legal defenses and to otherwise participate in the
     defense of such action on behalf of the Indemnified Person; provided
     further, however, that (i) the Indemnifying Person shall not, in connection
     with any one such action or separate but substantially similar or related
     actions in the same jurisdiction arising out of the same general
     allegations or circumstances, be liable for the fees and expenses of more
     than one separate firm of attorneys (in addition to local counsel) at any
     one time for an Indemnified Person and its officers, directors and
     employees and all other persons so controlling such Indemnified Person and
     (ii) the Indemnifying Person shall not be liable for any settlement of any
     such claim or action effected without its written consent.  Any obligation
     under this Section 3.01(b) of an Indemnifying Person to reimburse an
     Indemnified Person for expenses include the obligation to make advances to
     the Indemnified Person to cover such expenses in reasonable amounts and at
     reasonable periodic intervals not more often than monthly as requested by
     the Indemnified Person.

          (3) The Remarketing Agent agrees to indemnify and hold harmless the
     Company, its directors and officers to the same extent as the indemnity
     from the Company to the Indemnified Persons described in subsection (1) of
     this Section 3.01(b) but only with respect to any untrue statement or
     alleged untrue statement, omission or alleged omission which has been
     included in the Preliminary Remarketing Statement, the Remarketing
     Statement and any

                                       3
<PAGE>

     amendment thereof or supplement thereto or any other disclosure document
     that may be used from time to time in connection with a remarketing of the
     First Series Bonds by the Remarketing Agent pursuant to this Agreement, or
     omitted therefrom, in reliance upon and in conformity with information
     furnished in writing to the Company by the Remarketing Agent expressly for
     use therein. In case any action shall be brought against the Company in
     respect of which indemnity may be sought against the Remarketing Agent, the
     Remarketing Agent shall have the rights and duties given to the Company,
     and the Company shall have the rights and duties given to the Indemnified
     Persons, by subsections (1) and (2) of this Section 3.01(b). The indemnity
     agreement in this subsection (3) shall be in addition to any liability
     which the Remarketing Agent may otherwise have to the Company and shall
     extend upon the same terms and conditions to each person, if any, who
     controls the Company within the meaning of the Act.

          (4) In order to provide for just and equitable contribution in
     circumstances in which the indemnification provided for in paragraph (1) of
     this Section 3.01(b) is due in accordance with its terms but is for any
     reason held by a court to be unavailable from the Company on grounds of
     policy or otherwise, the Company and the Remarketing Agent shall contribute
     to the aggregate losses, claims, damages and liabilities (including legal
     or other expenses reasonably incurred in connection with investigating or
     defending same) to which the Company and the Remarketing Agent may be
     subject in such proportion as is appropriate to reflect the relative
     benefits received by the Company on the one hand and the Remarketing Agent
     on the other from the remarketing of the First Series Bonds.  The relative
     benefits received by the Company on the one hand and the Remarketing Agent
     on the other shall be deemed to be in the same proportion as the aggregate
     principal amount of the First Series Bonds remarketed pursuant to this
     Agreement bear to the total remarketing fees received by the Remarketing
     Agent; provided, however, that (i) in no case shall the Remarketing Agent
     be responsible for any amount in excess of such fee applicable to the First
     Series Bonds remarketed by the Remarketing Agent and (ii) no person guilty
     of fraudulent misrepresentation within the meaning of Section 11(f) of the
     Act shall be entitled to contribution from any person who was not guilty of
     such fraudulent misrepresentation.  For purposes of this Section 3.01(b),
     each person who controls the Remarketing Agent within the meaning of
     Section 15 of the Act shall have the same rights as the Remarketing Agent.
     Any party entitled to contribution shall, promptly after receipt of notice
     of commencement of any action, suit or proceeding against such party in
     respect of which a claim for contribution may be made against another party
     or parties under this subsection (4), notify such party or parties from
     whom contribution may be sought, but the omission so to notify such party
     or parties shall not relieve the party or parties from whom contribution
     may be sought from any other obligation it or they may have hereunder or
     otherwise than under this subsection (4) unless, and only to the extent
     that, such omission results in the forfeiture of substantive rights or
     defenses by the party or parties from whom contribution may be sought.

                                       4
<PAGE>

          (5) The indemnity and contribution agreements contained in this
     Section 3.01(b) shall remain operative and in full force and effect,
     regardless of any investigation made by or on behalf of the Remarketing
     Agent or the Company, or the delivery of and any payment for any First
     Series Bonds hereunder, and shall survive the termination or cancellation
     of this Agreement."

     3.   The obligations of the Remarketing Agent under the Remarketing
Agreement to remarket the Bonds on the Remarketing Date are also subject, in the
discretion of the Remarketing Agent, to the conditions that (i) there shall not
have occurred any material adverse change in the properties, business, condition
(financial or other) or results of operations of the Company since the date of
the Remarketing Statement, (ii) the representations and warranties contained in
paragraph 4 hereof are accurate on the Remarketing Date and (iii) the
Remarketing Agent shall have received such certificates, accountants' letters
and opinions of counsel as it shall reasonably request.

     4.   The Company represents and warrants to, and covenants and agrees with,
the Remarketing Agent as follows:

     (i)   This Remarketing Agreement Amendment has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or other laws, judicial decisions or principles of equity relating to or
affecting the enforcement of creditors' rights or contractual obligations
generally.

     (ii)  The continuing disclosure agreement relating to the Bonds between the
Company and the Trustee to be dated as of the Remarketing Date (the "Continuing
Disclosure Agreement") has been duly authorized by the Company, on the
Remarketing Date, will be duly executed and delivered by the Company and,
assuming the due authorization, execution and delivery thereof by the Trustee,
will constitute the valid and binding obligations of the Company enforceable
against the Company in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws, judicial
decisions or principles of equity relating to or affecting the enforcement of
creditors' rights or contractual obligations generally.

     (iii) No other consent, approval, authorization or order of any regulatory
body or administrative agency or other governmental body relating to the Company
is legally required for the execution and delivery of this Remarketing Agreement
Amendment or the Continuing Disclosure Agreement or fulfillment of the terms
hereof or thereof except such as have been obtained.

     (iv)  The execution and delivery of this Remarketing Agreement Amendment
and the Continuing Disclosure Agreement by the Company does not, and fulfillment
of the terms hereof or thereof will not, result in a breach of any of the terms
or provisions

                                       5
<PAGE>

of, or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party, or the Restated
Articles of Incorporation or Bylaws of the Company, or any order, rule or
regulation applicable to the Company of any court or of any Federal or state
regulatory body or administrative agency or other governmental body having
jurisdiction over the Company or over any of its properties, or any statute of
any jurisdiction applicable to the Company.

     (v)   The Remarketing Statement (as defined in Section 3.01(b) of the
Remarketing Agreement, as amended by paragraph 2 hereof) does not, as of the
date hereof, and, as it may be amended or supplemented (including by way of any
document incorporated by reference therein), will not, as of the Remarketing
Date, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

     5.   Except as expressly set forth in this Remarketing Agreement Amendment,
all terms and provisions of the Remarketing Agreement are, and shall continue to
be, in full force and effect.

     6.   This Remarketing Agreement Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York without
reference to the choice of law provisions thereof.

     7.   This Remarketing Agreement Amendment shall be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.

                                       6
<PAGE>

     If the foregoing is acceptable to the Remarketing Agent, please sign and
return to the Company a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement between the Remarketing Agent
and the Company in accordance with its terms.

                                    Very truly yours,

                                    EL PASO ELECTRIC COMPANY

                                    By: /s/ GARY R. HEDRICK
                                       -----------------------
                                       Name: Gary R. Hedrick
                                       Title: CFO
Agreed and acknowledged by:

SALOMON SMITH BARNEY INC.,
as Remarketing Agent

By: /s/ JAMES A. BRODT
   --------------------------
   Name: James A. Brodt
   Title

                                       7

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