Document:

Exhibit

Exhibit 10.1
Execution Version

TEXAS-NEW MEXICO POWER COMPANY

$60,000,000

3.53% First Mortgage Bonds, due 2026, Series 2016A

______________

BOND PURCHASE AGREEMENT

______________

Dated December 17, 2015

4189643

TABLE OF CONTENTS
SECTION HEADING PAGE	
			
	SECTION 1.
	AUTHORIZATION OF BONDS
	1

	SECTION 2.
	SALE AND PURCHASE OF BONDS
	1

	SECTION 3.
	CLOSING
	2

	SECTION 4.
	CONDITIONS TO CLOSING
	2

	Section 4.1.
	Representations and Warranties
	2

	Section 4.2.
	Performance; No Event of Default or Bond Repurchase Event
	2

	Section 4.3.
	Compliance Certificates
	3

	Section 4.4.
	Opinions of Counsel
	3

	Section 4.5.
	Purchase Permitted By Applicable Law, Etc
	3

	Section 4.6.
	Sale of Other Bonds
	3

	Section 4.7.
	Payment of Special Counsel Fees
	3

	Section 4.8.
	Private Placement Number
	4

	Section 4.9.
	Changes in Corporate Structure
	4

	Section 4.10.
	Funding Instructions
	4

	Section 4.11.
	Proceedings and Documents
	4

	Section 4.12.
	Issuance of Bonds under Indenture; Execution and Delivery and Filing and Recording of the Supplement
	4

	Section 4.13.
	Regulatory Approvals
	4

	SECTION 5.
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	5

	Section 5.1.
	Organization; Power and Authority
	5

	Section 5.2.
	Authorization, Etc
	5

	Section 5.3.
	Disclosure
	5

	Section 5.4.
	Organization and Ownership of Shares of Subsidiaries
	5

	Section 5.5.
	Financial Statements; Material Liabilities
	6

	Section 5.6.
	Compliance with Laws, Other Instruments, Etc.
	6

	Section 5.7.
	Governmental Authorizations, Etc
	7

	Section 5.8.
	Litigation; Observance of Agreements, Statutes and Orders
	7

	Section 5.9.
	Taxes
	7

	Section 5.10.
	Title to Property; Leases
	7

	Section 5.11.
	Licenses, Permits, Etc
	8

	Section 5.12.
	Compliance with ERISA
	8

	Section 5.13.
	Private Offering by the Company
	9

	Section 5.14.
	Use of Proceeds; Margin Regulations
	9

	Section 5.15.
	Existing Indebtedness
	10

	 
	 
	 

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	Section 5.16.
	Foreign Assets Control Regulations, Etc
	10
	

	Section 5.17.
	Status under Certain Statutes
	12
	

	Section 5.18.
	Lien of Indenture
	12
	

	SECTION 6.
	REPRESENTATIONS OF PURCHASERS
	12
	

	Section 6.1.
	Purchase for Investment
	12
	

	Section 6.2.
	Source of Funds
	13
	

	SECTION 7.
	INFORMATION AS TO COMPANY
	14
	

	Section 7.1.
	Visitation
	14
	

	SECTION 8.
	COVENANTS
	15
	

	Section 8.1.
	Compliance with Law
	15
	

	Section 8.2.
	Books and Records
	15
	

	Section 8.3.
	Transactions with Affiliates
	15
	

	Section 8.4.
	Line of Business
	16
	

	SECTION 9.
	REMEDIES ON DEFAULT
	16
	

	SECTION 10.
	EXPENSES, ETC
	16
	

	Section 10.1.
	Transaction Expenses
	16
	

	Section 10.2.
	Survival
	16
	

	SECTION 11.
	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
	17
	

	SECTION 12.
	AMENDMENT AND WAIVER
	17
	

	Section 12.1.
	Requirements
	17
	

	Section 12.2.
	Solicitation of Holders of Bonds
	17
	

	Section 12.3.
	Binding Effect, Etc
	17
	

	Section 12.4.
	Bonds Held by Company, Etc
	18
	

	SECTION 13.
	REPRODUCTION OF DOCUMENTS
	18
	

	SECTION 14.
	CONFIDENTIAL INFORMATION
	18
	

	SECTION 15.
	SUBSTITUTION OF PURCHASER
	19
	

	SECTION 16.
	MISCELLANEOUS
	20
	

	Section 16.1.
	Successors and Assigns
	20
	

	Section 16.2.
	Severability
	20
	

	 
	 
	 

	 
	 
	 

	 
	 
	 

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	Section 16.3.
	Construction, Etc
	20
	

	Section 16.4.
	Counterparts
	20
	

	Section 16.5.
	Governing Law
	20
	

	Section 16.6.
	Jurisdiction and Process; Waiver of Jury Trial
	20
	

	Section 16.7.
	Notices
	21
	

	Signature
	.
	23
	

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SCHEDULE A        —         DEFINED TERMS

SCHEDULE 4.4(a) —    FORM OF OPINIONS OF VARIOUS COUNSEL TO THE COMPANY

SCHEDULE 4.4(b) —    FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS

SCHEDULE 5.3    —    DISCLOSURE MATERIALS

SCHEDULE 5.4    —    ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; 
AFFILIATES

SCHEDULE 5.5    —    FINANCIAL STATEMENTS

SCHEDULE 5.15    —    EXISTING INDEBTEDNESS

SCHEDULE B    —    INFORMATION RELATING TO PURCHASERS

SCHEDULE C    —    FORM OF SEVENTH SUPPLEMENTAL INDENTURE

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3.53% FIRST MORTGAGE BONDS, DUE 2026, SERIES 2016A

December 17, 2015

TO EACH OF THE PURCHASERS LISTED IN
SCHEDULE B HERETO:
Ladies and Gentlemen:
Texas-New Mexico Power Company, a Texas corporation (together with any successor thereto that becomes a party hereto, the “Company”), agrees with each of the Purchasers as follows:
		
	SECTION 1.
	AUTHORIZATION OF BONDS    .

The Company will authorize the issue and sale of $60,000,000 aggregate principal amount of its 3.53% First Mortgage Bonds, due 2026, Series 2016A (as amended, restated or otherwise modified from time to time and including any such bonds issued in substitution therefor pursuant to the Indenture, the “Bonds”).  The Bonds will be issued under and secured by that certain First Mortgage Indenture dated as of March 23, 2009 (the “Original Indenture”), from the Company, as grantor, to MUFG Union Bank, N.A. (formerly known as Union Bank, N.A.), as trustee (the “Trustee”), as previously amended and supplemented by a First Supplemental Indenture dated as of March 23, 2009, a Second Supplemental Indenture, dated as of March 25, 2009, a Third Supplemental Indenture, dated as of April 30, 2009, as amended by a First Amendment, dated as of December 16, 2010, a Fourth Supplemental Indenture dated as of September 30, 2011, a Fifth Supplemental Indenture, dated as of April 3, 2013, and a Sixth Supplemental Indenture dated as of June 27, 2014, each such supplemental indenture being between the Company and the Trustee, and to be further supplemented and amended by the Seventh Supplemental Indenture (such Seventh Supplemental Indenture being referred to herein as the “Supplement”) which will be substantially in the form set out in Schedule C, with such changes therein, if any, as shall be approved by the Purchasers and the Company.  The Original Indenture, as supplemented and amended by the aforementioned six supplemental indentures and the Supplement, and as further supplemented or amended according to its terms, is hereinafter referred to as the “Indenture”.  Certain capitalized and other terms used in this Agreement are defined in Schedule A.  Terms used herein by not defined herein shall have the meanings set forth in the Indenture unless otherwise specified.  References to a “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified.  References to a “Section” are references to a Section of this Agreement unless otherwise specified.
		
	SECTION 2.
	SALE AND PURCHASE OF BONDS.

Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for 

in Section 3, Bonds in the principal amount specified opposite such Purchaser’s name in Schedule B at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non‐performance of any obligation by any other Purchaser hereunder.
		
	SECTION 3.
	CLOSING.

The sale and purchase of the Bonds to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at 10:00 a.m., Chicago time, at a closing (the “Closing”) on February 10, 2016 or on such other Business Day thereafter on or prior to February 12, 2016 as may be agreed upon by the Company and the Purchasers.  At the Closing, the Company will deliver to each Purchaser the Bonds to be purchased by such Purchaser in the form of a single Bond (or such greater number of Bonds in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company in accordance with the instructions delivered by the Company pursuant to Section 4.10.  If at the Closing the Company shall fail to tender such Bonds to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction or such failure by the Company to tender such Bonds.
		
	SECTION 4.
	CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Bonds to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:
Section 4.1.    Representations and Warranties.  The representations and warranties of the Company in this Agreement shall be correct when made and at the Closing.
Section 4.2.    Performance; No Event of Default or Bond Repurchase Event.  The Company shall have performed and complied with all agreements and conditions contained in this Agreement and in the other Financing Agreements required to be performed or complied with by it prior to or at the Closing and from the date of this Agreement to the Closing.  From the date of this Agreement until the Closing, before and after giving effect to the issue and sale of the Bonds (and the application of the proceeds thereof as contemplated by Section 5.14), no Bond Repurchase Event under the Supplement or Event of Default under the Indenture or violation of Section 8 hereof, in each case assuming the Bonds had been issued as of the date hereof, shall have occurred and be continuing.

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Section 4.3.    Compliance Certificates.
(a)    Officer’s Certificate.  The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that (i) the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled and (ii) the Indenture attached thereto (together with all amendments and supplements thereto, but exclusive of property exhibits, recording information and the like) is a true copy and in full force and effect.
(b)    Secretary’s Certificate.  The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Bonds and this Agreement and the other Financing Agreements and (ii) the Company’s organizational documents as then in effect.
Section 4.4.    Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from McGuireWoods LLP, Jackson Walker L.L.P. and in-house legal counsel to the Company, counsel for the Company, covering the matters set forth in Schedule 4.4(a), covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request and containing assumptions, qualifications, limitations and exclusions reasonably acceptable to Purchasers and their special counsel (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.
Section 4.5.    Purchase Permitted By Applicable Law, Etc.  On the date of the Closing such Purchaser’s purchase of Bonds shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date of the Closing.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.
Section 4.6.    Sale of Other Bonds.  Contemporaneously with the Closing, the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Bonds to be purchased by it at the Closing as specified in Schedule B.
Section 4.7.    Payment of Special Counsel Fees.  Without limiting Section 10.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one (1) Business Day prior to the Closing.

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Section 4.8.    Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Bonds.
Section 4.9.    Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.  
Section 4.10.    Funding Instructions.  At least three (3) Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company specifying (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Bonds is to be deposited.
Section 4.11.    Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and the other Financing Agreements, and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.
Section 4.12.    Issuance of Bonds under Indenture; Execution and Delivery and Filing and Recording of the Supplement.  The Company shall have taken all actions necessary under the Indenture to effect the issue of the Bonds thereunder.  The Supplement shall have been duly executed and delivered by the Company.  The Indenture, as it exists as of the date hereof, has been duly recorded as a mortgage and deed of trust of real estate, and any required filings with respect to personal property and fixtures subject to the Lien of the Indenture, as it exists as of the date hereof, have been duly made in each place in which such recording or filing is required to protect, preserve and perfect the Lien of the Indenture, as it exists as of the date hereof.  Prior to or contemporaneous with Closing, the Supplement will be duly recorded with the applicable Governmental Authority.
Section 4.13.    Regulatory Approvals.  The issue and sale of the Bonds shall have been duly authorized by each regulatory authority whose consent or approval shall be required for the issue and sale of the Bonds to the Purchasers and any orders issued pursuant thereto shall be in full force and effect as of the Closing and all appeal periods, if any, shall have expired; provided, however, that with respect to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction, satisfaction of the foregoing condition assumes the accuracy of the representations and warranties of the Purchasers contained in Section 6.1 of this Agreement.  

‐4‐

		
	SECTION 5.
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:
Section 5.1.    Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease, the properties it purports to own or hold under lease, to transact the business it transacts, to execute and deliver this Agreement, the Bonds and the Supplement (and had the corporate power and authority to execute and deliver the Indenture at the time of execution and delivery thereof) and to perform the provisions of this Agreement and the other Financing Agreements.
Section 5.2.    Authorization, Etc.  Each Financing Agreement has been duly authorized by all necessary corporate action on the part of the Company, and each Financing Agreement (other than the Supplement and the Bonds) constitutes, and when the Supplement is executed and delivered by the Company and the Trustee and when the Bonds are executed, issued and delivered by the Company, authenticated by the Trustee and paid for by the Purchasers, the Supplement and each Bond will constitute a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3.    Disclosure.  The Company, through its agents, J.P. Morgan Securities LLC, Citibank Global Markets Inc. and Wells Fargo Securities, LLC, has delivered to each Purchaser a copy of an November 2015 Private Placement Memorandum (the “Memorandum”), relating to the transactions contemplated hereby.  This Agreement, the Memorandum, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings (including the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and interim reports on Form 8-K filed with the Securities and Exchange Commission) delivered or made available to the Purchasers by or on behalf of the Company prior to November 10, 2015 in connection with the transactions contemplated hereby and identified in Schedule 5.3 (collectively, the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since December 31, 2014, there has been no change in the financial condition, operations, business or properties of the Company or any Subsidiary except changes that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.4.    Organization and Ownership of Shares of Subsidiaries; Affiliates.  (a) Schedule  5.4  contains  (except  as  noted  therein)  complete  and  correct  lists  of  (i)  the

‐5‐

Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and officers.
(b)    All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries, have been validly issued, are fully paid and non‐assessable and are owned by the Company or another Subsidiary, free and clear of any Lien that is prohibited by this Agreement.
(c)    Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Subsidiary has the corporate or other power and authority to own or hold under lease, the properties it purports to own or hold under lease and to transact the business it transacts.
Section 5.5.    Financial Statements; Material Liabilities.  The Company, through its agents, J.P. Morgan Securities LLC, Citibank Global Markets Inc. and Wells Fargo Securities, LLC,  has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5.  All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects, the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year‐end adjustments).   The Company and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents.
Section 5.6.    Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of this Agreement and the other Financing Agreements (including the prior execution and delivery of the Indenture) will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien, other than the Lien created under the Indenture, in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by‐laws, shareholders agreement or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. 

‐6‐

Section 5.7.    Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, notice, filing or declaration with, any Governmental Authority is required in connection with, or to ensure, the execution, delivery, legality, validity or performance or enforceability by the Company of this Agreement, the Bonds and the Supplement except for (i) the filing of the Supplement in the Filing Office, (ii) such consents, approvals, authorizations, orders, notices, filings and registrations or qualifications as have been previously obtained, which such actions remain in full force and effect and for which appeal periods have expired and (iii) such consents, approvals, authorizations, orders and registrations or qualifications as may be required to enforce the Lien of the Indenture and the Supplement and the priority and perfection thereof or exercise remedies under the Indenture and the Supplement that have been obtained and remain in full force and effect or will be obtained prior to or contemporaneous with Closing; provided, however, that with respect to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction, the foregoing representation and warranty assumes the accuracy of the representations and warranties of the Purchasers contained in Section 6.1 of this Agreement.
Section 5.8.    Litigation; Observance of Statutes and Orders.  (a) There are no actions, suits, investigations or proceedings pending or, to the best knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b)    Neither the Company nor any Subsidiary is (i) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (ii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including, without limitation, Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.9.    Taxes.  The Company and its Subsidiaries have filed or caused to be filed, all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The U.S. federal income tax liabilities of the Company and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2011. 
Section 5.10.    Title to Property; Leases.  The Company and its Subsidiaries have good and sufficient title to their respective Material properties, including all such properties reflected

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in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement or the Indenture, except for Permitted Liens and except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect.  All Material leases are valid and subsisting and are in full force and effect in all material respects. 
Section 5.11.    Licenses, Permits, Etc.  The Company and its Subsidiaries own or possess all licenses, permits, franchises, certificates of conveyance and necessity, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.
Section 5.12.    Compliance with ERISA.  Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect:
(a)     During the five-year period prior to the date hereof: (i) no ERISA Event has occurred, and, to the best knowledge of the Company, 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 Plan has failed to meet the minimum funding standards of section 412 of the Code whether or not waived, nor has a failure to make by its due date a required installment to a Plan under section 430(j) of the Code occurred; (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 funding target under each Single Employer Plan, whether or not vested, did not, as of December 31, 2014, exceed the market value of assets with discounted receivable contributions as described in each Single Employer Plan’s most recent Actuarial Valuation Report.
(c)    Neither the Company nor any ERISA Affiliate has incurred, or, to the best knowledge of the Company, is reasonably expected to incur, any withdrawal liability (or any contingent withdrawal liabilities) under ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither the Company 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 Company, 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 Company 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 

‐8‐

under any agreement or other instrument pursuant to which the Company 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 Company 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 5.5 in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60.
(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.
(g)    The execution and delivery of this Agreement and the issuance and sale of the Bonds hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)‐(D) of the Code.  The representation by the Company to each Purchaser in the first sentence of this Section 5.12(g) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Bonds to be purchased by such Purchaser.
Section 5.13.    Private Offering by the Company.  Neither the Company nor anyone acting on its behalf has offered the Bonds or any similar Securities for sale to, or solicited any offer to buy the Bonds or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than ten (10) other Institutional Investors, each of which has been offered the Bonds at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Bonds to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.
Section 5.14.    Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Bonds hereunder as set forth in the section of the Memorandum titled “Executive Summary — The offering and use of proceeds.”  No part of the proceeds from the sale of the Bonds hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 2% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 2% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

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Section 5.15.    Existing Indebtedness.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of each individual item of outstanding Indebtedness of the Company and its Subsidiaries that exceeds $5,000,000 (or in the case of Contingent Obligations, such Contingent Obligations guaranteeing or otherwise in respect of obligations that exceed $5,000,000 described in the definition of “Indebtedness”) as of September 30, 2015 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranties thereof), since which date there has been no Material change, (other than with respect to the outstanding Indebtedness related to (i) the Credit Agreement, (ii) intercompany loans and (iii) the termination amount of hedges, which changes, in the case of the foregoing clauses (i), (ii) and (iii), are permitted under the Credit Agreement as of the date of this Agreement, could not reasonably be expected to have a Material Adverse Effect, and would be permitted under the Financing Agreements if the Bonds had been issued as of the date hereof) in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary the outstanding principal amount of which exceeds $5,000,000 that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
(b)    Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as disclosed in Schedule 5.15.
Section 5.16.    Foreign Assets Control Regulations, Etc.  (a) Neither the Company nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”).  Neither  the  Company  nor  any  Controlled  Entity  has  been  notified  that  its  name 

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appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.
(b)    No part of the proceeds from the sale of the Bonds hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (ii) otherwise in violation of U.S. Economic Sanctions.
(c)    Neither the Company nor any Controlled Entity (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist‐related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti‐Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the Company’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti‐Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties under any Anti‐Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti‐Money Laundering Laws. The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti‐Money Laundering Laws and U.S. Economic Sanctions.
(d)    (i) Neither the Company nor any Controlled Entity (A) has been charged with, or convicted of bribery or any other anti‐corruption related activity under any applicable law or regulation in a U.S. or any non‐U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti‐Corruption Laws”); (B) to the Company’s actual knowledge after making due inquiry, is under investigation by any U.S. or non‐U.S. Governmental Authority for possible violation of Anti‐Corruption Laws; (C) has been assessed civil or criminal penalties under any Anti‐Corruption Laws; or (D) has been or is the target of sanctions imposed by the United Nations or the European Union;
(ii)    To the Company’s actual knowledge after making due inquiry, neither the Company nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (A) influencing any act, decision or failure to act by such Government Official in his or her official capacity or such commercial counterparty; (B) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty; or (C) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and

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(iii)    No part of the proceeds from the sale of the Bonds hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage.  The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti‐Corruption Laws.
Section 5.17.    Status under Certain Statutes.  Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18.    Lien of Indenture.  The Indenture (and, for avoidance of doubt, including the Supplement when executed and delivered by the parties thereto and filed in the Filing Office) constitutes a direct and valid Lien upon the Mortgaged Property, subject only to the exceptions referred to in the Indenture and Permitted Liens, and will create a similar Lien upon all properties and assets acquired by the Company after the date hereof which are required to be subjected to the Lien of the Indenture, when acquired by the Company, subject only to the exceptions referred to in the Indenture and Permitted Liens, and subject, further, as to real property interests, any requirement to the recordation of a supplement to the Indenture describing such after-acquired property or any requirement to file a notice relating to such after-acquired property; the descriptions of all such properties and assets contained in the granting clauses of the Indenture are correct and adequate for the purposes of the Indenture; the Indenture has been duly recorded as a “utility security instrument” under and as defined in the Utility Security Instrument Act, and any required filings with respect to personal property and fixtures subject to the Lien of the Indenture have been duly made in each place in which such recording or filing is required to protect, preserve and perfect the Lien of the Indenture; and all taxes and recording and filing fees required to be paid with respect to the execution, recording or filing of the Indenture, the filing of financing statements related thereto and similar documents and the issuance of the Bonds have been paid. 
		
	SECTION 6.
	REPRESENTATIONS OF THE PURCHASERS.

Section 6.1.    Purchase for Investment.  Each Purchaser severally represents that (a) it is purchasing the Bonds for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control and (b) it is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act).  Each Purchaser understands that the Bonds have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available (or under circumstances where the law does not require registration or exemption thereto) and that the Company is not required to register the Bonds.

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Section 6.2.    Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Bonds to be purchased by such Purchaser hereunder:
(a)    the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95‐60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95‐60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(b)    the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c)    the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90‐1 or (ii) a bank collective investment fund, within the meaning of the PTE 91‐38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(d)    the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84‐14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate 

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(within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);or
(e)    the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96‐23 (the “INHAM Exemption”)) managed by an “in‐house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
(f)    the Source is a governmental plan; or
(g)    the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
(h)    the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.
		
	SECTION 7.
	INFORMATION AS TO COMPANY.

Section 7.1.    Visitation.  The Company shall permit the representatives of each Purchaser and each holder of a Bond that is an Institutional Investor:
(a)    No Default — if no Event of Default or Bond Repurchase Event then exists, at the expense of such Purchaser or such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and
(b)    Default — if an Event of Default or Bond Repurchase Event then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to

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discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.
		
	SECTION 8.
	COVENANTS.    

From the date of this Agreement until the Closing and thereafter, so long as any of the Bonds are outstanding, the Company covenants that:
Section 8.1.    Compliance with Laws.  The Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non‐compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section  8.2.    Books and Records.  The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be.  The Company will, and will cause each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets.  The Company and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue to maintain such system.
Section 8.3.    Transactions with Affiliates.  The Company will not, and will not permit any Subsidiary to, enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s‐length transaction with a Person not an Affiliate.

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Section 8.4.    Line of Business.  The Company will not, and will not permit any Subsidiary to, engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Memorandum.
		
	SECTION 9.
	REMEDIES ON DEFAULT.    

If the event of a breach or violation hereof has occurred and is continuing, the holders of the Bonds may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, or for an injunction against a violation of any of the terms hereof and thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
		
	SECTION 10.
	EXPENSES, ETC.

Section 10.1.    Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Bond in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, any other Financing Agreement (whether or not such amendment, waiver or consent becomes effective), including, without limitation:  (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, any other Financing Agreement or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any other Financing Agreement, or by reason of being a holder of any Bond, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work‐out or restructuring of the transactions contemplated hereby and by the Bonds and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided that such costs and expenses under this clause (c) shall not exceed $3,500 for each series.  The Company will pay, and will save each Purchaser and each other holder of a Bond harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Bonds) and (ii) any and all wire transfer fees that any bank deducts from any payment under such Bond to such holder or otherwise charges to a holder of a Bond with respect to a payment under such Bond.
Section 10.2.    Survival    .  The obligations of the Company under this Section 10 will survive the payment or transfer of any Bond, the enforcement, amendment or waiver of any provision of this Agreement, any other Financing Agreement, and the termination of this Agreement or any other Financing Agreement.

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	SECTION 11.
	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Bonds, the purchase or transfer by any Purchaser of any Bond or portion thereof or interest therein and the payment of any Bond, and may be relied upon by any subsequent holder of a Bond, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Bond.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement and the Bonds embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.
		
	SECTION 12.
	AMENDMENT AND WAIVER.  

Section 12.1.    Requirements    .  This Agreement may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 16 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing.
Section 12.2.    Solicitation of Holders of Bonds.
(a)    Solicitation.  The Company will provide each Purchaser and holder of a Bond with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser and holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Bonds.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 12 to each Purchaser and each holder of a Bond promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of Bonds.
(b)    Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any Purchaser or holder of a Bond as consideration for or as an inducement to the entering into by such Purchaser or holder of any waiver or amendment of any of the terms and provisions hereof or any Bond unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each Purchaser and each holder of a Bond, even if such Purchaser or holder did not consent to such waiver or amendment.
Section 12.3.    Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 12 or any other Financing Agreement, applies equally to all Purchasers and holders of Bonds and is binding upon them and upon each future holder of any Bond and upon the Company without regard to whether such Bond has been marked to indicate such amendment or waiver.   No  such  amendment  or  waiver  will  extend  to  or  affect  any  obligation,  covenant,

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agreement, Event of Default or Bond Repurchase Event not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any Purchaser or holder of a Bond and no delay in exercising any rights hereunder or under any other Financing Agreement shall operate as a waiver of any rights of any Purchaser or holder of such Bond.
Section 12.4.    Bonds Held by Company, Etc    .  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Bonds then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any other Financing Agreement, or have directed the taking of any action provided herein or in any other Financing Agreement to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Bonds then outstanding, Bonds directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.
		
	SECTION 13.
	REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Bonds themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 13 shall not prohibit the Company or any other holder of Bonds from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
		
	SECTION 14.
	CONFIDENTIAL INFORMATION.

For the purposes of this Section 14, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser, as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser, any Person acting on such Purchaser’s behalf, or any Person from whom such disclosure would, to the knowledge of such Purchaser, violate a duty of confidentiality to the Company or any Subsidiary, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company, any Subsidiary or any Person from  whom  such  disclosure  would,  to  the  knowledge  of  such Purchaser, violate a duty of

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confidentiality to the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Bonds); (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 14; (iii) any other holder of any Bond; (iv) any Institutional Investor to which it sells or offers to sell such Bond or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 14); (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 14); (vi) any federal or state regulatory authority having jurisdiction over such Purchaser; (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio; or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser; (x) in response to any subpoena or other legal process (y) in connection with any litigation to which such Purchaser is a party; or (z) if an Event of Default or Bond Repurchase Event has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Bonds, this Agreement or any other Financing Agreement.  Each holder of a Bond, by its acceptance of a Bond, will be deemed to have agreed to be bound by and to be entitled to, the benefits of this Section 14 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Bond of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 14.
In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Bond is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 14, this Section 14 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 14 shall supersede any such other confidentiality undertaking.
		
	SECTION 15.
	SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the purchaser  of  the  Bonds  that  it  has  agreed  to  purchase  hereunder,  by  written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall 

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contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 15), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Bonds then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 15), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Bonds under this Agreement.
		
	SECTION 16.
	MISCELLANEOUS.

Section 16.1.    Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Bond) whether so expressed or not.
Section 16.2.    Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 16.3.    Construction, Etc.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
Section 16.4.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.
Section 16.5.    Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‐of‐law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
Section 16.6.    Jurisdiction and Process; Waiver of Jury Trial.  (a) The Company irrevocably submits to the non‐exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, in the City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Bonds.   To  the  fullest  extent  permitted  by

‐20‐

applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
(b)    The Company consents to process being served by or on behalf of any holder of Bonds in any suit, action or proceeding of the nature referred to in Section 16.6(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in section 2.08 of the Supplement or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(c)    Nothing in this Section 16.6 shall affect the right of any holder of a Bond to serve process in any manner permitted by law, or limit any right that the holders of any of the Bonds may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d)    THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE BONDS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.
Section 16.7.    Notices.  All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:
(i)    if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,
(ii)    if to any other holder of any Bond, to such holder at such address as such other holder shall have specified to the Company in writing, or
(iii)    if to the Company, to the Company at 414 Silver Ave. SW, Albuquerque, New Mexico 87102-3289, to the attention of Vice President and Treasurer, or at such other address as the Company shall have specified to the holder of each Bond in writing.

‐21‐

Notices under this Section 16.7 will be deemed given only when actually received.
*    *    *    *    *

‐22‐

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

Very truly yours,

TEXAS-NEW MEXICO POWER COMPANY

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

‐23‐

This Agreement is hereby
accepted and agreed to as 
of the date hereof.

THE LINCOLN LIFE INSURANCE  
COMPANY

		
	By:
	Delaware Investment Advisers, a series of Delaware Management Business Trust, Attorney in Fact

		
	By:
	/s/ Karl H. Spaeth    

Name:    Karl H. Spaeth 
Title:    Vice President

‐24‐

This Agreement is hereby
accepted and agreed to as 
of the date hereof.

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

		
	By:
	Northwestern Mutual Investment Management Company, LLC, its investment adviser

		
	By:
	/s/ Howard Stern    

Name:    Howard Stern 
Title:    Managing Director

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY FOR ITS GROUP ANNUITY SEPARATE ACCOUNT

		
	By:
	/s/ Howard Stern    

Name:    Howard Stern 
Title:    Authorized Representative

‐25‐

This Agreement is hereby
accepted and agreed to as 
of the date hereof.

UNITED OF OMAHA LIFE INSURANCE COMPANY

		
	By:
	/s/ Lee R. Martin    

Name:    Lee R. Martin 
Title:    Vice President

‐26‐

This Agreement is hereby
accepted and agreed to as 
of the date hereof.

AMERICAN UNITED LIFE INSURANCE COMPANY

		
	By:
	/s/ David M. Weisenburger    

Name:    David M. Weisenburger 
Title:    V.P., Fixed Income Securities

‐27‐

DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.
“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Anti‐Corruption Laws” is defined in Section 5.16(d)(1).
“Anti‐Money Laundering Laws” is defined in Section 5.16(c).
“Blocked Person” is defined in Section 5.16(a).
“Bond Repurchase Event” is defined in section 2.07 of the Supplement.
“Bonds” is defined in Section 1.
“Business Day” means for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Houston, Texas are required or authorized to be closed.
“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.
“CISADA” means the Comprehensive Iran Sanctions, Accountability and Divestment Act.
“Closing” is defined in Section 3.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

SCHEDULE A 
(to Bond Purchase Agreement)

“Company” means Texas New-Mexico Power Company, a Texas corporation or any successor that becomes such in the manner prescribed in the Indenture.
“Confidential Information” is defined in Section 14.
“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 or 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 against loss or failure or inability to perform in respect thereof; provided, however, that, with respect to the Company 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).
“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Disclosure Documents” is defined in Section 5.3.
“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 
“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.

A‐2

“ERISA Event” means, with respect to the Company: (a) a Reportable Event with respect to a Plan or a Multiemployer Plan, (b) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan, or the receipt by the Company 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 Company 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 Company 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 Company or any ERISA Affiliate to enforce section 515 of ERISA, which is not dismissed within thirty (30) days, (f) the imposition upon the Company 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 Company 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 Company 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 Company or any ERISA Affiliate may be directly or indirectly liable, (i) the granting of a security interest in connection with the amendment of a Plan, or (j) the withdrawal of the Company or any ERISA Affiliate from a Multiple Employer Plan during a plan 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.
“Event of Default” is defined in the Indenture.
“Filing Office” means the Office of the Secretary of State of the State of Texas.
“Financing Agreements” means this Agreement, the Indenture (including without limitation, the Supplement) and the Bonds.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America, and, notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Company or any Subsidiary at “fair value”, as defined therein.  

A‐3

“Governmental Authority” means
(a)    the government of
(i)    the United States of America or any state or other political subdivision thereof, or
(ii)    any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or
(b)    any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
“Governmental Official” means any governmental official or employee, employee of any government‐owned or government‐controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:
(a)    to purchase such indebtedness or obligation or any property constituting security therefor;
(b)    to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;
(c)    to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or
(d)    otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.
“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required 

A‐4

or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.
“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 Company to its jurisdictional and wholesale customers in the ordinary course of business).
“holder” means, with respect to any Bond, the Person in whose name such Bond is registered in the register maintained by the Company pursuant to section 3.05 of the Indenture, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 15.2 and 16 and any related definitions in this Schedule A, “holder” shall mean the beneficial owner of such Bond whose name and address appears in such register.
“INHAM Exemption” is defined in Section 6.2(e).
“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’ acceptance (in each case, whether or not drawn or matured and in the stated amount thereof); (d) all obligations of such Person to pay for 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 Specified Securities; and (l) all indebtedness referred to in clauses (a) through (k) 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.

A‐5

“Institutional Investor” means (a) any Purchaser of a Bond, (b) any holder of a Bond holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Bonds then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Bond.
“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or capital lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement and the Bonds, or (c) the validity or enforceability of this Agreement or any other Financing Agreement.
“Memorandum” is defined in Section 5.3.
“Mortgaged Property” is defined in the Indenture.
“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
“Multiple Employer Plan” means, with respect to the Company, a Single Employer Plan to which the Company or any ERISA Affiliate and at least one employer other than the Company or any ERISA Affiliate are contributing sponsors.
“NAIC” means the National Association of Insurance Commissioners or any successor thereto.
“OFAC” is defined in Section 5.16(a).
“OFAC Listed Person” is defined in Section 5.16(a).
“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource‐center/sanctions/Programs/Pages/Programs.aspx.
“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

A‐6

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
“Permitted Liens” is defined in the Indenture.
“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.
“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.
“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
“PTE” is defined in Section 6.2(a).
“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.
“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns, provided, however, that any Purchaser of a Bond that ceases to be the registered holder or a beneficial owner (through a nominee) of such Bond as the result of a transfer thereof pursuant to the Indenture shall cease to be included within the meaning of “Purchaser” of such Bond for the purposes of this Agreement upon such transfer.
“QPAM Exemption” is defined in Section 6.2(d).
“Related Fund” means, with respect to any holder of any Bond, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.
“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.

A‐7

“Required Holders” means at any time (i) prior to the Closing, the Purchasers and (ii) on or after the Closing, the holders of more than 50% in principal amount of the Bonds at the time outstanding (exclusive of Bonds then owned by the Company or any of its Affiliates).
“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.
“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act. 
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Company.
“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.
“Source” is defined in Section 6.2.
“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” and “Subsidiaries” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Any reference to a Subsidiary of the Company herein shall not include a Subsidiary that is inactive, has minimal or no assets and does not generate revenues.  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
“Substitute Purchaser” is defined in Section 15.

A‐8

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.
“USA PATRIOT Act” means United States Public Law 107‐56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“U.S. Economic Sanctions” is defined in Section 5.16(a).
“Utility Security Instrument Act” means Title 8, Chapter 261 of the Texas Business & Commerce Code.

A‐9

OPINIONS OF VARIOUS COUNSEL 
TO THE COMPANY

[Such opinions to be provided subject to assumptions, qualifications, limitations and exclusions reasonably acceptable to Purchasers and their special counsel]

OPINIONS REQUESTED OF MCGUIREWOODS LLP
1.    Execution and Delivery.  Each of the Bond Purchase Agreement, the Indenture, the Seventh Supplemental Indenture and the Bonds has been duly authorized, executed and delivered by the Company. 
2.    Validity and Enforceability.  Each of the Bond Purchase Agreement, the Indenture, the Seventh Supplemental Indenture and the Bonds constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
3.    Noncontravention.  Neither the execution and delivery by the Company of any Subject Document to which it is a party, nor the performance by the Company of its obligations thereunder: (a) violates any statute or regulation of Applicable Law that, in each case, is applicable to the Company; (b) violates any provision of the Organizational Documents of the Company; or (c) violates, results in any breach of any of the terms of, or constitutes a default under, any Reviewed Document.
4.    Governmental Approvals.  No consent, approval or authorization of, filing with, or order of any federal or New York court or governmental agency or body, is required for (a) the issuance and sale of the Bonds, or (b) the execution and delivery of the Subject Documents, except in each case as have previously been made or obtained or except such as may be required under the blue sky laws of any jurisdiction (as to which we express no opinion).
5.    Proceedings.  To our knowledge, there is no outstanding judgment, action, suit or proceeding pending against the Company before any court, governmental agency or arbitrator which challenges the validity of any Subject Document to which the Company is a party.  
6.    Investment Company Act.  The Company is not required to be registered under the Investment Company Act of 1940, as amended.
7.    Registration.  No registration under the Securities Act of 1933, as amended, of the Bonds and no qualification of the Indenture or the Seventh Supplemental Indenture under the Trust Indenture Act of 1939, as amended, is required for the offer and sale of the Bonds in the manner contemplated by the Bond Purchase Agreement, the Indenture and the Seventh Supplemental Indenture, it being understood that no opinion is expressed as to any subsequent resale of any Bonds.
OPINIONS REQUESTED OF JACKSON WALKER, L.L.P.

(a)The Base Indenture and the Supplemental Indentures have each been received for  filing in the State Filing Office, and the Notices have been received for recording by the County  Filing  Offices,  which  State  Filing  Office  and  County  Filing  Offices  constitute

SCHEDULE 4.4(a) 
(to Bond Purchase Agreement)

each jurisdiction in which the Base Indenture, the Supplemental Indentures and the Notices, respectively, are required to be filed or recorded, and such receipt for filing or recording makes effective the Lien intended to be created by the Indenture.

(b)The Bonds, when issued, authenticated and delivered in the manner provided for in the Indenture, will be entitled to the benefit of the Lien of the Indenture equally and ratably with all other Securities then Outstanding.

(c)The Indenture constitutes a Lien on the Designated Property Additions, and, based solely upon the Lien Search, the Designated Property Additions are subject to no Lien prior to the Lien of the Indenture except Permitted Liens.

OPINIONS REQUESTED OF IN-HOUSE LEGAL COUNSEL TO THE COMPANY, SCOTT SEAMSTER, ESQ.
1.     The Company is a corporation validly existing and in good standing under the laws of the State of Texas.  The Company has the corporate power and authority to own its properties and conduct its business as described in the Memorandum.  The Company is duly qualified to do business as a foreign corporation and in good standing under the laws of each jurisdiction which requires such qualification, other than in those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

2.    The Company has the corporate power to issue and sell the 2016A Bonds, execute, deliver and perform its obligations under the Agreement, the Indenture and the 2016A Bonds, and the Company has taken all necessary corporate action to authorize the issuance and sale of the 2016A Bonds and the execution, delivery and performance by it of the Agreement, Indenture and the 2016A Bonds.

3.    Each of the Base Indenture, the Agreement and the Seventh Supplemental Indenture has been duly authorized, executed and delivered by the Company.  The 2016A Bonds have been duly authorized and executed by the Company.

4.    Neither the execution and delivery by the Company of the Agreement, the  Indenture and the 2016A Bonds, nor the performance by the Company of its obligations thereunder: (a) violates any applicable law or regulation of the State of Texas that. in each case, is applicable to the Company; (b) violates any provision of the articles of incorporation or bylaws of the Company; or (c) violates, results in any breach of any of the terms of, or constitutes a default under any indenture, credit agreement, mortgage, or deed of trust, or any other material contract, agreement or instrument to which the Company is a party or by which the Company or its properties may be bound (each a “Company Agreement”). 

5.    No consent, approval or authorization, filing with or order of any Texas governmental agency, or Texas court, is required to be obtained by the Company for the issuance and sale of the 2016A Bonds.

4.4(a)-2

6.    To my knowledge, there is no outstanding judgment, action, suit or proceeding pending against the Company before any court, governmental agency or arbitrator which challenges the validity of the Agreement, the Indenture or the 2016A Bonds.

4.4(a)-3

FORM OF OPINION OF SPECIAL COUNSEL 
TO THE PURCHASERS
[To Be Provided on a Case by Case Basis]

SCHEDULE 4.4(b) 
(to Bond Purchase Agreement)

DISCLOSURE MATERIALS
TEXAS‐NEW MEXICO POWER COMPANY

	
		
	IntraLinks Items:
	Document Title

	TNMP Cover Letter
	TNMP Cover Letter 11.2.15.pdf

	TNMP Bond Purchase Agreement
	TNMP Bond Purchase Agreement.pdf (Draft of 10/30/15)

	TNMP Bond Purchase Agreement - Redline
	TNMP Bond Purchase Agreement_Redline.pdf (redlined to 12/9/13 BPA)

	TNMP First Mortgage Indenture
	TNMP First Indenture 3-23-09.pdf

	TNMP Historical Supplemental
	TNMP First Supplemental Indenture 3.23.09.pdf

	TNMP Historical Supplemental
	TNMP Second Supplemental Indenture 3.25.09.pdf

	TNMP Historical Supplemental
	TNMP Third Supplemental Indenture 4.30.09.pdf

	TNMP Historical Supplemental
	TNMP First Amendment to Third Supplemental Indenture

	TNMP Historical Supplemental
	TNMP Fourth Supplemental Indenture 09.30.11.pdf

	TNMP Historical Supplemental
	TNMP Fifth Supplemental Indenture 04.03.13.pdf

	TNMP Historical Supplemental
	TNMP Sixth Supplemental Indenture 06.27.15.pdf

	TNMP Supplemental Indenture
TNMP Supplemental Indenture- 
-Redline
	TNMP Seventh Supplemental Indenture Draft 10.30.15.pdf
TNMP Seventh Supplemental Indenture_Redline.pdf (redlined to Sixth Supplemental Indenture

	Private Placement Memorandum
	 

	Earnings Press Release
	PNM_Q3_2015_Earnings_Press_Release.pdf

	TNMP Investor Call Presentation
	TNMP Investor Presentation November 2015 PNM FINAL.pdf

	Moody’s Ratings Report
S&P Ratings Report
	TNMP Moody’s Credit Opinion 06.23.15.pdf
TNMP S&P Summary 04.08.15.pdf

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	Financial Statements Listed in Schedule 5.5

	SEC Filings: TNMP’s Annual Reports on Form 10-K for the years ended December 31, 2011‐2014; Quarterly Reports on Form 10‐Q for March 31, 2015, June 30, 2015 and September 30, 2015; and all available on the following link:
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000022767&owner=exclude&count=40&hidefilings=0

SCHEDULE 5.3
(to Bond Purchase Agreement)

Organization and Ownership of Shares of Subsidiaries; Affiliates
As of December 17, 2015

		
	i)
	The Company’s Subsidiaries (as defined):

None

		
	ii)
	The Company’s Affiliates1, other than Subsidiaries:

		
	a)
	PNM Resources, Inc.

		
	b)
	TNP Enterprises, Inc.

		
	c)
	Public Service Company of New Mexico

		
	d)
	PNMR Services Company

		
	iii)
	The Company’s Directors and Officers:

		
	a)
	Directors:

Patricia K. Collawn, Chairman
Ronald N. Darnell, Director
Charles N. Eldred, Director
Ronald E. Talbot, Director
James N. Walker, Director

		
	b)
	Officers:

Patrick V. Apodaca, Senior Vice President, General Counsel and Secretary
Patricia K. Collawn, Chief Executive Officer
Elisabeth A. Eden, Vice President and Treasurer
Charles N. Eldred, Executive Vice President and Chief Financial Officer
Keith C. Nix, Vice President, Engineering and Technical Services
Evans Spanos, Vice President, Operations
Ronald E. Talbot, Senior Vice President and Chief Operating Officer
Joseph D. Tarry, Vice President and Controller
James N. Walker, President
Stacey R. Whitehurst, Vice President, Regulatory Affairs

__________________________
1 List does not include inactive Affiliates.

SCHEDULE 5.4
(to Bond Purchase Agreement)

Financial Statements Of Texas-New Mexico Power Company
contained in the following SEC Filings:

	
			
	Date Filed
	SEC Filings
	Description

	10/30/2015
	10-Q
	Quarterly Report for quarter ended 9/30/15

	7/31/2015
	10-Q
	Quarterly Report for quarter ended 6/30/15

	5/1/2015
	10-Q
	Quarterly Report for quarter ended 3/31/15

	2/27/2015
	10-K
	Annual Report for year ended 12/31/14

	2/28/2014
	10-K
	Annual Report for year ended 12/31/13

	3/1/2013
	10-K
	Annual Report for year ended 12/31/12

	2/29/2012
	10-K
	Annual Report for year ended 12/31/11

Available on the following link:

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000022767&owner=exclude&count=40&hidefilings=0

SCHEDULE 5.5
(to Bond Purchase Agreement)

EXISTING INDEBTEDNESS OF TEXAS‐NEW MEXICO POWER COMPANY
AS OF 9/30/2015

Long‐term Debt

	
						
	Description
	Date of Note
	Maturity Date
	Interest Rate
	OUTSTANDING PRINCIPAL 
($ IN MILLIONS)
	Collateral

	Taxable First Mortgage Bonds Series 2009A (CUSIP # 882587AY4)
	5/23/2009
	4/1/2019
	9.50%
	$172.3
	Mortgaged Property

	Taxable First Mortgage Bonds Series 2013A (CUSIP # 882587AZ1)
	4/3/2013
	4/1/2043
	6.95%
	$93.2
	Mortgaged Property

	Taxable First Mortgage Bonds Series 2014A  (ID:EK3951234)
	6/27/2014
	7/1/2024
	4.03%
	$80.0
	First Mortgage Bond

	 
	 
	 
	 
	_________
	 

	TNMP Total Long‐term Debt
	 
	 
	 
	$345.5
	 

Short‐term Debt

	
						
	Description
	Date of Note
	Maturity Date
	Interest Rate*
	OUTSTANDING PRINCIPAL* 
($ IN MILLIONS)
	Collateral

	TNMP $75 million Revolver* 
Lenders: Key Bank; JPMorgan; Union Bank; Sun Trust; Wells Fargo 
	9/18/2013
	9/18/2018
	1.193%
	$0
	First Mortgage Bond Series 2009C

	TNMP $50 million Intercompany Loan Agreement dated 2/1/2007
Lender: PNM Resources, Inc. (parent)
	9/30/2015 (renewed yearly)
	Renewed yearly as appropriate
	1.05%
	$48.5
	None

	

TNMP Total Short‐term Debt
	 
	 
	 
	$48.5
	 

____________________________
* Based on 30 day LIBOR of 0.193% as of 9/30/2015 and amounts outstanding as of 9/30/2015

SCHEDULE 5.15
(to Bond Purchase Agreement)

TEXAS-NEW MEXICO POWER COMPANY 
414 Silver Ave. SW 
Albuquerque, New Mexico  87102-3289 
 
INFORMATION RELATING TO PURCHASERS
	
		
	NAME AND ADDRESS OF PURCHASER
	PRINCIPAL ACOUNT OF BONDS TO BE PURCHASED

	THE LINCOLN NATIONAL LIFE INSURANCE COMPANY 
c/o Delaware Investment Advisers 
2005 Market Street, Mail Stop 41-104 
Philadelphia, PA  19103 
Email:  delawareprivateplacements@delinvest.com
	$12,000,000
$8,000,000
$5,000,000

_____________________________________________________________________________________

REGISTER SECURITIES IN THE NAME OF:  THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
(Note:  a separate security will be needed for each breakdown listed below)
-------------------------------------------------------------------------------------------------------------------------------

SECURITY:   Texas New Mexico Power Co 3.53% FMB due 2/10/26

BOND
AMOUNT        LINCOLN ACCOUNT NAME                     BANK CUSTODY ACCT #
 12,000,000        The Lincoln National Life Ins Co – Seg 65            215732
   8,000,000        The Lincoln National Life Ins Co – Seg 76            215736
   5,000,000        The Lincoln National Life Ins Co – Seg 201            186228

TAX ID for THE LINCOLN NATIONAL LIFE INSURANCE COMPANY:   35-0472300

SIGNATURE BLOCK:      THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By:  Delaware Investment Advisers,
a series of Delaware Management Business Trust,  Attorney in Fact

PRINCIPAL & INTEREST PAYMENTS:      
The Bank of New York Mellon
  (via Fed Wire)        One Wall Street, New York, NY  10286
ABA #:  021000018
BENEFICIARY/Account #:  GLA 111566
Acct Name:  The Bank of New York Mellon Private Placement Income Collection
Bank to Bank Information Ref:  insert Custody Account# listed above;  
PPN #/Sec Desc/ P&I Details 
Reference Registered Holder:  The Lincoln National Life Insurance Company

SCHEDULE B
(to Bond Purchase Agreement)

INVESTMENT ADVISER ADDRESS     TREASURY OPERATIONS        BANK ADDRESS
--ALL COMMUNICATIONS:        --NOTICE OF PAYMENT ONLY:     --NOTICE OF PAYMENT ONLY:

Delaware Investment Advisers        Lincoln Financial Group        The Bank of New York Mellon
2005 Market Street, Mail Stop 41-104    1300 South Clinton St.              P. O. Box 392003
Philadelphia, PA 19103            Fort Wayne, IN  46802            Pittsburgh, PA  15251-9003
Attn:  Fixed Income Private Placements    Attn:  Inv Acctg–Treasury Operations    Attn:  Private Placement P & I Dept
Private Placement Fax:  215-255-1654    Email: securities_data_rese@lfg.com    Ref:  Registered Holder/Sec Desc/PPN#
Email: delawareprivateplacements@delinvest.com        Email: ppservicing@bnymellon.com

FORWARD SECURITIES TO:    The Depository Trust Company
(via Express Delivery)        570 Washington Blvd – 5th Floor
Jersey City, New Jersey 07310
ATTENTION:  BNY MELLON/BRANCH DEPOSIT DEPARTMENT
(in cover letter reference Bond amt, acct name, and bank custody account #)

Please fax copy of cover letter to:  Karen Costa – The Bank of New York Mellon
Fax #:  1-844-601-7769

B-2

	
		
	NAME AND ADDRESS OF PURCHASER
	PRINCIPAL AMOUNT OF BONDS TO BE PURCHASED

	THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY 
720 East Wisconsin Avenue 
Milwaukee, WI  53202 
Attention:  Securities Department 
E-Mail:  privateinvest@northwesternmutual.com 

	$24,500,000

	I.   All payments on account of Bonds held by such Purchaser shall be made by wire transfer of immediately available funds, providing sufficient information to identify the source of the transfer, the amount of the dividend and/or redemption (as applicable) and the identity of the security as to which payment is being made.

Please contact our Treasury & Investment Operations Department to securely obtain wire transfer instructions for The Northwestern Mutual Life Insurance Company.

E-mail:  payments@northwesternmutual.com
Phone: (414) 665-1679

	II.   All notices with respect to confirmation of payments on account of the Bonds shall be delivered or mailed to:

The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Investment Operations
E-mail: payments@northwesternmutual.com
Phone: (414) 665-1679

	III.   All other communications shall be delivered or mailed to:

The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Securities Department
E-mail: privateinvest@northwesternmutual.com

	 

B-3

	
		
	IV.   Address for delivery of Bonds and Closing Documents:

The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention:  Ryan Heinemann

	V.       If posted to Intralinks or another document repository/hosted website to:
          Email:  preautodownload@northwesternmutual.com

	 VI.   Tax Identification No.: 39-0509570

B-4

	
		
	NAME AND ADDRESS OF PURCHASER
	PRINCIPAL AMOUNT OF BONDS TO BE PURCHASED

	THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY FOR ITS GROUP ANNUITY SEPARATE ACCOUNT 
720 East Wisconsin Avenue 
Milwaukee, WI  53202 
Attention:  Securities Department 
E-Mail:  privateinvest@northwesternmutual.com 

	$500,000

	I.   All payments on account of Bonds held by such Purchaser shall be made by wire transfer of immediately available funds, providing sufficient information to identify the source of the transfer, the amount of the dividend and/or redemption (as applicable) and the identity of the security as to which payment is being made.

Please contact our Treasury & Investment Operations Department to securely obtain wire transfer instructions for The Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account.

E-mail:  payments@northwesternmutual.com
Phone: (414) 665-1679

	II.   All notices with respect to confirmation of payments on account of the Bonds shall be delivered or mailed to:

The Northwestern Mutual Life Insurance Company
for its Group Annuity Separate Account
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Investment Operations
E-mail: payments@northwesternmutual.com
Phone: (414) 665-1679

	III.   All other communications shall be delivered or mailed to:

The Northwestern Mutual Life Insurance Company
for its Group Annuity Separate Account
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Securities Department
E-mail: privateinvest@northwesternmutual.com

B-5

	
		
	IV.   Address for delivery of Bonds:

The Northwestern Mutual Life Insurance Company
for its Group Annuity Separate Account
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention:  Ryan Heinemann

	V.    If posted to Intralinks or another document repository/hosted website to:
       Email:  preautodownload@northwesternmutual.com

	 VI.  Tax Identification No.: 39-0509570

B-6

	
		
	NAME AND ADDRESS OF PURCHASER
	PRINCIPAL AMOUNT OF BONDS TO BE PURCHASED

	UNITED OF OMAHA LIFE INSURANCE COMPANY 
Mutual of Omaha Plaza 
4 - Investment Management 
Omaha, NE  68175-1011 
privateplacements@mutualofomaha.com 

	$5,000,000

1.    Bonds to be registered in the name of 
UNITED OF OMAHA LIFE INSURANCE COMPANY

2.    Tax I.D. # is 47-0322111.

3.    All principal and interest payments on the Bonds shall be made by wire transfer of 
immediately available funds to:

JPMorgan Chase Bank
ABA #021000021
Private Income Processing

For credit to:
United of Omaha Life Insurance Company
Account # 900-9000200
a/c:  G07097
Cusip/PPN: 882884 A@8
Interest Amount:  ______________
Principal Amount:  ______________

4.    Address for delivery of bonds:

JPMorgan Chase Bank
4 Chase Metrotech Center, 3rd Floor
Brooklyn, NY  11245-0001
Attention:  Physical Receive Department 
Account # G07097

**It is imperative that the custody account be included on the delivery letter.  Without this information, the security will be returned to the sender.

5.    Address for all notices in respect of payment of Principal and Interest, Corporate Actions, and Reorganization Notifications:

B-7

JPMorgan Chase Bank
14201 Dallas Parkway - 13th Floor
Dallas, TX  75254-2917
Attn:  Income Processing 
a/c:  G07097

6.     Address for all other communications (i.e.: Quarterly/Annual reports, Tax filings, Modifications, Waivers regarding the indenture):

4 - Investment Management
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha,  NE  68175-1011

Email Address for Electronic Document Transmission: privateplacements@mutualofomaha.com

B-8

	
		
	NAME AND ADDRESS OF PURCHASER
	PRINCIPAL AMOUNT OF BONDS TO BE PURCHASED

	AMERICAN UNITED LIFE INSURANCE COMPANY 
One American Square, Suite 305W 
Post Office Box 368 
Indianapolis, IN  46206 
mike.bullock@oneamerica.com
	$5,000,000

Purchaser:    American United Life Insurance Company

Issuer:        Texas-New Mexico Power Company 

Issues:        Senior Bonds Due 2026

Closing:    02/10/2016   

Issue:        3.53%

Amount:    $5,000,000.00

We will not send a representative to the closing.

The original Bond should be sent to:

Bank of New York
One Wall Street, 3rd Floor 
New York, NY 10286
Re:  American United Life Insurance Company, Account # 186683
Attn:  Anthony Saviano/Window A
cc:  Michele Morris/NYC Physical Desk on all correspondence

Please send all POST-CLOSING documentation to:

American United Life Insurance Company
Attn:  Mike Bullock, Securities Department
One American Square, Suite 305W
Post Office Box 368
Indianapolis, IN 46206

		
	Payment:
	Texas New Mexico Power shall make payment of principal and interest on the Bond(s) in immediately available funds by wire transfer to the following bank account:

AMERICAN UNITED LIFE INSURANCE COMPANY

B-9

Bank of New York
ABA #: 021000018
Credit Account:  GLA111566
Account Name: American United Life Insurance Company
Account #:  186683
P & I Breakdown:  [______]
Re:  PPN 882884 A@8; Texas New Mexico Power

Payments should contain sufficient information to identify the breakdown of principal and interest and should identify the full description of the Bond(s) and the payment date.

The United States Tax I.D. Number of American United Life Insurance Company is 35-0145825.

B-10

FORM OF SEVENTH SUPPLEMENTAL INDENTURE 
 
[SEE ATTACHED]

SCHEDULE C
(to Bond Purchase Agreement)

  

___________________________________________________________________________
___________________________________________________________________________

TEXAS-NEW MEXICO POWER COMPANY

to

MUFG UNION BANK, N.A.,
as Trustee

_______________________________________

SEVENTH SUPPLEMENTAL INDENTURE
dated as of February 10, 2016

Supplemental to the First Mortgage Indenture
dated as of March 23, 2009
(file no.:  09-0007931211)

Establishing a series of Securities designated

3.53% FIRST MORTGAGE BONDS, DUE 2026, SERIES 2016A 

___________________________________________________________________________
___________________________________________________________________________

THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS
4839-9894-9160v8

C-1

  

Address of Debtor:
Texas-New Mexico Power Company
Attention: Vice President and Treasurer
414 Silver Ave. SW, MS 0905 
Albuquerque, New Mexico 87102-3289

Address of Secured Party:
MUFG Union Bank, N.A., as Trustee
120 S. San Pedro Street, Suite 400
Los Angeles, California   90012 
Attention:  Corporate Trust – Timothy P. Miller

C-2

SEVENTH SUPPLEMENTAL INDENTURE, dated as of February 10, 2016, between TEXAS-NEW MEXICO POWER COMPANY, a corporation organized and existing under the laws of the State of Texas (the “Company”), and MUFG UNION BANK, N.A. (formerly known as Union Bank, N.A.), a national banking association organized and existing under the laws of the United States (successor as trustee to The Bank of New York Mellon Trust Company, N.A.), as Trustee under the Indenture hereinafter referred to (the “Trustee”).

RECITALS OF THE COMPANY

WHEREAS, the Company has heretofore executed and delivered to the Trustee a First Mortgage Indenture dated as of March 23, 2009 (the “Original Indenture”), providing for the issuance by the Company from time to time of its bonds, notes or other evidence of indebtedness to be issued in one or more series (in the Original Indenture and herein called the “Securities”) and to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Securities and the performance and observance of the other obligations of the Company thereunder; and

WHEREAS, the Company has also heretofore executed and delivered to the Trustee a First Supplemental Indenture, dated as of March 23, 2009, a Second Supplemental Indenture, dated as of March 25, 2009, a Third Supplemental Indenture, dated as of April 30, 2009, as amended by a First Amendment, dated as of December 16, 2010, a Fourth Supplemental Indenture, dated as of September 30, 2011, a Fifth Supplemental Indenture, dated as of April 3, 2013, and a Sixth Supplemental Indenture, dated as of June 27, 2014, each such supplemental indenture being between the Company and the Trustee, each providing for the establishment of the terms of a series of Securities (the Original Indenture, as supplemented by said First Supplemental Indenture, said Second Supplemental Indenture, said Third Supplemental Indenture (as amended), said Fourth Supplemental Indenture, said Fifth Supplemental Indenture and said Sixth Supplemental Indenture,  the “Indenture”); and

WHEREAS, on June 1, 2011, MUFG Union Bank, N.A. (under its then name, Union Bank, N.A.) succeeded to The Bank of New York Mellon Trust Company, N.A., as Trustee under the Indenture; and

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Indenture and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Seventh Supplemental Indenture to the Indenture as permitted by Sections 2.01, 3.01 and 14.01 of the Original Indenture in order to establish the form and terms of, and to provide for the creation and issuance of, a new series of Securities under the Indenture to be known as its “3.53% First Mortgage Bonds, due 2026, Series 2016A” (the “2016A Bonds”) in an aggregate principal amount of $60,000,000; and

WHEREAS, all things necessary to make the 2016A Bonds, when executed by the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions hereinafter and in the Indenture set forth, the valid, 

C-3

binding and legal obligations of the Company and to make this Seventh Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

NOW, THEREFORE, THIS SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish the terms of the 2016A Bonds and for and in consideration of the premises and of the covenants contained in the Indenture and in this Seventh Supplemental Indenture and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, it is mutually covenanted and agreed as follows:

ARTICLE ONE

DEFINITIONS
Section 1.01 Certain Definitions.  Each capitalized term that is used herein and is defined in the Original Indenture shall have the meaning specified in the Original Indenture unless such term is otherwise defined in this Seventh Supplemental Indenture. Unless the context otherwise requires, any reference herein to a “Section” or an “Exhibit” means a Section of, or an Exhibit to,  this Seventh Supplemental Indenture, as the case may be.  The words “herein,” “hereof” and “hereunder” and words of similar import refer to this Seventh Supplemental Indenture as a whole  and not to any particular Article, Section or other subdivision.
The following terms have the meanings given to them in this Article One and, for purposes of this Seventh Supplemental Indenture, such meanings shall supersede and replace the meanings given them, if any, in the Original Indenture: 
Certain terms, used principally in Article Two, are defined in that Article.

“Blocked Person” means (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”).  
 “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) 

C-4

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 in 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 percent (25%) of the Capital Stock of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent 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 Parent 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; (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 Parent, or control over the Voting Stock of the Parent 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 percent (25%)  or more of the combined voting power of such Voting Stock; or (d) the Parent shall cease to own, directly or indirectly, and free and clear of all Liens or other encumbrances (other than any Lien in favor of the administrative agent for the benefit of the lenders under any Material Credit Facility (as it may be amended, restated, supplemented, refinanced or otherwise modified from time to time) securing Indebtedness thereunder), at least 100% of the outstanding Voting Stock of the Company on a fully diluted basis.  
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
 “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.

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“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 and (ii) 10% of Consolidated Capitalization (calculated assuming clause (i) above is applicable).
“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 or 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 against loss or failure or inability to perform in respect thereof; provided, however, that, with respect to the Company 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).
“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Corporate Trust Office” has the meaning given to it in the Original Indenture and for the purposes of such term in the Indenture and this Seventh Supplemental Indenture, the principal corporate trust office of the Trustee is 120 S. San Pedro Street, Suite 410, Los Angeles, California 90012 unless and until the Trustee shall have designated such other address as contemplated by such term.
 “Default Rate” means, as of any date, that rate of interest that is the greater of (i) ___% per annum or (ii) 2% over the rate of interest publicly announced from time to time by Union Bank, N.A. in Los Angeles, California as its “base” or “prime” rate, as in effect on such date.

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 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 
“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.
“Fiscal Quarter” means each of the calendar quarters ending as of the last day of each March, June, September and December.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America, and, notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Company or any Subsidiary at “fair value”, as defined therein.” 
“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 Company to its jurisdictional and wholesale customers in the ordinary course of business).
      “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’ acceptance (in each case, whether or not drawn or matured and in the stated amount thereof), (d) all obligations of such Person to pay for 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 Specified Securities and (l) all indebtedness referred to in clauses (a) through (k) above secured by any Lien  on  any  property  or  asset  owned  or  held  by  such  Person  regardless  of  whether  the 

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indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person.
 “Institutional Investor” means (a) any Holder of a 2016A Bond on the date hereof, (b) any Holder of a 2016A Bond holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the 2016A Bonds then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any Holder of any 2016A Bond.
“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or capital lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under the Indenture and the 2016A Bonds, or (c) the validity or enforceability of the Indenture and the 2016A Bonds.

“Material Credit Facility” means, as to the Company and its Subsidiaries, 
(a)    the $75,000,000 Second Amended and Restated Credit Agreement among the Company, certain lenders identified therein and certain agents identified therein dated as of September 18, 2013 including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof (the “Credit Agreement”); and
(b)    any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the date of Closing by the Company or any Subsidiary of the Company, or in respect of which the Company or any Subsidiary of the Company is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $50,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency); and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility. 
“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

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“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource‐center/sanctions/Programs/Pages/Programs.aspx.
“Parent” means PNM Resources, Inc., a New Mexico corporation, together with its successors.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.
“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.
“Related Fund” means, with respect to any Holder of any 2016A Bond, any fund or entity that (i) invests in securities or bank loans, and (ii) is advised or managed by such Holder, the same investment advisor as such Holder or by an Affiliate of such Holder or such investment advisor.
“Responsible Officer of the Company” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of the matters set forth in the Indenture as supplemented and amended.
“Restrictive Legend” means the legend set forth on the form of the First Mortgage Bonds in Exhibit A hereto.
“Rule 144” means Rule 144 (or any successor rule) under the Securities Act.
“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.
 “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
 “Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Company.
“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 

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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” and “Subsidiaries” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Any reference to a Subsidiary of the Company herein shall not include a Subsidiary that is inactive, has minimal or no assets and does not generate revenues.  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company. 
“Total Assets” means all assets of the Company and its Subsidiaries as shown on its most recent quarterly consolidated balance sheet, as determined in accordance with GAAP.
 “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).

ARTICLE TWO

TITLE, FORM AND TERMS OF THE 2016A BONDS
Section 2.01 Title of the First Mortgage Bonds.  This Seventh Supplemental Indenture hereby creates a series of Securities designated as the “3.53% First Mortgage Bonds, due 2026, Series 2016A” (the “2016A Bonds”).  The 2016A Bonds shall be executed, authenticated and delivered in accordance with the provisions of, and, except as hereinafter provided, shall in all respects be subject to all of the terms, conditions and covenants of, the Indenture as supplemented and amended by this Seventh Supplemental Indenture.  For purposes of the Indenture, the 2016A Bonds shall constitute a single series of Securities and (subject to the limitations set forth in Article IV of the Original Indenture) shall be issued in an  aggregate principal amount of $60,000,000.
Section 2.02 Form and Terms of the 2016A Bonds.  The form and terms of the 2016A Bonds pursuant to the authority granted by this Seventh Supplemental Indenture in accordance with Sections 2.01 and 3.01 of the Original Indenture are set forth herein.   The  2016A  Bonds 

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shall be issued in registered form without coupons in the denominations of $100,000 and integral multiples thereof, appropriately numbered and substantially in the form set forth in Exhibit A hereto.  The terms of the 2016A Bonds contained in the form thereof set forth in Exhibit A hereto are hereby incorporated herein by reference and made a part hereof as if set forth in full herein.
The 2016A Bonds shall mature on February 10, 2026 and shall bear interest at the rate of 3.53% per annum (the “Coupon Rate”) from February 10, 2016 through Maturity, payable semi-annually on the tenth (10th) day of February and the tenth (10th) day of August in each year commencing August 10, 2016 (each such February 10 and August 10 hereinafter called an “Interest Payment Date”) until the principal thereof is paid or made available for payment.

If any Interest Payment Date falls on a day that is not a Business Day, the Interest Payment Date will be the next succeeding Business Day (and no interest or other payment shall be payable in respect of any such delay, provided that any payment of principal of or Make-Whole Amount on any 2016A Bond (including principal due upon Maturity) that is due on a date that is not a Business Day shall be due and payable on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable at such next succeeding Business Day).  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.
The 2016A Bonds shall be payable as to principal, Make-Whole Amount, if any, and interest (including interest on overdue principal and on overdue installments of interest to the extent lawful) in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, and shall be payable as provided for in the Indenture.  
To the extent lawful, the Company shall pay interest on overdue principal and Make-Whole Amount, if any, at the Default Rate (instead of the Coupon Rate), from the day any such payment was due until the amount is paid or made available for payment and it shall pay interest on overdue installments of interest at the Default Rate (instead of the Coupon Rate) from the applicable Interest Payment Date until such interest is paid or made available for payment.

The interest so payable on any Interest Payment Date shall be paid to the Persons in whose names the 2016A Bonds are registered at the close of business on the regular record date for such Interest Payment Date, which shall be the fifteenth (15th) day of the month next preceding such Interest Payment Date (hereinafter called a “Regular Record Date”); except that if the Company shall default in the payment of any interest due on such Interest Payment Date, the Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a date (herein called a “Special Record Date”) established to determine the Holders of record who will receive such Defaulted Interest (which shall be fixed in accordance with Section 3.07 of the Original Indenture), which Special Record Date shall not be more than fifteen (15) days or less than ten (10) days prior to the date proposed by the Company for payment of such Defaulted Interest.
        

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Section 2.03. Optional Prepayments with Make‐Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the 2016A Bonds, in an amount not less than 10% of the aggregate principal amount of the 2016A Bonds then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with accrued and unpaid interest thereon, and the Make‐Whole Amount determined for the prepayment date with respect to such principal amount.  The Company will give each Holder of 2016A Bonds written notice, with a copy to the Trustee, of each optional prepayment under this Section 2.03 not less than ten days and not more than sixty days prior to the date fixed for such prepayment unless the Company and the Holders of more than 50% of the principal amount of the 2016A Bonds then outstanding agree in writing to another time period.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the 2016A Bonds to be prepaid on such date, the principal amount of each 2016A Bond held by such Holder to be prepaid (determined in accordance with Section 2.03(a)), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make‐Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each Holder of Bonds a certificate of a Senior Financial Officer specifying the calculation of such Make‐Whole Amount as of the specified prepayment date.
(a)    Allocation of Partial Prepayments.  In the case of each partial prepayment of the 2016A Bonds pursuant to Section 2.03, the principal amount of the 2016A Bonds to be prepaid shall be allocated among all of the 2016A Bonds at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment, after giving effect to minimum authorized denominations of $100,000.
(b)    Maturity; Surrender, Etc.  In the case of each optional prepayment of 2016A Bonds pursuant to this Section 2.03, the principal amount of each 2016A Bond to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make‐Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make‐Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any 2016A Bond paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no 2016A Bond shall be issued in lieu of any prepaid principal amount of any 2016A Bond.
Section 2.04. Purchase of Bonds.  The Company will not and will not permit any Subsidiary of the Company to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding 2016A Bonds except (a) upon the payment or prepayment of the 2016A Bonds in accordance with this Seventh Supplemental Indenture and the 2016A Bonds or (b) pursuant to an offer to purchase made by the Company or a Subsidiary of the Company pro rata to the Holders of all 2016A Bonds at the time outstanding upon the same terms and conditions.  Any such offer shall provide each Holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 10 

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Business Days.  If the Holders of more than 50% of the principal amount of the 2016A Bonds then outstanding accept such offer, the Company shall promptly notify the remaining Holders of such fact and the expiration date for the acceptance by Holders of 2016A Bonds of such offer shall be extended by the number of days necessary to give each such remaining Holder at least 5 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all 2016A Bonds acquired by it or any Subsidiary of the Company pursuant to any payment, prepayment or purchase of 2016A Bonds pursuant to this Seventh Supplemental Indenture and no 2016A Bonds may be issued in substitution or exchange for any such 2016A Bonds.
Section 2.05.  Make‐Whole Amount    ‐.
“Make‐Whole Amount” means, with respect to any 2016A Bond, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such 2016A Bond over the amount of such Called Principal, provided that the Make‐Whole Amount may in no event be less than zero.  For the purposes of determining the Make‐Whole Amount, the following terms have the following meanings:
“Called Principal” means, with respect to any 2016A Bond, the principal of such 2016A Bond that is to be prepaid pursuant to Section 2.03 or Section 2.07 or is declared to be due and payable pursuant to Section 10.02 of the Original Indenture.
“Discounted Value” means, with respect to the Called Principal of any 2016A Bond, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the 2016A Bonds is payable) equal to the Reinvestment Yield with respect to such Called Principal.
“Reinvestment Yield” means, with respect to the Called Principal of any 2016A Bond, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on‐the‐run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on‐the‐run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the 2016A Bond.  
If  such  yields  are  not  Reported  or  the  yields  Reported  as  of  such  time  are  not ascertainable  (including  by  way  of  interpolation),  then  “Reinvestment  Yield”  means,  with 

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respect to the Called Principal of any 2016A Bond, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable 2016A Bond.
“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360‐day year composed of twelve 30‐day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
“Remaining Scheduled Payments” means, with respect to the Called Principal of any 2016A Bond, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the 2016A Bonds, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 2.03 or Section 2.07 or is declared to be due and payable pursuant to Section 10.02 of the Original Indenture.
“Settlement Date” means, with respect to the Called Principal of any 2016A Bond, the date on which such Called Principal is to be prepaid pursuant to Section 2.03 or Section 2.07 or is declared to be due and payable pursuant to Section 10.02 of the Original Indenture.
2.06  Change in Control    .  

(a)     Notice of Change in Control.  The Company will, within thirty (30) Business Days after the occurrence of any Change in Control, give written notice (the “Change in Control Notice”) of such Change in Control to each Holder of 2016A Bonds, with a copy to the Trustee.  Such Change in Control Notice shall contain and constitute an offer to prepay the 2016A Bonds as described in Section 2.06(b) hereof and shall be accompanied by the certificate described in Section 2.06(e).  
(b)    Offer to Prepay Bonds.  The offer to prepay 2016A Bonds contemplated by Section  2.06(a) shall be an offer to prepay, in accordance with and subject to this Section  2.06, all, but 

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not less than all, the 2016A Bonds held by each Holder (in this case only, “Holder” in respect of any 2016A Bond registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date (which shall be a Business Day) specified in such Change in Control Notice (the “Proposed Prepayment Date”).  Such date shall be not fewer than thirty (30) days and not more than sixty (60) days after the date of delivery of the Change in Control Notice.
(c)    Acceptance; Rejection.  Any Holder of 2016A Bonds may accept or reject the offer to prepay made pursuant to this Section  2.06 by causing a notice of such acceptance or rejection to be delivered to the Company not fewer than then (10) days prior to the Proposed Prepayment Date.  A failure by a Holder of 2016A Bonds to respond to an offer to prepay made pursuant to this Section  2.06 shall be deemed to constitute a rejection of such offer by such Holder.
(d)    Prepayment.  Prepayment of the 2016A Bonds to be prepaid pursuant to this Section 2.06 shall be at 100% of the principal amount of the 2016A Bonds together with accrued and unpaid interest thereon but without any Make-Whole Amount or other premium.  The prepayment shall be made on the Proposed Prepayment Date.
(e)    Company Certificate.  Each Change in Control Notice delivered pursuant to Section 2.06(a) shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of delivery of the Change in Control Notice, stating:  (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section  2.06; (iii) the principal amount of each 2016A Bond offered to be prepaid (which shall be 100% of the outstanding principal balance of each such 2016A Bond); (iv) the amount of accrued interest that would be due and payable on each 2016A Bond offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section  2.06 required to be fulfilled prior to the giving of notice have been fulfilled; and (vi) in reasonable detail, a general description of the events that resulted in, and date of occurrence of, the Change in Control.
2.07  Bond Repurchase Event.
On the Bond Repurchase Date, the Company shall repurchase (the “Bond Repurchase Requirement”) the 2016A Bonds for a purchase price equal to the aggregate principal amount of the 2016A Bonds then Outstanding, all accrued and unpaid interest thereon, and the Make‐Whole Amount determined for the Bond Repurchase Date with respect to such principal amount (the “Bond Repurchase Amount”).  On the Bond Repurchase Date, the Company will deposit with the Trustee immediately available funds in an amount equal to the Bond Repurchase Amount and the Trustee shall pay such amount as soon as practicable after receipt thereof to the Holders of such 2016A Bonds.  Payment of a Bond Repurchase Amount shall be deemed to satisfy and discharge in full the principal of, and Make-Whole Amount, and accrued and unpaid interest on, the 2016A Bonds.
The Company’s obligation to satisfy a Bond Repurchase Requirement shall be mandatory upon the occurrence of a Bond Repurchase Event.  
    

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Any Bonds surrendered to the Trustee in connection with a Bond Repurchase Requirement shall promptly be cancelled in accordance with Section 3.09 of the Original Indenture.
For the purposes of this Section 2.07, the following terms will have the meanings set forth below: 
“Bond Repurchase Date” means the date of the occurrence of a Bond Repurchase Event while any of the 2016A Bonds are Outstanding.
A “Bond Repurchase Event” shall exist if any of the conditions or events described in any of paragraphs (1) through (7) below shall be continuing fifteen (15) days following the first to occur of (i) a Responsible Officer of the Company obtaining actual knowledge of such occurrence or (ii) the Company’s receipt of a written notice from any Holder of a 2016A Bond of such occurrence: 
 (1)  Terrorism Sanctions Regulations.  The Company does or permits any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target  of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the 2016A Bonds) with any Person if such investment, dealing or transaction (i) would cause any Holder of the 2016A Bonds to be in violation of any law or regulation applicable to such Holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c)  engages, or any Affiliate of either engages, in any activity that could subject such Holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.

(2)  Sale or Lease of Assets.  The Company sells, leases, transfers or otherwise disposes 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) sales or other transfers of assets 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 Company, as calculated as of the end of the most recent Fiscal Quarter, and (b) sales, leases, transfers or other dispositions, at less than fair value, of any other assets of the Company and its Subsidiaries, provided that the aggregate book value of such assets shall not exceed $25,000,000 in any calendar year. 
    
(3)  Debt Capitalization.  The ratio of (i) Consolidated Indebtedness of the Company to (ii) Consolidated Capitalization of the Company is greater than 0.65 to 1.0.

(4)  Financial and Business Information.  The Company fails to deliver to each Holder of 2016A Bonds that is an Institutional Investor the documents set forth below in paragraphs (a) Quarterly Statements, (b) Annual Statements, (c) SEC and other Reports (if any), (d) Notice of Event of Default or Bond Repurchase Event (if any), and (e) ERISA Matters (if any) by either (i) within the time periods set forth in such paragraphs (a), (b), (c), (d) and (e) (x) delivering paper copies, to the address, if any, specifically designated therefore by such Holder, by telecopy, 

C-16

hand-delivery, or by overnight courier or (y) delivering electronic copies by email or (ii) with respect to the documents set forth in paragraphs (a), (b) and (c), giving written notice within fifteen (15) Business Days after the timely filing on EDGAR or posting on its home page or on its Parent’s home page on the internet or on Intralinks or on any similar website to which each Holder of the 2016A Bonds has free access, by the Company of a Form 10-K (or such annual financial statements satisfying the requirements of paragraph (b) below), Form 10-Q (or such quarterly financial statements satisfying the requirements of paragraph (a) below), Form 8-K or any proxy statement, as the case may be:

(a)    Quarterly Statements — within sixty (60) days (or such shorter period as is the earlier of (x) fifteen (15) days greater than the period applicable to the filing of the Company’s Quarterly Report on Form 10‐Q (the “Form 10‐Q”) with the SEC regardless of whether the Company is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of
(i)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and
(ii)    consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, 
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year‐end adjustments, provided  that delivery within the time period specified above of copies of the Company’s Form 10‐Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this paragraph (a)- Quarterly Statements; 
(b)    Annual Statements — within one hundred twenty (120) days (or such shorter period as is the earlier of (x) fifteen (15) days greater than the period applicable to the filing of the Company’s Annual Report on Form 10‐K (the “Form 10‐K”) with the SEC regardless of whether the Company is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which 

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such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each fiscal year of the Company, duplicate copies of
(i)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and
(ii)    consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Form 10‐K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a‐3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this paragraph (b)-Annual Statements;

(c)    SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary of the Company to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public securities holders generally, and (ii) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such Holder), and each final prospectus and all amendments thereto filed by the Company or any Subsidiary of the Company with the SEC; 
(d)    Notice of Event of Default or Bond Repurchase Event — promptly, and in any event within five (5) Business Days after a Responsible Officer of the Company becomes aware of the existence of any Event of Default or any Bond Repurchase Event, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto; and
         (e)    ERISA Matters — promptly, and in any event within ten (10) Business Days after a Responsible Officer of the Company becoming aware of any of the 

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following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:
(i)    with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof if such event would reasonably be expected to result in a Material Adverse Effect; or
(ii)    the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii)    any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect.
(5)  Officer’s Certificate.  The Company fails to deliver to each Holder of 2016A Bonds that is an Institutional Investor, in the manner and at the time periods set forth above in paragraph 4(a)-Quarterly Statements and paragraph 4(b)-Annual Statements, a certificate of a Senior Financial Officer certifying that such Senior Financial Officer has reviewed the relevant terms of this Seventh Supplemental Indenture and of the Indenture and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes an Event of Default or Bond Repurchase Event or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.
(6)  Material Credit Facilities.  With respect to any Material Credit Facility (a) the Company or any Subsidiary of the Company defaults in the payment of any principal of or premium or make-whole amount or interest that is outstanding in an aggregate principal amount of at least $20,000,000 beyond any period of grace with respect thereto, or (b) the Company or any Subsidiary of the Company is in default in the performance of or compliance with any term of  any  Material  Credit  Facility  in  an  aggregate  outstanding  principal  amount  of  at  least 

C-19

$20,000,000 or any other condition exists, and as a consequence of such default such Material Credit Facility has become, or has been declared (or one or more Persons are entitled to declare such Material Credit Facility to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (c) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder or lender of any Material Credit Facility to convert such indebtedness into equity interests), (i) the Company or any Subsidiary of the Company has become obligated to purchase or repay such indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $20,000,000, or (ii) one or more Persons have the right to require the Company or any Subsidiary of the Company so to purchase or repay such indebtedness.

(7)  Material Misrepresentation.  Any representation or warranty made in writing by or on behalf of the Company in this Seventh Supplemental Indenture or in any writing furnished to the Holders of the 2016A Bonds in connection with the 2016A Bonds proves to have been false or incorrect in any material respect on the date made.
 Section 2.08    Intentionally Omitted.

     Section 2.09    Payment on Bonds.    
(a)    Place of Payment, etc.      Subject to Section 2.09(b), payments of principal, Make‐Whole Amount, if any, and interest due and payable on the 2016A Bonds shall be made in Los Angeles, California at the Corporate Trust Office of MUFG Union Bank, N.A.  Registration of transfer and exchange of the 2016A Bonds shall be effected, in accordance with Section 3.05 of the Indenture, in Los Angeles, California at the Corporate Trust Office of MUFG Union Bank, N.A.  Notice and demands to or upon the Company in respect of the 2016A Bonds and the Indenture, as supplemented and amended, may be served, in addition to the provisions of Section 1.08 of the Indenture, in Los Angeles, California at the Corporate Trust Office of MUFG Union Bank, N.A.  The Company may at any time, by notice to each Holder of a 2016A Bond, change the place of payment of the 2016A Bonds, place where registration or exchange may be effected and where such notices and demands shall be served so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal corporate trust office of a bank or trust company in such city.  MUFG Union Bank, N.A. will be the Paying Agent and Note Registrar for the 2016A Bonds.
(b)    Home Office Payment.  With respect to all Holders of the 2016A Bonds on the date hereof and any Institutional Investor that subsequently becomes a Holder of a 2016A Bond and complies with the provisions of this Section 2.09(b), all sums becoming due on the 2016A Bonds for principal, Make‐Whole Amount, if any, interest and all other amounts due hereunder to each Holder of a 2016A Bond shall be paid to each such Holder by the method and at the address of such Holder in the Security Register, without the presentation or surrender of such 2016A Bond or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any 2016A Bond, such Holder shall surrender such Bond for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment 

C-20

most recently designated by the Company pursuant to Section 2.09(a).  Prior to any sale, transfer or other disposition of any 2016A Bond held on the date hereof by a Holder or its nominee, such Holder will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such 2016A Bond to the Company in exchange for a new 2016A Bond or 2016A Bonds pursuant to Section 3.05 of the Original Indenture. 
Section 2.10 Consent in Contemplation of Transfer.  Any consent given pursuant to Section 14.02 of the Original Indenture by a Holder of a 2016A Bond that has transferred or has agreed to transfer its 2016A Bond to the Company, any Subsidiary of the Company or any Affiliate of the Company in connection with such consent shall be void and of no force or effect except solely as to such Holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other Holders of 2016A Bonds that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such Holder.

Section 2.11 Restrictions on Transfer.  The 2016A Bonds and any related documents may be amended or supplemented from time to time by the Company without the consent of any Holder to modify the restrictions on and procedures for resales and other transfers of the 2016A Bonds to reflect any change in applicable law or regulation (or the interpretation thereof) or in practices relating to the resale or transfer of restricted securities generally. Holders of the 2016A  Bonds are deemed by the acceptance of such 2016A Bonds to have agreed to any such amendment or supplement.

The Company shall issue a 2016A Bond that does not bear the Restrictive Legend in replacement of a 2016A Bond bearing the Restrictive Legend at the request of any Holder following such request if (i) the Holder shall have obtained an opinion of counsel reasonably acceptable to the Company in form and substance reasonably satisfactory to the Company to the effect that the First Mortgage Bond may lawfully be disposed of without registration, qualification or legend pursuant to Rule 144, or (ii) the Holder sells or otherwise transfers the First Mortgage Bond pursuant to Rule 144 or an effective registration statement.

Section 2.12  Sinking Fund.  The 2016A Bonds are not subject to any sinking fund.

Section 2.13  Calculations, etc.  The Trustee may conclusively presume that no optional prepayment pursuant to Section 2.03, Change in Control or Bond Repurchase Event shall have occurred unless and until a Responsible Officer of the Trustee shall have received at the Corporate Trust Office of the Trustee a certificate executed by a Senior Financial Officer specifying the following:

1.  in the case of an optional prepayment pursuant to Section 2.03, the name of each Holder to which such payments will be made, the amount of each such payment (including the applicable Make-Whole Amount and accrued interest), and the date of such payment and;

    

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2.  in the case of a Change of Control, the name of each Holder that accepts the related offer to prepay, the amount of each such payment (including accrued interest), and the date of such payment; and 

3.  in the case of a Bond Repurchase Event, the name of each Holder to which the Bond Repurchase Amount has been paid, the amount of such Bond Repurchase Amount payment and the date of such payment.

The Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, shall be fully protected in relying upon the Company’s calculation of any optional prepayment amount, Change in Control repurchase payment or Bond Repurchase Amount, including interest and,  if and to the extent applicable, any Make-Whole Amount, and shall have no responsibility for such calculation.

ARTICLE THREE

ISSUANCE OF THE 2016A BONDS

Section 3.01 Authentication.  The 2016A Bonds in the aggregate principal amount of Sixty Million Dollars ($60,000,000) may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated and delivered by the Trustee (either before or after the filing or recording hereof) pursuant to and in accordance with a Company Order delivered pursuant to, and upon compliance by the Company with the other applicable provisions and requirements of, Article IV of the Original Indenture.

ARTICLE FOUR

AMENDMENTS

Section 4.01.  The Indenture is hereby amended by adding the following as a second paragraph of Section 11.06:

“The Trustee shall furnish the Company periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the Company. Upon the Company’s election, such statements will be delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request.  The Company waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law.  The Company further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.”

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Section 4.02.  The Indenture is hereby amended by deleting the last sentence of Section 3.09 in its entirety and replacing it with the following sentence:

“The Trustee shall destroy all cancelled Securities held by it and shall deliver a certificate of such destruction to the Company.”  

ARTICLE FIVE

MISCELLANEOUS PROVISIONS

Section 5.01  Utility and Transmitting Utility.  The Company is a utility as defined in Section 261.001(a) of the Texas Business and Commerce Code (the “TBCC”). The Company intends to subject the Original Indenture, as heretofore supplemented and as supplemented and amended by this Seventh Supplemental Indenture, to the requirements and benefits of Chapter 261 of the TBCC. The perfection of and notice provided by the Original Indenture, as heretofore supplemented and as supplemented and amended by this Seventh Supplemental Indenture, under Section 261.004 of the TBCC with respect to the interest in property granted as security thereunder shall be effective from its date of deposit for filing until and to the extent such interest in property is released by the filing of a termination statement or a release of such interest in property, in each case signed or authorized in writing by the Trustee, and no renewal, refiling or continuation statement shall be required to continue such effectiveness.  The Company is also a transmitting utility as defined in Section 9.102 of the TBCC.  The Original Indenture, as heretofore supplemented and as supplemented and amended by this Seventh Supplemental Indenture, shall remain effective as (a) a financing statement until a termination statement is filed, as provided in Section 9.515(f) of the TBCC, and (b) a financing statement filed as a fixture filing until the Original Indenture (as heretofore supplemented and as supplemented and amended by this Seventh Supplemental Indenture) is released in full or satisfied of record or its effectiveness otherwise terminates as to the real property covered thereby, as provided in Section 9.515(g) of the TBCC.

Section 5.02 Ratification.  The Indenture, as supplemented and amended by this Seventh Supplemental Indenture, is in all respects ratified and confirmed, and this Seventh Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. 

Section 5.03 Trustee.  The Trustee hereby accepts the trust hereby declared and provided, and agrees to perform the same upon the terms and conditions set forth in the Indenture, as supplemented and amended by this Seventh Supplemental Indenture.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Seventh Supplemental Indenture or of the 2016A Bonds or the due execution hereof or thereof by the Company or for or in respect of the recitals contained herein or therein  (except the Trustee’s certificate of authentication) or the statements contained in Section 5.01, all of which recitals and statements are made by the Company solely.

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Section 5.04 Governing Law.  This Seventh Supplemental Indenture and the 2016A Bonds shall be governed by and construed in accordance with the law of the State of New York (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act would be applicable were this Seventh Supplemental Indenture qualified under the Trust Indenture Act and except to the extent that the law of any other jurisdiction shall mandatorily govern the creation, perfection, priority or enforcement of the Lien of the Indenture, as supplemented and amended by this Seventh Supplemental Indenture or the exercise of remedies with respect to the Mortgaged Property.
Section 5.05 Counterparts.  The Seventh Supplemental Indenture referred to herein is an indenture supplemental to the Indenture. This Seventh Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument.

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IN WITNESS WHEREOF, said TEXAS-NEW MEXICO POWER COMPANY has caused this Seventh Supplemental Indenture to be executed on its behalf and said MUFG UNION BANK, N.A., as Trustee as aforesaid, in evidence of its acceptance of the trust hereby created, has caused this Seventh Supplemental Indenture to be executed on its behalf, to be effective as of the date first written above.

	
			
	 
	TEXAS-NEW MEXICO POWER COMPANY 
 

	 
	By:
	 

	 
	 
	Name:

	 
	 
	Title:

ACKNOWLEDGMENT:

STATE OF NEW MEXICO        )
COUNTY OF BERNALILLO    )

This instrument was acknowledged before me on this __ day of February, 2016, by _______________, _______________ of TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation, on behalf of said corporation.

_____________________________________ 
Notary Public in and for the State of New Mexico

C-25

	
			
	 
	MUFG UNION BANK, N.A., as Trustee 
 

	 
	By:
	 

	 
	 
	Name:

	 
	 
	Title:

	
	
	A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA    )
COUNTY OF LOS ANGELES    )
On February __, 2016 before me, _________________, Notary Public, personally appeared ____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
	
		
	Signature:  _____________________________________ 

	(seal)

[Signature Page to Seventh Supplemental Indenture to 
First Mortgage Indenture of Texas-New Mexico Power Company] 

C-26

Exhibit A
[FORM OF 3.53% FIRST MORTGAGE BOND, DUE 2026, SERIES 2016A]

THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF AMERICA AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT, EXCEPT UNDER CIRCUMSTANCES WHERE NEITHER SUCH REGISTRATION NOR SUCH EXEMPTION IS REQUIRED BY LAW.

TEXAS-NEW MEXICO POWER COMPANY

(Incorporated under the laws of the State of Texas)

3.53% First Mortgage Bond, due 2026, Series 2016A

No.                                         [Date]
$[________]                                    PPN: 882884 A@8          

TEXAS-NEW MEXICO POWER COMPANY, a corporation organized and existing under the laws of the State of Texas (hereinafter called the “Company”, which term shall include any Successor Corporation under the Indenture), for value received, hereby promises to pay to _____________________, or registered assigns, on February 10, 2026, the principal sum of [___________ dollars ($________)] (or so much thereof as shall not have been prepaid), in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, and to pay interest on said principal sum in like coin or currency from the date hereof, or from the most recent February 10 or August 10 to which interest has been paid or duly provided for, at the rate of three and fifty-three one-hundredths percent (3.53%) per annum (the “Coupon Rate”), payable semi-annually, on the tenth (10th) day of February and tenth (10th) day of August in each year, commencing August 10, 2016 (each an “Interest Payment Date”), until Maturity.  To the extent permitted by law, the Company shall pay interest on any overdue principal or Make-Whole Amount, if any, at the Default Rate (instead of the Coupon Rate), from the day such principal or Make-Whole Amount was due until paid or made available for payment and it shall pay interest on any overdue installments of interest at the Default Rate (instead of the Coupon 

C-27

Rate), from the applicable Interest Payment Date until such interest is paid or made available for payment.  For purposes of the Seventh Supplemental Indenture and this Security, the term “interest” shall be deemed to include interest provided for in the first and second immediately preceding sentences.  If any Interest Payment Date falls on a day that is not a Business Day then payment of interest payable on such date will be made on the next succeeding Business Day (and no interest or other payment shall be payable in respect of any such delay, provided that any payment of principal of or Make-Whole Amount on this Security (including principal due upon Maturity) that is due on a date that is not a Business Day shall be due and payable on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable at such next succeeding Business Day).  Interest will be computed on the basis of a 360 day year consisting of twelve (12) thirty (30) day months.

The interest so payable on any Interest Payment Date will, subject to certain exceptions provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such Interest Payment Date, which shall be the fifteenth (15th) day of the month next preceding such Interest Payment Date; except that if the Company shall default in the payment of any interest due on such Interest Payment Date, such defaulted interest shall be paid to the Holder of this Security as of the close of business on a date selected by the Trustee (in accordance with Section 3.07 of the Indenture) (a “Special Record Date”), which Special Record Date shall not be more than fifteen (15) days or less than ten (10) days prior to the date proposed by the Company for payment of such defaulted interest.

Principal of, and Make-Whole Amount (if any) and interest on this Security are payable at the Corporate Trust Office of the Trustee, in Los Angeles, California, as Paying Agent for the Company; provided however, that the Company may at any time, by notice to the Holder of this Security, change the place of payment so long as the place of payment shall be either the principal office of the Company in such city or the principal Corporate Trust Office of a bank or trust company in such city and further provided that if the Holder of this Security shall have specified by written notice to the Company an address and reasonable method for such payment pursuant to and in compliance with Section 2.09(b) of the Seventh Supplemental Indenture, the Company shall make such payment at the address and by the reasonable method set forth in such written notice.

This Security is subject to (1) prepayment at the option of the Company in whole at any time, or in part from time to time, (2) prepayment in whole at the option of the Holder hereof in connection with a Change in Control and (3) mandatory repurchase in whole upon the occurrence of a Bond Repurchase Event, in each case at the times, in the amounts and upon the terms specified in Sections 2.03, 2.06 and 2.07, respectively, of the Seventh Supplemental Indenture.  This Security is not otherwise subject to optional redemption.

The provisions of this Security are continued on the reverse hereof, and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

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This Security shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or be valid or obligatory for any purpose, unless MUFG Union Bank N.A., the Trustee under the Indenture, or a successor trustee thereto under the Indenture, shall have manually signed the certificate of authentication endorsed hereon.

IN WITNESS WHEREOF, TEXAS-NEW MEXICO POWER COMPANY has caused the signature of its duly authorized officer to be hereto affixed.

Dated: ____________
	
			
	

	By:
	TEXAS-NEW MEXICO POWER COMPANY

	 
	 
	Name:

	 
	 
	Title:

C-29

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture, as supplemented and amended, including as supplemented and amended by the Seventh Supplemental Indenture.

	
			
	

	By:
	MUFG UNION BANK, N.A., as Trustee

	 
	 
	Authorized Officer

C-30

[FORM OF REVERSE OF 
3.53% FIRST MORTGAGE BOND, DUE 2026, SERIES 2016A]

This Security is one of a duly authorized issue of Securities of the Company (herein called the “First Mortgage Bonds”), unlimited in aggregate principal amount, of the series hereinafter specified, all issued and to be issued under and equally secured by an indenture, dated as of March 23, 2009, executed by the Company to MUFG Union Bank, N.A. (formerly known as Union Bank, N.A.) (successor to The Bank of New York Mellon Trust Company, N.A.) (herein called the “Trustee”) (said indenture being herein called the “Indenture”), to which Indenture and all indentures supplemental thereto (including the Seventh Supplemental Indenture hereinafter referred to) reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owners of the First Mortgage Bonds and of the Trustee in respect thereto, and the terms and conditions upon which the First Mortgage Bonds are, and are to be, secured, and for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the First Mortgage Bonds and of the terms upon which the First Mortgage Bonds are, and are to be, authenticated and delivered. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the Holders of the First Mortgage Bonds may be made, in certain cases without the consent of the Holders of the First Mortgage Bonds, as set forth in Section 14.01 of the Indenture, and otherwise with the consent of the Company by an affirmative vote of not less than a majority in amount of the First Mortgage Bonds entitled to vote then outstanding, at a meeting of Holders of the First Mortgage Bonds called and held as provided in the Indenture, or by an affirmative vote of not less than a majority in amount of the First Mortgage Bonds of any series entitled to vote then outstanding and affected by such modifications or alterations, in case one or more but less than all of the series of First Mortgage Bonds then outstanding under the Indenture are so affected; provided, however, that no such modifications or alterations shall be made which will affect the terms of payment of the principal of, or interest on, this Security, which are unconditional. The First Mortgage Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Indenture. This Security is one of a series designated as “3.53% First Mortgage Bonds, due 2026, Series 2016A” of the Company, issued under and secured by the Indenture and all indentures supplemental thereto and described in an indenture supplemental thereto (herein called the “Seventh Supplemental Indenture”), dated as of February 10, 2016, executed by the Company to the Trustee.
The Company, at its option, may redeem all, or from time to time, any part of the First Mortgage Bonds of this series on not less than 10 days nor more than 60 days notice by first-class mail, postage prepaid as provided in the Indenture at a Redemption Price equal to the sum of the principal amount so prepaid plus the Make-Whole Amount as defined in the Seventh Supplemental Indenture and upon the other terms and conditions therein and in the Indenture provided. 

The Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, shall be fully protected in relying upon the Company’s calculation of any optional prepayment  amount,  Change  in  Control  repurchase  payment  or  Bond  Repurchase  Amount, 

C-31

including interest and,  if and to the extent applicable, any Make-Whole Amount, and shall have no responsibility for such calculation.

In the event of prepayment of the First Mortgage Bonds of this series in part only, a new Security of First Mortgage Bonds of this series and of like tenor for the non-prepaid portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. 
The Indenture contains provisions for satisfaction and discharge of the entire indebtedness of the First Mortgage Bonds of this series.

In case an Event of Default shall occur, the principal of all the First Mortgage Bonds at any such time Outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the Holders of a majority in principal amount of the First Mortgage Bonds outstanding. In the event of any declaration of acceleration of the maturity of the First Mortgage Bonds, the amount due and payable on this Security (and for all outstanding First Mortgage Bonds of this series) shall consist of the unpaid principal and accrued and unpaid interest thereon plus the Make-Whole Amount (as defined in Section 2.05 of the Seventh Supplemental Indenture), which Make-Whole Amount shall be determined as of the date of such declaration. 

No recourse shall be had for the payment of the principal of, or Make-Whole Amount, if any, or the interest on, this Security, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, as such, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether for amounts unpaid on stock subscriptions or by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this First Mortgage Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture.

This Security is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that purpose as provided for in the Indenture upon surrender and cancellation of this Security and on presentation of a duly executed written instrument of transfer, and thereupon a new Security of the same series of First Mortgage Bonds, of the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange therefor; and this Security, with or without others of like series, may in like manner be exchanged for one or more new First Mortgage Bonds of the same series of other authorized denominations but of the same aggregate principal amount; all upon payment of the charges and subject to the terms and conditions set forth in the Indenture.

C-32

This Security shall be subject to certain restrictions on transfer as set forth in the Indenture and the Seventh Supplemental Indenture.

This Security shall be governed by, and construed in accordance with, the laws of the State of New York) (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act would be applicable were the Seventh Supplemental Indenture qualified under the Trust Indenture Act and except to the extent that the law of any other jurisdiction shall mandatorily govern the creation, perfection, priority or enforcement of the Lien of the Indenture, as supplemented and amended by all indentures supplemental thereto (including the Seventh Supplemental Indenture), or the exercise of remedies with respect to the Mortgaged Property.

All capitalized terms used but not defined in this Security shall have the meanings assigned to them in the Indenture or the Seventh Supplemental Indenture, as applicable.

C-33Exhibit 10.01

 

THIS
NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

 

4%
UNSECURED CONVERTIBLE PROMISSORY NOTE

 

	US  $1,955,933.91		Effective
                                         December 1, 2015, Signed December 16, 2015

 

FOR
VALUE RECEIVED, Truli Media Group, Inc.,
a Delaware corporation (the "Company"), hereby unconditionally promises to pay to the order
of Michael Jay Solomon (Mr. Solomon, together with his successors and assigns, being referred to herein as the "Holder")
the aggregate principal sum of One Million, Nine Hundred Fifty Five Thousand, Nine Hundred Thirty Three and 91/100 United States
Dollars ($1,955,933.91), together with simple interest on the unpaid principal balance of this 4% Unsecured Convertible Promissory
Note (this "Note") at a rate equal to four percent (4%) (computed on the basis of the actual number of
days elapsed in a 365-day year) per annum (the "Interest Rate") on the Maturity Date. Interest shall accrue
from the date hereof and shall continue to accrue on the outstanding principal balance of this Note until paid in full or converted
in full. Except as expressly provided herein, all payments of principal and interest by the Company under this Note shall be made
in United States dollars in immediately available funds to an account specified by the Holder. To the extent this Note is subdivided
in the future, all the notes issuable in connection therewith shall be referred to herein collectively as the “Note”.
This Note is being issued to formalize, memorialize and supersede a promissory note with a principal balance of $1,428,609.93
at March 31, 2015, with the accrued interest thereon, as well as subsequent advances made by Holder to the Company and accrued
interest on the same terms and conditions. Such note bore interest at the rate of four (4%) percent per annum and came due September
30, 2015. Such note remains unpaid in full. The note represented an obligation for a series of advances made by the Holder to
the Company through December 31, 2013 and this note includes subsequent advances made by Holder through November 30, 2015.

 

In
no event shall any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable
law and if any such payment is paid by the Company, then such excess sum shall be credited by the Holder as a payment of principal.

 

1.            Definitions.
Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated:

 

"Affiliate"
means with respect to any Person or entity, any Person or entity which directly or indirectly, controls, is controlled by, or
is under common control with such Person or entity, as the case may be.

 

"Common
Stock" means the Company’s Common Stock, $.0001 par value per share.

 

     

     

    

 

"Conversion
Shares" means the shares of the Company’s Common Stock issuable upon conversion of this Note.

 

"Liquidation
Event" means any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary but not
including a merger as set forth in Section 7 (i) hereof.

 

"Majority
of Holders" means the holders of more than 50% of the then outstanding aggregate principal amount of the Notes.

 

"Maturity
Date" means December 1, 2020, subject to Section 3(b) hereof.

 

"Person"
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

 

"Transfer.
Subject to compliance with any applicable securities laws, this Note and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, by Holder upon five (5) days’ written notice to Maker.

 

2.            Payment
of Principal and Interest; Prepayment.

 

(a)                
Interest on this Note shall accrue from the date hereof and shall be payable on the Maturity Date, unless prepaid pursuant to
Section 2(b) hereof or earlier converted pursuant to Section 3 hereof.

 

(b)                
The Company may prepay all or any portion of the principal amount or accrued but unpaid interest on this Note at any time without
premium or penalty. Any prepayments shall be paid pro rata to all Holders of this Note and shall be applied first to the
payment of accrued but unpaid interest (pro rata based on the amount of interest owed) and then to principal. Without limiting
the foregoing, if the Company elects to prepay the Note in connection with a Liquidation Event, it must elect to prepay all Holders
of interest in the Note on a pro rata basis.

 

3.            Conversion.

 

(a)               
Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the
date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment in full of all amounts due under
this Note, to convert all or any part of the outstanding and unpaid principal amount and accrued but unpaid interest of this Note
into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the date same is issued, or any shares
of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified at
the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”).
No Conversion shall affect Holder’s ability to future Conversion of any remaining portion of the Note. The number of shares
of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined
below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached
hereto as Exhibit A (the “Notice of Conversion”), delivered to the Company by the Holder in accordance
with Section 14 below; provided that the Notice of Conversion is submitted by e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Company before 6:00 p.m., New York, New York time on such conversion date (the “Conversion
Date”). The term “Conversion Amount” means, with respect to any conversion of this Note,
the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) accrued and unpaid interest,
if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

 

    	 	2	 

     

    

 

(b)              
Conversion Price. The Conversion Price shall equal $0.02 per share as adjusted pursuant to Section 4 hereof.

 

(c)                No fractional shares shall be issued upon any conversion of this Note into Common Stock, as applicable, pursuant to Section 3(a)
hereof. If any fractional share of Common Stock, as applicable, would be delivered upon such conversion, the Company, in lieu
of delivering such fractional share, shall pay to the Holder an amount in cash equal to the allocable portion of the price per
share of such fractional share of Common Stock. The Company covenants that all shares of Common Stock issued pursuant to Section
3(a) hereof will be duly and validly issued and fully paid and non-assessable, and free from all taxes, liens and charges with
respect to the issue thereof. The Company will pay any and all issue and transfer taxes that may be payable in respect of any
issuance or delivery of Conversion Shares upon conversion of this Note.

 

(d)               Upon any taking by the Company of a record of the holders of any class or series
of securities for the purpose of determining the holders thereof who are entitled to vote with respect to any Liquidation Event,
the Company shall provide notice to the Holder at least ten (10) business days prior to the record date specified therein (or
such shorter period approved by a Majority of Holders) specifying (i) the date on which any such record is to be taken for the
purpose of determining stockholders entitled to vote with respect to any such Liquidation Event and (ii) the date, if any, that
is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares
of Common Stock (or other securities) for securities or other property deliverable upon such Liquidation Event.

 

(e)               In addition to the notice described in Section 3(d), the Company shall provide notice
to the Holder of any Liquidation Event, as applicable, at least ten (10) business days prior to the consummation of such event
(the "Corporate Event Notice"). The Corporate Event Notice shall set forth all material facts and terms
relating to such Liquidation Event, including without limitation, as applicable: (i) the nature, amount, terms and conditions
of payment, if any, to the holders of Common Stock in connection with
any such Liquidation Event, (ii) the date on which such Liquidation Event is expected to be consummated, (iii) the procedures
that must be followed (and the latest date that such procedures must be completed) in order for the Holder to effect a conversion
of this Note into shares of Common Stock, and (iv) a statement as to whether the Company has elected to prepay this Note in connection
with the Liquidation Event pursuant to this Section 3. The Corporate Event Notice shall also provide the Holder with
the option to require the Company to prepay this Note pursuant to this Section 3.
Upon receipt of the Corporate Event Notice, the Holder shall promptly (but in any
event at least two (2) business days prior to the consummation of the Liquidation Event) provide written notice to the Company
of its election (if Holder so elects) to have this Note prepaid.

 

    	 	3	 

     

    

  

(f)               
Beneficial Ownership.  Unless waived by the Holder upon no less than sixty one (61) days prior written notice to the
Company, the Company shall not effectuate any conversion of this Note pursuant to Section 3(a) to the extent that after
giving effect to such conversion the Holder (together with the Holder's affiliates) would beneficially own in excess of 4.99%
of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.  Even if the Holder
waives the limitation set forth in the preceding sentence, the Company shall in no event effect any conversion of this Note, and
the Holder of this Note shall not have the right to convert any portion of this Note pursuant to Section 3(a), to the extent
that after giving effect to such conversion, the Holder (together with the Holder's affiliates) would beneficially own in excess
of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion, again, unless
waived by the Holder.  For purposes of the foregoing sentences, the number of shares of Common Stock beneficially owned by
the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect
to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would
be issuable upon (A) conversion of the remaining, non-converted portion of this Note beneficially owned by the Holder or
any of its affiliates and (B) exercise or conversion of the unexercised or non-converted portion of any other securities
of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned
by the Holder or any of its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 3(f),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended.  For purposes of this Section 3(f), in determining the number of outstanding shares of Common Stock, the Holder
may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Form 10-Q
or Form 10-K, (y) a more recent public announcement by the Company or (z) any other notice by the Company or its
transfer agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written
or oral request of the Holder, the Company shall within two business days confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.

 

(g)              Principal Market Regulation.  The Company shall not be obligated to issue any shares of Common Stock upon conversion
of this Note if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock that the Company
may issue upon conversion of the Notes without breaching the Company's obligations under the rules or regulations of the
principal market (the “Principal Market”) upon which such securities are traded, if any (the "Exchange
Cap"), except that such limitation shall not apply in the event that the Company (A) obtains the approval of
its stockholders as required by the applicable rules of the Principal Market for issuances of Common Stock in excess of such
amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion
shall be reasonably satisfactory to the Holders of the Note representing at least a majority of the principal amount of the Note
then outstanding.  Until such approval or written opinion is obtained, no Holder (the "Purchasers")
shall be issued, upon conversion of Notes, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied
by a fraction, the numerator of which is the principal amount (and accrued interest) of the Notes owned by such Purchaser and
the denominator of which is the aggregate initial principal amount of the Note (with respect to each Purchaser, the "Exchange
Cap Allocation").  In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser's
interest in the Note, the transferee shall be allocated a pro rata portion of such Purchaser's Exchange Cap Allocation, the restrictions
of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such
transferee.  In the event that any Holder shall convert all of such holder's interest in the Note into a number of shares
of Common Stock which, in the aggregate, is less than such Holder's Exchange Cap Allocation, then the difference between such
Holder's Exchange Cap Allocation and the number of shares of Common Stock actually issued to such Holder shall be allocated to
the respective Exchange Cap Allocations of the remaining Holders on a pro rata basis in proportion to the aggregate principal
amount (and accrued interest) of the Note then held by each such Holder.

 

    	 	4	 

     

    

 

4.
          Adjustment. The number of Conversion Shares issuable upon conversion of this Note or any portion thereof (or any shares
of stock or other securities or property at the time receivable or issuable upon conversion of this Note or any portion thereof)
and the Conversion Price therefor are subject to adjustment upon the occurrence of any of the following events between the date
hereof and the date that all obligations hereunder are repaid or this Note is converted in full:

 

(a)                Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc. The Conversion Price of this Note will be proportionally
adjusted to reflect any stock dividend, stock split, reverse stock split, reclassification, recapitalization or other similar
event affecting the number of outstanding Conversion Shares.

 

(b)               Conversion of Stock. In case all the authorized Common Stock of the Company is converted, pursuant to the Company's Certificate
of Incorporation, into other securities or property, or the Common Stock otherwise ceases to exist, then, in such case, the Holder,
upon conversion of this Note at any time after the date on which the Common Stock is so converted or ceases to exist (the "Termination
Date"), will receive, in lieu of the number of Conversion Shares that would have been issuable upon such exercise
immediately prior to the Termination Date (the "Former Number of Conversion Shares"), the stock and other
securities and property which the Holder would have been entitled to receive upon the Termination Date if the Holder had converted
this Note with respect to the Former Number of Conversion Shares immediately prior to the Termination Date (all subject to further
adjustment as provided in this Note).

 

(c)               Certificate of Adjustments. The Company will, at its expense, cause an authorized officer promptly to prepare a written certificate
showing each adjustment or readjustment of the Conversion Price or the number of Conversion Shares or other securities issuable
upon conversion of this Note and cause such certificate to be delivered to the Holder. The certificate will describe the adjustment
or readjustment and include a description in reasonable detail of the facts on which the adjustment or readjustment is based.

 

(d)               No Change Necessary. The form of this Note need not be changed because of any adjustment in the Conversion Price or in the
number of Conversion Shares issuable upon its conversion.

 

    	 	5	 

     

    

 

5.            Event of Default. The occurrence of any of following events shall constitute an "Event of Default"
hereunder:

 

(a)                the failure of the Company to make any payment of principal or interest on this Note when due, whether at maturity, upon acceleration
or otherwise; or

 

(b)                the Company makes an assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as
they become due; or an order, judgment or decree is entered adjudicating the Company as bankrupt or insolvent; or any order for
relief with respect to the Company is entered under the Federal Bankruptcy Code or any other bankruptcy or insolvency law; or
the Company petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Company
or a subsidiary or of any substantial part of the assets of the Company, or commences any proceeding relating to it under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction;
or any such petition or application is filed, or any such proceeding is commenced, against the Company and either (i) the Company
by any act indicates its approval thereof, consents thereto or acquiescence therein or (ii) such petition application or proceeding
is not dismissed within twenty (20) days.

 

Upon
the occurrence of any such Event of Default and upon the giving of 10 day’s notice and 10 days’ opportunity to cure
(but only in the event of nonpayment as set forth in subsection (a) hereof all unpaid principal and accrued interest under this
Note shall become immediately due and payable. Upon the occurrence of any Event of Default, the Holder may, in addition to declaring
all amounts due hereunder to be immediately due and payable, pursue any available remedy, whether at law or in equity, including,
without limitation, exercising its rights under this Note. If an Event of Default occurs, the Company shall pay to the Holder
the reasonable attorneys' fees and disbursements and all other reasonable out-of-pocket costs incurred by the Holder in order
to collect amounts due and owing under this Note or otherwise to enforce the Holder’s rights and remedies hereunder.

 

6.            Reservation of Authorized Shares.

 

(a)    Reservation. 
The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for the
Note equal to 100% of the Conversion Price with respect to the Conversion Amount of the Note as of the issuance date.  Thereafter,
the Company, so long as any amounts are due under this Note, shall reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Note, 100% of the number of shares of Common Stock as
shall from time to time be necessary to effect the conversion of all amounts due under the Note (without regard to any limitations
on conversions) (the "Required Reserve Amount").  In addition to any other remedies provided
by this Note, if the Company at any time fails to meet this reservation of Common Stock requirement it shall pay the Holder, as
partial liquidated damages and not as a penalty a sum equal to $50 per day for each $100,000 of the then-outstanding principal
balance on this Note. Additionally, it shall sell to the Holders, pro rata, for $100, a series of preferred stock which contains
the power to vote a number of votes equal to 51% of the number of votes eligible to vote at any special or annual meeting of the
Company’s shareholders (with the power to take action by written consent in lieu of a shareholders meeting) for the sole
purpose of amending the Company’s Articles of Incorporation to increase its authorized Common Stock. The Company shall not
enter into any agreement or file any amendment to its Articles of Incorporation (including the filing of a Certificate of Designation)
which conflicts with this Section 6 while any amount due under the Note remains outstanding. The number of shares of Common Stock
reserved for conversions of the Notes shall be allocated pro rata among the Holders of the Note based on the principal amount
and accrued interest of the Note held by each Holder at such time or increase in the number of reserved shares, as the case may
be (the "Authorized Share Allocation").  In the event that a Holder shall sell or otherwise transfer
any portion of such holder's Note, each transferee shall be allocated a pro rata portion of such holder's Authorized Share Allocation. 
Any shares of Common Stock reserved and allocated to any Person which ceases to hold any portion of the Note shall be allocated
to the remaining Holders of the Note, pro rata based on the principal amount of the Note then held by such Holders.

 

    	 	6	 

     

    

 

(b)   Insufficient
Authorized Shares.  If at any time while any amount remains due under the Note the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of
the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an "Authorized Share
Failure"), then the Company shall as soon as practicable use all efforts to increase the Company's authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Note then outstanding.

 

7.           Rights Upon Change Of Control.

 

(a)               Change
of Control.  Each of the following events shall constitute a "Change of Control":

 

(i)    the
consolidation, merger or other business combination (including, without limitation, a reorganization or recapitalization) of the
Company with or into another Person (other than (B) pursuant to a migratory merger effected solely for the purpose of changing
the jurisdiction of incorporation of the Company);

 

(ii)   the
sale or transfer of all or substantially all of the Company's assets; or

 

(iii)  a
purchase, tender or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common
Stock.

 

No
sooner than 15 days nor later than 10 days prior to the consummation of a Change of Control, but not prior to the public announcement
of such Change of Control, the Company shall deliver written notice thereof via electronic communication or overnight courier
to Holder (a "Change of Control Notice").

 

(b)               Assumption. 
Prior to the consummation of any Change of Control, the Company will secure from any Person purchasing the Company's assets or
Common Stock or any successor resulting from such Change of Control (in each case, an "Acquiring Entity")
a written agreement (in form and substance satisfactory to the holders of Note representing a Majority of Holders to deliver to
each Holder in exchange for such Note, a security of the Acquiring Entity evidenced by a written instrument substantially similar
in form and substance to the Note, including, without limitation, having a principal amount and interest rate equal to the principal
amounts and the interest rates of the Notes held by such Holder and convertibility features equal or superior to those included
herein.  In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity (“Parent”)
whose common stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, a Majority
of the Holders representing at least a majority of the aggregate outstanding principal amount of the Note may elect to treat such
Parent as the Acquiring Entity for purposes of this Section 7(b).

 

    	 	7	 

     

    

 

8.            Investment Representations. By its acceptance of this Note, Holder acknowledges that this Note and the Conversion Shares have
not been registered under the Securities Act. Holder also understands that the Note and the Conversion Shares are being offered
and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Holder's representations
set forth below. By its accpetance of this Note, Holder hereby represents and warrants as follows:

 

(a)               Holder Bears Economic Risk. Holder has substantial experience in financial and business matters and in evaluating
and investing in private placement transactions of securities in companies similar to the Company so that Holder is capable of
evaluating the merits and risks of its investment in the Company and
has the capacity to protect his/its own interests. Holder must bear the economic risk of this investment indefinitely unless this
Note or the Conversion Shares are registered pursuant to the Securities Act, or an exemption from registration is available. Holder
understands that the Company has no present intention of registering the Note or the Conversion Shares. Holder also understands
that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available,
such exemption may not allow Holder to transfer all or any portion of this Not or the Conversion Shares under the circumstances,
in the amounts or at the times Holder might propose.

 

(b)               Acquisition for Own Account.  Holder is acquiring this Note and the Conversion Shares for Holder's own
account for investment only, and not with a view towards their resale or distribution.

 

(c)               Holder Can Protect Its Interests. Holder represents that by reason of its, or of its management, business or financial
experience, Holder has the capacity to protect its own interests in connection with the transactions contemplated in
this Note.

 

(d)               Accredited Investor. Holder represents that he, she or it is an "accredited investor" within the meaning of Regulation
D promulgated under the Securities Act.

 

(e)               Rule 144.  Holder acknowledges and agrees that this Note and the Conversion Shares are "restricted securities"
as defined in Rule 144 promulgated under the Securities Act as in effect from time to time and must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from such registration is available. Holder has been
advised or is aware of the provisions of Rule 144, which permits limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things: the availability of certain current public information
about the Company, the resale occurring following the required holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified limitations.

 

    	 	8	 

     

    

 

(f)                Legend. All certificates representing the Conversion Shares, if any, will have endorsed thereon a legend prohibiting transfer
except in compliance with the Securities Act and applicable state securities laws. Such certificates
also will contain any additional legend required to be placed thereon by any applicable Blue Sky or other regulations.

 

9.            No Waiver. No delay or omission on the part of the Holder in exercising any right under this Note shall operate as a waiver
of such right or of any other right of the Holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar
to or waiver of the same or any other right on any future occasion.

 

10.          Amendments in Writing. Any term of this Note may be amended, modified (including, without limitation, any extension of the
Maturity Date, to change the conversion price or to cause the Notes to be prepayable) or waived upon the written consent of the
Company and a Majority of Holders; provided however, that, any such amendment or waiver must apply to all outstanding Notes; provided
further, that, the Interest Rate, Section 3 through 5 hereof may not be amended or waived without the written consent of Holder.
No such waiver or consent in any one instance shall be construed to be a continuing waiver or a waiver in any other instance unless
it expressly so provides. The Company shall promptly notify all Holders of any such change or amendment.

 

11.          Waivers, Masculine/Feminine. The Company hereby forever waives presentment, demand, presentment for payment, protest, notice
of protest, notice of dishonor of this Note and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note. As used herein the masculine form includes the feminine and neuter, and vice
versa, the singular form includes the plural, all as the context may so require.

 

12.          Governing Law; Jurisdiction; Venue. This Note, and all matters arising directly and indirectly herefrom (the "Covered
Matters"), shall be governed in all respects by the laws of the State of Delaware as such laws are applied to agreements
between parties in Delaware. The Company irrevocably submits to the personal jurisdiction of the courts of the State of
Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, proceeding or
judgment relating to or arising out of the Covered Matters. Service of process on the Company in connection with any such suit,
action or proceeding may be served on the Company anywhere in the world by the same methods as are specified for the giving of
notices under this Note. The Company irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding
and to the laying of venue in such court. The Company irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.

 

13.          Costs. If action is instituted to collect on this Note, the Company promises to pay all costs and expenses, including reasonable
attorney's fees, incurred in connection with such action.

 

14.          Notices. All notices and other communications given or made pursuant to this Note shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile
if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five days after
having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the Holder at the address set forth on the books and records of the Company or at such other place as may be
designated by the Holder in writing to the Company, and to the Company at 515 Challette Drive, Beverly Hills CA 90210, or to such
e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 14.

 

    	 	9	 

     

    

 

15.          Successors and Assigns. This Note shall be binding upon the successors or assigns of the Company and shall inure to the benefit
of the successors and assigns of the Holder.

 

16.          Specific Performance. The Company acnkowledges that any violation or breach of its obligations under this Note shall result
in immediate and irreparable injury to the Holder for which a remedy at law would be inadequate. Accordingly, in the event of
any breach or threatened breach by the Company of its obligations under this Note, the Holder shall be entitled to have such court
compel the Company to specifically perform its obligations under this Note.

 

17.          Waiver of Jury Trial. THE HOLDER AND THE COMPANY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF OR IN ANY WAY CONNECTED TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

IN
WITNESS WHEREOF, the Company has caused this Note to be signed in its name effective as of the date first above written.

  

	 	TRULI MEDIA GROUP, INC.
	 	 	 
	 	By:	/s/
    Michael     Jay Solomon
	 	Name:	Michael
    Jay Solomon
	 	Title:	Chief
    Executive Officer

 

    	 	10	 

     

    

 

EXHIBIT
A

NOTICE
OF CONVERSION 

 

The
undersigned hereby elects to convert $_________________ principal amount and accrued interest of the “Note”
(defined below) into that number of shares of Common Stock to be issued pursuant to the
conversion of the Note (“Common Stock”) as set forth below, of  TRULI MEDIA GROUP, INC., a Delaware
corporation (the “Company”) according to the conditions of the convertible note of the Company dated as of __________
(the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer
taxes, if any.

 

Box
Checked as to applicable instructions:

 

	 	☐	The
    undersigned hereby requests that the Company issue a certificate or certificates or arrange appropriate book entry for the
    number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto)
    in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

	 	Date
    of Conversion:  	_____________
	 	Applicable
    Conversion Price: 	$____________
	 	Number
    of Shares of Common Stock to be Issued	 
	 	Pursuant
    to Conversion of the Notes:  	 _____________
	 	Amount
    of Principal Balance Due remaining	 
	 	Under
    the Note after this conversion:	 ______________

  

	 	By:_____________________________	 
	 	Name:	 
	 	Title:
    	 
	 	Date:  ______________

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