Document:

AMENDED AGREEMENT BETWEEN W. DOUGLAS HOBBS AND TNMP

 
EXHIBIT
10(J)(1) 
 
August 5, 2002

 
PERSONAL AND CONFIDENTIAL

 
Mr. Douglas Hobbs 
Texas-New Mexico Power Company 
4100 International Plaza 
Fort Worth, Texas 76109 
 
Dear Mr. Hobbs: 
 
This letter agreement is entered into by and between you and Texas-New Mexico Power Company (the Company) in order to amend the employment agreement between you and the Company dated as of April 5, 2000 (the April 5, 2000 Agreement).
The April 5, 2000 Agreement is hereby amended solely in the following respects: 
 

	 	•	 	in paragraph 1, your position shall be Senior Vice President and Chief Operations Officer of the Company; and 

 

	 	•	 	paragraph 3 (including the numbered subparagraphs) shall now be amended as follows: 

 
For the period of April 7, 2002, through April 6, 2003, you will be entitled to an annual compensation of no
less than $351,330, payable as follows: 
 

	 	1.	 	your annual Base Salary of $173,093 for the period from April 7, 2002, through August 4, 2002, and an annual Base Salary of $205,000 for the period from August 5,
2002, through April 6, 2003, paid in accordance with the Company’s customary payroll practices and an annual Bonus of $113,634 payable to you in a lump sum on April 6, 2003, provided that you have not terminated your employment with the Company
as of the day immediately prior to the date of the payment of the annual Bonus; and 

 

	 	2.	 	an annual incentive bonus ranging from 0% to 37.5% of your annual Base Salary received during the calendar year if you remain employed by the Company through the end
of the calendar year. The amount of your annual incentive bonus will be based on the attainment of certain pre-established financial and operational goals of the Company. Your target annual incentive bonus shall be equal to 25% of your prorated
annual rate of pay for the 12 months ending December 31, 2002. 

 

	 	3.	 	In the event that the total compensation you receive during the 12-month period ending April 6, 2003, including your Base Salary, Bonus and incentive bonus, is less
than $351,330, you shall be entitled to an additional bonus for such 12-month period equal to the amount of such shortfall, which amount shall be payable as soon as practicable following the date hereof, as applicable, provided that you have not
terminated your employment with the Company prior to April 6, 2003. 

 
If this meets with your approval, please so indicate by countersigning this letter in the space provided below, returning one copy to me. 
 
Sincerely, 
 
 
By: /s/ Jack
V. Chambers 
 
Jack V.
Chambers, Chairman of the Board of Directors of Texas-New Mexico Power Company 
 
Agreed to and accepted this 19 day of August, 2002. 
 
 
/s/ Douglas Hobbs 
Douglas HobbsPromissory Note,dated as of June 14,2002

 
EXHIBIT 10.45

 
INTEREST-FREE 
SECURED PROMISSORY DEMAND NOTE 
 

	 $500,000.00
	 	 June 14, 2002

 
FOR
VALUE RECEIVED, the undersigned, Dan and Rebecca Cushing, (“Maker”), promises to pay to the order of Prentiss Properties Limited, Inc., a Delaware corporation (“Payee”), the principal amount of Five Hundred Thousand
and No One-Hundredths Dollars ($500,000.00), in the lawful money of the United States of America, together with interest on the unpaid principal balance of this Note from time to time outstanding, at a rate per annum (compounded annually) equal to
0.00%. 
 
The principal of, and all accrued
interest upon, this Note shall be due and payable on demand or, if sooner, the earliest of, 1) upon termination of employment as described below, 2) the sale of Maker’s new California residence or 3) June 14, 2012, subject to the terms below.

 
Subsequent to January 1 2002, interest shall
accrue on the outstanding principal balance of this Note at a rate per annum (compounded annually) equal to 0.0%. 
 
Maker shall have the right to prepay the unpaid principal balance of this Note from time to time without premium or penalty, provided,
however, that accrued interest on the amount of such prepayment of principal shall be due and payable contemporaneously with such prepayment of principal. 
 
Maker waives demand, presentment for payment, notice of intention to accelerate, notice of acceleration, protest, notice of protest, and
all other notice, filing of suit, and diligence in collecting this Note. 
 
No delay on the part of the holder of this Note in the exercise of any power or right under this Note, or under any other instrument executed pursuant hereto, shall operate as a waiver thereof, nor shall a single or partial
exercise of any power or right preclude other or further exercise thereof or the exercise of any other power or right. A waiver on one occasion shall not be construed as a bar to or a waiver of any other right in the future. 
 
If this Note is placed in the hands of any attorney for
collection, or if it is collected through bankruptcy or other judicial proceedings, Maker further agrees to pay all expenses of collection, including reasonable attorneys’ fees. In the event of default by Maker, the interest rate applicable to
this Note shall be the highest rate allowed by law. 
 
Notwithstanding any other terms of this note to the contrary, the then outstanding principal sum evidenced by this Note plus all accrued interest, shall become due and payable in full ninety (90) days after the termination of
employment or separation from service of Dan Cushing with the Payee for any reason. 

 
Maker herewith expressly
grants Payee the right, but not the obligation, to offset any amount due to Maker from Payee upon the termination of employment or separation from service of Maker with Payee. 
 
IN ADDITION TO THE TERMS, PROMISES AND COVENANTS CONTAINED HEREIN, THIS NOTE SHALL BE FURTHER SECURED BY THE
PROPERTY AND TERMS COVERED BY THAT CERTAIN SECOND LIEN DEED OF TRUST OF EVEN DATE HEREWITH BETWEEN MAKER AND PAYEE, AND ALSO BY ANY AGREEMENT, DOCUMENT, OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH. 
 
As used herein, the term “Holder” shall be deemed to
include any company or entity owned or controlled, whether directly or indirectly, by Payee. 
 
This note is secured by the Security Agreement attached hereto and made a part hereof for all purposes. 
 
This Note shall be governed by and construed in accordance with the laws of the State of Texas. 
 
/s/ Dan Cushing 
Dan Cushing 
 
/s/ Rebecca Cushing 
Rebecca Cushing 

 
SECURITY
AGREEMENT 
 
THIS SECURITY AGREEMENT (this
“Security Agreement”) is entered into to be effective as of the 14th day of June, 2002, by Dan and
Rebecca Cushing, (“Debtor”), for the benefit of Prentiss Properties Limited, Inc., a Delaware corporation, (“Secured Party”). 
 
WITNESSETH: 
 
WHEREAS, concurrently with the execution and delivery hereof, Secured Party is loaning $500,000.00, to Debtor pursuant to that certain
Interest Free Secured Promissory Demand Note of even date herewith (“Note”) executed by Debtor and payable to Secured Party in the original principal amount of $500,000.00; and 
 
WHEREAS, as a condition to making such loan, Secured Party is requiring Debtor to grant to Secured Party a
security interest in and to the Collateral (as defined in Section 2 hereof); 
 
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor hereby covenants and agrees with Secured Party as follows: 
 
1. Security Interest. In order to secure the full and
complete payment and performance of the Note when due, Debtor hereby grants to Secured Party a security interest in and to the Collateral and pledges and assigns the Collateral to Secured Party, all upon and subject to the terms and conditions of
this Security Agreement. 
 
2. Collateral.
As used herein, the term “Collateral” means all of the property listed in Exhibit A attached hereto and incorporated herein for all purposes, and all monies, profits, income, accounts, general intangibles, chattel papers,
documents, and instruments now due and owing and hereafter to become due and owing to Debtor pursuant to the terms and provisions of or in connection with the property described in Exhibit A. 
 
Debtor hereby represents and warrants that Debtor owns the
Collateral free and clear of any existing or outstanding lien, pledge, security interest, mortgage, assignment, or other encumbrance, except for the first lien and those originating from prior loans made by the Secured Party to the Debtor concerning
the Collateral, and no financing statement or other instrument of hypothecation covering any of the Collateral or its proceeds is on file in any public office. 
 
3. Covenants and Agreements. Debtor shall pay to the Secured Party any sum or sums due or which may become due pursuant to the Note
in accordance with the terms of the Note and the terms of this Security Agreement. Upon full payment of Debtor’s obligations under the Note, this Security Agreement shall automatically terminate and Secured Party shall execute such releases,
documents, and statements as shall be necessary to release Debtor from this Security Agreement and to discharge the security interest created hereby. 

 
4. Event of
Default. Debtor shall be in default under this Agreement upon the occurrence of any of the following events or conditions (singularly and collectively, an “Event of Default”): (a) Debtor’s failure to pay when due any
indebtedness due under the Note and secured by this Security Agreement and such failure remains unremedied for a period of 10 days after written notice thereof shall have been given by Secured Party to Debtor; or (b) the failure of the Debtor to
perform any other obligation of Debtor under the Note or this Security Agreement and such failure remains unremedied for a period of 30 days after written notice thereof shall have been given by Secured Party to Debtor. 
 
5. Remedies. Upon the occurrence of an Event of
Default, Secured Party shall notify Debtor of such Event of Default and Debtor (a) may declare all indebtedness owing under the Note and secured by this Security Agreement immediately due and payable and (b) shall have, in addition to any and all
other rights and remedies available to the Debtor at law, in equity, or otherwise, all rights and remedies provided for in the Uniform Commercial Code in force in the State of Texas as in effect at the time in question. 
 
6. Miscellaneous. 
 
(a) Amendments. This Agreement may be amended only by
an instrument in writing executed jointly by Debtor and Secured Party. 
 
(b) Parties Bound. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their successors, heirs and assigns. 
 
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the day and year first written above.

 
/s/ Dan Cushing 
Dan Cushing 
 
/s/ Rebecca Cushing 
Rebecca Cushing

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