Document:

Exhibit 10.3

    
      

    

    Exhibit
      10.3

    

    SECOND
      AMENDMENT TO CREDIT AGREEMENT

    

    

    THIS
      SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”)
      is
      entered into as of December 20, 2006 among PNM RESOURCES, INC., a New Mexico
      corporation (the “Company”),
      FIRST
      CHOICE POWER, L.P., a Texas limited partnership (“FCP”),
      TEXAS-NEW
      MEXICO POWER COMPANY,
      a Texas
      corporation (“TNMP”,
      collectively with the Company and FCP, the “Borrowers”),
      the
      Lenders party hereto, and BANK OF AMERICA, N.A., as Administrative Agent for
      the
      Lenders (in such capacity, the “Administrative
      Agent”).
      Capitalized terms used herein and not otherwise defined shall have the meanings
      ascribed thereto in the Credit Agreement (as defined below).

    

    

    R
      E C
      I T A L S

    

    WHEREAS,
      the Borrowers, the Lenders party thereto and the Administrative Agent are
      parties to that certain Amended and Restated Credit Agreement, dated as of
      August  15, 2005 (as amended or modified from time to time, the
“Credit
      Agreement”);
      and

    

    WHEREAS,
      the Borrowers have requested that the Administrative Agent and Lenders agree
      to
      certain changes to the Credit Agreement.

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants contained
      herein, and for other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the parties hereto agree as
      follows:

    

    A
      G R
      E E M E N T

    

    1. Amendments.
      

    

    (a)
       Section
      1.1.
      The
      definition of "Affiliate" appearing in Section 1.1 of the Credit Agreement
      is
      hereby amended and restated in its entirety to read as follows:

    

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

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
       Section
      8.3.
      Section
      8.3 of the Credit Agreement is hereby amended and restated in its entirety
      to
      read as follows:

    

    8.3 Sale
      or Lease of Assets.

    

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

     

    2. Conditions
      Precedent.
      This
      Amendment shall be effective upon receipt by the Administrative Agent of copies
      of this Amendment duly executed by each Borrower and the Required
      Lenders.

    

    3. Ratification
      of Credit Agreement.
      The
      term “Credit Agreement” as used in each of the Credit Documents shall hereafter
      mean the Credit Agreement as amended by this Amendment. Except as herein
      specifically agreed, the Credit Agreement is hereby ratified and confirmed
      and
      shall remain in full force and effect according to its terms.

    

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

    

    (a) It
      has
      taken all necessary action to authorize the execution, delivery and performance
      of this Amendment.

    

    (b) This
      Amendment has been duly executed and delivered by such Person and constitutes
      such Person’s legal, valid and binding obligations, enforceable in accordance
      with its terms, except as such enforceability may be subject to (i) bankruptcy,
      insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
      similar laws affecting creditors’ rights generally and (ii) general principles
      of equity (regardless of whether such enforceability is considered in a
      proceeding at law or in equity).

    

    (c) No
      consent, approval, authorization or order of, or filing, registration or
      qualification with, any court or governmental authority or third party is
      required in connection with the execution, delivery or performance by such
      Person of this Amendment.

    

    5. Representations
      and Warranties.
      Each
      Borrower represents and warrants to the Lenders that (a) the
      representations and warranties of such Borrower set forth in Section 6 of
      the Credit Agreement are true and correct as of the date hereof, unless they
      specifically refer to an earlier date, (b) no
      event has occurred and is continuing which constitutes a Default or an Event
      of
      Default, and (c) it
      has no claims, counterclaims, offsets, credits or defenses to its obligations
      under the Credit Documents or to the extent it has any they are hereby released
      in consideration of the Lenders entering into this Amendment.

    

    
      
         

      

      
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    6. No
      Conflicts.
      Neither
      the execution and delivery of this Amendment, nor the consummation of the
      transactions contemplated herein, nor performance of and compliance with the
      terms and provisions hereof by any Borrower will (a) violate,
      contravene or conflict with any provision of its respective articles or
      certificate of incorporation, bylaws or other organizational or governing
      document, (b) violate,
      contravene or conflict with any law, rule, regulation, order, writ, judgment,
      injunction, decree or permit applicable to a Borrower, (c) violate,
      contravene or conflict with contractual provisions of, or cause an event of
      default under, any indenture, loan agreement, mortgage, deed of trust, contract
      or other agreement or instrument to which a Borrower is a party or by which
      it
      or its properties may be bound or (d) result
      in or require the creation of any Lien upon or with respect to a Borrower’s
      properties.

    

    7. Counterparts/Telecopy.
      This
      Amendment may be executed in any number of counterparts, each of which when
      so
      executed and delivered shall be an original, but all of which shall constitute
      one and the same instrument. Delivery of executed counterparts by telecopy
      shall
      be effective as an original and shall constitute a representation that an
      original will be delivered if requested.

    

    8. GOVERNING
      LAW.
      THIS
      AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
      GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
      STATE OF NEW YORK.

    

    

    

    

    

    

    [remainder
      of page intentionally left blank]

    

    

    

    
      
         

         

      

      
        3

        
          

        

      

      
         

      

    

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

    

    

    BORROWERS: 
  
PNM
      RESOURCES, INC.,

       
      a New Mexico corporation

    

    

    By: /s/
      Wendy A. Carlson   

    Name:Wendy
      A. Carlson____________________

    Title:
      Vice
      President and Treasurer___________

    

    

    FIRST
      CHOICE POWER, L.P.,

    a
      Texas
      limited partnership

    By:
      First
      Choice Power GP, LLC, 

    its
      general partner

    

    

    By: /s/
      Wendy A. Carlson   

    Name: Wendy
      A. Carlson   

    Title: Vice
      President and Treasurer  

    

    

    TEXAS-NEW
      MEXICO POWER COMPANY,

    a
      Texas
      corporation

    

    

    By: /s/
      Tom Sategna    

    Name:
      Thomas
      G. Sategna___________________

    Title: Vice
      President, Controller and Treasurer 

    

    

    

    ADMINISTRATIVE
      

    AGENT:     
BANK
      OF AMERICA, N.A.,

      
      as Administrative Agent

    

    

    By: /s/
      Maria A. McClain   

    Name: Maria
      A. McClain   

    Title: Vice
      President    

    
      
         

         

         

      

      
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    LENDERS:     
BANK
      OF AMERICA, N.A.,

           
      as a Lender and L/C Issuer

    

    

    By: /s/Kevin
      Bertelsen   

    Name: Kevin
      Bertelsen    

    Title: Senior
      Vice President   

    

    

    WACHOVIA
      BANK, NATIONAL ASSOCIATION,

    as
      a
      Lender and L/C Issuer

    

    

    By: /s/
      Frederick W. Price   

    Name: Frederick
      W. Price   

    Title: Managing
      Director   

    

    

    UNION
      BANK OF CALIFORNIA, N.A.

    

    

    By: /s/
      Efrain Soto    

    Name: Efrain
      Soto    

    Title: Vice
      President    

    

    

    JPMORGAN
      CHASE BANK, N.A.

    

    

    By: /s/Michael
      DeForge   

    Name: Michael
      DeForge    

    Title: Vice
      President    

    

    

    CITIBANK,
      N.A.

    

    

    By: /s/Scott
      Hancock   

    Name: Scott
      Hancock    

    Title: Vice
      President    

    

    

    WELLS
      FARGO BANK, N.A.

    

    

    By: /s/
      Daniel A. Conklin   

    Name: Daniel
      A. Conklin   

    Title: V.P.     

    

    
      
         

      

      
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    MERRILL
      LYNCH BANK USA

    

    

    By: /s/Louis
      Alder    

    Name: Louis
      Alder    

    Title: Director     

    

    

    MORGAN
      STANLEY BANK

    

    

    By: /s/Daniel
      Twenge   

    Name: Daniel
      Twenge    

    Title: Authorized
      Signatory   

    Morgan
      Stanley Bank   

    

    

    UBS
      LOAN FINANCE LLC

    

    

    By: /s/Irja
      R. Otsa  /s/Marie
      Haddad  

    Name: Irja
      R. Otsa  Marie
      A. Haddad 

    Title: Associate
      Director Associate
      Director 

    Banking
      Products Banking
      Products 

    Services,
      US  Services,
      U.S.  

    

    

    LEHMAN
      BROTHERS BANK, FSB

    

    

    By: /s/Janine
      M. Shugan   

    Name: Janine
      M. Shugan   

    Title: Authorized
      Signatory   

    

    

    WILLIAM
      STREET COMMITMENT CORPORATION

    

    

    By: /s/Mark
      Walton    

    Name: Mark
      Walton    

    Title: Assistant
      Vice President   

    

    

    CREDIT
      SUISSE, CAYMAN ISLANDS BRANCH

    

    

    By: /s/Sarah
      Wu    

    Name: Sarah
      Wu    

    Title: Director     

    

    
      
         

      

      
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    By: /s/Shaheen
      Malik   

    Name: Shaheen
      Malik    

    Title: Associate    

    

    

    U
      S BANK NATIONAL ASSOCIATION

    

    

    By: /s/James
      W. Henken   

    Name: James
      W. Henken   

    Title: Vice
      President    

    

    

    HSBC
      BANK USA, NATIONAL ASSOCIATION

    

    

    By: /s/Richard
      J. Ward   

    Name: Richard
      J. Ward    

    Title: First
      Vice President   

    

    

    MELLON
      BANK, N.A.

    

    

    By: /s/Mark
      W. Rogers   

    Name: Mark
      W. Rogers    

    Title: Vice
      President    

    

    

    ROYAL
      BANK OF CANADA

    

    

    By: /s/David
      A. McCluskey   

    Name: David
      A. McCluskey   

    Title: Authorized
      Signatory   

    

    

    COMPASS
      BANK

    

    

    By: /s/     

    Name:      

    Title:      

    

    
      
         

      

      
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    SOUTHWEST
      SECURITIES BANK; FSB

    formerly
      Southwest Securities Bank

    

    By: /s/Lonnie
      Warren   

    Name: Lonnie
      Warren    

    Title: President,
      North Arlington  

    Banking
      Center   

    

    

    BANK
      OF ALBUQUERQUE, N.A.

    

    

    By: /s/Myka
      C. Gentry   

    Name: Myka
      C. Gentry    

    Title: Vice
      President    

    

    BANK
      HAPOALIM BM

    

    By:/s/Helen
      H. Gateson  /s/Charles
      McLaughlin

    Name: Helen
      H. Gateson Charles
      McLaughlin 

    Title: President  Senior
      Vice President 

    

    

    8Exhibit 10.89

    
      

    

     

    
      Exhibit
        10.89

      

      AMENDMENT
        FOUR TO UNDERGROUND COAL SALES AGREEMENT

      

      THIS
        AMENDMENT FOUR TO UNDERGROUND COAL SALES AGREEMENT
        (“Amendment Four”), by and between SAN JUAN COAL COMPANY, a Delaware corporation
        (referred to herein as “SJCC”) and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New
        Mexico corporation, and TUCSON ELECTRIC POWER COMPANY, an Arizona corporation
        (collectively referred to herein as the “Utilities”) (with SJCC and Utilities
        herein sometimes collectively referred to as “Parties”), amends that certain
        Underground Coal Sales Agreement dated August 31, 2001 as amended (the “UG-CSA”)
        between SJCC and the Utilities. 

      

      RECITALS

      

      WHEREAS,
        SJCC and
        the Utilities wish to add the April 24, 2006 modification to Federal Coal
        Lease
        NM 28093 as defined herein to the Coal Leases;

       

      NOW
        THEREFORE,
        in
        consideration of the terms, covenants and agreements contained in this Amendment
        Four and for other good and valuable consideration, the Utilities jointly
        and
        severally agree with SJCC as follows:

      

      AGREEMENT

      

      	1.  	
              The
                April 24, 2006 modification to Federal Coal Lease NM 28093 is hereby
                added
                to the Coal Leases. Specifically, the UG-CSA is amended by adding
                the
                following coal lease description to Exhibit “A” “Coal
                Leases”:

            

       

      NM
        28093 Mod 1 - April 2006 modification to Federal Coal Lease NM 28093, the
        Deep
        Lease, approx. 160.6 acres.

      Township
        29 North, Range 15 West, NMPM, approx. 160.6 acres

      Section
        1: Lots 3-4, S/2NW/4

      The
        attached map will replace the current map in Exhibit A.

       

      	2.  	
              The
                UG-CSA is amended by deleting the following language at the end of
                the
                paragraph in Section A of Exhibit “F” Operating
                Costs.

            

       

      and
        the
        lease acquisition costs for NM HC-0004. Recovery of the NM HC-0004 lease
        acquisition costs and other costs incurred in acquiring, developing, assessing,
        or otherwise preparing for delivery of coal from NM HC-0004 shall be pursuant
        to
        the UG-CSA and contingent on delivery of coal to Utilities from NM
        HC-0004.

       

      And
        replacing it with:

       

      and
        the
        lease acquisition costs for NM HC-0004 and NM 28093 Mod 1. Recovery of the
        NM
        28093 Mod 1 lease acquisition costs and other costs incurred in acquiring,
        developing, assessing, or otherwise preparing for delivery of coal from NM
        28093
        Mod 1 shall be pursuant to the UG-CSA and contingent on delivery of coal
        to
        Utilities from NM 28093 Mod 1.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      	3.  	
              All
                other provisions of the UG-CSA not specifically amended by this Amendment
                Four remain in full force and effect. Except as otherwise stated,
                the
                terms of this Agreement shall be effective upon execution by all
                Parties.

            

       

      IN
        WITNESS WHEREOF,
        the
        Parties hereto have caused this Agreement to be executed on their behalf
        by
        their respective officers, thereunto duly authorized.

      

      Public
        Service Company of New Mexico

       

      

      By: /s/
        Hugh W. Smith   

      Name: Hugh
        W. Smith  

      Title:Senior
        Vice President, Energy Resources  Date: 3/7/07    

      

      

      Tucson
        Electric Power Company

      

       

      By: /s/
        Michael J. DeConcini  

      Name: Michael
        J. DeConcini  

      Title: Senior
        VP      Date: 9/21/06   

      

      

      San
        Juan
        Coal Company

       

      

      By: /s/
        Evan Y. Jones   

      Name: Evan
        Y. Jones   

      Title: VP
        SJCC      Date: 9/13/06   

       

      
         

        
           

          
            

          

        

        
           

            

        

      

      

      CONSENT
        OF GUARANTOR

      

      BHP
        Minerals International Inc., a Delaware corporation, (formerly BHP-Utah
        International Inc.), the guarantor of the obligations of San Juan Coal Company
        under the Underground Coal Sales Agreement pursuant to the Guarantee dated
        September 25, 2001 (the Guarantee”), hereby consents to the foregoing Amendment
        Four to the Underground Coal Sales Agreement and agrees that all references
        in
        the Guarantee to the Underground Coal Sales Agreement shall be deemed to
        be
        references to the Underground Coal Sales Agreement as amended by this Amendment
        Four.

       

      

      BHP
        Minerals International, Inc.

       

      

      By: /s/
        Earl K. Moore   

      Name: Earl
        K. Moore   

      Title: President     Date: December
        7, 2006  

      

       

      

      By: /s/
        M.
        Ruth Rhodes   

      Name: M.
        Ruth Rhodes  

      Secretary     Date: December
        7, 2006  

      

      

      

      (Corporate
        Seal)

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