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EXHIBIT G to
Unit 2 First Amendment
TNP SECOND LIEN MORTGAGE MODIFICATION NO. 2
THIS INSTRUMENT MODIFIES AND AMENDS AN INSTRUMENT WHICH
GRANTED A
SECURITY INTEREST BY A UTILITY AND WHICH CONTAINED
AFTER-ACQUIRED PROPERTY PROVISIONS PURSUANT TO
SUBCHAPTER 35A OF THE TEXAS BUSINESS AND COMMERCE CODE
SECOND LIEN MORTGAGE AND
DEED OF TRUST (WITH SECURITY AGREEMENT)
MODIFICATION, EXTENSION AND AMENDMENT AGREEMENT NO. 2
THIS SECOND LIEN MORTGAGE AND DEED OF TRUST (WITH SECURITY
AGREEMENT) MODIFICATION, EXTENSION AND AMENDMENT AGREEMENT NO.
2
("TNP Second Lien Mortgage Modification No. 2") dated as of
September 21, 1993, is executed and delivered by TEXAS-NEW MEXICO
POWER COMPANY, a Texas corporation ("Mortgagor"), having an
office at 4100 International Plaza, 820 Hulen Towers, Fort Worth,
Texas 76109, Attention: D. R. Barnard, to DONALD H. SNELL, having
an office at Suite 1030, 200 Crescent Court, Dallas, Texas 75201,
as mortgage trustee ("Mortgage Trustee"), for the benefit of the
Secured Parties, as described in the Credit Agreement
(hereinafter defined). Unless otherwise described or defined
herein, all terms used in this TNP Second Lien Mortgage
Modification No. 2 shall have the same meanings herein as are
assigned to such terms in that certain Unit 2 First Amended and
Restated Project Loan and Credit Agreement dated as of January 8,
1992 as amended by the First Amendment (hereinafter defined) (as
so amended, and as further amended, "Credit Agreement") among
Mortgagor, TEXAS GENERATING COMPANY II ("Borrower"), the banks
party thereto ("Banks"), and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION) as agent for the Banks and the Replacement Note
Holders (the "Agent").
W I T N E S S E T H:
Recitals
A. As of October 1, 1988, Mortgagor executed and delivered
to Mortgage Trustee, for the benefit of the Secured Parties, a
certain Second Lien Mortgage and Deed of Trust (with Security
Agreement) ("TNP Second Lien Mortgage"), granting to Mortgage
Trustee, for the benefit of the Secured Parties, a second lien
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 1>
against property of Mortgagor located in the State of Texas
("Second Lien Mortgage Trust Estate") and more particularly
described in the TNP Indenture (as defined in the TNP Second Lien
Mortgage), which TNP Second Lien Mortgage was filed with the
Secretary of State of Texas on October 4, 1988, as Utility
Security Instrument Number 229147. The lien created by the TNP
Second Lien Mortgage is subordinate by its own terms to the lien
of the TNP Indenture.
B. By its terms, the TNP Second Lien Mortgage excluded
from the Second Lien Mortgage Trust Estate certain real property
located in Robertson County, Texas (the "Property") since no
portion thereof was then owned by Mortgagor.
C. Pursuant to a certain Warranty Deed dated as of
October 1, 1988 and recorded in Volume 521 at Page 532 of the
Public Records of Robertson County, Texas, Project Funding
Corporation conveyed 7.466 acres of the Property ("Unit 2
Property") to Texas TPFC, Inc. (the Property less and except the
Unit 2 Property, hereinafter called the "Robertson County
Property").
D. On December 27, 1990, pursuant to the Facility Purchase
Agreement, Mortgagor purchased an undivided 30/345 interest in
the Robertson County Property (including Unit 1 located thereon)
which interest was conveyed to Mortgagor by that certain
Conveyance and Bill of Sale recorded in Volume 556 at Page 653 of
the Public Records of Robertson County, Texas.
E. The Alternative Assumption Date occurred as of May 31,
1991. Effective as of that date, the Unit 2 Property was
conveyed to the Borrower pursuant to a certain Conveyance and
Bill of Sale dated effective May 31, 1991, recorded on July 26,
1991 in Volume 566 at Page 283 of the Public Records of Robertson
County, Texas. Contemporaneously therewith, all of the
Obligations under the terms of the Credit Agreement were assumed
by the Borrower pursuant to a certain Assumption Agreement
recorded on July 26, 1991 in Volume 566 at Page 252 of the Public
Records of Robertson County, Texas. Also contemporaneously
therewith, the obligations of Mortgagor under that certain
Guaranty dated as of May 31, 1991 ("Guaranty") became effective
and pursuant thereto, Mortgagor (sometimes hereinafter called
"Guarantor") guarantees the Obligations that were assumed by the
Borrower.
F. On January 8, 1992, Mortgagor and the Agent, on behalf
of the Secured Parties, executed that certain Second Lien
Mortgage and Deed of Trust (With Security Agreement)
Modification, Extension and Amendment Agreement (the "Second Lien
Mortgage Modification No. 1"), to among other things, further
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 2>
modify the TNP Second Lien Mortgage to clarify and confirm that
any portion of the Trust Estate under the TNP Indenture (as
defined in the TNP Second Lien Mortgage) located in Robertson
County, Texas then owned or thereafter acquired by the Mortgagor
would be included as a part of the Second Lien Trust Estate.
G. On January 27, 1992, pursuant to the Facility Purchase
Agreement (as defined in the Unit 1 Credit Agreement), Mortgagor
purchased an additional undivided 45/345 interest in the
Robertson County Property (including Unit 1 located thereon).
H. On the date hereof, pursuant to the Facility Purchase
Agreement (as defined in the Unit 1 Credit Agreement), Mortgagor
has purchased an additional undivided 65/345 interest in the
Robertson County Property (including Unit 1 located thereon).
I. On the date hereof, pursuant to the Facility Purchase
Agreement, Mortgagor purchased an undivided 75.75/288.5 interest
in the Unit 2 Property (including Unit 2 located thereon).
J. Although all of the undivided interests described in
Recitals G, H and I are presently subject to the liens of the TNP
Second Lien Mortgage by reason of provision to that effect
therein, the parties desire to reflect this fact of record.
K. Mortgagor and the Agent, on behalf of the Secured
Parties, have modified the TNP Second Lien Mortgage to clarify
and confirm that, any portion of the Robertson County Trust
Estate Property owned by or acquired by the Mortgagor shall be
included as a part of the Second Lien Mortgage Trust Estate. The
Mortgagor and the Agent, on behalf of the Secured Parties, have
executed and delivered the TNP Second Lien Mortgage Modification
dated as of January 8, 1992 and caused it to be filed with the
Secretary of State of the State of Texas.
L. Borrower, Mortgagor and the Agent, on behalf of the
Secured Parties, have agreed, as set forth in the First Amendment
(defined below), to modify the terms of the Credit Agreement in
order to permit Mortgagor and Borrower to secure Permitted
Collateralized Indebtedness with the Collateral, adjust the terms
of payment thereunder and to extend the dates for payments
required thereby, and to make other modifications all as set
forth in and subject to the terms and conditions of the Credit
Agreement.
M. The Agent is authorized by Section 15.01 of the Credit
Agreement to execute and deliver this Agreement.
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
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Agreements
NOW, THEREFORE, in consideration of the premises and of the
sum of Ten and No/100 Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of all of
which are hereby acknowledged, the TNP Second Lien Mortgage, as
previously modified by the TNP Second Lien Mortgage Modification,
is hereby modified, extended and amended as follows:
1. Amendment to TNP Second Lien Mortgage. The Mortgagor,
to further secure the Obligations in the manner and to the extent
provided in the TNP Second Lien Mortgage as modified by the
Second Lien Mortgage Modification No. 1 and this TNP Second Lien
Mortgage Modification No. 2, and the performance and observance
by the Mortgagor of all of the covenants, warranties,
representations and other obligations contained in the Project
Documents which are to be performed by it and to expressly
subject to the liens and security interests of the TNP Second
Lien Mortgage additional property acquired by Mortgagor since the
date of execution and delivery of the TNP Second Lien Mortgage,
Mortgagor does hereby BARGAIN, SELL, GRANT, CONVEY, TRANSFER,
MORTGAGE, PLEDGE AND ASSIGN to the Mortgage Trustee and his
successors and substitutes in trust hereunder for the benefit of
the Secured Parties, the following property:
(a) that certain 45/345 undivided interest in and to those
certain lands, Unit 1 and certain property rights
appurtenant to said lands and Unit 1, all as described
and conveyed by that certain Conveyance and Bill of
Sale from Texas Generating Company to Mortgagor
recorded in Volume 573 at Page 552 of the Public
Records of Robertson County, Texas; and
(b) that certain 65/345 undivided interest in and to those
certain lands, Unit 1 and certain property rights
appurtenant to said lands and Unit 1, all as described
and conveyed by that certain Conveyance and Bill of
Sale of even date herewith from Texas Generating
Company to Mortgagor recorded on the date hereof in
Volume [__] at Page [__] of the Public Records of
Robertson County, Texas; and
(c) that certain 75.75/288.5 undivided interest in and to
those certain lands, Unit 2 and certain property rights
appurtenant to said lands and Unit 2, all as described
and conveyed by that certain Conveyance and Bill of
Sale of even date herewith from Texas Generating
Company II to Mortgagor recorded in Volume [__] at Page
[__] of the Public Records of Robertson County, Texas
(the undivided interests referred to in clauses (a) and
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 4>
(b) above and this clause (c), collectively referred to herein
as, the "Additional Trust Estate Property").
TO HAVE AND TO HOLD the said Additional Trust Estate Property
unto the Mortgage Trustee, his successors and assigns, forever,
and Mortgagor does hereby bind itself, its successors and assigns
to warrant and forever defend the title to the Additional Trust
Estate Property unto the Mortgage Trustee for the benefit of the
Secured Parties, against the claims and demands of all persons
whomsoever, except those claiming under Permitted Encumbrances,
and second and subordinate in all respects to the lien and
security interest of, and other rights and benefits granted to
the trustee in the TNP Indenture.
2. Modification of Terms of the Credit Agreement. The
terms of the Credit Agreement are amended and modified pursuant
to the Amendment No. 1 (the "First Amendment") dated as of
September 21, 1993 among the Mortgagor, the Borrower, the Banks
and the other parties thereto. The First Amendment, among other
things, and subject to certain conditions precedent, provides for
(i) rescheduling the amounts and dates of certain repayments,
including extension of the Final Maturity Date to December 31,
1998; (ii) increasing interest rates on the Project Loans; (iii)
adding certain fees payable to the Agent and the Banks; (iv)
providing the Borrower with a revolving credit facility; and (v)
providing for the issuance of Subsequent Replacement Notes
(hereinafter described). Under the Credit Agreement, the Loans
made originally to TPFC and assumed by TGC II on the Alternative
Assumption Date and the Loans made to TGC II after the
Alternative Assumption Date were evidenced by a Project Note held
by each Bank. Under the terms of the Credit Agreement, subject
to certain conditions precedent, TNP may purchase a portion of
the Loans. Such purchase is to be made pro rata from the Banks
which shall make an entry on their respective Project Notes of
the amount so purchased and correspondingly reduce the amount of
the principal due on said Project Notes. Simultaneously, TGC II
shall issue a substitution and replacement promissory note (a
"Subsequent Replacement Note") to TNP to evidence the aggregate
principal amount of the Loans purchased by TNP which now
constitute a part of the Obligations as described in the Credit
Agreement. Therefore, the aggregate of the principal amount of
all the Loans under the Credit Agreement, as evidenced by the
Project Notes and the Replacement Note, shall not be changed as a
result of the issuance of any Subsequent Replacement Note.
3. Effect of Modification. The Loans, whether evidenced
by Project Notes or the Replacement Notes, and all other
Obligations as described in the Credit Agreement are secured by
the liens, security interests and assignments of the TNP Second
Lien Mortgage and the other Security Documents. The validity and
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 5>
priority of the liens, security interests and assignments of the
TNP Second Lien Mortgage shall not be extinguished, impaired,
reduced, released or adversely affected by the terms of this TNP
Second Lien Mortgage Modification No. 2 or the First Amendment.
4. Extension of Rights and Liens. The Mortgagor hereby
extends all rights, titles, liens, security interests,
assignments, powers and privileges securing the Obligations as
described in the Credit Agreement by virtue of the TNP Second
Lien Mortgage until all of such Obligations have been paid in
full and agrees that the execution of this TNP Second Lien
Mortgage Modification No. 2 shall in no manner impair the rights,
titles, liens, security interests, assignments, powers and
privileges existing by virtue of the TNP Second Lien Mortgage, as
they are extended and modified hereby.
5. Joinder of Guarantor. Contemporaneously with the
execution and delivery of this TNP Second Lien Mortgage
Modification No. 2, and as consideration therefor, Mortgagor, as
the Guarantor, hereby confirms and consents to each and every of
the terms and conditions of this TNP Second Lien Mortgage
Modification No. 2 and the First Amendment, and agrees that the
terms and conditions of the Guaranty are in full force and effect
and unaffected by the execution by Borrower and Mortgagor of the
First Amendment and this TNP Second Lien Mortgage Modification
No. 2, and acknowledges that there are no claims or offsets
against, or defenses or counterclaims to, the Guaranty.
6. Successors and Assigns. This TNP Second Lien Mortgage
Modification No. 2 shall be binding upon the successors and
assigns of Mortgagor, the Secured Parties and the Collateral
Agent, and shall inure to the benefit of the successors and
assigns of the Secured Parties; provided, however, nothing
contained in this Section 6 is intended to authorize TNP or the
Borrower to assign any of the Obligations or to sell any of the
Second Lien Mortgage Trust Estate except in accordance with the
Credit Agreement and the Facility Purchase Agreement.
7. Counterparts. This TNP Second Lien Mortgage
Modification No. 2 may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
instrument, and any of the parties hereto many execute this TNP
Second Lien Mortgage Modification No. 2 by signing any such
counterpart.
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 6>
EXECUTED as of the date first hereinabove written.
SECURED PARTIES:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Agent
By:/s/ Bettylou J. Robert
Title: Vice President
MORTGAGOR:
TEXAS-NEW MEXICO POWER COMPANY,
a Texas corporation
By:/s/ D. R. Barnard
Title: Sector Vice President &
Chief Financial Officer
The undersigned hereby
consents and agrees to the
foregoing pursuant to
Section 1(c) of the
Intercreditor Agreement
as defined in the
Credit Agreement.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Collateral Agent
By:/s/ Bettylou J. Robert
Title: Vice President
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 7>
STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the 27th day
of September, 1993, by Bettylou J. Robert, Vice President of THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Agent.
/s/ Elizabeth A. Sullivan
NOTARY PUBLIC in and for
the State of NEW YORK
My Commission Expires:
/s/ Elizabeth A. Sullivan
February 1, 1995 Typed or Printed Name of Notary
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 8>
STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the 27th day
of September, 1993, by Bettylou J. Robert, Vice President of THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Collateral Agent.
/s/ Elizabeth A. Sullivan
NOTARY PUBLIC in and for
the State of NEW YORK
My Commission Expires:
/s/ Elizabeth A. Sullivan
February 1, 1995 Typed or Printed Name of Notary
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
<PAGE 9>
THE STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the 27th day
of September, 1993, by D. R. Barnard, Sector Vice President & CFO
of TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation, on behalf
of said corporation.
/s/ Aisha Piracha
NOTARY PUBLIC in and for
the State of TEXAS
My Commission Expires:
/s/ Aisha Piracha
November 16, 1994 Typed or Printed Name of Notary
TNP SECOND LIEN MORTGAGE MODIFICATION NO.2
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