AMENDMENT NO. 1 to the Credit Agreement
and
AMENDMENT NO. 1 to the Pledge Agreement
Dated as of June 7, 1995
AMENDMENT NO. 1 to the Credit Agreement referred to below
among Public Service Company of New Mexico, a New Mexico corporation
(the "Borrower"), the lenders party to the Credit Agreement (the
"Lenders") and Chemical Bank and Citibank, N.A., as co-agents (the "Co-
Agents") for the Lenders thereunder and AMENDMENT NO. 1 to the Pledge
Agreement referred to below between Public Service Company of New Mexico
(in such capacity, the "Pledgor") and Citibank, N.A. (in such capacity,
the "Collateral Agent").
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders and the Co-Agents are
parties to a short-term Revolving Credit Agreement dated as of December
14, 1993 (the "Credit Agreement"). Capitalized terms not otherwise
defined in this Amendment shall have the same meanings as specified in
the Credit Agreement.
(2) The Pledgor and the Collateral Agent are parties to a
Pledge Agreement dated as of December 14, 1993 (the "Pledge Agreement")
made by the Pledgor to the Collateral Agent for the benefit of the
Lenders pursuant to the Credit Agreement.
(3) The Borrower desires to amend interest and fee
provisions and extend the maturity of the Credit Agreement to reflect
the Borrower's improved financial and business condition and to take
advantage of current bank market conditions. The Borrower has requested
further amendments consistent with its current financial and business
strategy. In addition, the Credit Agreement and Pledge Agreement
require updates of certain Schedules as set forth below.
(4) The Lenders are, on the terms and conditions stated
below, willing to agree to amend the Credit Agreement and the Pledge
Agreement as hereinafter set forth.
SECTION 1. Amendments to the Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof,
hereby amended as follows:
(a) The definition of "Applicable Margin" in Section 1.01
of the Credit Agreement is amended in full to read as follows:
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Bond Rating in effect on such
date as set forth below:
Applicable Margin Applicable Margin Applicable Margin
Bond Rating For Base Rate for Adjusted CD for Eurodollar
Moody's/S&P Advances Rate Advances Rate Advances
-------------- ----------------- ----------------- -----------------
Baa3 or BBB- or above 0% 3/4 of 1% 5/8 of 1%
below Baa3 and BBB-
but at least Ba1 or BB+ 0% 1 1/8% 1%
below Ba1 and BB+
but at least Ba2 or BB 1/4 of 1% 1 3/8% 1 1/4%
below Ba2 and BB 3/4 of 1% 1 7/8% 1 3/4%
(b) The definition of "Bond Rating" in Section 1.01 of the
Credit Agreement is amended by deleting the text up to the first
proviso thereof and replacing therefor the following:
"`Bond Rating' means, as of any date, the higher of
the ratings that have been most recently announced by either
Moody's or S&P, as the case may be, for First Mortgage Bonds
in effect on such date,"
(c) The definition of "Designated Subsidiary" in Section
1.01 of the Credit Agreement is amended in full to read as
follows:
"`Designated Subsidiary' means any Person that becomes
a Subsidiary of the Borrower on or after June 7, 1995.".
(d) The definition of "Investment" in Section 1.01 of the
Credit Agreement is amended by deleting the words "of existing
Indebtedness" in the last line thereof and replacing therefor the
following:
"or retirement of existing Indebtedness or lease obligation
bonds under the Palo Verde Leases, or the renewal or
replacement of credit support for existing Indebtedness".
(e) The definition of "Supplemental Indentures" in Section
1.01 of the Credit Agreement is amended in full to read as
follows:
"`Supplemental Indentures' means all supplemental
indentures to the FMB Indenture in effect from time to time
relating to this Agreement."
(f) The definition of "Termination Date" in Section 1.01
of the Credit Agreement is amended by deleting the date "June 13,
1995" in the first line thereof and replacing therefor the date
"June 30, 1998".
(g) Section 2.03(a) of the Credit Agreement is amended by
deleting subclauses (i) through (iv) thereof and replacing
therefor the following:
(i) 1/4 of 1% during such times as the Bond Rating by
Moody's or S&P is at least Baa3 or BBB-, respectively, (ii)
3/10 of 1% during such times as clause (a)(i) of this
Section 2.03 is not applicable and the Bond Rating by
Moody's or S&P is at least Ba1 or BB+, respectively, (iii)
3/8 of 1% during such times as clauses (a)(i) and (a)(ii) of
this Section 2.03 are not applicable and the Bond Rating by
Moody's or S&P is at least Ba2 or BB, respectively, and (iv)
1/2 of 1% at all other times.
(h) Section 2.03(b) of the Credit Agreement is amended by
deleting the percentage "1/4 of 1%" in the third line thereof and
replacing therefor the percentage "1/10 of 1%" and further by
deleting the phrase "the date hereof" in the last line thereof and
replacing therefor the date "June 7, 1995".
(i) Section 2.06 of the Credit Agreement is amended in
full to read as follows:
SECTION 2.06. Interest. (a) The Borrower shall pay
interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until
such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. During such periods
as such Advance is a Base Rate Advance, a rate per
annum equal at all times during each Interest Period
for such Advance to the sum of (A) the Base Rate in
effect from time to time plus (B) the Applicable
Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and on the
date such Advance shall be Converted or paid in full.
(ii) Adjusted CD Rate Advances. During such
periods as such Advance is an Adjusted CD Rate
Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of
(A) the Adjusted CD Rate in effect from time to time
plus (B) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such
Interest Period and on the date such Advance shall be
Converted or paid in full.
(iii) Eurodollar Rate Advances. During such
periods as such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the
Eurodollar Rate for such Interest Period for such
Advance plus (B) the Applicable Margin in effect from
time to time, payable in arrears on the last day of
such Interest Period and on the date such Advance
shall be Converted or paid in full.
(b) Upon the occurrence and during the continuance of
any Event of Default, the Borrower shall pay interest on the
unpaid principal amount of each Advance owing to each Lender
and on the unpaid amount of all interest, fees and other
amounts payable hereunder that is not paid when due, payable
in arrears on the dates referred to in clauses (a)(i)
through (iii) above and on demand, at a rate per annum equal
at all times to 1% above the rate per annum otherwise
required to be paid on such Advances pursuant to clauses
(a)(i) through (iii) above or in the case of such other
amounts, 1% above the rate per annum required to be paid on
Base Rate Advances pursuant to clause (a)(i) above.
(j) Section 3.01(a)(iii) of the Credit Agreement is
amended by deleting the parenthetical "(the `Supplemental
Indentures')" in the last line thereof.
(k) Section 4.01(f) of the Credit Agreement is amended by
(i) deleting the date "December 31, 1992" in the fourth line
thereof and replacing therefor the date "December 31, 1994", (ii)
deleting the date "September 30, 1993" in the second sentence
thereof and replacing therefor the date "March 31, 1995" and (iii)
deleting the last sentence thereof in its entirety and replacing
therefor the following:
Since December 31, 1994, there has been no material adverse
change in the condition (financial or otherwise), results of
operations, assets, business or prospects of the Borrower
and its Designated Subsidiaries, except as disclosed in the
Borrower's 1994 Form 10-K, Form 10-Q for the three months
ending on March 31, 1995 and Forms 8-K delivered to the Co-
Agents prior to
June 7, 1995.
(l) Section 4.01(i) of the Credit Agreement is amended by
deleting the exception clause up to, but not including, the
parenthetical "(the `Disclosed Litigation')" in lines eight
through twelve thereof and replacing therefor the following:
", except as disclosed in the Borrower's 1994 Form 10-K,
Form 10-Q for the three months ending on March 31, 1995 and
Forms 8-K delivered to the Co-Agents prior to June 7, 1995".
(m) Section 4.01(m) of the Credit Agreement is amended by
deleting the billing period "September 1993" in the seventh line
thereof and replacing therefor the billing period "March 1995".
(n) Section 4.01(q) of the Credit Agreement is amended by
deleting reference to the "1992 annual report" in the first line
thereof and replacing therefor reference to the "1993 annual
report".
(o) Section 4.01(x) of the Credit Agreement is amended by
deleting the date "October 31, 1993" in the seventh and ninth
lines thereof and replacing therefor the date "May 31, 1995".
(p) Section 5.01(h) of the Credit Agreement is amended by
deleting the ratio "0.72 to 1" in the fifth line thereof and
replacing therefor the ratio "0.70 to 1" and is further amended by
deleting the proviso at the end thereof in its entirety.
(q) Section 5.02(a) of the Credit Agreement is amended by
(i) deleting the word "and" in the last line of subclause (x)
thereof, (ii) deleting the following text from subclause (xi)
thereof:
"signing and filing financing statements under the Uniform
Commercial Code of the applicable jurisdictions and",
(iii) deleting the period at the end of subclause (xi) thereof and
replacing therefor a semicolon followed by the word "and" and (iv)
adding at the end thereof a new subclause (xii) to read as
follows:
"(xii)signing and filing appropriate financing statements
under the Uniform Commercial Code of the applicable
jurisdictions to the extent required in connection
with transactions not otherwise prohibited
hereunder.".
(r) Section 5.02(c)(iii)(C) of the Credit Agreement is
amended by deleting the phrase "San Juan Unit 4 Capacity to UAMPS"
and replacing therefor the phrase "the Borrower's gas gathering
and processing assets to Williams Gas Processing-Blanco, Inc."
(s) Section 5.02(d) of the Credit Agreement is amended by
(i) deleting the word "and" in the last line of subclause (vi)
thereof, (ii) deleting the period at the end of subclause (vii)
thereof and replacing therefor a semicolon followed by the word
"and" and (iii) adding at the end thereof a new subclause (viii)
to read as follows:
"(viii) other Investments by the Borrower and
Designated Subsidiaries not to exceed an aggregate amount
equal to $7,000,000 in any fiscal year.".
(t) Section 5.02(e)(ii) of the Credit Agreement is amended
by deleting the figure "$2,000,000" in the last line thereof and
replacing therefor the figure "$7,000,000".
(u) Schedules II, III, IV, V, VI, VII and VIII of the
Credit Agreement are amended in full to read as set forth on the
corresponding Schedules hereto.
SECTION 2. Amendment to the Pledge Agreement. Schedule I
of the Pledge Agreement is, effective as of the date hereof and subject
to the satisfaction of the conditions precedent set forth in Section 3
hereof, hereby amended in full to read as set forth on Schedule I
hereto.
SECTION 3. Conditions of Effectiveness. This
Amendment shall become effective as of the date first above written
when, and only when, the following conditions shall have been satisfied:
(a) The Co-Agents shall have received on or before the
date hereof the following, each dated such day, in form and
substance satisfactory to the Lenders:
(i) Counterparts of this Amendment duly executed by
the Borrower and the Lenders or, as to any of the Lenders,
advice satisfactory to the Co-Agents that such Lender has
executed this Amendment.
(ii) The promissory notes, in substantially the form
of Exhibit A hereto (collectively, the "1995 Notes"), of the
Borrower payable to the order of each of the Lenders,
respectively, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Advances made by
such Lender and reflecting the extension of maturity of the
Credit Agreement through June 30, 1998.
(iii) The forty-third and forty-fourth supplemental
indentures, in substantially the forms of Exhibits B-1 and
B-2 hereto (collectively, the "1995 Supplemental
Indentures"), to the FMB Indenture, each duly executed by
the Borrower and The Bank of New York, as trustee (the
"Trustee") under the FMB Indenture, providing for the
creation of two new issues of first mortgage bonds payable
to Citibank, N.A. to be due on June 30, 1998 (collectively,
the "1998 Bonds").
(iv) The 1998 Bonds duly executed and delivered by
the Borrower, together with the respective certificates of
authentification duly executed by the Trustee.
(v) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this Amendment,
and of all documents evidencing other necessary corporate
action and governmental approvals, including, without
limitation, the required approval of PUC permitting the
extension of the Termination Date under the Credit
Agreement, with respect to this Amendment and the other
documents to be delivered hereunder.
(vi) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to
sign this Amendment and the other documents to be delivered
hereunder.
(vii) A certificate signed by a duly authorized
officer of the Borrower stating that on the date hereof (A)
the representations and warranties contained in Section 4.01
of the Credit Agreement and in Section 4 of the Pledge
Agreement are true and correct and (B) no event has occurred
and is continuing which constitutes a Default.
(viii)A favorable opinion of Keleher & McLeod, P.A.,
counsel for the Borrower, in substantially the form of
Exhibit C hereto.
(b) The Borrower shall have paid all fees and expenses of
the Co-Agents and the Lenders, including, without limitation, the
participation fee referred to in Section 2.03(b) of the Credit
Agreement, as amended hereby.
SECTION 4. Reference to and Effect on the Loan Documents.
(a) On and after the effectiveness of this Amendment, (i) each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to "the Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, as
amended hereby, and (ii) each reference in the Pledge Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to
the Pledge Agreement, and each reference in the other Loan Documents to
"the Pledge Agreement", "thereunder", "thereof" or words of like import
referring to the Pledge Agreement, shall mean and be a reference to the
Pledge Agreement, as amended hereby.
(b) Except as specifically amended by this Amendment, the
Credit Agreement, the Notes and each of the other Loan Documents are and
shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed. Without limiting the generality of the
foregoing, the Pledge Agreement and all of the collateral described
therein do and shall continue to secure the payment of all Secured
Obligations (as defined therein) of the Borrower under the Loan
Documents, in each case as amended hereby.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender, the Co-Agents or the
Collateral Agent under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.
SECTION 5. Costs and Expenses. The Borrower agrees to pay
on demand all costs and expenses of the Co-Agents in connection with the
preparation, execution, delivery and administration, modification and
amendment of this Amendment (including, without limitation, the
reasonable fees and expenses of counsel for the Co-Agents) in accordance
with the terms of Section 8.04 of the Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment may
be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 7. Governing Law. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
PUBLIC SERVICE COMPANY OF
NEW MEXICO, as Borrower and
Pledgor
By___________________________________
Title:
CHEMICAL BANK, individually, as Co-Agent
and as Administrative Agent
By___________________________________
Title:
CITIBANK, N.A., individually, as Co-Agent
and as Collateral Agent
By___________________________________
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By___________________________________
Title:
THE BANK OF CALIFORNIA, N.A.
By___________________________________
Title:
CIBC INC.
By___________________________________
Title:
THE CHASE MANHATTAN BANK,
NATIONAL ASSOCIATION
By___________________________________
Title:
MELLON BANK, N.A.
By___________________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By___________________________________
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN LIMITED, Los Angeles Agency
By___________________________________
Title:
SCHEDULE I
Attached to and forming part of the Pledge Agreement dated as of
December 14, 1993, as amended or otherwise modified from time to time,
by PUBLIC SERVICE COMPANY OF NEW MEXICO, as Pledgor, to CITIBANK, N.A.,
as Collateral Agent
Debt Issuer Description of Debt Debt Certificate Final Maturity Original Principal
No(s). Amount
-------------- ------------------- ---------------- -------------- ------------------
Public Service First Mortgage Bonds, 1 June 30, 1998 $41,859,900
Company of New 1995 Series A
Mexico
Public Service First Mortgage Bonds, 1 June 30, 1998 $58,140,100
Company of New
Mexico
Schedules II, III, IV, V, VI, VII and VIII to be updated and provided by the
Borrower.