========================================================================
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of November 3, 1995
among
TEXAS-NEW MEXICO POWER COMPANY,
THE LENDERS PARTY HERETO,
CHEMICAL BANK, as Administrative Agent and as Collateral Agent, and
THE BANK OF NEW YORK, CIBC, INC., NATIONSBANK
OF TEXAS, N.A. and UNION BANK, as Co-Agents
=======================================================================
TABLE OF CONTENTS
Article Section Page
I. DEFINITIONS
1.1 Defined Terms 1
1.2 Terms Generally 17
II. THE CREDITS
2.1 Commitments 17
2.2 Loans 18
2.3 Borrowing Procedure 19
2.4 Evidence of Debt; Repayment of Loans 19
2.5 Commitment Fees 20
2.6 Interest on Loans 20
2.7 Default Interest 21
2.8 Alternate Rate of Interest 21
2.9 Termination and Reduction of Commitments 21
2.10 Prepayment 22
2.11 Reserve Requirements; Change in Circumstances 22
2.12 Change in Legality 23
2.13 Indemnity 24
2.14 Pro Rata Treatment 24
2.15 Sharing of Setoffs 25
2.16 Payments 25
2.17 Taxes 25
2.18 Assignment of Commitments Under Certain Circumstances; Duty to Mitigate 27
2.19 The Replacement Loan 29
III. REPRESENTATIONS AND WARRANTIES
3.1 Organization; Powers 29
3.2 Authorization 29
3.3 Enforceability 30
3.4 Government Approvals 30
3.5 Financial Statements 30
3.6 No Material Adverse Change 30
3.7 Title to Properties; Possession Under Leases 30
3.8 Subsidiaries 31
3.9 Litigation; Compliance with Laws 31
3.10 Agreements 31
3.11 Federal Reserve Regulations 31
3.12 Investment Company Act; Public Utility Holding Company Act 32
3.13 Use of Proceeds 32
3.14 Tax Returns 32
3.15 No Material Misstatements 32
3.16 Employee Benefit Plans 32
3.17 Environmental Matters 32
3.18 Insurance 33
3.19 Pledge Agreements 33
3.20 Labor Matters 33
3.21 Solvency 34
3.22 Existing Facility Agreement Representations 34
IV. CONDITIONS PRECEDENT TO LENDING
4.1 All Borrowings 34
4.2 First Borrowing 35
4.3 Borrowings in Excess of $100,000,000 38
V. AFFIRMATIVE COVENANTS
5.1 Existence; Businesses and Properties 39
5.2 Insurance 39
5.3 Obligations and Taxes 39
5.4 Financial Statements, Reports, etc. 40
5.5 Litigation and Other Notices 41
5.6 Employee Benefits 41
5.7 Maintaining Records; Access to Properties
and Inspections 41
5.8 Use of Proceeds 41
5.9 Compliance with Laws and Environmental Laws 41
5.10 Preparation of Environmental Reports 42
5.11 Further Assurances 42
5.12 Maintenance; Ownership of Guarantor Capital Stock 42
5.13 Performance and Continuation of Certain Documents 42
VI. NEGATIVE COVENANTS
6.1 Indebtedness 43
6.2 Liens 43
6.3 Sale and Lease-Back Transactions 44
6.4 Investments, Loans and Advances 44
6.5 Mergers, Consolidations; Sales of Assets
and Acquisitions 45
6.6 Dividends and Distributions; Restrictions on Ability
of Subsidiaries to Pay Dividends 45
6.7 Transactions with Affiliates 46
6.8 Business of Borrower and Subsidiaries 46
6.9 Additional Generating Facilities 46
6.10 Amendment or Modification of Certain Agreements; Pledged Notes 46
6.11 Interest Coverage Ratio 47
6.12 Debt to Capitalization Ratio 47
6.13 Capital Expenditures 47
VII. EVENTS OF DEFAULT 47
VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT 50
IX. MISCELLANEOUS
9.1 Notices 52
9.2 Survival of Agreement 53
9.3 Binding Effect 53
9.4 Successors and Assigns 53
9.5 Expenses; Indemnity 55
9.6 Right of Setoff 56
9.7 Applicable Law 56
9.8 Waivers; Amendment 56
9.9 Interest Rate Limitation 57
9.10 Entire Agreement 57
9.11 Waiver of Jury Trial 57
9.12 Severability 58
9.13 Counterparts 58
9.14 Headings 58
9.15 Jurisdiction; Consent to Service of Process 58
9.16 Confidentiality 59
9.17 Release of Collateral 59
9.18 Representations of Lenders 60
Schedule 2.1 Commitments
Schedule 3.6 Changes
Schedule 3.8 Subsidiaries
Schedule 3.9 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 6.1 Intercompany Indebtedness
Schedule 6.2 Existing Liens
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of TGC II Guarantee and Pledge Agreement
Exhibit E Form of Bond Agreement
Exhibit F Form of Note Pledge Agreement
Exhibit G-1 Form of Opinion of Haynes and Boone, L.L.P.
Exhibit G-1-A Form of Opinion of Michael Blanchard, General Counsel of Borrower and Guarantor
Exhibit G-2 Form of Opinion of Snell, Banowsky & Trent
Exhibit G-3 Form of Opinion of Rubin, Katz, Salazar, Alley & Rouse
Exhibit H Form of Sixth TGC II Mortgage Modification and Extension Agreement
Exhibit I Form of TNP Second Lien Mortgage Modification No.3
Exhibit J Form of Assignment and Amendment Agreement
Exhibit K Form of Assignment of TGC II Mortgage Lien
Exhibit L Form of Collateral Transfer of Notes, Rights and Interests
Exhibit M Form of Assignment of TNP Second Lien Mortgage
Exhibit N Form of Collateral Transfer of Notes, Rights and Interests
Exhibit O Form of Amendment No. 1 to the TNP Security Agreement
CREDIT AGREEMENT dated as of November 3, 1995, among TEXAS-NEW MEXICO POWER
COMPANY, a Texas corporation (the "Borrower"), the Lenders (as defined in
Article I), CHEMICAL BANK, a New York banking corporation, as administrative
agent (in such capacity, the "Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the Lenders and THE BANK OF NEW YORK,
CIBC, INC., NATIONSBANK OF TEXAS, N.A. and UNION BANK, as Co-Agents (the
"Co-Agents")
The Borrower has requested the Lenders to extend credit in the form of
Loans (such term and each other capitalized term used but not defined herein
having the meaning given it in Article I) at any time and from time to time
prior to the Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of $150,000,000. The proceeds of the Loans are to be
used solely to purchase loans outstanding under the Existing Facility Agreement
and, directly or indirectly, to repay existing Indebtedness of the Borrower and
for general corporate purposes.
The Lenders are willing to extend such credit to the Borrower on the terms
and subject to the conditions set forth herein. Accordingly, the parties hereto
agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Additional Bonds" shall have the meaning assigned to such term in Section
4.3.
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"Aggregate Credit Exposure" shall mean the aggregate amount of the Lenders'
Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% or (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) or (c),
or both, of the preceding sentence, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
The term "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective. The term "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate. The term "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day for such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan, or with respect to the Commitment Fees, as the case
may be, the applicable percentage set forth below under the caption "Eurodollar
Spread", "ABR Spread" or "Fee Percentage", respectively, based upon the ratings
by S&P and Moody's applicable on such date to the Index Debt:
Eurodollar ABR Fee
Spread Spread Percentage
Category 1
BBB- or higher by S&P
Baa3 or higher by Moody's 0.8750% 0.0000% 0.2500%
Category 2
BB+ by S&P
Ba1 by Moody's 1.3750% 0.3750% 0.3125%
Category 3
BB by S&P
Ba2 by Moody's 1.6250% 0.6250% 0.3750%
Category 4
BB- by S&P
Ba3 by Moody's 1.8750% 0.8750% 0.3750%
Category 5
B+ by S&P
B1 by Moody's 2.2500% 1.2500% 0.5000%
Category 6
B or below by S&P
B2 or below by Moody's 2.5000% 1.5000% 0.5000%
For purposes of the foregoing, (i) if either Moody's or S&P shall not have
in effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then such rating agency
shall be deemed to have established a rating in Category 6; (ii) if the ratings
established or deemed to have been established by Moody's and S&P for the Index
Debt shall fall within different Categories, the Applicable Percentage shall be
based on the inferior (or numerically higher) of the two Categories; and (iii)
if the rating established by Moody's or S&P for the Index Debt shall be changed
(other than as a result of a change in the rating system of Moody's or S&P),
such change shall be effective as of the date on which it is first announced by
the applicable rating agency. Each change in the Applicable Percentage shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change. If the rating system of Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith to amend
this definition to reflect such changed rating system or the non-availability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Percentage shall be determined by reference to the
rating most recently in effect prior to such change or cessation.
"Assessment Rate" shall mean for any date the annual rate (rounded upwards,
if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor thereto) for insurance
by such Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"Assignment Agreement" shall mean the Assignment and Amendment Agreement
substantially in the form of Exhibit J dated the date hereof, among the
Borrower, the Guarantor, the Existing Facility Banks, the Existing Facility
Agent, the Existing Facility Collateral Agent, the Administrative Agent and the
Collateral Agent.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent, in
the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"Bond Agreement" shall mean the Bond Agreement substantially in the form of
Exhibit E, between the Borrower and the Collateral Agent for the benefit of the
Lenders.
"Bonds" shall mean the $30,000,000 principal amount of non-redeemable First
Mortgage Bonds issued by the Borrower to the Collateral Agent for the benefit of
the Lenders pursuant to the Bond Agreement.
"Bond Total" shall mean the aggregate principal amount of Bonds and
Additional Bonds issued to and held by the Collateral Agent pursuant to the Bond
Agreement.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in accordance with
the terms of Section 2.3 and substantially in the form of Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean expenditures related to the acquisition
of plant and equipment (including, without limitation, capitalized interest and
start-up expenses related to such plant and equipment) which are capitalized in
accordance with GAAP.
"Capital Lease Obligations" of any person shall mean obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" shall mean an event or the last of a series of events
by which
(i) any person or group (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
rules and regulations of the Securities and Exchange Commission relating to such
sections, as amended from time to time), is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership " of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 40% of the total voting power of all outstanding common stock of TNP
Enterprises;
(ii) the Borrower consolidates with or merges into another corporation and
the Borrower is not the surviving entity, or the Borrower conveys, transfers or
leases substantially all of its assets, or TNP Enterprises shall cease to own
100% of the common stock of the Borrower; or
(iii) during any period of 24 consecutive months, whether commencing before
or after the date hereof, but ending on or after the date hereof,
(a) individuals who at the beginning of such 24-month period were directors
of TNP Enterprises, and
(b) any new directors who were elected or recommended for election to the
board of directors of TNP Enterprises by a vote of at least a majority of the
directors then still in office who either were directors at the beginning of
such 24-month period or whose election was previously so approved or so
recommended,
cease for any reason to constitute a majority of the board of directors of
TNP Enterprises.
"Chase" shall mean The Chase Manhattan Bank (National Association).
"Closing Date" shall mean the date of the first Borrowing hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all the "Collateral" as defined in the Pledge
Agreements.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to make Loans hereunder as set forth on Schedule 2.1 or in the
Assignment and Acceptance pursuant to which such Lender assumed its Commitment,
as applicable, as the same may be (a) reduced from time to time pursuant to
Section 2.9 or pursuant to Section 2.18 and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 9.4.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.5.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated August 1995.
"Consolidated EBIT" shall mean with respect to the Borrower and its
consolidated Subsidiaries for any period, operating revenues of the Borrower and
its consolidated Subsidiaries for such period less operating expenses of the
Borrower and its consolidated Subsidiaries, but before the deduction therefrom
of any applicable interest charges and income taxes for such period, all
determined on a consolidated basis in accordance with GAAP. For the purposes of
this definition, EBIT shall be calculated before any reduction for any write
down after the date hereof in the book value of assets of the Borrower or its
Subsidiaries resulting from any statute or any rule, regulation or order of the
PUCT.
"Consolidated Interest Expense" shall mean the aggregate Interest Expense
of the Borrower and the Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Total Indebtedness" shall mean the aggregate Indebtedness of
the Borrower and the Subsidiaries of the sort referred to in clause (a) of the
definition of "Indebtedness", determined on a consolidated basis in accordance
with GAAP.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Credit Exposure" shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Loans of such Lender.
"Cumulative Net Income Available for Common Dividends " shall mean for any
period the sum of all consolidated net income available for common dividends as
reflected in the Borrower's consolidated statements of operations for such
period.
"Debenture Trustees" shall mean the First Debenture Trustee and any
Subsequent Debenture Trustee, and "Debenture Trustee" shall mean any of them.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Dividend" shall mean, with respect to any person, any dividend on any
shares of the common, preferred or preference stock, or any other class of stock
or equity capital, of such person or any other distribution in respect thereof
(other than dividends payable solely in shares of such stock) and any payments
on account of the purchase, redemption or other retirement of any of such
person's common stock or any other class of stock or equity capital, or any
warrants or options therefor, whether in cash or in property or in obligations
or securities.
"dollars" or "$" shall mean lawful money of the United States of America.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation, notice
of violation, claim, demand, order, directive, cost recovery action or other
cause of action by, or on behalf of, any Governmental Authority or any person
for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon: (a) the existence, or
the continuation of the existence, of a release of Hazardous Materials
(including sudden or non-sudden, accidental or non-accidental releases); (b)
exposure to any Hazardous Material; (c) the presence, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material; or (d)
the violation or alleged violation of any Environmental Law or Environmental
Permit.
"Environmental Law" shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or to health and safety
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Amendments of 1984, 42 U.S.C.
Section 6901 et seq., the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., the Clean Air Act of
1970, as amended 42 U.S.C. Section 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. Section 2601 et seq., the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. Section 651 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., and
any similar or implementing state or local law, and all amendments or
regulations promulgated thereunder.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Governmental Authority pursuant to any Environmental Law.
"Equity Capital" shall mean, as of any date of determination
thereof, the sum of the following for the Borrower and its Subsidiaries
determined on a consolidated basis (without duplication) in accordance with
GAAP:
(a) the amount of capital stock (including, without limitation, preferred
and preference stock), plus
(b) the amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such deficit), plus
(c) the amount of any other items of an equity capital nature, minus
(d) the sum of (x) the cost of treasury shares plus (y) goodwill.
For the purposes of this definition, the sum shall be calculated before any
reduction for any write down after the date hereof in the book value of the
assets of the Borrower or its Subsidiaries resulting from any statute or any
rule, regulation or order of the PUCT; provided, that the excess of any such
write-downs over $10,000,000 in the aggregate during the term of this Agreement
shall be taken into account in determining Equity Capital.
"Equity Issuance" shall mean any issuance or sale by any
person of any shares of capital stock or other equity securities of such person,
or any obligations convertible into or exchangeable for, or giving any person a
right, option or warrant to acquire, such securities or such convertible or
exchangeable obligations.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (b) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (e) the incurrence of any
liability under Title IV of ERISA with respect to the termination of any Plan or
the withdrawal or partial withdrawal of the Borrower or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; (f) the receipt by the Borrower
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the receipt by the Borrower or any ERISA Affiliate
of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the occurrence
of a "prohibited transaction" with respect to which the Borrower or any of its
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which the Borrower or any such Subsidiary could
otherwise be liable; and (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could reasonably be expected to result in liability
of the Borrower.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate determined
by reference to the LIBO Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Existing Facility Agent" shall mean the "Agent" referred to in the
Existing Facility Agreement.
"Existing Facility Agreement" shall mean the Unit 2 First Amended and
Restated Project Loan and Credit Agreement dated January 8, 1992, as amended and
in effect immediately prior to the date hereof, among the Borrower, the
Guarantor, the Existing Facility Banks, the Existing Facility Collateral Agent
and the Existing Facility Agent.
"Existing Facility Amendment No. 1" shall mean the First Amendment to the
Existing Facility Agreement dated as of September 21, 1993.
"Existing Facility Banks" shall mean the banks party to the Existing
Facility Agreement.
"Existing Facility Collateral" shall have the meaning assigned to the term
"Collateral" in the Existing Facility Agreement.
"Existing Facility Collateral Agent" shall mean the "Collateral Agent"
referred to in the Existing Facility Agreement.
"Existing Facility Common Collateral" shall have the meaning assigned to
the term "Common Collateral" in the Intercreditor Agreement.
"Existing Facility Documents" shall mean, collectively, the Existing
Facility Agreement, the Existing Facility Project Documents and the Existing
Facility Security Documents.
"Existing Facility Project Documents" shall have the meaning assigned to
the term "Project Documents" in the Existing Facility Agreement.
"Existing Facility Secured Parties" shall have the meaning assigned to the
term "Secured Parties" in the Existing Facility Agreement.
"Existing Facility Security Documents" shall mean the "Security Documents"
and the "First Amendment Security Documents", as such terms are defined in the
Existing Facility Agreement.
"Facility Purchase Agreement" shall mean the Unit 2 First Amended and
Restated Facility Purchase Agreement, among the Borrower and the Guarantor dated
as of January 8, 1992, as amended from time to time.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or controller of such
corporation.
"First Commitment Reduction Date" shall mean November 3, 1998.
"First Debenture Trustee" shall mean IBJ, as trustee under, or any
successor trustee under, the First Secured Debenture Indenture.
"First Mortgage Bonds" shall mean the first mortgage bonds issued by the
Borrower pursuant to the TNP Bond Indenture.
"First Secured Debenture Indenture" shall mean the Indenture and Security
Agreement dated as of January 15, 1992 between the Borrower and IBJ, as trustee,
as the same may from time to time be amended, modified or supplemented or its
provisions waived.
"First Secured Debentures" shall mean the debentures, due January 15, 1999,
issued by the Borrower on January 27, 1992 under the First Secured Debenture
Indenture.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis, but giving effect to changes in such accounting
principles as provided in Section 1.2.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantor" shall mean Texas Generating Company II, a Texas corporation.
"IBJ" shall mean IBJ Schroder Bank & Trust Company.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person with respect to deposits or advances of any kind, (c) all obligations of
such person evidenced by bonds, debentures, notes or similar instruments, (d)
all obligations of such person upon which interest charges are customarily paid,
(e) all obligations of such person under conditional sale or other title
retention agreements relating to property or assets purchased by such person,
(f) all obligations of such person issued or assumed as the deferred purchase
price of property or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business), (g) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such person, whether or not the obligations secured thereby
have been assumed, (h) all Guarantees by such person of Indebtedness of others,
(i) all Capital Lease Obligations of such person, (j) all obligations of such
person in respect of Interest Rate Protection Agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements and
(k) all obligations of such person as an account party in respect of letters of
credit and bankers' acceptances.
"Index Debt" shall mean the First Mortgage Bonds.
"Intercreditor Agreement" shall mean the Intercreditor and Non-disturbance
Agreement dated as of October 1, 1988, as amended from time to time, among the
Borrower, the Guarantor (as successor in interest to TPFC), the banks party
thereto and Chase, in its several capacities as the Existing Facility Collateral
Agent and the Unit 1 Credit Agent and the Unit 2 Credit Agent (each as defined
therein).
"Interest Expense" shall mean with respect to any person, for any period,
the sum of the following: (a) all interest expense in respect of indebtedness
during such period (whether or not actually paid during such period) plus (b)
the net amounts payable (or minus the net amounts receivable) under any Interest
Rate Protection Agreement during such period (whether or not actually paid or
received during such period).
"Interest Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day that would have been an Interest Payment Date
had successive Interest Periods of three months' duration been applicable to
such Borrowing, and, in addition, the date of any prepayment of such Borrowing
or refinancing of such Borrowing with a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect (except that as to Eurodollar Borrowings made on the Closing
Date or within three Business Days thereafter, the Borrower may request an
Interest Period of any duration not fewer than 7 days and not more than 6
months) and (b) as to any ABR Borrowing, the period commencing on the date of
such Borrowing and ending on the earliest of (i) the next succeeding March 31,
June 30, September 30 or December 31, (ii) the Maturity Date and (iii) the date
such Borrowing is prepaid in accordance with Section 2.10; provided, however,
that if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period.
"Interest Rate Protection Agreement" shall mean any agreement providing for
an interest rate swap, cap or collar, or for any other financial arrangement
designed to protect against fluctuations in interest rates.
"Lenders" shall mean (a) the financial institutions listed on Schedule 2.1
(other than any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any financial institution that
has become a party hereto pursuant to an Assignment and Acceptance.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing, the rate
(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to, the Administrative Agent's portion
of such Eurodollar Borrowing and for a maturity comparable to such Interest
Period are offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Assignment Agreement, the
Pledge Agreements, Amendment No. 1 to the TNP Security Agreement (as defined in
the Existing Facility Agreement) substantially in the form of Exhibit O and any
promissory notes that may be issued pursuant to Section 9.4(h).
"Loan Parties" shall mean the Borrower and the Guarantor.
"Loans" shall mean the loans made by the Lenders to the Borrower pursuant
to Section 2.1. Each Loan shall be a Eurodollar Loan or an ABR Loan.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on the
business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole or the Borrower and the Guarantor
on a combined basis, (b) material impairment of the ability of the Borrower or
any other Loan Party to perform any of its obligations under any Loan Document
to which it is or will be a party or (c) material impairment of the rights of or
benefits available to the Lenders under any Loan Document.
"Maturity Date" shall mean November 3, 2000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean with respect to any Equity Issuance or any
issuance of debt securities, cash proceeds net of underwriting commissions or
placement fees and expenses directly incurred in connection therewith.
"Note Pledge Agreement" shall mean the Note Pledge Agreement, substantially
in the form of Exhibit F, between the Borrower and the Collateral Agent for the
benefit of the Lenders.
"Obligations" shall mean all obligations defined as "Obligations" in the
TGC II Guarantee and Pledge Agreement and in the Pledge Agreements.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $250,000,000;
(d) deposits not exceeding $2,000,000 in the aggregate with,
or investments issued by or guaranteed by (and backed by the full faith
and credit of the United States of America), any domestic office of a
commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of less than $250,000,000 but not less than
$30,000,000; and
(e) other investment instruments approved in writing by
the Required Lenders.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreements" shall mean the Bond Agreement, the Note Pledge
Agreement and the TGC II Guarantee and Pledge Agreement and each of the
agreements and other instruments executed and delivered pursuant to either of
them or pursuant to Section 5.11.
"Pledged Notes" shall mean the notes issued under the Existing Facility
Agreement and held immediately prior to the Closing Date by the Existing
Facility Banks and purchased and pledged by the Borrower to the Collateral Agent
for the benefit of the Lenders pursuant to the Note Pledge Agreement.
"Project" shall mean, collectively, Unit 2 and the Site.
"PUCT" shall mean the Public Utility Commission of the State of Texas or
any successor thereto.
"Quarterly Dates" shall mean the last day of each March, June, September
and December, the first of which Quarterly Dates shall be the first such date
after the date any Loan is made, provided that, if any such date is not a
Business Day, the relevant Quarterly Date shall be the next succeeding Business
Day.
"Register" shall have the meaning assigned to such term in Section 9.4(d).
"Regulation G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Release Conditions" shall have the meaning assigned to such term in
Section 9.17(a).
"Release Date" shall have the meaning assigned to such term in Section
9.17(a).
"Release of Collateral" shall have the meaning assigned to such term in
Section 9.17(a).
"Replacement Loan" shall have the meaning assigned to such term in Section
2.19.
"Replacement Note" shall have the meaning assigned to such term in Section
2.19.
"Replacement Note Holder" shall have the meaning assigned to such term in
the Existing Facility Agreement.
"Replacement Note Maturity Date" shall mean January 15, 1999.
"Required Lenders" shall mean, at any time, Lenders having Loans and unused
Commitments representing at least 66-2/3% of the sum of all Loans outstanding
and unused Commitments at such time.
"Responsible Officer" of any corporation shall mean any executive officer
or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"S&P" shall mean Standard & Poor's Ratings Service, a division of
McGraw-Hill, Inc.
"Second Commitment Reduction Date" shall mean November 3, 1999.
"Secured Debenture Indentures" shall mean the First Secured Debenture
Indenture and any Subsequent Secured Debenture Indentures, and "Secured
Debenture Indenture" shall mean any of them.
"Secured Debentures" shall mean the First Secured Debentures and any
Subsequent Secured Debentures (which may include subsequent series of debentures
issued under any indenture supplemental to any Subsequent Secured Debenture
Indenture), and may refer to the Secured Debentures of any one or more such
series, as the context may require.
"Site" shall have the meaning assigned thereto in the TGC II Mortgage.
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which the
Administrative Agent is subject, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Subsequent Debenture Trustee" shall mean the trustee under any Subsequent
Secured Debenture Indenture.
"Subsequent Secured Debenture Indenture" shall mean any indenture or
agreement, other than the First Secured Debenture Indenture, which provides for
the issuance of and sets out the terms and conditions of any Indebtedness of the
Borrower which is secured by the Replacement Note pursuant to and in accordance
with Section 2.19, whether or not said agreement shall be denominated an
"indenture" and whether or not said debt shall be denominated "debentures," in
each case, as the same may from time to time be amended, modified or
supplemented or its provisions waived.
"Subsequent Secured Debentures" shall mean any Indebtedness of the
Borrower, other than the First Secured Debentures, which is secured by the
Replacement Note in accordance with Section 2.19, whether or not said debt shall
be denominated "debentures". Said term may refer to Subsequent Secured
Debentures of any one or more such series, as the context may require.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Supplemental Bond Indenture" shall mean the Twenty-Fourth Supplemental
Indenture dated as of November 3, 1995 between the Borrower and Bank of America
Illinois, as trustee.
"TGC" shall mean Texas Generating Company, a Texas corporation.
"TGC II" shall mean Texas Generating Company II, a Texas corporation.
"TGC II Guarantee and Pledge Agreement" shall mean the Guarantee and Pledge
Agreement, substantially in the form of Exhibit D, made by the Guarantor in
favor of the Collateral Agent for the benefit of the Lenders.
"TGC II Mortgage" shall mean the Mortgage and Deed of Trust (with Security
Agreement and UCC Financing Statement for Fixture Filing) dated to be effective
as of October 1, 1988 by TPFC in favor of Donald H. Snell as mortgage trustee,
recorded in Volume 521 at Page 601 of the Public Records of Robertson County,
Texas, as amended or modified from time to time.
"TGC II Mortgage Trust Estate" shall have the meaning ascribed to the term
Mortgage Trust Estate as defined in the TGC II Mortgage, as the same may be
reduced from time to time pursuant to the Facility Purchase Agreement.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
"TNP" shall mean the Borrower.
"TNP Bond Indenture" shall mean the Indenture of Mortgage and Deed of
Trust, dated as of November 1, 1944, between Community Public Service Company
(predecessor to the Borrower) and City National Bank and Trust Company of
Chicago (predecessor to Bank of America Illinois), as Trustee, as amended and
supplemented by supplemental indentures.
"TNP Enterprises" shall mean TNP Enterprises, Inc., a Texas corporation.
"TNP Second Lien Mortgage" shall have the meaning assigned to such term in
the Existing Facility Agreement, as amended by any modification to such
Mortgage.
"Total Capitalization" shall mean, as of any date, the sum of Equity
Capital and the aggregate amount of Indebtedness of the sort referred to in
clause (a) of the definition of "Indebtedness" (including the current portion of
such Indebtedness), in each case of the Borrower and its Subsidiaries,
determined on a consolidated basis.
"Total Commitment" shall mean, at any time, the aggregate amount of the
Commitments, as in effect at such time.
"TPFC" shall mean Texas PFC, Inc.
"Transactions" shall have the meaning assigned to such term in Section 3.2.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
LIBO Rate and the Alternate Base Rate.
"Unit 1" shall have the meaning assigned to such term in the Existing
Facility Agreement.
"Unit 1 Credit Agreement" shall have the meaning assigned to such term in
the Existing Facility ----------------------- Agreement.
"Unit 2" shall have the meaning assigned to such term in the Existing
Facility Agreement.
"wholly owned subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Whenever definitions in Section 1.1
are defined by reference to defined terms in the Existing Facility Agreement,
and such defined terms in the Existing Facility Agreement contain capitalized
terms not otherwise defined herein, such capitalized terms shall have the
meanings assigned to such terms in the Existing Facility Agreement. Except as
otherwise expressly provided herein, (a) any reference in this Agreement to any
Loan Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article
VI or any related definition to eliminate the effect of any change in GAAP
occurring after the date of this Agreement on the operation of such covenant (or
if the Administrative Agent notifies the Borrower that the Required Lenders wish
to amend Article VI or any related definition for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.
ARTICLE II. THE CREDITS
SECTION 2.1. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Loans to the Borrower, at any time and from
time to time on or after the date hereof, and until the earlier of the Maturity
Date and the termination of the Commitment of such Lender in accordance with the
terms hereof, in an aggregate principal amount at any time outstanding that will
not result in such Lender's Credit Exposure exceeding its Commitment. Within the
limits set forth in the preceding sentence and subject to the terms, conditions
and limitations set forth herein, the Borrower may borrow, pay or prepay and
reborrow Loans.
SECTION 2.2. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). The Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $1,000,000 and
not less than $2,000,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 2.8 and 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.3. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than six Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 11:00 a.m., New York City time, and the Administrative Agent shall by 12:00
(noon), New York City time, credit the amounts so received to an account with
the Administrative Agent designated by the Borrower in the applicable Borrowing
Request, which account must be in the name of the Borrower or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
(f) The Borrower may refinance all or any part of a Borrowing with another
Borrowing, subject to the conditions and limitations set forth in this
Agreement. Any Borrowing or part thereof so refinanced shall be deemed to be
repaid or prepaid in accordance with the applicable provisions of this Agreement
with the proceeds of the new Borrowing, and the proceeds of such new Borrowing,
to the extent they do not exceed the principal amount of the Borrowing being
refinanced, shall not be transferred as contemplated by paragraph (c) above.
SECTION 2.3. Borrowing Procedure. In order to request a Borrowing, the
Borrower shall hand deliver or telecopy to the Administrative Agent a duly
completed Borrowing Request (or shall notify the Administrative Agent by
telephone of the information contained in such a Borrowing Request, with a copy
of such Borrowing Request to be delivered or telecopied to the Administrative
Agent promptly after such notice) (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before a proposed
Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon,
New York City time, one Business Day before a proposed Borrowing. Each Borrowing
Request shall be irrevocable, shall be signed by or on behalf of the Borrower
and shall specify the following information: (i) whether the Borrowing then
being requested is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day), (iii) the number and
location of the account to which funds are to be disbursed (which shall be an
account that complies with the requirements of Section 2.2(c)); (iv) the amount
of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing,
the Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in Section 2.2.
If no election as to the Type of Borrowing is specified in any such notice, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.3 (and the contents thereof), and of
each Lender's portion of the requested Borrowing.
If the Borrower shall not have delivered a Borrowing Request in accordance
with this Section 2.3 prior to the end of the Interest Period then in effect for
any Borrowing and requesting that such Borrowing be refinanced, then the
Borrower shall (unless the Borrower has notified the Administrative Agent, not
less than three Business Days prior to the end of such Interest Period, that
such Borrowing is to be repaid at the end of such Interest Period) be deemed to
have delivered a Borrowing Request requesting that such Borrowing be refinanced
with a new Borrowing of equivalent amount, and such new Borrowing shall be an
ABR Borrowing.
SECTION 2.4. Evidence of Debt; Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent, for the account of
each Lender, the principal amount of each Loan on the earlier of the last day of
the Interest Period applicable thereto and the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or the Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the event any
Lender shall request and receive a promissory note payable to such Lender and
its registered assigns, the interests represented by such note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 9.4) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.
SECTION 2.5. Commitment Fees. The Borrower agrees to pay to each Lender,
through the Administrative Agent, on each Quarterly Date and on each date on
which the Commitment of such Lender shall expire or be terminated as provided
herein, a commitment fee (a "Commitment Fee") equal to the Applicable Percentage
per annum in effect from time to time on the average daily unused amount of the
Commitment of such Lender during the preceding quarter (or other period
commencing with the date hereof or ending with the Maturity Date or the date on
which the Commitments of such Lender shall expire or be terminated). All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Commitment Fee due to each Lender shall
commence to accrue on the date hereof and shall cease to accrue on the date on
which the Commitment of such Lender shall be terminated as provided herein.
All Commitment Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution among the Lenders.
Once paid, none of the Commitment Fees shall be refundable under any
circumstances.
SECTION 2.6. Interest on Loans. (a) Subject to the provisions of Section
2.7, the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate plus the Applicable Percentage in effect
from time to time.
(b) Subject to the provisions of Section 2.7, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.
Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or LIBO Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.7. Default Interest. If the Borrower shall default in the payment
of the principal of or interest on any Loan or any other amount becoming due
hereunder, by acceleration or otherwise, or under any other Loan Document, the
Borrower shall on demand from time to time pay interest, to the extent permitted
by law, on such defaulted amount to but excluding the date of actual payment
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when determined by reference to the Prime Rate and over a year of 360
days at all other times) equal to the sum of the Alternate Base Rate plus the
Applicable Percentage plus 2.00%.
SECTION 2.8. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent or the
Required Lenders shall have determined that dollar deposits in the principal
amounts of the Loans comprising such Borrowing are not generally available in
the London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to any Lender of
making or maintaining its Eurodollar Loan during such Interest Period, or that
reasonable means do not exist for ascertaining the LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.3 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent or the Required Lenders hereunder
shall be conclusive absent manifest error.
SECTION 2.9. Termination and Reduction of Commitments. (a) The Commitments
shall automatically terminate on the Maturity Date.
(b) The Total Commitment shall be reduced automatically to $125,000,000 on
the First Commitment Reduction Date and to $100,000,000 on the Second Commitment
Reduction Date (unless, in each case, it shall already have been reduced below
such amount prior to such Commitment Reduction Date).
(c) On each date upon which the Borrower receives the proceeds from any
Equity Issuance (including any proceeds of an Equity Issuance by TNP
Enterprises) (or within 6 months after the date of such Equity Issuance if the
Borrower certifies to the Administrative Agent that clause (i) or (ii) below is
expected to apply to such proceeds), the Borrower shall permanently reduce the
Total Commitment in an amount equal to 100% of the Net Cash Proceeds of such
Equity Issuance or, in the case of any Equity Issuance by TNP Enterprises, the
amount of cash proceeds received by the Borrower therefrom; provided, that such
reduction will not be required to the extent such proceeds:
(i) result from an Equity Issuance by TNP Enterprises of its
common stock and are applied within 6 months from the date of such
Equity Issuance (A) to make acquisitions permitted under Sections 6.4
and 6.5, (B) to prepay or repay Indebtedness of the sort described in
clause (a) of the definition of "Indebtedness" of the Borrower or the
Guarantor or (C) to pay at maturity (but not prepay) Indebtedness of
such sort of TGC; or
(ii) result from an Equity Issuance by the Borrower of
preferred stock and are applied within 6 months from the date of such
Equity Issuance (A) to make acquisitions permitted under Sections 6.4
and 6.5, (B) to refinance outstanding preferred stock with new
preferred stock which shall not be redeemable mandatorily or at the
option of the holder thereof (other than in the event of a Change of
Control) prior to the Maturity Date, (C) to prepay or repay
Indebtedness of the sort described in clause (a) of the definition of
"Indebtedness" of the Borrower or the Guarantor or (D) to repay at
maturity (but not prepay) Indebtedness of such sort of TGC.
(d) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $5,000,000 and (ii) the Total Commitment shall not be reduced to an
amount that is less than the Aggregate Credit Exposure at the time.
(e) In the event a Change in Control shall have occurred, the Borrower
shall so notify the Administrative Agent and the Lenders and, in the event the
Required Lenders shall so elect in a notice delivered to the Borrower, the
Commitments shall permanently terminate on a date specified in such notice
(which date shall be not fewer than five Business Days after the delivery of
such notice to the Borrower).
(f) Each reduction in the Commitments hereunder shall be made ratably among
the Lenders in accordance with their respective Commitments. The Borrower shall
pay to the Administrative Agent for the account of the applicable Lenders, on
the date of each termination or reduction, the Commitment Fees on the amount of
the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.
SECTION 2.10. Prepayment. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least three Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent before 11:00 a.m., New York City time; provided, however,
that each partial prepayment shall be in an amount that is an integral multiple
of $1,000,000 and not less than $2,000,000.
(b) In the event of any termination of all the Commitments
(whether mandatory or optional), the Borrower shall repay or prepay all its
outstanding Borrowings on the date of such termination. In the event of any
partial reduction of the Commitments (whether mandatory or optional), then (i)
at or prior to the effective date of such reduction or termination, the
Administrative Agent shall notify the Borrower and the Lenders of the Aggregate
Credit Exposure after giving effect thereto and (ii) if the Aggregate Credit
Exposure would exceed the Total Commitment after giving effect to such reduction
or termination, then the Borrower shall, on the date of such reduction or
termination, repay or prepay Borrowings in an amount sufficient to eliminate
such excess.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section 2.10 shall be subject to Section 2.13 but
otherwise without premium or penalty. All prepayments under this Section 2.10
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.11. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan made by such Lender or any
Commitment Fees or other amounts payable hereunder (other than changes in
respect of taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by any Lender or
shall impose on such Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender, and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Eurodollar Loan or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material, then the Borrower
will pay to such Lender upon demand such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption
after the date hereof of any law, rule, regulation, agreement or guideline
regarding capital adequacy, or any change after the date hereof in any such law,
rule, regulation, agreement or guideline (whether such law, rule, regulation,
agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any Governmental Authority has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender pursuant hereto to a level below that which such Lender or such Lender's
holding company could have achieved but for such applicability, adoption, change
or compliance (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company as specified
in paragraph (a) or (b) above, and setting forth in reasonable detail the manner
in which such amount or amounts shall have been determined, shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate delivered
by it within 10 days after its receipt of the same.
(d) Except as provided in Section 2.18(c), failure or delay on
the part of any Lender to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
shall not constitute a waiver of such Lender's right to demand such
compensation. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, agreement, guideline or other change or condition
that shall have occurred or been imposed.
SECTION 2.12. Change in Legality. (a) Notwithstanding any
other provision of this Agreement, if, after the date hereof, any change in any
law or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder, whereupon any request for a Eurodollar Borrowing
shall, as to such Lender only, be deemed a request for an ABR Loan,
unless such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.12, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan made by
such Lender, if lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Loan; in all other cases such notice shall be
effective on the date of receipt by the Borrower.
SECTION 2.13. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender or the
Administrative Agent in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount on
account of the principal of any Eurodollar Loan prior to the end of the Interest
Period in effect therefor or (ii) any Eurodollar Loan to be made by such Lender
not being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being called a
"Breakage Event") or (b) any default in the making of any payment or prepayment
required to be made hereunder. In the case of any Breakage Event, such loss
shall include an amount equal to the excess, as reasonably determined by such
Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is the
subject of such Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or that would have been
in effect) for such Loan over (ii) the amount of interest likely to be realized
by such Lender in redeploying the funds released or not utilized by reason of
such Breakage Event for such period. A certificate of any Lender setting forth
any amount or amounts, and setting forth in reasonable detail the manner in
which such amount or amounts shall have been determined, which such Lender is
entitled to receive pursuant to this Section 2.13 shall be delivered to the
Borrower and shall be conclusive absent manifest error.
SECTION 2.14. Pro Rata Treatment. Except as required under
Section 2.12, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees, each reduction of the Commitments and each refinancing of any Borrowing
with a Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.15. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower or any other Loan Party, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, obtain payment (voluntary or involuntary)
in respect of any Loan or Loans as a result of which the unpaid principal
portion of its Loans shall be proportionately less than the unpaid principal
portion of the Loans of any other Lender, it shall be deemed simultaneously to
have purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the Loans of such
other Lender, so that the aggregate unpaid principal amount of the Loans and
participation in Loans held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Loans outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.15 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by the Borrower to such Lender by reason thereof as fully as if such Lender had
made a Loan directly to the Borrower in the amount of such participation.
SECTION 2.16. Payments. (a) The Borrower shall make each
payment (including principal of or interest on any Borrowing or any Commitment
Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 (noon), New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Commitment Fees or other amounts) hereunder or under any
other Loan Document shall become due, or otherwise would occur, on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest or Commitment Fees, if applicable.
SECTION 2.17. Taxes. (a) Any and all payments by or on behalf
of the Borrower or any Loan Party hereunder and under any other Loan Document
shall be made, in accordance with Section 2.16, free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
income taxes imposed on the net income of the Administrative Agent or any Lender
(or any transferee or assignee thereof, including a participation holder (any
such entity a "Transferee")) and (ii) franchise taxes imposed on the net income
of the Administrative Agent or any Lender (or Transferee), in each case by the
jurisdiction under the laws of which the Administrative Agent or such Lender (or
Transferee) is organized or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, being called "Taxes"). If the
Borrower or any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to the
Administrative Agent or any Lender (or any Transferee), (i) the sum payable
shall be increased by the amount (an "additional amount") necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) the Administrative Agent or
such Lender (or Transferee), as the case may be, shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower or such Loan Party shall make such deductions and (iii) the Borrower or
such Loan Party shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrower will indemnify the Administrative Agent and
each Lender (or Transferee) for the full amount of Taxes and Other Taxes paid by
the Administrative Agent or such Lender (or Transferee), as the case may be, and
any liability (including penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability, and setting forth in reasonable detail the manner in which
such payment or liability shall have been determined, prepared by the
Administrative Agent or a Lender (or Transferee), or the Administrative Agent on
its behalf, absent manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within 30 days after the date
the Administrative Agent or any Lender (or Transferee), as the case may be,
makes written demand therefor.
(d) If the Administrative Agent or a Lender (or Transferee)
receives a refund in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower or any other
Loan Party has paid additional amounts pursuant to this Section 2.17 and no
Event of Default shall have occurred and be continuing, it shall within 30 days
from the date of such receipt pay over such refund to the Borrower or such other
Loan Party (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower or such other Loan Party under this Section 2.17
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender (or
Transferee) and without interest (other than interest paid by the relevant
Governmental Authority with respect to such refund); provided, however, that the
Borrower or such other Loan Party, upon the request of the Administrative Agent
or such Lender (or Transferee), shall repay the amount paid over to the Borrower
or such other Loan Party (plus penalties, interest or other charges) to the
Administrative Agent or such Lender (or Transferee) in the event the
Administrative Agent or such Lender (or Transferee) is required to repay such
refund to such Governmental Authority.
(e) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Borrower or any other Loan Party to the relevant
Governmental Authority, the Borrower or such other Loan Party will deliver to
the Administrative Agent, at its address referred to in Section 9.1, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(f) Each Lender (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.17(f), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.17(f) that
such Non-U.S. Lender is not legally able to deliver.
(g) The Borrower shall not be required to indemnify any
Non-U.S. Lender or to pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to paragraph (a) or
(c) above to the extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a Transferee that is
a participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office, the
date such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this paragraph (g) shall not apply (x) to any
Transferee or New Lending Office that becomes a Transferee or New Lending Office
as a result of an assignment, participation, transfer or designation made at the
request of the Borrower and (y) to the extent the indemnity payment or
additional amounts any Transferee, or any Lender (or Transferee), acting through
a New Lending Office, would be entitled to receive (without regard to this
paragraph (g)) do not exceed the indemnity payment or additional amounts that
the person making the assignment, participation or transfer to such Transferee,
or Lender (or Transferee) making the designation of such New Lending Office,
would have been entitled to receive in the absence of such assignment,
participation, transfer or designation or (ii) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions of paragraph (g) above.
(h) Nothing contained in this Section 2.17 shall require any
Lender (or any Transferee) or the Administrative Agent to make available any of
its tax returns (or any other information that it deems to be confidential or
proprietary).
SECTION 2.18. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) In the event (i) any Lender delivers a
certificate requesting compensation pursuant to Section 2.11, (ii) any Lender
delivers a notice described in Section 2.12 or (iii) the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority on account
of any Lender pursuant to Section 2.17, the Borrower may, at its sole expense
and effort (including with respect to the processing and recordation fee
referred to in Section 9.4(b)), upon notice to such Lender and the
Administrative Agent, require such Lender to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.4), all of its interests, rights and obligations under this Agreement
to an assignee that shall assume such assigned obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, and (z) the Borrower or such
assignee shall have paid to the affected Lender in immediately available funds
an amount equal to the sum of the principal of and interest accrued to the date
of such payment on the outstanding Loans of such Lender plus all Commitment Fees
and other amounts accrued for the account of such Lender hereunder (including
any amounts under Section 2.11 and Section 2.13); provided further that, if
prior to any such transfer and assignment the circumstances or event that
resulted in such Lender's claim for compensation under Section 2.11 or notice
under Section 2.12 or the amounts paid pursuant to Section 2.17, as the case may
be, cease to cause such Lender to suffer increased costs or reductions in
amounts received or receivable or reduction in return on capital, or cease to
have the consequences specified in Section 2.12, or cease to result in amounts
being payable under Section 2.17, as the case may be (including as a result of
any action taken by such Lender pursuant to paragraph (b) below), or if such
Lender shall waive its right to claim further compensation under Section 2.11 in
respect of such circumstances or event or shall withdraw its notice under
Section 2.12 or shall waive its right to further payments under Section 2.17 in
respect of such circumstances or event, as the case may be, then such Lender
shall not thereafter be required to make any such transfer and assignment
hereunder.
(b) If (i) any Lender shall request compensation under Section
2.11, (ii) any Lender shall deliver a notice described in Section 2.12 or (iii)
the Borrower shall be required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender, pursuant to Section 2.17, then
such Lender shall use reasonable efforts (which shall not require such Lender to
incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any
action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested in
writing by the Borrower or (y) to assign its rights and delegate and transfer
its obligations hereunder to another of its offices, branches or affiliates, if
such filing or assignment would reduce its claims for compensation under Section
2.11 or enable it to withdraw its notice pursuant to Section 2.12 or would
reduce amounts payable pursuant to Section 2.17, as the case may be, in the
future. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such filing or assignment,
delegation and transfer.
(c) Notwithstanding any other provision of this Agreement, no
Lender shall be entitled to compensation under Section 2.11 or 2.13, or to the
payment of any additional amount under Section 2.17, for any costs incurred or
imposed, reductions suffered or amounts withheld on or with respect to any date
unless it shall have notified the Borrower that it will request such
compensation or the payment of such additional amount not later than 180 days
after the later of (i) such date and (ii) the date on which such Lender shall
have become aware of such costs or reductions or such withholding.
SECTION 2.19. The Replacement Loan.
(a) On January 27, 1992, the Borrower purchased pro rata from
the Existing Facility Banks $65,000,000 of the loans outstanding under the
Existing Facility Agreement. Automatically upon their purchase by the Borrower,
such loans were converted into a replacement loan (the "Replacement Loan"),
evidenced by a replacement note (the "Replacement Note"), that was secured by
the Existing Facility Collateral, pari passu with the other loans under the
Existing Facility Agreement, pursuant to the Existing Facility Security
Documents. Simultaneously with the conversion, the Replacement Note was pledged
to the First Debenture Trustee as security for First Secured Debentures, the
proceeds of which were used by the Borrower to purchase the loans under the
Existing Facility Agreement. As a result of such pledge, the First Secured
Debentures indirectly share pari passu in the Existing Facility Collateral.
(b) Subject to the limitations set forth in Section 6.1(c),
the Borrower shall have the right (i) to issue Subsequent Secured Debentures to
refinance the First Secured Debentures (or previously issued Subsequent Secured
Debentures) so long as such Subsequent Secured Debentures are secured only by
the Replacement Note, and (ii) to issue Subsequent Secured Debentures if the
Commitments are terminated and the Loans and other Obligations are paid in full
at the time of such issuance.
(c) Without limiting any other provision of this Agreement,
the Borrower, the Guarantor and any Debenture Trustee shall have the right to
extend the maturity date of the Replacement Loan (and to make any such
conforming changes to the Replacement Note), in accordance with the terms of the
applicable Secured Debenture Indenture and the Replacement Loan, so as to
facilitate the refinancing of any Secured Debentures. Neither the Borrower nor
the Guarantor shall borrow additional Replacement Loans or issue additional
Replacement Notes, as such terms are defined in the Existing Facility Agreement.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative
Agent, the Collateral Agent and each of the Lenders that:
SECTION 3.1. Organization; Powers. The Borrower and each of
the Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents, the Existing Facility Project Documents and
the Existing Facility Security Documents (including any amendments thereto to be
entered into in connection with the transactions contemplated hereby) and each
other agreement or instrument contemplated hereby to which it is or will be a
party and, in the case of the Borrower, to borrow hereunder.
SECTION 3.2. Authorization. The execution, delivery and
performance by each Loan Party of each of the Loan Documents, the Existing
Facility Project Documents and the Existing Facility Security Documents to which
such Loan Party is a party, including any amendments thereto to be entered into
in connection with the transactions contemplated hereby, the borrowings
hereunder, the advance by the Guarantor to the Borrower provided for in Section
4.2(h) and the issuance and the pledge of the Pledged Bonds (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate and, if
required, stockholder action and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of the Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any indenture (including the TNP Bond Indenture and the First Secured Debenture
Indenture), agreement (including the Existing Facility Agreement) or other
instrument to which the Borrower or any Subsidiary is a party or by which any of
them or any of their property is or may be bound, except to the extent that such
violation could not reasonably be expected to result in a Material Adverse
Effect, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under, or give rise to any right
to accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by the Borrower or any
Subsidiary (other than any Lien created under the Existing Facility Security
Documents or the Pledge Agreements).
SECTION 3.3. Enforceability. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each other Loan
Document and each amendment to the Existing Facility Project Documents or the
Existing Facility Security Documents being entered into in connection with the
transactions contemplated hereby, when executed and delivered by each Loan Party
thereto, will constitute, a legal, valid and binding obligation of such Loan
Party enforceable against such Loan Party in accordance with its terms.
SECTION 3.4. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and (b) such as
have been made or obtained and are in full force and effect.
SECTION 3.5. Financial Statements. The Borrower has heretofore
furnished to the Lenders its consolidated balance sheet and statement of
operations and cash flow (a) as of and for the fiscal year ended December 31,
1994, audited by and accompanied by the opinion of KPMG Peat Marwick LLP,
independent public accountants, and (b) as of and for the fiscal quarter and the
six months ended June 30, 1995, certified by its chief financial officer. Such
financial statements present fairly the financial condition and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods. Such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of the Borrower and its
consolidated Subsidiaries as of the dates thereof. Such financial statements
were prepared in accordance with GAAP.
SECTION 3.6. No Material Adverse Change. Except as set forth
on Schedule 3.6, there has been no material adverse change, and no event that
could reasonably be expected to result in a material adverse change, in the
business, assets, operations, condition, financial or otherwise, or material
agreements of the Borrower and the Subsidiaries, taken as a whole, since
December 31, 1994.
SECTION 3.7. Title to Properties; Possession Under Leases. (a)
The Borrower and each of the Subsidiaries has good and commercially acceptable
title to, or valid leasehold interests in, all its material properties and
assets including all of the Collateral, except for minor defects in title that
do not interfere with its ability to conduct its business as currently conducted
or to utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.2.
(b) The Borrower and each of the Subsidiaries has complied
with all obligations under all material leases to which it is a party and all
such leases are in full force and effect. The Borrower and each of the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
SECTION 3.8. Subsidiaries. Schedule 3.8 sets forth as of the
Closing Date a list of all Subsidiaries and the percentage ownership interest of
the Borrower therein. The shares of capital stock or other ownership interests
so indicated on Schedule 3.8 are fully paid and non-assessable and are owned by
the Borrower, directly or indirectly, free and clear of all Liens.
SECTION 3.9. Litigation; Compliance with Laws. (a) Except as
set forth on Schedule 3.9, there are not any actions, suits or proceedings at
law or in equity or by or before any Governmental Authority now pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or
any Subsidiary or any business, property or rights of any such person (i) that
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) None of the Borrower or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation, or any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
(c) The Borrower has furnished to the Administrative Agent a
true and complete copy of each Existing Facility Project Document and each
Existing Facility Security Document (including all amendments thereto and
exhibits, schedules and disclosure letters referred to therein or delivered
pursuant thereto, if any). Except as permitted pursuant to Section 10.05 or
10.11 of the Existing Facility Agreement none of the Existing Facility Project
Documents or the Existing Facility Security Documents to which the Borrower or
the Guarantor is a party has been amended, modified or terminated, and all of
such Existing Facility Project Documents and Existing Facility Security
Documents are in full force and effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower nor any
of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
buy or carry any Margin Stock or for any purpose that entails a violation of, or
that is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. Neither the Borrower nor any Subsidiary is an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940. TNP is exempt from regulation under the Public Utility Holding Company Act
of 1935, as amended, other than under Section 9(a)(2) thereof.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans only for the purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed by it and has paid
or caused to be paid all taxes due and payable by it and all assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves in accordance with
GAAP.
SECTION 3.15. No Material Misstatements. None of (a) the
Confidential Information Memorandum or (b) any other information, report,
financial statement, exhibit or schedule furnished by or on behalf of the
Borrower or the Guarantor to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities under
each Plan (based on those assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed by more than $20,000,000
the fair market value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed by more than $20,000,000 the fair market value of the assets of
all such underfunded Plans.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17:
(a) The properties owned or operated by the Borrower and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or have constituted, a violation
of, or (ii) could give rise to liability under, Environmental Laws, which
violations and liabilities, in the aggregate, could result in a Material Adverse
Effect;
(b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last ten years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not result in a Material Adverse Effect;
(c) There have been no releases or threatened releases of
Hazardous Materials at, from or under the Properties or otherwise in connection
with the operations of the Borrower or the Subsidiaries, which releases or
threatened releases, in the aggregate, could result in a Material Adverse
Effect;
(d) Neither the Borrower nor any of the Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the operations of the Borrower or the Subsidiaries or with regard to any
person whose liabilities for environmental matters the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could result in a
Material Adverse Effect, nor do the Borrower or the Subsidiaries have reason to
believe that any such notice will be received or is being threatened;
(e) Hazardous Materials have not been transported from the
Properties, nor have Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of the Properties in a manner that could give
rise to liability under any Environmental Law, nor have the Borrower or the
Subsidiaries retained or assumed any liability, contractually, by operation of
law or otherwise, with respect to the generation, treatment, storage or disposal
of Hazardous Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the aggregate, could result in
a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true,
complete and correct description of all insurance maintained by the Borrower or
by the Borrower for its Subsidiaries as of the date hereof and the Closing Date.
As of each such date, such insurance is in full force and effect and all
premiums have been duly paid. The Borrower and its Subsidiaries have insurance
in such amounts and covering such risks and liabilities as are in accordance
with normal industry practice.
SECTION 3.19. Pledge Agreements. Each of the Pledge Agreements
is effective to create in favor of the Collateral Agent, for the ratable benefit
of the Lenders, a legal, valid and enforceable security interest in the
Collateral (as defined in such Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgor thereunder in such Collateral, in each case prior and
superior in right to any other person.
SECTION 3.20. Labor Matters. As of the date hereof and the
Closing Date, there are no strikes, lockouts or slowdowns against the Borrower
or any Subsidiary pending or, to the knowledge of the Borrower, threatened. The
hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters,
except to the extent such violations could not reasonably be expected to result
in a Material Adverse Effect. All payments due from the Borrower or any
Subsidiary, or for which any claim may be made against the Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary, except to the extent the failure to pay or accrue
such liabilities could not reasonably be expected to result in a Material
Adverse Effect. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
SECTION 3.21. Solvency. (a) Immediately prior to and after the
consummation of the Transactions to occur on the Closing Date, (i) the fair
market value of the assets of the Borrower and its Subsidiaries on a
consolidated basis will exceed their debts and liabilities, subordinated,
contingent or otherwise; (ii) the present fair saleable value of the assets of
the Borrower and its Subsidiaries on a consolidated basis will be greater than
the amount that will be required to pay the probable liability on their debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) the Borrower and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the business in which they are engaged as such business is
now conducted and is proposed to be conducted following the Closing Date.
SECTION 3.22. Existing Facility Agreement Representations. The
representations and warranties of the Borrower and the Guarantor set forth in
the Existing Facility Agreement, the Existing Facility Project Documents and the
Existing Facility Security Documents were when made and remain at and as of the
present, true and correct, except to the extent such representations and
warranties expressly relate to an earlier date.
ARTICLE IV. CONDITIONS PRECEDENT TO LENDING
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.1. All Borrowings. On the date of each Borrowing,
including each Borrowing in which Loans are refinanced with new Loans as
contemplated by Section 2.2(f) (each such event being called a "Credit Event"):
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.3 (or such notice shall have
been deemed given in accordance with Section 2.3).
(b) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) The Borrower and each other Loan Party shall be in
compliance with all the terms and provisions set forth herein, in each
other Loan Document, in the Existing Facility Agreement, in each
Existing Facility Project Document and in each Existing Facility
Security Document on its part to be observed or performed, and at the
time of and immediately after such Borrowing, no Event of Default or
Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.1.
SECTION 4.2. First Borrowing. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself and the Lenders, a written opinion of (i) Haynes and Boone,
L.L.P., counsel for the Borrower and the Guarantor, substantially to
the effect set forth in Exhibit G-1; (ii) Michael Blanchard, General
Counsel of the Borrower and the Guarantor, substantially to the effect
set forth in Exhibit G-1-A; (iii) Snell, Banowsky & Trent, Texas
counsel to the Administrative Agent and the Lenders, substantially to
the effect set forth in Exhibit G-2 and (iv) Rubin, Katz, Salazar,
Alley & Rouse, New Mexico regulatory counsel for the Borrower and the
Guarantor, substantially in the form of Exhibit G-3, in each case (A)
dated the Closing Date, (B) addressed to the Administrative Agent and
the Lenders, and (C) covering such other matters as the Administrative
Agent shall reasonably request, and the Borrower hereby requests such
counsel to deliver such opinions.
(b) All legal matters incident to the Transactions shall be
satisfactory to the Lenders and their counsel, to the Administrative
Agent and to Cravath, Swaine & Moore, counsel for the Administrative
Agent.
(c) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date from
such Secretary of State and, in the case of the Borrower, from the
Secretary of State of the State of New Mexico; (ii) a certificate of
the Secretary or an Assistant Secretary of each Loan Party dated the
Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws of such Loan Party as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such Loan Party is a party
and the Transactions and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the certificate
or articles of incorporation of such Loan Party have not been amended
since the date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (i) above, and (D) as to
the incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection herewith on
behalf of such Loan Party; (iii) a certificate of another officer as to
the incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above; and (iv)
such other documents as the Lenders or their counsel, the
Administrative Agent or Cravath, Swaine & Moore, counsel for the
Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of the Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.1.
(e) The Administrative Agent shall have received all
Commitment Fees and other amounts due and payable on or prior to the
Closing Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid
by the Borrower hereunder or under any other Loan Document.
(f) The Assignment Agreement shall have been duly executed and
delivered by each of the parties thereto and shall have become
effective in accordance with its terms, and the amendments to the
Existing Facility Agreement and the transfer to the Collateral Agent of
rights to the Existing Facility Collateral provided for therein shall
have become effective.
(g) The Bonds shall have been validly issued in compliance
with the TNP Bond Indenture pursuant to the Supplemental Bond Indenture
and registered in the name of Chemical Bank, as Collateral Agent. The
Bonds (i) shall bear interest at 0% per annum unless an Event of
Default shall have occurred and be continuing or shall have resulted in
an exercise of remedies pursuant to Article VII, in which case they
shall bear interest at Chemical Bank's prime rate plus 2% per annum,
(ii) shall be nonredeemable, (iii) shall mature no earlier than the
Maturity Date, (iv) shall become immediately due and payable upon any
acceleration of the maturity of the Loans pursuant to Article VII, (v)
shall have been authenticated and acknowledged to be "outstanding"
under the TNP Bond Indenture by the trustee thereunder and (vi) shall
otherwise have terms satisfactory to the Lenders and the Administrative
Agent.
(h) Immediately prior to the initial borrowing hereunder not
less than $147,750,000 aggregate principal amount of loans shall be
outstanding and held by the Existing Facility Banks under the Existing
Facility. TGC II shall have transferred to the Borrower in partial
satisfaction of intercompany indebtedness owed by it to the Borrower
proceeds of borrowings under the Existing Facility Agreement which,
together with the proceeds of the initial borrowing hereunder, are
sufficient in amount to provide the funds required for the purchase by
TNP from the Existing Facility Banks of the loans under the Existing
Facility Agreement. The Pledged Notes, evidencing the full amount of
the loans outstanding under the Existing Facility, shall have been or
shall simultaneously with the initial borrowing hereunder be purchased
by the Borrower pursuant to the Assignment Agreement with the proceeds
of the initial borrowing hereunder and of the advance referred to in
the preceding sentence and shall have been or shall simultaneously be
delivered to the Borrower accompanied by duly executed instruments of
transfer meeting the requirements of the Existing Facility Agreement
and satisfactory to the Collateral Agent.
(i) Each of the Bond Agreement and the Note Pledge Agreement
shall have been duly executed by the parties thereto and delivered to
the Collateral Agent and shall be in full force and effect, and all the
Bonds and the Pledged Notes shall have been duly and validly pledged
thereunder to the Collateral Agent for the ratable benefit of the
Lenders and the Bonds and the Pledged Notes, accompanied by duly
executed, undated instruments of transfer satisfactory to the
Collateral Agent, shall be in the actual possession of the Collateral
Agent. The TNP Security Agreement (as defined in the Existing Facility
Agreement) shall have been amended pursuant to Amendment No. 1 to the
TNP Security Agreement substantially in the form of Exhibit O in order
to provide for a pledge by the Borrower of its rights under the
Operating Agreement (as defined in the Existing Facility Agreement) to
Chemical Bank, for the benefit of the Secured Parties (as defined in
the Existing Facility Agreement).
(j) The TGC II Guarantee and Pledge Agreement shall have been
duly executed by the Guarantor and delivered to the Collateral Agent
and shall be in full force and effect, and any promissory notes
evidencing intercompany indebtedness shall have been duly and validly
pledged thereunder to the Collateral Agent for the ratable benefit of
the Lenders and shall have been delivered to and shall be in the actual
possession of the Collateral Agent, together with duly executed,
undated instruments of transfer satisfactory to the Collateral Agent.
(k) The Administrative Agent shall have received on behalf of
the Lenders a satisfactory certificate dated the Closing Date from the
Borrower as to the solvency of the Borrower and its Subsidiaries on a
consolidated basis after giving effect to the transactions contemplated
hereby and by the Assignment Agreement.
(l) The Existing Facility Project Documents and the Existing
Facility Security Documents shall be in full force and effect on the
Closing Date. The Existing Facility Collateral Agent, on behalf of the
holders from time to time of the Pledged Notes and the Replacement Note
Holder, shall have a security interest in the Existing Facility
Collateral of the type and priority described in each Existing Facility
Security Document, perfected to the extent contemplated by Section 2.05
or 2.18, as the case may be, of the Existing Facility Agreement.
(m) The Administrative Agent shall have received, on behalf of
the Lenders, duly executed copies of (i) this Agreement; (ii) the TNP
Second Lien Mortgage Modification No. 3 substantially in the form of
Exhibit I; (iii) the Sixth TGC II Mortgage Modification and Extension
Agreement substantially in the form of Exhibit H; (iv) the Assignment
of TGC II Lien substantially in the form of Exhibit K; (v) the
Collateral Transfer of Notes, Rights and Interests substantially in the
form of Exhibit L; (vi) the Assignment of TNP Second Mortgage Lien
substantially in the form of Exhibit M and (vii) the Collateral
Transfer of Notes, Rights and Interests substantially in the form of
Exhibit N, each executed by each Person which is or is intended to be a
party thereto.
(n) The Administrative Agent shall have received, on behalf of
the Lenders, (i) duly executed Financing Statements under the Uniform
Commercial Code as are necessary or advisable in the judgement of the
Collateral Agent to protect, preserve and maintain the priority of
liens contemplated by the Existing Facility Security Documents in favor
of the Collateral Agent, on behalf of the holders from time to time of
the Pledged Notes and the Replacement Note Holder, (ii) Uniform
Commercial Code search reports together with copies of the financing
statements (or similar documents) disclosed by such search reports with
respect to each of the Guarantor and the Borrower, as "debtor",
confirming the absence of any Liens that are not permitted by this
Agreement or the Existing Facility Agreement and (iii) all other
instruments to be recorded or filed or delivered in connection with the
purchases by the Borrower of the Pledged Notes on the Closing Date.
(o) No Default or Event of Default under the Existing Facility
Documents shall have occurred and be continuing or would occur upon the
effectiveness hereof.
(p) The Transactions, the continuance of the Liens created by
the Existing Facility Security Documents in favor of the Collateral
Agent on behalf of the holders from time to time of the Pledged Notes
and the Replacement Note Holder, the pledge of the Bonds and the
Additional Bonds pursuant to the Bond Agreement and the pledge of the
Pledged Notes pursuant to the Note Pledge Agreement shall have been
approved or exempted by all Governmental Authorities to the extent
required under applicable law, and all such approvals or exemptions,
including any conditions imposed thereby, shall be satisfactory in all
respects to the Lenders. No action shall have been taken by any
Governmental Authority which restrains or prevents or seeks to restrain
or prevent, or imposes or seeks to impose materially adverse conditions
upon, any of the Transactions.
(q) Except as set forth in Schedule 3.9, no action, suit,
investigation, litigation or other proceeding at law or in equity or by
or before any court or other Governmental Authority shall exist or, in
the case of litigation by a Governmental Authority, be threatened, with
respect to any of the Transactions which would in the reasonable
opinion of the Lenders be likely to restrain, prevent or impose
burdensome conditions to any of the Transactions, or to result in a
Material Adverse Effect.
(r) All aspects of the structure and documentation of the
Transactions and all corporate and other proceedings taken or to be
taken in connection therewith and all documents incidental thereto, in
each case to the extent not otherwise provided for herein, shall be
reasonably satisfactory in form and substance to the Lenders and their
counsel, to the Administrative Agent and to Cravath, Swaine & Moore,
counsel for the Administrative Agent, and the Lenders shall have
received copies of all such documents as the Lenders may reasonably
request.
(s) At the sole cost of the Borrower and the Guarantor,
Stewart Title Guaranty Company (the "Original Title Company") shall
have issued to the Administrative Agent (i) a T-3 Endorsement in
accordance with Procedural Rule P-9b(2) to that certain Mortgagee
Policy of Title Insurance No. M-5842-12343 dated September 29, 1993
(the "Original Mortgagee Policy") naming the Administrative Agent as
the Insured and changing the effective date of the Original Mortgagee
Policy to the date of said Endorsement and containing such other
information reasonably requested by the Administrative Agent and (ii) a
T-38 Endorsement in accordance with the provisions of Procedural Rule
P-9b(3) stating that the Original Title Company will not claim that
policy coverage has terminated or been reduced by reason of the
execution of this Agreement or the Assignment Agreement and containing
such other provisions reasonably requested by the Administrative Agent.
In addition, the Guarantor, at the sole cost of the Guarantor and the
Borrower, shall deliver to the Administrative Agent a title information
report showing that (A) good and indefeasible title to the TGC II
Mortgage Trust Estate is vested in the Guarantor, (B) the TGC II
Mortgage constitutes a valid first mortgage lien on the TGC II Mortgage
Trust Estate and (C) there are no intervening liens or other
encumbrances which would adversely affect the priority of the liens
securing the Loans or the TGC II Mortgage Trust Estate other than
Permitted Liens.
(t) The Collateral Agent shall have received evidence of the
effectiveness of the insurance required to be maintained pursuant to
Section 5.2 and the Existing Facility Documents.
SECTION 4.3. Borrowings in Excess of $100,000,000. In addition
to the conditions set forth in Section 4.1, the obligations of the Lenders to
make Loans which, when aggregated with the principal amount of all other Loans
then outstanding, would exceed $100,000,000 shall be subject to the satisfaction
of the following conditions precedent:
(a) The Borrower shall have issued or shall simultaneously
issue to the Collateral Agent, for the benefit of the Lenders, pursuant
to and in accordance with the Bond Agreement, an additional principal
amount of its nonredeemable First Mortgage Bonds in the same form as,
and with the same terms (including a maturity date no earlier than the
Maturity Date) as, the Bonds (such additional First Mortgage Bonds
being herein called the "Additional Bonds") such that the Bond Total is
equal to or greater than the aggregate principal amount of Loans that
would be outstanding after giving effect to such Borrowing, minus
$70,000,000.
(b) The Additional Bonds shall have been validly issued in
compliance with the TNP Bond Indenture and registered in the name of
Chemical Bank, as Collateral Agent for the Lenders, and the Collateral
Agent shall have received, on behalf of the Lenders, (i) an opinion of
counsel reasonably satisfactory to the Collateral Agent with respect to
the issuance and pledge of such Additional Bonds, in form and substance
comparable to the opinions delivered on the Closing Date with respect
to the issuance and pledge of the Bonds, and (ii) the Additional Bonds;
provided, that, any Borrowings in excess of $100,000,000 (and the
Additional Bonds pledged pursuant to this Section 4.3) shall be in an
aggregate principal amount that is an integral multiple of $1,000,000
and not less than $5,000,000.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Commitment
Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full, unless the Required Lenders shall otherwise consent in
writing, the Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.1. Existence; Businesses and Properties.
(a) Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence, except as
otherwise expressly permitted under Section 6.5.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names material to the conduct of its business; maintain and operate such
business in substantially the manner in which it is presently conducted and
operated; comply in all material respects with all applicable laws, rules,
regulations and decrees and orders of any Governmental Authority, whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 5.2. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it; and maintain
such other insurance as may be required by law or by Section 9.17 of the
Existing Facility Agreement.
SECTION 5.3. Obligations and Taxes. Pay its Indebtedness and
other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim set forth in Schedule 3.9 or so
long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the Borrower shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP and such contest
operates to suspend collection of the contested obligation, tax, assessment or
charge and enforcement of a Lien.
SECTION 5.4. Financial Statements, Reports, etc. In the case of the
Borrower, the Guarantor and TGC, furnish to the Administrative Agent and each
Lender:
(a) within 100 days after the end of each fiscal year, a
balance sheet and related statements of operations, stockholders'
equity and cash flows showing the financial condition of (i) the
Borrower and its Subsidiaries on a consolidated basis, (ii) the
Guarantor and (iii) TGC, each as of the close of such fiscal year and
the results of their respective operations during such year, all
audited by KPMG Peat Marwick LLP or other independent public
accountants of recognized national standing acceptable to the
Administrative Agent and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect
that such financial statements fairly present the financial condition
and results of operations of (i) the Borrower and its Subsidiaries on a
consolidated basis, (ii) the Guarantor and (iii) TGC, each in
accordance with GAAP;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year, a balance sheet and related
statements of operations, stockholders' equity and cash flows showing
the financial condition of (i) the Borrower and its Subsidiaries on a
consolidated basis, (ii) the Guarantor and (iii) TGC, each as of the
close of such fiscal quarter and the results of their respective
operations during such fiscal quarter and the then elapsed portion of
the fiscal year, all certified by one of its Financial Officers as
fairly presenting the financial condition and results of operations of
(i) the Borrower and its Subsidiaries on a consolidated basis, (ii) the
Guarantor and (iii) TGC, each in accordance with GAAP, subject to
normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of a Financial Officer,
and, in the case of any delivery under paragraph (a) above, the
accounting firm opining on such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters
and disclaim responsibility for legal interpretations) (i) certifying
that in making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, that an Event of
Default or Default has occurred or, if such an Event of Default or
Default has occurred, specifying the nature and extent thereof and any
corrective action which the Borrower has taken or proposed to take with
respect thereto and (ii) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Sections 6.11 and 6.12;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as the case
may be; and
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.5. Litigation and Other Notices. Furnish to the Administrative
Agent and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse
Effect;
(c) any change in the ratings by S&P or Moody's of the Index Debt; and
(d) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.6. Employee Benefits. (a) Comply in all material
respects with the applicable provisions of ERISA and the Code and (b) furnish to
the Administrative Agent as soon as possible after, and in any event within 10
days after any Responsible Officer of the Borrower or any ERISA Affiliate knows
or has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event could reasonably be expected to result in liability
of the Borrower in an aggregate amount exceeding $20,000,000 or requiring
payments exceeding $5,000,000 in any year, a statement of a Financial Officer of
the Borrower setting forth details as to such ERISA Event and the action, if
any, that the Borrower proposes to take with respect thereto.
SECTION 5.7. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of the Borrower or any
Subsidiary at reasonable times and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of the Borrower or any Subsidiary with the
officers thereof and independent accountants therefor.
SECTION 5.8. Use of Proceeds. Use the proceeds of the Loans only for the
purposes set forth in the preamble to this Agreement.
SECTION 5.9. Compliance with Laws and Environmental Laws.
Comply, and cause all lessees and other persons occupying its Properties to
comply, in all material respects with all laws, rules, regulations and orders,
and with all Environmental Laws and Environmental Permits applicable to its
operations and Properties, except in each case to the extent that failure to so
comply could not reasonably be expected to result in a Material Adverse Effect;
obtain and renew all material Environmental Permits necessary for its operations
and Properties; and conduct any Remedial Action in accordance with Environmental
Laws; provided, however, that neither the Borrower nor any of the Subsidiaries
shall be required to undertake any Remedial Action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves in accordance with GAAP are being maintained with
respect to such circumstances.
SECTION 5.10. Preparation of Environmental Reports. If a
Default caused by reason of a breach of Section 3.17 or 5.9 shall have occurred
and be continuing, at the request of the Required Lenders through the
Administrative Agent, provide to the Lenders within 60 days after such request,
at the expense of the Borrower, an environmental site assessment report for the
Properties which are the subject of such default prepared by an environmental
consulting firm acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or Remedial Action in connection with such Properties.
SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements) that may be required under applicable law, or that the Required
Lenders, the Administrative Agent or the Collateral Agent may reasonably
request, in order to effectuate the transactions contemplated by the Loan
Documents and in order to grant, preserve, protect and perfect the validity and
first priority of the security interests created or intended to be created by
the Pledge Agreements and the Existing Facility Security Documents. The Borrower
agrees to provide such evidence as the Collateral Agent shall reasonably request
as to the perfection and priority status of each such security interest and
Lien.
Section 5.12. Maintenance; Ownership of the Guarantor Capital
Stock. (a) Maintain and preserve the Project and all of its other properties
necessary or useful in the proper conduct of its business, in good working order
and condition, ordinary wear and tear excepted; and restore, replace or rebuild
its property, or any part thereof now or hereafter damaged or destroyed by any
casualty (whether or not insured against or insurable) except any such property
that the Borrower determines in good faith not to be necessary to the conduct of
its business.
(b) In the case of the Borrower, own all of the issued and
outstanding capital stock of the Guarantor free and clear of all Liens.
Section 5.13. Performance and Continuation of Certain
Documents. Perform and observe all of its covenants and agreements contained in
the Existing Facility Agreement, any of the Existing Facility Project Documents
and any of the Existing Facility Security Documents to which it or such
Subsidiary is a party, take all reasonable and necessary action to prevent the
termination of the Existing Facility Agreement, any such Project Document or any
of the Existing Facility Security Documents in accordance with the terms thereof
or otherwise, maintain the Facility Purchase Agreement in full force and effect
in accordance with its terms on the date hereof, enforce each material covenant
or obligation of the Existing Facility Agreement, such Project Document and such
Existing Facility Security Document in accordance with its terms and take all
such action to that end as from time to time may be reasonably requested by the
Administrative Agent.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Commitment
Fees and all other expenses or amounts payable under any Loan Document have been
paid in full, unless the Required Lenders shall otherwise consent in writing,
the Borrower will not, and will not cause or permit any of the Subsidiaries to:
SECTION 6.1. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness incurred hereunder or under any other Loan Document or
under the Existing Facility Documents;
(b) accounts payable owed by the Borrower to the Guarantor or TGC, to the
extent incurred and paid in the ordinary course of business;
(c) Secured Debentures; provided, however, that (i) the aggregate principal
amount of Secured Debentures outstanding at any time shall not exceed
$270,000,000 and (ii) no Secured Debentures shall be secured by a Lien on any
asset other than the Replacement Note and replacement notes issued pursuant to
the Unit 1 Credit Agreement, unless in either case, the Commitments are
terminated and the Loans and other Obligations paid in full at the time any such
Secured Debentures are issued;
(d) First Mortgage Bonds; provided, however, that the aggregate principal
amount of First Mortgage Bonds outstanding at any time (including any First
Mortgage Bonds pledged pursuant to the Bond Pledge Agreement or any other
agreement) shall not exceed the sum of (x) $360,000,000 and (y) the aggregate
amount by which the Total Commitment has been reduced subsequent to the Closing
Date; and provided further that the limitations of the foregoing proviso to this
clause (d) shall not apply (i) so long as the Pledged Bond Total is equal to or
greater than the Total Commitment or (ii) after the Release Conditions have been
satisfied and the Release Date has occurred as provided in Section 9.17;
(e) intercompany Indebtedness pledged to the Collateral Agent for the
benefit of the Lenders on terms satisfactory to the Collateral Agent and
intercompany Indebtedness owed to the Borrower by TNP Enterprises or TGC on the
Closing Date and listed on Schedule 6.1;
(f) Indebtedness in respect of interest rate swaps or other interest
hedging agreements to the extent such swaps or agreements are used to hedge
interest rate risk in respect of outstanding floating rate Indebtedness and not
for speculative purposes;
(g) Indebtedness of TGC under the Unit 1 Credit Agreement;
(h) customer advances and security deposits in the ordinary course of
business; and
(i) additional Indebtedness not exceeding $2,000,000 in aggregate principal
amount outstanding at any time with local banking institutions.
SECTION 6.2. Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including capital stock or other securities of any
Subsidiary or other person) now owned or hereafter acquired by it or on any
income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.2; provided that such
Liens shall secure only those obligations which they secure on the date hereof;
(b) any Lien created under the Loan Documents, the Existing Facility
Agreement or the Existing Facility Security Documents;
(c) Liens arising under any trust indenture pursuant to which the Borrower
issues First Mortgage Bonds;
(d) Liens arising under the Secured Debenture Indentures (and refinancings
thereof);
(e) Liens expressly permitted under the Existing Facility Agreement;
(f) in the case of TGC, Liens expressly permitted under the Unit 1 Credit
Agreement; and
(g) sales of accounts receivable consistent with the Borrower's past
practices.
SECTION 6.3. Sale and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.
SECTION 6.4. Investments, Loans and Advances. Purchase, hold
or acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments by the Borrower existing on the date hereof in
the capital stock of the Subsidiaries or resulting from acquisitions
made in accordance with Section 6.5;
(b) intercompany Indebtedness permitted under Section 6.1(e);
(c) investments accepted by the Borrower or any Subsidiary in
the ordinary course of business from customers in satisfaction of
indebtedness of such customers.
(d) Permitted Investments;
(e) investments, loans and advances that shall not exceed
$1,000,000 in the aggregate outstanding at any time made in the
ordinary course of business; and
(f) key personnel life insurance the proceeds of which are
intended to fund the excess benefit plan.
SECTION 6.5. Mergers, Consolidations, Sales of Assets and
Acquisitions. (a) Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets (whether now owned or hereafter acquired) or
any capital stock of any Subsidiary, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that (i) the Borrower and any Subsidiary may
purchase and sell inventory in the ordinary course of business, (ii) the
Borrower and any Subsidiary may permit any assets to be taken for any public or
quasi-public use under any governmental law, ordinance or regulation or by right
of eminent domain and to be sold under threat of condemnation; (iii) the
Borrower may sell accounts receivable consistent with its past practices; (iv)
acquisitions (in one transaction or a series of transactions) of assets or
capital stock of another person not to exceed $25,000,000 in the aggregate; and
(v) if at the time thereof and immediately after giving effect thereto no Event
of Default or Default shall have occurred and be continuing (A) any wholly owned
Subsidiary (other than TGC and TGC II) may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation and (B) any
wholly owned Subsidiary (other than TGC and TGC II) may merge into or
consolidate with any other wholly owned Subsidiary in a transaction in which the
surviving entity is a wholly owned Subsidiary and no person other than the
Borrower or a wholly owned Subsidiary receives any consideration (C) the
Borrower or any Subsidiary may sell assets which when taken together with any
assets sold by the Borrower or any of its Subsidiaries during the same period
have an aggregate book value not exceeding (x) $10,000,000 in any consecutive
twelve month period and (y) $25,000,000 during the period commencing on the
Closing Date and ending upon the termination of the Commitments and payment in
full of all outstanding Loans; provided, however, that, to the extent that the
proceeds of any asset sale made in reliance upon clause (a)(ii) or clause
(a)(v)(C) are not used to reduce or redeem First Mortgage Bonds within 40 days
after such asset sale, the Borrower shall be required to reduce the Commitments
pursuant to Section 2.9 by an amount equal to the proceeds that are not so used,
and shall effect such reduction immediately upon the expiration of such period;
provided, that the foregoing limitation with respect to proceeds of asset sales
made in reliance upon such clauses shall not apply to the first $500,000 of
proceeds received during any consecutive twelve month period; provided, further
that in no event shall the immediately preceding exclusion apply to more than
$1,000,000 of proceeds during the period commencing on the Closing Date and
ending upon the termination of the Commitments and payment in full of all
outstanding Loans.
(b) In the case of TGC II, purchase or acquire any assets
other than (i) assets reasonably required for the maintenance or operation of
the Project, and (ii) supplies purchased in the ordinary course of business.
SECTION 6.6. Dividends and Distributions; Restrictions on
Ability of Subsidiaries to Pay Dividends. (a) Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its capital stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of its capital stock
or set aside any amount for any such purpose; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions to the
Borrower, (ii) the Borrower may declare and pay cash dividends on its common
stock to its shareholder if (A) no Event of Default shall have occurred and be
continuing (or would result therefrom) and (B) such declaration or payment would
not cause the sum of all Dividends declared or paid on common stock by the
Borrower during the most recently ended twenty-four month period (or shorter
period, as the case may be) commencing not earlier than September 30, 1995 and
ending on the Quarterly Date next preceding the date of any proposed declaration
or payment to exceed Cumulative Net Income Available For Common Dividends for
such period, (iii) the Borrower may declare and pay cash dividends on its
preferred stock if (A) no Event of Default specified in paragraph (b), (c) or
(d) of Article VII (if, in the case of paragraph (d), such Event of Default
relates to a default in Sections 6.11 or 6. 12) shall have occurred and be
continuing (or would result therefrom) and (B) if any other Event of Default
shall have occurred and be continuing (or would result therefrom), the Borrower
shall have requested in writing permission to continue declaring and paying such
dividends and the Required Lenders shall have delivered to the Borrower such
authorization and (iv) the Borrower may redeem its preferred stock (A) pursuant
to mandatory redemption requirements in effect on the date hereof or (B) with
the proceeds of newly issued preferred stock which will not be redeemable
mandatorily or at the option of any holder thereof (other than in the event of a
Change of Control) prior to the Maturity Date.
(b) Permit any Subsidiary, directly or indirectly, to create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to the Borrower or the parent of such
Subsidiary except encumbrances and restrictions existing on the date hereof
under this Agreement, the Existing Facility Agreement and the Unit 1 Credit
Agreement.
SECTION 6.7. Transactions with Affiliates. Sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except that the Borrower or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties; provided that
this Section 6.7 shall not apply to (i) any transactions expressly permitted or
contemplated by the Existing Facility Project Documents or the Unit 1 Credit
Agreement and the project documents described therein, (ii) the creation of
subsidiaries and the entry into transactions for the purpose of financing
Capital Expenditures with respect to Unit 1, (iii) the sale of power to
Affiliates and (iv) the payment of Dividends to TNP Enterprises as permitted by
this Agreement.
SECTION 6.8. Business of Borrower and Subsidiaries. Engage at
any time in any business or business activity other than the business currently
conducted by it and business activities reasonably incidental thereto.
SECTION 6.9. Additional Generating Facilities. Create,
acquire or construct any additional generating facilities or generating assets
(pursuant to the exercising of its rights under the Construction Contract or
otherwise).
SECTION 6.10. Amendment or Modification of Certain Agreements;
Pledged Notes. (a) Enter into, consent to or permit any amendment, modification,
supplement or waiver of a Secured Debenture Indenture or the Replacement Note
which shall (1) shorten the stated maturity of the principal of, or any
installment of interest on, any Secured Debenture then outstanding or the
Replacement Note, or increase the principal amount thereof or the rate of
interest thereon, (2) grant any additional collateral security for any Secured
Debenture or the Replacement Note or (3) have the effect of impairing in any
material respect, directly or indirectly, the rights or interests of the Lenders
in the Existing Facility Collateral or the Collateral under this Agreement, or
make or permit any payment or prepayment of the principal of the Replacement
Note; provided, that nothing in this Section 6.10 shall prohibit (i) the pledge
of the Replacement Note under the First Secured Debenture Indenture as in effect
on the Closing Date and (ii) securing Subsequent Secured Debentures with the
Replacement Note in accordance with Section 2.19 under Subsequent Secured
Debenture Indentures.
(b) Enter into, consent to or permit any amendment,
modification, supplement or waiver of the Existing Facility Agreement or any of
the Existing Facility Project Documents or the Existing Facility Security
Documents or the Pledged Notes, or make or permit any payment or prepayment of
the principal of the Pledged Notes or any prepayment of interest due or to
become due thereon.
SECTION 6.11. Interest Coverage Ratio. Permit the ratio of (i)
Consolidated EBIT to (ii) Consolidated Interest Expense for any period of four
consecutive fiscal quarters ending on any Quarterly Date during any period set
forth below to be less than the ratio set forth opposite such period:
Period Ratio
------ -----
Closing Date through June 30, 1996 1.20
July 1, 1996 through June 30, 1997 1.30
July 1, 1997 through June 30, 1998 1.30
Thereafter 1.50
SECTION 6.12. Debt to Capitalization Ratio. Permit the ratio
of (i) Consolidated Total Indebtedness to (ii) Total Capitalization (the "Debt
to Capitalization Ratio") at any time during any period set forth below to
exceed the ratio set forth opposite such period:
Period Ratio
------ -----
Closing Date through June 30, 1996 0.77
July 1, 1996 through June 30, 1997 0.75
July 1, 1997 through June 30, 1998 0.72
July 1, 1998 through June 30, 1999 0.68
Thereafter 0.65
SECTION 6.13. Capital Expenditures. Make Capital Expenditures
in excess of $40,000,000 during any fiscal year; provided, that any amount of
such $40,000,000 not used in any fiscal year may be carried over into and used
in the next fiscal year but not any subsequent fiscal year (it being understood
that for purposes of computing the amount permitted to be carried over, the
$40,000,000 applicable to each fiscal year shall be deemed to be used prior to
the use of any applicable carryover).
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or Existing Facility Document or
the borrowings hereunder or thereunder, or any representation,
warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document or Existing Facility
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Commitment Fee or any other amount (other than an
amount referred to in (b) above) due under any Loan Document or
Existing Facility Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of
five days;
(d) default shall be made in the due observance or performance
by the Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.1(a), 5.8, 5.12(b) or 5.13 or in
Article VI;
(e) default shall be made in the due observance or performance
by the Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.5 and such default shall continue
unremedied for a period of 10 days;
(f) default shall be made in the due observance or performance
by the Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in
(b), (c) or (d) above) and such default shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent or
any Lender to the Borrower;
(g) default shall be made in the due observance or performance
by the Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Existing Facility Document after giving
effect to any applicable cure periods thereunder;
(h) the Borrower or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $5,000,000 in the case
of the Borrower, and $100,000, in the case of any Subsidiary, when and
as the same shall become due and payable, or (ii) fail to observe or
perform any other term, covenant, condition or agreement contained in
any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause
(ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity;
(i) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Subsidiary, or of a substantial part of the property or assets of the
Borrower or a Subsidiary, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of the property or assets of the Borrower or a
Subsidiary or (iii) the winding-up or liquidation of the Borrower or
any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
(j) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
the filing of any petition described in (h) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of the property or assets of the
Borrower or any Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $7,500,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties
of the Borrower or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to result in liability of the
Borrower and its ERISA Affiliates in an aggregate amount exceeding
$20,000,000 or requires payments exceeding $5,000,000 in any year; or
(m) any security interest purported to be created by any
Pledge Agreement, any Existing Facility Security Document or the TNP
Bond Indenture shall cease to be, or shall be asserted by the Borrower
or any other Loan Party not to be, a valid, perfected, first priority
(except as otherwise expressly provided in this Agreement, such Pledged
Agreement, such Existing Facility Security Document or the TNP Bond
Indenture) security interest in the securities, assets or properties
covered thereby, except to the extent that any such loss of perfection
or priority results from the failure of the Collateral Agent to
maintain possession of certificates representing securities pledged
under either Pledge Agreement;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (i) or (j) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (i) or (j) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding. Notwithstanding the foregoing, a
Default (as defined in the Existing Facility Agreement) under Sections 10.01,
10.02, 10.08, 10.14, 10.17, 10.21 and 10.22 or paragraphs (g), (i) or (l) of
Section 11 of the Existing Facility Agreement will not be deemed to be an Event
of Default hereunder if the events or circumstances constituting such Default
would not, but for such provisions of the Existing Facility Agreement,
constitute or result in an Event of Default under Section 6.5, 6.6, 6.1, 6.5,
6.13, 6.6, 6.11 or 6.12 or paragraph (k), (h) or (l) of Article VII of this
Agreement, respectively; it being agreed, however, that if the events and
circumstances constituting such a Default shall result in a violation of any
provisions of any Loan Document other than those enumerated above in this
sentence, nothing in this sentence shall prevent the occurrence of an Event of
Default hereunder by reason of such violation.
ARTICLE VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as Administrative Agent and
Collateral Agent on behalf of the Lenders (for purposes of this Article VIII,
the Administrative Agent and the Collateral Agent are referred to collectively
as the "Agents"). Each of the Lenders and each assignee of any such Lender
hereby irrevocably authorizes the Agents to take such actions on behalf of such
Lender or assignee and to exercise such powers as are specifically delegated to
the Agents by the terms and provisions hereof and of the other Loan Documents
and Existing Facility Documents, together with such actions and powers as are
reasonably incidental thereto. The Administrative Agent is hereby expressly
authorized by the Lenders, without hereby limiting any implied authority, (a) to
receive on behalf of the Lenders all payments of principal of and interest on
the Loans and all other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower or any other Loan Party pursuant to this
Agreement or the other Loan Documents as received by the Administrative Agent.
Without limiting the generality of the foregoing, the Collateral Agent is hereby
expressly authorized to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement, the other Loan Documents and the Existing Facility Documents.
None of the Agents, the Co-Agents or any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his own gross negligence or
wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower or any other Loan Party of any of the
terms, conditions, covenants or agreements contained in any Loan Document or
Existing Facility Document. None of the Agents or any Co-Agent shall be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other Loan Document or
Existing Facility Document, or any related instrument or agreement. The Agents
shall in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders and, except
as otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. Each Agent shall,
in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. None of the
Agents, the Co-Agents or any of their respective directors, officers, employees
or agents shall have any responsibility to the Borrower or any other Loan Party
on account of the failure of or delay in performance or breach by any Lender of
any of its obligations hereunder or to any Lender on account of the failure of
or delay in performance or breach by any other Lender or the Borrower or any
other Loan Party of any of their respective obligations hereunder or under any
other Loan Document or in connection herewith or therewith. Each of the Agents
may execute any and all duties hereunder by or through agents or employees and
shall be entitled to rely upon the advice of legal counsel selected by it with
respect to all matters arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the advice of such
counsel.
The Lenders hereby acknowledge that neither Agent shall be
under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent
as provided below, either Agent may resign at any time by notifying the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor which, unless a Default or Event of Default shall
have occurred and be continuing, shall be reasonably satisfactory to the
Borrower. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank with an office in New
York, New York, having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Upon the acceptance of any appointment as
Agent hereunder by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After the Agent's resignation hereunder, the provisions of this
Article and Section 9.5 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent and
Co-Agent in its individual capacity and not as Agent or Co-Agent, respectively,
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not an Agent or Co-Agent, respectively, and the Agents,
Co-Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent or Co-Agent, respectively.
Each Lender agrees (a) to reimburse the Agents and Co-Agents,
on demand, in the amount of their pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the Agents
or Co-Agents, as the case may be, including counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders, that
shall not have been reimbursed by the Borrower and (b) to indemnify and hold
harmless each Agent, Co-Agent and any of their directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against it in its
capacity as Agent or Co-Agent, as the case may be, or any of them in any way
relating to or arising out of this Agreement or any other Loan Document or
Existing Facility Document or any action taken or omitted by it or any of them
under this Agreement or any other Loan Document or Existing Facility Document,
to the extent the same shall not have been reimbursed by the Borrower or any
other Loan Party, provided that no Lender shall be liable to an Agent, Co-Agent
or any such other indemnified person for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements as shall be determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Agent, Co-Agent or any of their
directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents, the Co-Agents or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents,
the Co-Agents or any other Lender and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement or any other
Loan Document, any related agreement or any document furnished hereunder or
thereunder.
ARTICLE IX. MISCELLANEOUS
SECTION 9.1. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Borrower, to it at Texas-New Mexico Power Company, 4100
International Plaza, Fort Worth, TX 76109, Attention of Chief Financial Officer
(Telecopy No. 817-737-1343);
(b) if to the Administrative Agent, to Chemical Bank Agency Services
Corporation, Grand Central Tower, 140 East 45th Street, New York, New York
10017, Attention of Janet Belden (Telecopy No. (212) 622-0122), with a copy to
Chemical Bank, at 270 Park Avenue, New York 10017, Attention of Jaimin Patel
(Telecopy No. 212-270-2555); and
(c) if to a Lender, to it at its address (or telecopy number) set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.1 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.1.
SECTION 9.2. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any Commitment Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and so long as the Commitments have not been terminated. The provisions
of Sections 2.11, 2.13, 2.17 and 9.5 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent or any Lender.
SECTION 9.3. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
SECTION 9.4. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrower, the
Administrative Agent or the Lenders that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate of such Lender, (x) the Borrower (except if an Event of Default
shall have occurred and be continuing) and the Administrative Agent must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld) and (y) the amount of the Commitment of the assigning
Lender subject to each such assignment shall not be less than $5,000,000 (or, if
less, the entire remaining amount of such Lender's Commitment), (ii) the parties
to each such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$5,000 and (iii) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.4, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.11, 2.13, 2.17 and 9.5, as well as to any Commitment Fees accrued for its
account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balance of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or Existing Facility Document or any other instrument or
document furnished pursuant hereto or thereto, or the financial condition of the
Borrower or any Subsidiary or the performance or observance by the Borrower or
any Subsidiary of any of its obligations under this Agreement, any other Loan
Document or Existing Facility Document or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.5 or delivered pursuant to Section 5.4 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, the Collateral
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the
Collateral Agent, respectively, by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive and the Borrower, the Administrative Agent, the Collateral
Agent and the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Collateral Agent and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower and
the Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.11, 2.13 and 2.17 to the same extent as if
they were Lenders and (iv) the Borrower, the Administrative Agent and the
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to the Loans and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers decreasing any fees payable hereunder or the amount of principal of
or the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
increasing or extending the Commitments or releasing all or substantially all
the Collateral or the Existing Facility Collateral).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.4, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In order to
facilitate such an assignment to a Federal Reserve Bank, the Borrower shall, at
the request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Loans made to the Borrower by
the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Administrative Agent and each Lender, and any attempted assignment without such
consent shall be null and void.
SECTION 9.5. Expenses; Indemnity. (a) The Borrower agrees to
pay all reasonable out-of-pocket expenses incurred by the Administrative Agent
and the Collateral Agent in connection with the syndication of the credit
facilities provided for herein and the preparation and administration of this
Agreement and the other Loan Documents or in connection with any amendments,
modifications or waivers of the provisions hereof or thereof or of the Existing
Facility Documents (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Collateral Agent or any Lender in connection with the enforcement or protection
of its rights in connection with this Agreement, the other Loan Documents or the
Existing Facility Documents or in connection with the Loans made issued
hereunder, including the fees, charges and disbursements of counsel for the
Administrative Agent and the Collateral Agent, and, in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender.
(b) The Borrower agrees to indemnify the Administrative Agent,
the Collateral Agent and each Lender, each Affiliate of any of the foregoing
persons and each of their respective directors, officers, employees and agents
(each such person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or Existing Facility Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loans, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto, or (iv) any actual or alleged presence or release of Hazardous
Materials on any property owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Claim (including any claim under CERCLA, as
defined in the definition of "Environmental Law") related in any way to the
Borrower or the Subsidiaries; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.5 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the invalidity
or unenforceability of any term or provision of this Agreement or any other Loan
Document or Existing Facility Document, or any investigation made by or on
behalf of the Administrative Agent, the Collateral Agent or any Lender. All
amounts due under this Section 9.5 shall be payable on written demand therefor.
SECTION 9.6. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, with the consent of the Administrative Agent or the
Required Lenders, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.6 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.7. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.
SECTION 9.8. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent, the Collateral Agent or any Lender in exercising any
power or right hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or Existing Facility Document or consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(b) None of this Agreement, or any other Loan Document, or any
Existing Facility Document may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Required Lenders (or, in the case of any Pledge Agreement or Existing Facility
Document, an agreement or agreements in writing entered into by the Borrower or
other Loan Party or person party thereto and the Collateral Agent, acting
pursuant to the provisions of this Agreement or with the consent of the Required
Lenders); provided, however, that no such agreement shall (i) decrease the
principal amount of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any Loan, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest on
any Loan, without the prior written consent of each Lender affected thereby,
(ii) change or extend the Commitment or decrease the Commitment Fees of any
Lender without the prior written consent of such Lender, or (iii) amend or
modify the provisions of Section 2.14 or 9.4(i), the provisions of this Section
or the definition of the term "Required Lenders" or release the Guarantee of the
Guarantor or all or any substantial part of the Collateral other than as
provided herein, without the prior written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Collateral Agent hereunder
or under any other Loan Document without the prior written consent of the
Administrative Agent or the Collateral Agent, as the case may be.
SECTION 9.9. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 9.9 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter
and the other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any party
other than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.3. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a)
The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents or Existing Facility
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Collateral Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents or Existing Facility Documents against the
Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents or Existing Facility Documents in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.1. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the
Collateral Agent and each of the Lenders agrees to keep confidential (and to use
its best efforts to cause its respective agents and representatives to keep
confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Collateral Agent or any Lender shall be permitted
to disclose Information (a) to such of its respective officers, directors,
employees, agents, affiliates and representatives as need to know such
Information, (b) to the extent requested by any regulatory authority, (c) to the
extent otherwise required by applicable laws and regulations or by any subpoena
or similar legal process, (d) in connection with any suit, action or proceeding
relating to the enforcement of its rights hereunder or under the other Loan
Documents or (e) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 9.16 or (ii) becomes
available to the Administrative Agent, any Lender or the Collateral Agent on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" shall mean all financial statements, certificates,
reports, agreements and information (including all analyses, compilations and
studies prepared by the Administrative Agent, the Collateral Agent or any Lender
based on any of the foregoing) that are received from the Borrower and related
to the Borrower, any shareholder of the Borrower or any employee, customer or
supplier of the Borrower, other than any of the foregoing that were available to
the Administrative Agent, the Collateral Agent or any Lender on a
nonconfidential basis prior to its disclosure thereto by the Borrower, and which
are in the case of Information provided after the date hereof, clearly
identified at the time of delivery as confidential. The provisions of this
Section 9.16 shall remain operative and in full force and effect regardless of
the expiration and term of this Agreement.
SECTION 9.17. Release of Collateral. (a) Notwithstanding any
other provision of this Agreement, the Bond Pledge Agreement or the Note Pledge
Agreement, the Pledged Bonds and the Pledged Notes and all other collateral held
under the Pledge Agreements shall be released from the Liens created by the
Pledge Agreements, in each case without representation, warranty or recourse of
any nature, on a Business Day specified by the Borrower (the "Release Date"),
upon the satisfaction of the following conditions precedent (the "Release
Conditions"):
(i) the Borrower shall have given written notice to the
Lenders and the Collateral Agent at least 10 Business Days prior to the
Release Date, specifying the proposed Release Date;
(ii) as of the Release Date, the First Mortgage Bonds shall be
rated "BBB-" or better by S&P and "Baa3" or better by Moody's, and
shall have been so rated by each of S&P and Moody's for a period of not
less than 30 consecutive days;
(iii) no Default or Event of Default hereunder or under the
Existing Facility Agreement shall have occurred and be continuing as of
the Release Date;
(iv) on the Release Date, the Administrative Agent shall have
received a certificate, dated the Release Date and executed on behalf
of each of the Borrower and the Guarantor by a Responsible officer
thereof, confirming the satisfaction of the Release Conditions set
forth in clauses (ii) and (iii) above; and
(v) a successor Collateral Agent (which may be the Debenture
Trustee for the Secured Debentures then outstanding, if any, or its
designee) shall have been appointed with respect to the Existing
Facility Collateral and the Existing Facility Common Collateral, and
shall have accepted such appointment, under each Existing Facility
Security Document that will continue in effect after the Release Date
for the benefit of the holders from time to time of the Pledged Notes
and the Replacement Note Holder, and Chemical Bank shall have been
released and discharged, effective on the Release Date immediately
following the release of collateral provided for herein, from any and
all obligations and duties under the Existing Facility Security
Documents on terms and pursuant to documentation satisfactory to
Chemical Bank.
(b) The releases of collateral provided for in this Section
9.17 shall not release or otherwise affect the Liens granted under the Existing
Facility Security Documents, which shall continue in effect for the benefit of
the holders from time to time of the Pledged Notes and the Replacement Note
Holder to the extent contemplated by the Existing Facility Documents.
(c) Subject to the satisfaction of the conditions set forth in
paragraph (a) above, on and after the Release Date, the Collateral Agent shall
deliver the Pledged Bonds and the Pledged Notes to the Borrower and shall
execute and deliver to the Borrower all such instruments and documents as the
Borrower may reasonably request to evidence or confirm the releases of
collateral provided for in this Section 9.17.
(d) Without limiting the provisions of Section 9.5, the
Borrower and the Guarantor shall reimburse the Collateral Agent, the
Administrative Agent and the Lenders upon demand for all costs and expenses,
including attorneys' fees and disbursements, incurred by any of them in
connection with any action contemplated by this Section 9.17.
SECTION 9.18. Representations of the Lenders. In connection
with the issuance of the Bonds and their deposit with the Collateral Agent as
provided in the Bond Agreement, each Lender represents and warrants to the
Borrower as follows:
(a) Such Lender is acquiring its interest in the Bonds for its
own account with a view to holding such interest on the terms set forth in the
Bond Agreement and not with a view to or in connection with any distribution or
resale thereof. Such Lender is familiar with the limitations imposed by the Bond
Agreement and applicable Federal and state securities laws upon the transfer or
other disposition of the Bonds.
(b) Such Lender has had, during the course of the transactions
contemplated hereby and prior to its acquisition of its interest in the Bonds,
the opportunity to ask such questions of, and receive answers from, the Borrower
and to obtain such additional information with respect to the Borrower and the
Bonds as it has deemed necessary in connection with its decision to acquire its
interest in the Bonds (it being understood that nothing herein shall limit or
qualify the Borrower's representations under Section 3.15).
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
TEXAS-NEW MEXICO POWER COMPANY,
by /s/ M. S. Cheema
Name: M. S. Cheema
Title: Vice President
CHEMICAL BANK, individually and as
Administrative Agent and Collateral Agent
by /s/ Jane Ritchie
Name: Jane Ritchie
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by /s/ Rita M. Cahill
Name: Rita M. Cahill
Title: Vice President
THE BANK OF MONTREAL,
by /s/ Julia B. Buthman
Name: Julia B. Buthman
Title: Director
THE BANK OF NEW YORK, individually and as
Co-Agent,
by /s/ Ian K. Stewart
Name: Ian K. Stewart
Title: Senior Vice President
CIBC, INC., individually and as Co-Agent,
by /s/ Robert S. Lyle
Name: Robert S. Lyle
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by /s/ Robert Ivosevich
Name: Robert Ivosevich
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A., individually
and as Co-Agent,
by /s/ Bryan L. Diers
Name: Bryan L. Diers
Title: Senior Vice President
THE NIPPON CREDIT BANK, LTD.,
by /s/ James J. Pasquale
Name: James J. Pasquale
Title: Senior Manager
UNION BANK, individually and as Co-Agent,
by /s/ John M. Edmonston
Name: John M. Edmonston
Title: Vice President
EXHIBIT A
[Form of]
TEXAS-NEW MEXICO POWER COMPANY
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via Telecopy to
the attention of Janet Belden at Chemical Bank Agency Services Corporation as
soon as possible, at Telecopy No. (212) 622-0002.
- ------------------------------------------------------------------------
LENDER LEGAL NAME TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
POST-CLOSING, ONGOING CREDIT CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
2
Backup Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
TAX WITHHOLDING:
Nonresident Alien \ \ Y* \ \ N
* Form 4224 Enclosed
Tax ID Number _________________________
POST-CLOSING, ONGOING ADMINISTRATIVE CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, FEES, ETC.
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
PAYMENT INSTRUCTIONS:
Name of Bank to which funds are to be transferred:
Routing Transit/ABA number of Bank to which funds are to be transferred:
Name of Account, if applicable:
Account Number:
Additional information:
MAILINGS:
Please specify the person to whom the Borrower should send financial and
compliance information received subsequent to the closing (if different from
primary credit contact):
Name:
Street Address:
City, State, Zip Code:
It is very important that all the above information be accurately completed and
that this questionnaire be returned to the person specified in the introductory
paragraph of this questionnaire as soon as possible. If there is someone other
than yourself who should receive this questionnaire, please notify us of that
person's name and telecopy number and we will telecopy a copy of the
questionnaire. If you have any questions about this form, please call Janet
Belden at (212) 622-0001.
EXHIBIT B
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of November
3, 1995 (as the same may be modified, amended, extended or restated from time to
time, the "Credit Agreement"), among Texas-New Mexico Power Company (the
"Borrower"), the lenders from time to time party thereto (the "Lenders") and
Chemical Bank, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent") and collateral agent. Terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Effective Date set forth below (but not
prior to the registration of the information contained herein in the Register
pursuant to Section 9.4(e) of the Credit Agreement), the interests set forth
below (the "Assigned Interest") in the Assignor's rights and obligations under
the Credit Agreement and the other Loan Documents, including, without
limitation, the amounts and percentages set forth below of (i) the Commitments
of the Assignor on the Effective Date and (ii) the Loans owing to the Assignor
which are outstanding on the Effective Date. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 9.4(c) of the Credit Agreement, a
copy of which has been received by each such party. From and after the Effective
Date (i) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests assigned by this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and (ii)
the Assignor shall, to the extent of the interests assigned by this Assignment
and Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.17(f) of the Credit Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit A to the Credit Agreement
and (iii) a processing and recordation fee of $5,000.
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage
Assigned of
Commitment (set
forth, to at least
8 decimals, as a
percentage of the
aggregate
Commitments of all
Lenders
thereunder)
Principal Amount Assigned
Commitment Assigned: $ %
Loans:
The terms set forth above and on the
reverse side hereof are hereby agreed to: Accepted: */
______________, as Assignor CHEMICAL BANK, as administrative agent,
By: __________________________ By: _________________________
Name: Name:
Title: Title:
_____________, as Assignee TEXAS-NEW MEXICO POWER COMPANY,
By: ______________________ By: __________________________
Name: Name:
Title: Title:
*/ To be completed to the extent consents are required under Section 9.4(b) of
the Credit Agreement.
EXHIBIT C
FORM OF BORROWING REQUEST
Chemical Bank, as Administrative Agent for
the Lenders referred to below,
270 Park Avenue
New York, NY 10017
Attention of Jaimin Patel
[Date]
Ladies and Gentlemen:
The undersigned, Texas-New Mexico Power Company (the
"Company"), refers to the Credit Agreement dated as of November 3, 1995 (the
"Credit Agreement"), among the Company, the lenders from time to time party
thereto (the "Lenders") and Chemical Bank, as administrative agent for the
Lenders (in such capacity, the "Agent") and collateral agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement. The Company hereby gives you notice pursuant
to Section 2.3 of the Credit Agreement that it requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the terms on which
such Borrowing is requested to be made:
(A) Date of Borrowing
(which is a Business Day) ______________________________
(B) Principal Amount of
Borrowing 1/ ______________________________
(C) Interest rate basis 2/ ______________________________
(D) Interest Period and the last
day thereof 3/ ______________________________
(E) Funds are requested to be disbursed to the Company's account with
Chemical Bank (Account No. ).
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, the Company shall be deemed to have
represented and warranted that the conditions to lending specified in Sections
4.1(b) and (c) of the Credit Agreement have been satisfied.
TEXAS-NEW MEXICO POWER COMPANY,
by
Name:
Title: [Responsible Officer]
1/ Not less than $2,000 and in an integral multiple of $1,000,000, but in any
event not exceeding the available Total Commitment.
2/ Specify Eurodollar borrowing or ABR Borrowing.
3/ Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date (applicaable only for Eurodollar Borrowings).
EXHIBIT D
GUARANTEE AND PLEDGE AGREEMENT (this
"Agreement") dated as of November 3, 1995, between
TEXAS GENERATING COMPANY II, a Texas corporation (the
"Guarantor"), a subsidiary of TEXAS-NEW MEXICO POWER
COMPANY, a Texas corporation (the "Borrower"), and
CHEMICAL BANK, a New York banking corporation, as
collateral agent (the "Collateral Agent") for the
Lenders (as defined in the Credit Agreement referred
to below).
Reference is made to the Credit Agreement dated as of November
3, 1995 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and Chemical Bank, as administrative agent and as
collateral agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower pursuant
to, upon the terms of and subject to the conditions specified in the Credit
Agreement. The Guarantor is a wholly owned Subsidiary of the Borrower and
acknowledges that it will derive substantial benefit from the making of the
Loans by the Lenders. The obligations of the Lenders to make Loans are
conditioned on, among other things, the execution and delivery by the Guarantor
of a Guarantee in the form hereof. As consideration therefor and in order to
induce the Lenders to make Loans, the Guarantor is willing to enter into this
Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. The Guarantor unconditionally
guarantees, as a primary obligor and not merely as a surety, the due and
punctual payment and performance by the Borrower of (a) the principal of and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (b) all other monetary obligations (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Loan Parties to the Lenders under the Loan Documents, (c)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Loan Parties under or pursuant to the Loan Documents and (d)
all obligations of the Borrower under each Interest Rate Protection Agreement
entered into with a Lender to protect against interest rate fluctuations with
respect to Indebtedness under the Credit Agreement (the foregoing obligations
described in clauses (a), (b), (c) and (d) being collectively called the
"Obligations"). The Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Obligation.
Anything contained in this Agreement to the contrary
notwithstanding, the obligations of the Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not render
the Guarantor's obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any provisions of applicable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
the Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of the Guarantor
(a) in respect of intercompany indebtedness to the Borrower or Affiliates of the
Borrower to the extent that such indebtedness would be discharged in an amount
equal to the amount paid by the Guarantor hereunder and (b) under any Guarantee
of senior unsecured indebtedness or Indebtedness subordinated in right of
payment to the Obligations which Guarantee contains a limitation as to maximum
amount similar to that set forth in this paragraph, pursuant to which the
liability of such Guarantor hereunder is included in the liabilities taken into
account in determining such maximum amount) and after giving effect as assets to
the value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, contribution, reimbursement,
indemnity or similar rights of the Guarantor pursuant to (i) applicable law or
(ii) any agreement providing for an equitable allocation among the Guarantor and
other Affiliates of the Borrower of obligations arising under Guarantees by such
parties.
SECTION 2. Pledge of Intercompany Indebtedness. As security
for the payment and performance in full of the Obligations, the Guarantor hereby
transfers, grants, bargains, sells, conveys, hypothecates, pledges, sets over
and delivers unto the Collateral Agent, for the ratable benefit of the Lenders,
and grants to the Collateral Agent, for the ratable benefit of the Lenders, a
security interest in, (a) all intercompany Indebtedness owed to the Guarantor
including any promissory notes that may be issued to and delivered to the
Guarantor or the Collateral Agent in respect thereof or in substitution or
exchange for any such promissory notes and held by the Collateral Agent pursuant
to the terms hereof (collectively, the "Intercompany Indebtedness"), (b) all
other property which may be delivered to and held by the Collateral Agent
pursuant to the terms hereof (whether described herein or not), (c) all payments
of principal, interest and other amounts from time to time received, receivable
or otherwise distributed in respect of the Intercompany Indebtedness or in
exchange for or upon the conversion of any promissory notes evidencing the
Intercompany Indebtedness, (d) all rights and privileges of the Guarantor with
respect to the property referred to in clauses (a), (b) and (c) above, and (e)
all proceeds of any of the foregoing (the items referred to in clauses (a)
through (e) being collectively called the "Collateral"). Upon delivery to the
Collateral Agent, (x) any certificates, notes or other securities now or
hereafter included in the Collateral shall be accompanied by instruments of
transfer satisfactory to the Collateral Agent and by such other instruments and
documents as the Collateral Agent may reasonably request and (y) all other
property comprising part of the Collateral shall be accompanied by proper
instruments of assignment duly executed by the Guarantor and such other
instruments or documents as the Collateral Agent may reasonably request. In
addition to the rights and remedies granted to it in this Agreement and in any
other instrument or agreement securing, evidencing or relating to any of the
Obligations, the Collateral Agent shall have all the rights and remedies of a
secured party under the Uniform Commercial Code of the State of New York at that
time (the "Code"), whether or not the Code applies to the affected Collateral.
SECTION 3. Obligations Not Waived. To the fullest extent
permitted by applicable law, the Guarantor waives presentment to, demand of
payment from and protest to the Borrower of any of the Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of the Guarantor hereunder shall not be affected by (a) the failure of the
Collateral Agent or any other Lender to assert any claim or demand or to enforce
or exercise any right or remedy against the Borrower or any other guarantor of
the Obligations under the provisions of the Credit Agreement, any other Loan
Document or otherwise, (b) any rescission, waiver, amendment or modification of,
or any release from any of the terms or provisions of this Agreement, any other
Loan Document, any Guarantee or any other agreement, including with respect to
any other guarantor of the Obligations or (c) the failure to perfect any
security interest in, or the release of, any of the security held by or on
behalf of the Collateral Agent or any other Lender.
SECTION 4. Security. The Guarantor authorizes the Collateral
Agent and each of the other Lenders, to (a) take and hold security for the
payment of this Guarantee and the Obligations and exchange, enforce, waive and
release any such security, (b) following an Event of Default, apply such
security and direct the order or manner of sale thereof as they in their sole
discretion may determine and (c) release or substitute any one or more
endorsees, other guarantors of other obligors.
SECTION 5. Guarantee of Payment. The Guarantor further agrees
that its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Lender to any of the security held for payment of
the Obligations or to any balance of any deposit account or credit on the books
of the Collateral Agent or any other Lender in favor of the Borrower or any
other person.
SECTION 6. No Discharge or Diminishment of Guarantee. The
obligations of the Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Collateral Agent or any other Lender to assert any claim or demand or to enforce
any remedy under the Credit Agreement, any other Loan Document or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, wilful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of the Guarantor or that would otherwise operate as
a discharge of the Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations). It is expressly
agreed that the obligations of the Guarantor hereunder shall continue in full
force and effect following, and shall not be affected by, any release of
Collateral pursuant to Section 9.17 of the Credit Agreement.
SECTION 7. Defenses of Borrower Waived. To the fullest extent
permitted by applicable law, the Guarantor waives any defense based on or
arising out of any defense of the Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower, other than the final and indefeasible payment
in full in cash of the Obligations. The Collateral Agent and the other Lenders
may, at their election, foreclose on any security held by one or more of them by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrower or any other
guarantor or exercise any other right or remedy available to them against the
Borrower or any other guarantor, without affecting or impairing in any way the
liability of the Guarantor hereunder except to the extent the Obligations have
been fully, finally and indefeasibly paid in cash. The Guarantor waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantor against
the Borrower or any other guarantor, as the case may be, or any security.
SECTION 8. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that the Collateral Agent
or any other Lender has at law or in equity against the Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
or such other person or persons as shall be designated thereby in cash the
amount of such unpaid Obligations. Upon payment by the Guarantor of any sums to
the Collateral Agent or such other person or persons as provided above, all
rights of the Guarantor against the Borrower arising as a result thereof by way
of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, any
indebtedness of the Borrower now or hereafter held by the Guarantor is hereby
subordinated in right of payment to the prior payment in full of the
Obligations. If any amount shall erroneously be paid to the Guarantor on account
of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such indebtedness of the Borrower, such amount shall be held in
trust for the benefit of the Lenders and shall forthwith be paid to the
Collateral Agent to be credited against the payment of the Obligations, whether
matured or unmatured, in accordance with the terms of the Loan Documents.
SECTION 9. Information. The Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
the Guarantor assumes and incurs hereunder, and agrees that none of the
Collateral Agent or the other Lenders will have any duty to advise the Guarantor
of information known to it or any of them regarding such circumstances or risks.
SECTION 10. Representations and Warranties. The Guarantor
represents and warrants that (a) all representations and warranties relating to
it contained in the Credit Agreement are true and correct and (b) by virtue of
the execution and delivery by the Guarantor of this Agreement, when the filings
listed in Schedule 10(b) have been made, the Collateral Agent will have a valid
and first perfected lien upon and interest in the Intercompany Indebtedness as
security for the payment and performance of the Obligations, prior to all other
liens and encumbrances thereon and security interests therein.
SECTION 11. Termination. The Guarantee made hereunder (a)
shall terminate when all the Obligations have been indefeasibly paid in full and
the Lenders have no further commitment to extend credit under the Credit
Agreement and (b) shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Lender upon the bankruptcy or
reorganization of the Borrower or the Guarantor or otherwise.
SECTION 12. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantor that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
when a counterpart hereof executed on behalf of the Guarantor shall have been
delivered to the Collateral Agent, and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
the Guarantor and the Collateral Agent and their respective successors and
assigns, and shall inure to the benefit of the Guarantor, the Collateral Agent
and the other Lenders, and their respective successors and assigns, except that
the Guarantor shall not have the right to assign its rights or obligations
hereunder or any interest herein (and any such attempted assignment shall be
void).
SECTION 13. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No notice to or demand on the Guarantor in any case shall
entitle the Guarantor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Guarantor and the Collateral Agent, with the prior written consent
of the Required Lenders (except as otherwise provided in the Credit Agreement).
SECTION 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 9.1 of the Credit Agreement. All
communications and notices hereunder to the Guarantor shall be given to it in
care of the Borrower.
SECTION 16. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the Guarantor
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Collateral Agent and the other
Lenders and shall survive the making by the Lenders of the Loans regardless of
any investigation made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any other fee or amount payable under this Agreement or any other Loan
Document is outstanding and unpaid and as long as the Commitments have not been
terminated.
(b) In the event any one or more of the provisions contained
in this Agreement or in any other Loan Document should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 17. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 18. Rules of Interpretation. The rules of interpretation specified
in Section 1.2 of the Credit Agreement shall be applicable to this Agreement.
SECTION 19. Jurisdiction; Consent to Service of Process. (a)
The Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any other Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against the
Guarantor or its properties in the courts of any jurisdiction.
(b) The Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 15. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 20. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.
SECTION 21. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other Indebtedness at any time owing by such Lender to or
for the credit or the account of the Guarantor against any or all the
obligations of the Guarantor now or hereafter existing under this Agreement and
the other Loan Documents held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section 21 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
TEXAS GENERATING COMPANY II,
by
-----------------------
Name:
Title:
CHEMICAL BANK, as Collateral Agent,
by
-----------------------
Name:
Title:
Schedule 10(b)
UCC Filings
Secretary of State, Texas
Robertson County, Texas
EXHIBIT E
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY AND WHICH CONTAINS
AFTER-ACQUIRED PROPERTY PROVISIONS PURSUANT TO SUBCHAPTER 35A OF THE TEXAS
BUSINESS AND COMMERCE CODE
BOND AGREEMENT dated as of November 3, 1995,
by TEXAS-NEW MEXICO POWER COMPANY, a Texas
corporation ("TNP"), in favor of CHEMICAL BANK, a New
York banking corporation, as collateral agent for the
lenders (in such capacity, the "Collateral Agent")
party to the Credit Agreement dated as of November 3,
1995 (the "Credit Agreement"), among TNP, the lenders
named therein (the "Lenders") and CHEMICAL BANK, as
administrative agent and collateral agent for the
Lenders.
The Lenders have agreed to make Loans (such term and each
other term used but not defined herein having the meaning assigned to it in the
Credit Agreement) to the Borrower pursuant to, and subject to the terms of, the
Credit Agreement. The obligations of the Lenders to make the Loans are
conditioned, among other things, upon the execution and delivery by the Pledgor
of a bond pledge agreement in the form hereof to secure the due and punctual
payment by the Borrower of (a) the principal of and interest on the Loans, when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (b) all other monetary obligations of the Borrower to
the Lenders under the Loan Documents and (c) all obligations of the Pledgor or
any Subsidiary under any Interest Rate Protection Agreement entered into with a
Lender to protect against interest rate fluctuations with respect to
Indebtedness under the Credit Agreement (the foregoing obligations described in
clauses (a), (b) and (c) being collectively called the "Obligations"). It is
understood that TNP is the issuer of the Bonds pledged hereunder and that,
accordingly, the Bonds constitute obligations, and not property, of TNP, the
purpose of the arrangements provided for herein being to furnish security for
the Obligations through the issuance and pledge of the Bonds as contemplated by
Section 15.04 of the TNP Bond Indenture.
Accordingly, the Pledgor and the Collateral Agent hereby agree
as follows:
SECTION 1. Pledge of Bonds. As security for the payment and
performance in full of the Obligations, the Pledgor hereby transfers, grants,
bargains, sells, conveys, hypothecates, pledges, sets over and delivers unto the
Collateral Agent, for the ratable benefit of the Lenders, and grants to the
Collateral Agent, for the ratable benefit of the Lenders, a security interest in
(a) the First Mortgage Bonds listed on Schedule I hereto (the "Initial Bonds")
and the certificate or certificates representing or evidencing such First
Mortgage Bonds and any First Mortgage Bonds that may be delivered to the
Collateral Agent pursuant to Section 4.3 of the Credit Agreement and held by the
Collateral Agent pursuant to the terms hereof (the "Additional Bonds" and,
together with the Initial Bonds, the "Bonds"), (b) all other property which may
be delivered to and held by the Collateral Agent pursuant to the terms hereof
(whether or not described herein), (c) all payments of principal, interest and
other amounts from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of the securities referred to
in clauses (a) and (b) above, (d) all rights and privileges of the Pledgor with
respect to the securities and other property referred to in clauses (a) and (b)
above, and (e) all proceeds of any of the foregoing (the items referred to in
clauses (a) through (e) being collectively called the "Collateral"). Upon
delivery to the Collateral Agent, (x) the Bonds and any certificates, notes or
other securities now or hereafter included in the Collateral shall be
accompanied by duly executed instruments of transfer satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request and (y) all other property included in the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the Pledgor and such other instruments or documents as the
Collateral Agent may reasonably request.
SECTION 2. Representations, Warranties and Covenants. The Pledgor hereby
represents, warrants and covenants to and with the Collateral Agent that:
(a) at the time of their delivery hereunder, the Bonds will
have been authorized, executed, issued, authenticated and delivered,
and registered as provided in Section 3 below, in accordance with
applicable law and the terms and provisions of the TNP Bond Indenture
and will constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their terms and entitled to
the benefits of the TNP Bond Indenture and the Liens created thereby to
the same extent as the other First Mortgage Bonds issued thereunder;
(b) the Bonds delivered to and held by the Collateral Agent
hereunder will at all times be outstanding for all purposes of the TNP
Bond Indenture and the Collateral Agent and its successors, as holders
thereof, will be entitled to all voting, consensual and other rights
accruing to holders of First Mortgage Bonds issued under such
Indenture;
(c) the Pledgor will make no sale, assignment, pledge,
hypothecation or other transfer of, or create any other security
interest in, the Bonds or other Collateral;
(d) the Pledgor (i) has good right and legal authority to
pledge the Bonds and other Collateral to the Collateral Agent in the
manner hereby done or contemplated, (ii) will defend the interest of
the Collateral Agent in the Bonds and other Collateral against any and
all attachments, liens, claims, encumbrances, security interests or
other impediments of any nature, however arising, of all persons and
(iii) will promptly turn over to the Collateral Agent in the form in
which received any Collateral which shall at any time come into its
possession;
(e) no consent or approval of any Governmental Authority, the
Trustee under the TNP Bond Indenture or any securities exchange was or
is necessary for the valid issuance of the Bonds or the pledge effected
hereby except such as have been obtained and are in full force and
effect;
(f) by virtue of the execution and delivery by the Pledgor of
this Agreement, when the certificates, instruments or other documents
representing or evidencing the Bonds are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will
obtain a valid and perfected first lien upon and security interest in
such Bonds and the other Collateral as security for the payment and
performance of the Obligations, prior to all other liens and
encumbrances thereon and security interests therein; and
(g) the pledge effected hereby is effective to vest in the
Collateral Agent, on behalf of the Lenders, the rights of the
Collateral Agent in the Bonds and other Collateral as set forth herein.
SECTION 3. Registration of Bonds; Denominations. The Bonds
shall be registered on the register maintained by the Trustee under the TNP Bond
Indenture in the name of the Collateral Agent or its nominee. The Collateral
Agent shall have the right to exchange the certificates representing such Bonds
for certificates of smaller or larger denominations to facilitate the exercise
of its rights hereunder.
SECTION 4. Voting and Consensual Rights, Etc. (a) Until the
Collateral shall have been released as provided in Section 13, the Collateral
Agent shall have and may exercise, to the exclusion of the Pledgor, all voting,
consensual and other rights accruing to a holder of the Bonds, including,
without limitation, (i) the right to demand and receive payments of principal
and interest on the Bonds in accordance with the terms of the Bonds and the TNP
Bond Indenture (ii) the right to attend or be represented by proxy at any
meeting of bondholders under the TNP Bond Indenture, (iii) the right to vote the
Bonds in accordance with the terms of the TNP Bond Indenture, (iv) the right to
issue consents and waivers with respect to the Bonds, as a holder of First
Mortgage Bonds, under or in connection with the TNP Bond Indenture, (v) the
right to issue any and all instructions and requests for action to the Trustee
under the TNP Bond Indenture which are permitted to a bondholder under the TNP
Bond Indenture and (vi) the right to exercise all remedies provided in the TNP
Bond Indenture for the benefit of the holders of First Mortgage Bonds. The
Pledgor shall not amend, supplement or otherwise modify, or consent to any
amendment, supplement or other modification to, the terms of the Bonds or the
TNP Bond Indenture in any manner that could directly or indirectly affect the
Collateral, the Lien of the TNP Bond Indenture or the rights or interests of the
Lenders (other than issuances of First Mortgage Bonds permitted under Section
6.1(d) of the Credit Agreement pursuant to supplemental bond indentures), in
each case except with the prior written consent of the Collateral Agent.
(b) The Pledgor shall not consent to any voluntary prepayment
or redemption of the Bonds without the prior written consent of the Collateral
Agent, and any amounts received by or for the account of the Pledgor in respect
of any such prepayment or redemption shall constitute Collateral hereunder and
shall be held by the Collateral Agent for application as provided herein.
SECTION 5. No Disposition. Without the prior written consent
of the Collateral Agent, the Pledgor agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur or permit to exist any pledge,
lien, mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Collateral, or any interest therein, or
any proceeds thereof, except for the lien and security interest provided for by
this Agreement.
SECTION 6. Amendment, Modifications and Waivers with Respect
to Obligations. The Pledgor hereby agrees that, without notice to or further
assent by the Pledgor, any demand for payment of any of the Obligations made by
the Collateral Agent or the Lenders may be rescinded by the Collateral Agent or
the Lenders and any of the Obligations continued, and the Obligations, or the
liability of the Pledgor or any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of setoff with respect
thereto, may, from time to time, in whole or in part, be renewed, refunded,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by the Collateral Agent or any Lender and the Credit Agreement and any
other Loan Document or any other documents delivered in connection therewith may
be amended, modified, supplemented or terminated in whole or in part, as the
Lenders may deem advisable from time to time, and any collateral security at any
time held by the Lenders for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released on terms that in the good faith
judgement of the Collateral Agent are commercially reasonable in view of the
applicable circumstances and in view of the limitations described in Section 12,
all without notice to or the consent of the Pledgor, which will remain bound
hereunder, notwithstanding any such renewal, extension, modification,
acceleration, compromise, amendment, supplement, termination, sale, exchange,
waiver, surrender or release. Neither the Collateral Agent nor the Lenders shall
have any obligation to protect, secure, perfect or insure any other collateral
security document or property subject thereto at any time held as security for
the Obligations. The Pledgor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Collateral Agent or any Lender upon this Agreement, and the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Agreement, and all dealings between
the Pledgor and the Collateral Agent and the Lenders shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Agreement. The Pledgor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Pledgor with respect
to the Obligations.
SECTION 7. Remedies. (a) If a Default or Event of Default
shall have occurred and be continuing, the Collateral Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or at any of the Collateral Agent's offices or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk,
and the Collateral Agent or any Lender shall have the right, upon any such sale
or sales, public or private, to purchase the whole or any part of said
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby expressly waived or released. In addition to the
rights and remedies granted to it in this Agreement and in any other instrument
or agreement securing, evidencing or relating to any of the Obligations, the
Collateral Agent shall have all the rights and remedies of a secured party under
the Uniform Commercial Code of the State of New York at that time (the "Code"),
whether or not the Code applies to the affected Collateral. The Pledgor shall be
liable for the deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the Obligations.
(b) Neither the Collateral Agent nor any Lender shall be
liable for failure to collect or realize upon the Obligations or any collateral
security or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall any of them be under any obligation to take any action
whatsoever with regard thereto. Although the Collateral Agent or its nominee may
without notice exercise any and all rights, privileges or options pertaining to
any of the Bonds as if it were the absolute owner thereof, the Collateral Agent
shall have no duty to exercise any of the aforesaid rights, privileges or
options, shall not be responsible for any failure to do so or delay in so doing
and, in any event, may do so without liability.
SECTION 8. Application of Proceeds. The cash proceeds of any
sale of Collateral received by the Collateral Agent pursuant to Section 7, as
well as any cash Collateral received by the Collateral Agent, shall be applied
by the Collateral Agent as follows (the timing of such application to be in the
sole discretion of the Collateral Agent):
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent in connection with any such sale or otherwise in
connection with this Agreement or any of the Obligations, including,
but not limited to, all court costs and the reasonable fees and
expenses of its agents and legal counsel and any other costs or
expenses incurred in connection with the exercise of any right or
remedy hereunder;
SECOND, to the payment in full of the Obligations due but
unpaid at the time of such receipt, pro rata among the holders of the
Obligations in accordance with the amounts of the Obligations held by
them on the date of any distribution; provided that in the event no
such Obligations are due and payable at such time, or to the extent the
Collateral Agent receives noncash Proceeds, all cash Collateral and
Proceeds shall be retained by the Collateral Agent for application
against the Obligations as they become due and payable; and
THIRD, to the Pledgor, its successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
SECTION 9. Reimbursement of the Collateral Agent. The Pledgor
hereby agrees to reimburse the Collateral Agent, on demand, for all reasonable
out of pocket expenses incurred by the Collateral Agent in connection with the
administration and enforcement of this Agreement, and agrees to indemnify the
Collateral Agent and hold the Collateral Agent harmless from and against any and
all liability incurred by the Collateral Agent hereunder, or in connection
herewith, unless such liability shall be due to wilful misconduct or gross
negligence on the part of the Collateral Agent.
SECTION 10. The Collateral Agent Appointed Attorney-in-Fact.
The Pledgor hereby appoints the Collateral Agent as attorney-in-fact of the
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to the Pledgor representing any payment of interest or other
distribution payable in respect of the Collateral or any part thereof and to
give full discharge for the same.
SECTION 11. No Waiver. No failure on the part of the
Collateral Agent to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy by the Collateral Agent
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 12. Securities Act, etc. The Pledgor understands that
compliance with the Securities Act of 1933, as now or hereafter in effect, or
any similar statute hereafter enacted analogous in purpose or effect (such Act
and any such similar statute as from time to time in effect being called the
"Federal Securities Laws") might very strictly limit the course of conduct of
the Collateral Agent if the Collateral Agent were to attempt to dispose of all
or any part of the Collateral pursuant to Section 7, and might also limit the
extent to which or the manner in which any subsequent transferee of any
Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Collateral Agent in any attempt to
dispose of all or part of the Collateral pursuant to Section 7 under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Under applicable law, in the absence of an agreement to the contrary,
the Collateral Agent might be held to have certain general duties and
obligations to the Pledgor, to make some effort toward obtaining a fair price
even though the Obligations may be discharged or reduced by the proceeds of a
sale at a lesser price. The Pledgor clearly understands that the Collateral
Agent is not to have any such general duty or obligation to the Pledgor, and the
Pledgor will not in any way whatsoever attempt to hold the Collateral Agent
responsible for selling all or any part of the Collateral at an inadequate price
even if the Collateral Agent shall accept the first offer received or does not
approach more than one possible purchaser.
SECTION 13. Termination; Redelivery of Pledged Bonds. This
Agreement shall terminate when (a) all the Obligations have been fully and
indefeasibly paid and the Lenders have no further commitment to extend credit
under the Credit Agreement or (b) the conditions to the release of the
Collateral set forth in Section 9.17 of the Credit Agreement shall have been
satisfied. At the request of the Pledgor following such termination, the
Collateral Agent shall reconvey, reassign and deliver to the Pledgor, or to such
person or persons as the Pledgor shall designate, against receipt, such of the
Collateral (if any) as shall not have been applied by the Collateral Agent
pursuant to the terms hereof and shall still be held by it hereunder, together
with appropriate instruments of reconveyance, reassignment and release. Any such
reconveyance and reassignment shall be without recourse to or representation or
warranty by the Collateral Agent and at the expense of the Pledgor.
SECTION 14. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 9.1 of the Credit Agreement.
SECTION 15. Further Assurances. The Pledgor agrees to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 16. Binding Agreement; Assignments. This Agreement,
and the terms, covenants and conditions hereof, shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
(including any future Lender becoming a party to the Credit Agreement and any
purchaser of a participation in any of the Obligations), except that the Pledgor
shall not be permitted to assign this Agreement or any interest herein or in the
Collateral, or any part thereof, or otherwise convey, pledge, encumber or grant
any option with respect to the Collateral, or any part thereof, or any cash or
property held by the Collateral Agent as Collateral under this Agreement except
as contemplated by this Agreement.
SECTION 17. Survival of Agreement. All covenants and
agreements made by the Pledgor herein and in the certificates or other
instruments prepared or delivered in connection with this Agreement shall be
considered to have been relied upon by the Collateral Agent and the Lenders and
shall survive the making by the Lenders of the Loans and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any other fee or amount payable under this Agreement or, without duplication
of the foregoing, under any of the other Loan Documents, or any of the other
Obligations, is outstanding and unpaid and so long as this Agreement has not
terminated. The representations and warranties contained in Section 2 of this
Agreement shall be considered to have been relied upon by the Lenders and shall
survive the making of the Loans and shall remain in full force and effect after
the termination of this Agreement.
SECTION 18. Provisions Severable. The provisions of this
Agreement are severable, and if any clause or provision shall be held invalid
and unenforceable in whole or in part, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, and shall not in
any manner affect any other clause or provision of this Agreement.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
SECTION 21. Headings. Section headings used herein are for convenience only
and are not to affect the construction of, or be taken into consideration in
interpreting, this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Bond Pledge Agreement, or caused this Bond Pledge Agreement to be duly executed
on their behalf, as of the day and year first above written.
TEXAS-NEW MEXICO POWER COMPANY,
by
---------------------------
Name:
Title:
CHEMICAL BANK, as Collateral Agent,
by
-----------------------------
Name:
Title:
The undersigned hereby acknowledges receipt of a copy of the
Bond Agreement dated as of November 3, 1995 by Texas-New Mexico Power Company in
favor of Chemical Bank, as Collateral Agent (the "Bond Agreement"), and confirms
that the Bonds pledged under the Bond Agreement on the date hereof are
outstanding for all purposes of the TNP Bond Indenture.
BANK OF AMERICA ILLINOIS, as Trustee under the TNP Bond Indenture,
by -------------------------------
Name:
Title:
November __, 1995
THE STATE OF TEXAS
COUNTY OF ROBERTSON
This instrument was acknowledged before me on the ____ day of November,
1995, by __________ , ______________ of TEXAS-NEW MEXICO POWER COMPANY, a Texas
corporation, on behalf of said corporation.
----------------------------
NOTARY PUBLIC in and for the
State of TEXAS
My Commission Expires:
- -------------------------------------- -----------------------------
Typed or Printed Name of Notary
THE STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the ____ day of
November,1995, by _________, ____________________ of CHEMICAL BANK, a New York
banking corporation, on behalf of said corporation.
---------------------------
NOTARY PUBLIC in and for the
Sate of NEW YORK
My Commission Expires:
- -------------------------------------------- -----------------------
Typed or Printed Name of Notary
EXHIBIT F THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY AND
CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS PURSUANT TO SUBCHAPTER 35A OF THE
TEXAS BUSINESS AND COMMERCE CODE
NOTE PLEDGE AGREEMENT dated as of November
3, 1995, by TEXAS-NEW MEXICO POWER COMPANY, a Texas
corporation (the "Pledgor"), in favor of CHEMICAL
BANK, a New York banking corporation, as collateral
agent for the lenders (in such capacity, the
"Collateral Agent") party to the Credit Agreement
dated as of November 3, 1995 (the "Credit
Agreement"), among the Pledgor, the lenders named
therein (the "Lenders") and CHEMICAL BANK, as
administrative agent and collateral agent for the
Lenders.
The Lenders have agreed to make Loans (such term and each
other capitalized term used but not defined herein having the meaning assigned
to it in the Credit Agreement) to the Borrower pursuant to, and subject to the
terms of, the Credit Agreement. The obligations of the Lenders to make the Loans
are conditioned, among other things, upon the execution and delivery by the
Pledgor of a pledge agreement in the form hereof to secure the due and punctual
payment by the Borrower of (a) the principal of and interest on the Loans, when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (b) all other monetary obligations of the Borrower to
the Lenders under the Loan Documents and (c) all obligations of the Pledgor or
any Subsidiary under any Interest Rate Protection Agreement entered into with a
Lender to protect against interest rate fluctuations with respect to the
Indebtedness under the Credit Agreement (the foregoing obligations described in
clauses (a), (b) and (c) being collectively called the "Obligations").
Accordingly, the Pledgor and the Collateral Agent hereby agree
as follows:
SECTION 1. Pledge. As security for the payment and performance
in full of the Obligations, the Pledgor hereby transfers, grants, bargains,
sells, conveys, hypothecates, pledges, sets over and delivers unto the
Collateral Agent, for the ratable benefit of the Lenders, and grants to the
Collateral Agent, for the ratable benefit of the Lenders, a security interest
in, (a) the promissory notes listed on Schedule I hereto and any promissory
notes that may be issued and delivered to the Pledgor or the Collateral Agent
pursuant to the Existing Facility Agreement in substitution or exchange therefor
or otherwise (collectively, the "Notes"), (b) the Project Loans (as defined in
the Existing Facility Agreement) of the Pledgor under the Existing Facility
Agreement and all rights, interests and privileges of the Pledgor in, to and
under such Project Loans, the Notes, the Existing Facility Agreement and the
other Existing Facility Documents in so far as such rights relate to the Project
Loans and all other documents, title insurance policies, financing statements or
agreements executed and/or delivered evidencing and/or securing such Project
Loans, (c) all other property which may be delivered to and held by the
Collateral Agent pursuant to the terms hereof (whether or not described herein),
(d) all intercompany Indebtedness owed to the Pledgor (other than the
Replacement Note and intercompany indebtedness owed to the Pledgor by TNP
Enterprises or TGC on the Closing Date or any replacement note issued pursuant
to the Unit 1 Credit Agreement) including any promissory notes that may be
issued to and delivered to the Pledgor or the Collateral Agent in respect
thereof or in substitution or exchange for any such promissory notes, (e) all
rights under the Facility Purchase Agreement, (f) all payments of principal,
interest and other amounts from time to time received or receivable by the
Pledgor under the Existing Facility Agreement or any other Existing Facility
Document or otherwise in respect of any of the items referred to in clauses (a),
(b), (c), (d) and (e) above, and (g) all proceeds of any of the foregoing (the
items referred to in clauses (a) through (g) being collectively called the
"Collateral"). Upon delivery to the Collateral Agent, (x) the Notes and any
certificates, notes or other securities now or hereafter included in the
Collateral shall be accompanied by instruments of transfer satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request and (y) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the Pledgor and such other instruments or documents as the
Collateral Agent may reasonably request.
SECTION 2. Representations, Warranties and Covenants. The Pledgor hereby
represents, warrants and covenants to and with the Collateral Agent as follows:
(a) at the time of their delivery hereunder, the Notes will
have been authorized, executed, issued and delivered by the Guarantor
in accordance with applicable law and the terms and provisions of the
Existing Facility Agreement and will constitute the legal, valid and
binding obligations of the Guarantor, enforceable in accordance with
their terms;
(b) except for the interest of the Collateral Agent therein,
(i) the Notes are owned by the Pledgor free and clear of all Liens and
(ii) the Pledgor will make no sale, assignment, pledge, hypothecation
or other transfer of, or create any security interest in, the Notes or
other Collateral;
(c) the Pledgor (i) has good right and legal authority to
pledge the Notes and other Collateral to the Collateral Agent in the
manner hereby done or contemplated, (ii) will defend the interest of
the Collateral Agent in the Notes and other Collateral against any and
all attachments, liens, claims, encumbrances, security interests or
other impediments of any nature, however arising, of all persons and
(iii) will promptly turn over to the Collateral Agent in the form in
which received any Collateral which shall at any time come into its
possession ;
(d) no consent or approval of any Governmental Authority, any
Existing Facility Bank or the First Debenture Trustee was or is
necessary to the validity of the issuance of the Notes and the pledge
effected hereby;
(e) by virtue of the execution and delivery by the Pledgor of
this Agreement, when the Notes and any other certificates evidencing
securities included in the Collateral have been delivered to the
Collateral Agent in accordance with this Agreement and the filings
listed in Schedule 2(e) hereto have been duly made, the Collateral
Agent will have a valid and perfected first lien upon and security
interest in the Collateral as security for the payment and performance
of the Obligations, prior to all other liens and encumbrances thereon
and security interests therein; and
(f) the pledge effected hereby is effective to vest in the
Collateral Agent, on behalf of the Lenders, the rights of the
Collateral Agent in the Notes and other Collateral set forth herein.
SECTION 3. Endorsement; Denominations. The Notes and any other
certificates evidencing securities included in the Collateral shall be promptly
delivered to the Collateral Agent endorsed in the name of the Collateral Agent
or its nominee for the benefit of the Lenders. The Collateral Agent shall have
the right to exchange the Notes for notes of smaller or larger denominations to
facilitate the exercise of its rights hereunder.
SECTION 4. Voting and Consensual Rights; Payments in Respect
of Notes. (a) Until the Collateral shall have been released as provided in
Section 13, the Collateral Agent shall have and may exercise, to the exclusion
of the Pledgor, all voting, consensual and other rights of the Pledgor as an
Existing Facility Bank and holder of the Notes, including, without limitation,
(i) the right to demand and receive payments of principal of and interest on the
Notes in accordance with the terms of the Existing Facility Agreement, (ii) the
right to vote with respect to any amendment or waiver of any Existing Facility
Document and the taking of any action contemplated thereby and (iii) the right
to exercise all remedies provided in the Existing Facility Documents for the
benefit of the Existing Facility Banks. The Pledgor will not amend, supplement
or otherwise modify, or consent to any amendment, supplement or other
modification to, or consent to the taking of any action under, the terms of the
Existing Facility Agreement, the other Existing Facility Documents or the Notes,
in each case except as provided in the Assignment Agreement or with the prior
written consent of the Collateral Agent.
(b) The Pledgor shall not consent to any voluntary prepayment
of the principal of the Notes without the prior written consent of the
Collateral Agent, and any amounts received by or for the account of the Pledgor
in respect of any such prepayment shall constitute Collateral hereunder and
shall be paid over to and held by the Collateral Agent for application as
provided herein.
SECTION 5. No Disposition. Without the prior written consent
of the Collateral Agent, the Pledgor agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur or permit to exist any pledge,
lien, mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Collateral, or any interest therein, or
any proceeds thereof, except for the lien and security interest provided for by
this Agreement.
SECTION 6. Amendment, Modifications and Waivers with Respect
to Obligations. The Pledgor hereby agrees that, without notice to or the consent
of the Pledgor, any demand for payment of any of the Obligations made by the
Collateral Agent or the Lenders may be rescinded by the Collateral Agent or the
Lenders and any of the Obligations continued, and the Obligations, or the
liability of the Pledgor or any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of setoff with respect
thereto, may, from time to time, in whole or in part, be renewed, refunded,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by the Collateral Agent or any Lender and the Existing Facility
Agreement, the Existing Facility Documents, the Credit Agreement and any other
Loan Document or any other documents delivered in connection therewith may be
amended, modified, supplemented or terminated in whole or in part, as the
Lenders may deem advisable from time to time, and any collateral security at any
time held by the Lenders for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released, all without notice to or the consent
of the Pledgor, which will remain bound hereunder, notwithstanding any such
renewal, extension, modification, acceleration, compromise, amendment,
supplement, termination, sale, exchange, waiver, surrender or release. Neither
the Collateral Agent nor the Lenders shall have any obligation to protect,
secure, perfect or insure any other collateral security document or property
subject thereto at any time held as security for the Obligations. The Pledgor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Collateral Agent or
any Lender upon this Agreement, and the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Agreement, and all dealings between the Pledgor and the Collateral
Agent and the Lenders shall likewise be conclusively presumed to have been had
or consummated in reliance upon this Agreement. The Pledgor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Pledgor with respect to the Obligations.
SECTION 7. Remedies. (a) If a Default or Event of Default
shall have occurred and be continuing, the Collateral Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or at any of the Collateral Agent's offices or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk,
and the Collateral Agent or any Lender shall have the right, upon any such sale
or sales, public or private, to purchase the whole or any part of said
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby expressly waived or released. In addition to the
rights and remedies granted to it in this Agreement and in any other instrument
or agreement securing, evidencing or relating to any of the Obligations, the
Collateral Agent shall have all the rights and remedies of a secured party under
the Uniform Commercial Code of the State of New York at that time (the "Code"),
whether or not the Code applies to the affected Collateral. The Pledgor shall be
liable for the deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the Obligations.
(b) Neither the Collateral Agent nor any Lender shall be
liable for failure to collect or realize upon the Obligations or any collateral
security or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall any of them be under any obligation to take any action
whatsoever with regard thereto. Although the Collateral Agent or its nominee may
without notice exercise any and all rights, privileges or options pertaining to
any of the Collateral as if it were the absolute owner thereof, the Collateral
Agent shall have no duty to exercise any of the aforesaid rights, privileges or
options, shall not be responsible for any failure to do so or delay in so doing
and, in any event, may do so without liability.
SECTION 8. Application of Proceeds. The cash proceeds of any
sale of Collateral received by the Collateral Agent pursuant to Section 7, as
well as any cash Collateral received by the Collateral Agent, shall be applied
by the Collateral Agent as follows (the timing of such application to be in the
sole discretion of the Collateral Agent):
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent in connection with any such sale or otherwise in
connection with this Agreement or any of the Obligations, including,
but not limited to, all court costs and the reasonable fees and
expenses of its agents and legal counsel and any other costs or
expenses incurred in connection with the exercise of any right or
remedy hereunder;
SECOND, to the payment in full of the Obligations due but
unpaid at the time of such receipt, pro rata among the holders of the
Obligations in accordance with the amounts of the Obligations held by
them on the date of any distribution; provided that in the event no
such Obligations are due and payable at such time, or to the extent the
Collateral Agent receives noncash Proceeds, all cash Collateral and
Proceeds shall be retained by the Collateral Agent for application
against the Obligations as they become due and payable; and
THIRD, to the Pledgor, its successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
SECTION 9. Reimbursement of the Collateral Agent. The Pledgor
hereby agrees to reimburse the Collateral Agent, on demand, for all reasonable
out-of-pocket expenses incurred by the Collateral Agent in connection with the
administration and enforcement of this Agreement, and agrees to indemnify the
Collateral Agent and hold the Collateral Agent harmless from and against any and
all liability incurred by the Collateral Agent hereunder, or in connection
herewith, unless such liability shall be due to wilful misconduct or gross
negligence on the part of the Collateral Agent.
SECTION 10. The Collateral Agent Appointed Attorney-in-Fact.
The Pledgor hereby appoints the Collateral Agent as attorney-in-fact of the
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to the Pledgor representing any payment of interest or other
distribution payable in respect of the Collateral or any part thereof and to
give full discharge for the same.
SECTION 11. No Waiver. No failure on the part of the
Collateral Agent to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy by the Collateral Agent
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 12. Securities Act, etc. The Pledgor understands that
compliance with the Securities Act of 1933, as now or hereafter in effect, or
any similar statute hereafter enacted analogous in purpose or effect (such Act
and any such similar statute as from time to time in effect being called the
"Federal Securities Laws") might very strictly limit the course of conduct of
the Collateral Agent if the Collateral Agent were to attempt to dispose of all
or any part of the Collateral pursuant to Section 7, and might also limit the
extent to which or the manner in which any subsequent transferee of any
Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Collateral Agent in any attempt to
dispose of all or part of the Collateral pursuant to Section 7 under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Under applicable law, in the absence of an agreement to the contrary,
the Collateral Agent might be held to have certain general duties and
obligations to the Pledgor, to make some effort toward obtaining a fair price
even though the Obligations may be discharged or reduced by the proceeds of a
sale at a lesser price. The Pledgor clearly understands that the Collateral
Agent is not to have any such general duty or obligation to the Pledgor, and the
Pledgor will not in any way whatsoever attempt to hold the Collateral Agent
responsible for selling all or any part of the Collateral at an inadequate price
even if the Collateral Agent shall accept the first offer received or does not
approach more than one possible purchaser.
SECTION 13. Termination; Redelivery of Pledged Notes. This
Agreement shall terminate when (a) all the Obligations have been fully and
indefeasibly paid and the Lenders have no further commitment to extend credit
under the Credit Agreement or (b) the conditions to the release of the
Collateral set forth in Section 9.17 of the Credit Agreement shall have been
satisfied. At the request of the Pledgor following any such termination, the
Collateral Agent shall reconvey, reassign and deliver to the Pledgor, or to such
person or persons as the Pledgor shall designate, against receipt, such of the
Collateral (if any) as shall not have been applied by the Collateral Agent
pursuant to the terms hereof and shall still be held by it hereunder, together
with appropriate instruments of reconveyance, reassignment and release. Any such
reconveyance and reassignment shall be without recourse to or representation or
warranty by the Collateral Agent and at the expense of the Pledgor.
SECTION 14. Notices. All communications and notices here
under shall be in writing and given as provided in Section 9.1 of the Credit
Agreement.
SECTION 15. Further Assurances. The Pledgor agrees to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 16. Binding Agreement; Assignments. This Agreement,
and the terms, covenants and conditions hereof, shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
(including any future Lender becoming a party to the Credit Agreement and any
purchaser of a participation in any of the Obligations), except that the Pledgor
shall not be permitted to assign this Agreement or any interest herein or in the
Collateral, or any part thereof, or otherwise convey, pledge, encumber or grant
any option with respect to the Collateral, or any part thereof, or any cash or
property held by the Collateral Agent as Collateral under this Agreement except
as contemplated by this Agreement.
SECTION 17. Survival of Agreement. All covenants and
agreements made by the Pledgor herein and in the certificates or other
instruments prepared or delivered in connection with this Agreement shall be
considered to have been relied upon by the Collateral Agent and the Lenders and
shall survive the making by the Lenders of the Loans and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any other fee or amount payable under this Agreement or, without duplication
of the foregoing, under any of the other Loan Documents, or any of the other
Obligations, is outstanding and unpaid and so long as this Agreement has not
terminated in accordance with its terms. The representations and warranties
contained in Section 2 of this Agreement shall be considered to have been relied
upon by the Lenders and shall survive the making of the Loans and shall remain
in full force and effect after the termination of this Agreement.
SECTION 18. Provisions Severable. The provisions of this
Agreement are severable, and if any clause or provision shall be held invalid
and unenforceable in whole or in part, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, and shall not in
any manner affect any other clause or provision of this Agreement.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
SECTION 21. Headings. Section headings used herein are for convenience only
and are not to affect the construction of, or be taken into consideration in
interpreting, this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Note Pledge Agreement, or caused this Note Pledge Agreement to be duly executed
on their behalf, as of the day and year first above written.
TEXAS-NEW MEXICO POWER COMPANY,
by
------------------------------
Name:
Title:
CHEMICAL BANK, as Collateral Agent,
by
-------------------------------
Name:
Title:
The undersigned hereby (a) acknowledges receipt of a copy of
the Note Pledge Agreement dated as of November 3, 1995 by Texas-New Mexico Power
Company in favor of Chemical Bank, as Collateral Agent (the "Pledge Agreement")
and consents to such Agreement and the pledge effected and the other
transactions contemplated thereby (including the exercise of any and all
remedies set forth therein) and affirms that the representations set forth in
Section 2 thereof are true and correct and (b) consents to the pledge by TNP of
its rights under the Facility Purchase Agreement and the Operating Agreement.
TEXAS GENERATING COMPANY II,
by
-----------------------------------
Name:
Title:
November __, 1995
Chemical Bank, in its capacity as Agent under the Existing
Facility Documents, acknowledges that the liens securing the Pledged Notes under
such Existing Facility Documents will continue to secure such Pledged Notes
following the pledge thereof to the Collateral Agent, and TNP's beneficial
interests in and to such liens are also intended to be pledged pursuant to the
Note Pledge Agreement (it being understood that nothing herein shall diminish
the rights of the Replacement Note Holder as a secured party under the Existing
Facility Documents).
CHEMICAL BANK, as Agent,
by
---------------------------
Name:
Title
November __, 1995
Schedule 2(e)
UCC Filings
Secretary of State, Texas
Robertson County, Texas
STATE OF NEW YORK,)
) ss.:
COUNTY OF NEW YORK,)
This instrument was acknowledged before me on this __ day of
November, 1995 by ___________________________________________________of CHEMICAL
BANK, as Collateral Agent.
----------------------------------
NOTARY PUBLIC in and for the Stat
of NEW YORK
[Notarial Seal]
STATE OF TEXAS,)
) ss.:
COUNTY OF ROBERTSON,)
This instrument was acknowledged before me on this __ day of
November, 1995 by ________________________ of TEXAS GENERATING COMPANY II, a
Texas corporation.
---------------------------------
NOTARY PUBLIC in and for the
State of TEXAS
[Notarial Seal]
STATE OF TEXAS,)
) ss.:
COUNTY OF ROBERTSON,)
This instrument was acknowledged before me on this __ day of
November, 1995 by _______________________________ of TEXAS-NEW MEXICO POWER
COMPANY, a Texas corporation.
----------------------------------
NOTARY PUBLIC in and for the
State of TEXAS
[Notarial Seal]
EXHIBIT G-1
HAYNES AND BOONE, L.L.P.
ATTORNEYS AND COUNSELORS AT LAW
AUSTIN
DALLAS
FORT WORTH
3100 NATIONSBANK PLAZA HOUSTON
DALLAS, TEXAS 75202-3789 MEXICO CITY
TELEPHONE 214/651-5000 SAN ANTONIO
FAX 214/651-5940 WASHINGTON D.C.
November 3, 1995
Chemical Bank
individually and as Administrative
Agent under the TNP Credit
Agreement referred to below
270 Park Avenue
New York, NY 10017
The Lenders from time to time
under the TNP Credit Agreement
The Chase Manhattan Bank
(National Association), as agent
under the Existing Facility
Agreement referred to in the
TNP Credit Agreement
One Chase Manhattan Plaza
New York, NY 10005
Ladies and Gentlemen:
We have acted as special counsel to Texas-New Mexico Power Company, a
Texas corporation ("TNP"), and Texas Generating Company II, a Texas corporation
and wholly owned subsidiary of TNP ("TGC II"), in connection with the
transactions contemplated by (i) the Assignment and Amendment Agreement dated as
of November 3, 1995 (the "Assignment Agreement") among TNP, TGC II, the Existing
Facility Banks, the Original Collateral Agent, the Original Agent, the Lenders,
the Administrative Agent and the Collateral Agent (each as defined therein),
(ii) the Revolving Credit Agreement dated as of November 3, 1995 (the "TNP
Credit Agreement") among TNP, each of the lenders that is a signatory thereto
(the "Lenders") and Chemical Bank, as administrative agent and collateral agent
for the Lenders (in such capacities, the "Administrative Agent" and the
"Collateral Agent", respectively, and, together, the "Agents"), (iii) the Bond
Agreement dated as of November 3, 1995 (the "Bond Agreement") by TNP in favor of
Chemical Bank, as Collateral Agent, (iv) the Supplemental Indenture dated as of
November 3, 1995 (the "Supplemental Indenture") pursuant to which the Bonds (as
defined in the Bond Agreement) have been issued, (v) the Bonds (as defined in
the Bond Agreement), (vi) the Note Pledge Agreement dated as of November 3, 1995
(the "Note Pledge Agreement") by TNP in favor of the Collateral Agent, (vii) the
Guarantee and Pledge Agreement dated as of November 3, 1995 (the "Guarantee
Agreement") by TGC II in favor of the Collateral Agent, (viii) the Sixth TGC II
Modification and Extension Agreement dated as of November 3, 1995 (the "Sixth
TGC II Modification") among TGC II, TNP and the Secured Parties (as defined
therein), (ix) the TNP Second Lien Mortgage Modification No. 3 dated as of
November 3, 1995 (the "TNP Mortgage Modification No. 3") by TNP for the benefit
of the Secured Parties (as defined therein), (x) the Assignment of TGC II
Mortgage Lien dated as of November 3, 1995 (the "Assignment of TGC II Lien") by
The Chase Manhattan Bank (National Association), as Agent and as Collateral
Agent (each as defined therein) in favor of Chemical Bank, as agent for TNP
under the Existing Facility Agreement (pursuant to the Assignment Agreement),
and as agent for the Replacement Note Holder under the Existing Facility
Agreement, (xi) the Collateral Transfer of Notes, Rights and Interests dated as
of November 3, 1995 (the "TGC II Collateral Transfer") between TNP and the
Administrative Agent and the Collateral Agent, (xii) the Assignment of TNP
Second Mortgage Lien dated as of November 3, 1995 (the "Assignment of TNP Lien")
by The Chase Manhattan Bank (National Association), as Agent and as Collateral
Agent (each as defined therein) in favor of Chemical Bank, as agent for TNP
under the Existing Facility Agreement (pursuant to the Assignment Agreement),
and as agent for the Replacement Note Holder under the Existing Facility
Agreement, (xiii) the Collateral Transfer of Liens, Rights and Interests dated
as of November 3, 1995 (the "TNP Collateral Transfer") between TNP and the
Administrative Agent and the Collateral Agent, (xiv) Amendment No. 1 to the TNP
Security Agreement dated as of November 3, 1995 (the "TNP Security Amendment")
and (xv) financing statements naming TNP and TGC II, as applicable, as debtor,
and TNP and the Collateral Agent, as applicable, as secured party, which are to
be filed in the filing offices of the Secretary of State of the State of Texas
and the county clerk's office for Robertson County, Texas (such filing offices
collectively referred to as the "Filing Offices" and such financing statements
as the "Financing Statements") (each of the agreements, instruments and
documents referred to in the foregoing clauses (i) through (xv) being
collectively called the "Opinion Documents"). Unless otherwise defined herein,
terms defined in the TNP Credit Agreement are used herein as therein defined.
Except where the context otherwise requires, words importing the singular
include the plural and vice versa.
In rendering the opinions expressed below, we have examined (a) the
Opinion Documents, the Existing Facility Agreement and each of the other
Existing Facility Project Documents and Existing Facility Security Documents,
(b) such corporate records of TNP and TGC II, agreements, instruments and
documents which affect or purport to affect the obligations of TNP or TGC II
under the Opinion Documents, the Existing Facility Agreement, the Existing
Facility Project Documents and the Existing Facility Security Documents, and (c)
the TNP Bond Indenture and such other documents as we have deemed necessary as a
basis for the opinions expressed below. When relevant facts were not
independently established, we have relied upon statements of government
officials and upon representations made in or pursuant to the Opinion Documents
and certificates of appropriate representatives of TNP or TGC II.
In our examination we have assumed, with your consent (a) the
genuineness of all signatures (except as relates to the execution by TNP or TGC
II of any of the Opinion Documents) and the legal capacity of natural persons,
(b) the authenticity of documents submitted to us as originals and the
conformity with authentic original documents of all documents submitted to us as
copies, (c) the full corporate (or equivalent) power, authority and legal right
of each party other than TNP and TGC II to enter into and perform all agreements
to which it is a party and the due authorization, execution and delivery of each
Opinion Document by each such party, (d) the full corporate power, authority and
legal right of TNP and TGC II to enter into and perform the TNP Security
Agreement and the TGC II Security Agreement (each as defined in the Existing
Facility Agreement), respectively, (e) that the Opinion Documents constitute the
valid, binding and enforceable agreement of all parties thereto other than TNP
and TGC II, (f) the prompt and proper recordation or filing of any Opinion
Document for which recordation or filing is anticipated, (g) receipt of the
consideration contemplated by the Opinion Documents and (h) the correctness and
accuracy of all the facts set forth in all documents and certificates identified
in this Opinion.
As used in the opinions expressed herein, a "Material Adverse Effect"
means our reasonable view of what would constitute a material adverse effect on
(a) the validity, performance or enforceability of any Opinion Document, (b) the
financial condition, operations and assets of TNP or TGC II, or (c) the ability
of TNP or TGC II to fulfill its obligations under the Opinion Documents.
We have been advised by officers of TNP and TGC II (and with your
consent have relied on that advice) that the agreements described on Exhibit A
hereto (the "Material Agreements") are the only agreements that are material to
TNP or TGC II and which, if violated by the execution, delivery or performance
of the Opinion Documents, would have a Material Adverse Effect on TNP's or TGC
II's ability to comply with the Opinion Documents. We advise you that we have
not reviewed, and have not devoted substantive attention to, any other
agreements (other than those described on Exhibit A)
for the purposes of rendering the opinion set forth in paragraph 2 below.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
1. Each of TNP and TGC II is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Texas and has the necessary
corporate power, authority and legal right to execute, deliver and perform each
of the Opinion Documents to which it is party.
2. The execution, delivery and performance by each of TNP and TGC II of the TNP
Credit Agreement, the Assignment Agreement and each other Opinion Document to
which it is a party have been duly authorized by all necessary corporate action
and do not (a) require any consent or approval of the shareholders of either TNP
or TGC II or of the trustee under the TNP Bond Indenture or any holder of any
interest in any of the bonds issued and outstanding under the TNP Bond Indenture
or of the trustee under the First Secured Debenture Indenture or any holder of
any of the First Secured Debentures outstanding under the First Secured
Debenture Indenture, each as presently in effect, (b) violate any provision of
law, rule, regulation, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority, or any provision of the
articles or by-laws of TNP or TGC II, or the TNP Bond Indenture or the First
Secured Debenture Indenture, each as currently in effect, (c) result in a breach
of, or constitute a default or require any consent under, any Material Agreement
or (d) to our knowledge, result in or require the imposition of any Lien (other
than a Lien permitted under Section 6.2 of the TNP Credit Agreement) upon or
with respect to any property now owned or hereafter acquired by TNP or TGC II.
3. Each of TNP and TGC II has duly executed and delivered each of the Opinion
Documents to which it is a party.
4. Each Opinion Document (other than the Financing Statements) constitutes the
legal, valid and binding obligation of TNP or TGC II, as the case may be,
enforceable against such party in accordance with its terms, in each case except
as the enforceability thereof may be limited by (a) bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to the enforcement
of creditors' rights generally, (b) general principles of equity, regardless of
whether enforcement of any obligations mentioned therein is sought in a
proceeding at equity or at law, (c) statutory provisions of the federal
Bankruptcy Code and the Uniform Fraudulent Transfer Act as adopted by the States
of New York and Texas (and related court decisions) pertaining to the
voidability of preferential or fraudulent transfers, conveyances and
obligations, (d) the rights of the United States under the Federal Tax Lien Act
of 1966, as amended, (e) applicable laws or judicial decisions which may qualify
or limit certain rights, remedies or provisions contained therein but which, in
our opinion, will not materially interfere with the practical realization of the
benefits intended to be provided thereby except for the economic consequences of
any procedural delay which may result therefrom.
5. The provisions of each of the TNP Security Agreement, the TGC II Security
Agreement and the TNP Security Amendment are sufficient to create in favor of
the Collateral Agent a security interest in TNP's or TGC II's, as the case may
be, interest in the Collateral referred to therein and in which a security
interest may be created pursuant to Article 9 of the Code. The security
interests in the Collateral described in the TGC II Security Agreement were
perfected by the filing of the TGC II Security Agreement, pursuant to a Notice
of Utility Security Instrument, on July 26, 1991 in the office of the Secretary
of State of Texas, as Instrument No. 91-00145009, to the extent that such
Collateral constitutes personal property located in Texas in which a security
interest may be perfected by filing under Article 9 of the Code. The security
interests in the Collateral described in the TNP Security Agreement will be
perfected upon the filing, in the office of the Secretary of State of Texas, of
the Notice of Utility Security Instrument executed by TNP with a copy of the TNP
Security Agreement attached as Exhibit A thereto to the extent that such
Collateral constitutes personal property located in Texas in which a security
interest may be perfected by filing under Article 9 of the Code.
6. The execution, delivery and performance by TNP or TGC II (or both) of the TNP
Credit Agreement, the Assignment Agreement and each of the Opinion Documents to
which it is a party has not extinguished and will not extinguish any Liens
created by the Existing Facility Security Documents, diminish the priority of
such Liens as existing prior to the date of this opinion, or have any similar
result.
7. Except as set forth in Schedule 3.9 to the TNP Credit Agreement, there is to
our knowledge no action, suit or proceeding at law or in equity or by or before
any Governmental Authority now pending or threatened against or affecting either
TNP or TGC II or any of their properties, rights, or assets, or the Project,
which could reasonably be expected to materially and adversely affect the assets
or operations of TNP or TGC II or the ability of either of them to carry out the
transactions contemplated by the Opinion Documents or materially impair the
value of the security granted by either of them to the Collateral Agent.
8. The Bonds have been duly issued pursuant to, and are outstanding in
accordance with, the terms of the Supplemental Indenture and the TNP Bond
Indenture and are entitled to the benefits of the TNP Bond Indenture (including
the benefit of the Liens created thereby). The Bonds have been duly
authenticated by the trustee under the TNP Bond Indenture.
9. Neither TNP nor TGC II is an "investment company" or an "investment advisor"
within the meaning of the Investment Company Act of 1940, as amended.
10. The Note Pledge Agreement is effective to create in favor of the Collateral
Agent, as collateral security for the Obligations (as defined in therein), a
valid security interest in all of the right, title and interest of TNP in the
Collateral described therein. Upon delivery to the Collateral Agent of the
Pledged Notes and the filing of the Note Pledge Agreement as a utility security
instrument in the office of the Secretary of State of Texas, such security
interest in the Pledged Notes will be perfected.
11. The Financing Statements are in appropriate form for filing in each of the
Filing Offices under the Uniform Commercial Code as adopted in the State of
Texas and as effective on the date hereof (the "Code"). Upon the filing of the
TNP Security Amendment as a utility security instrument in the office of the
Secretary of State of Texas, the security interests in favor of the Collateral
Agent for the benefit of the Lenders in the Collateral described in the TNP
Security Amendment will be perfected.
12. The "Replacement Loans" as defined in and under the Unit 1 Credit Agreement
do not constitute "Project Loans" thereunder.
The foregoing opinions are qualified as set forth below:
A. Without limiting the generality of paragraph 4(b) hereof, we note
specifically that in applying such principles of equity, a court, among other
things (1) might not allow acceleration of the maturity of a debt upon the
occurrence of a default deemed immaterial or if a determination is made that any
Lender's security has not been impaired, (2) might require any Lender to act
with reasonableness and in good faith, (3) might not permit any Lender to retain
certain interests in any collateral which a court might view as resulting in a
forfeiture, (4) might apply its discretion in granting specific performance,
injunctive relief or other equitable remedies and (5) might not enforce
provisions purporting to give any Lender or any other party a power of attorney
to act on TNP's, TGC II's or any other party's behalf.
B. In rendering the opinion expressed in paragraph 4, we express no opinion as
to the enforceability of provisions of the Opinion Documents to the extent that
such provisions: (1) purport to waive or affect any rights to notices required
by law or that may be required by Section 9.504 of the Code and that are not
subject to waiver under Section 9.501 of the Code, (2) state that the failure or
delay in exercising rights, powers, privileges or remedies under the Opinion
Documents by any Lender or agent shall not operate as a waiver thereof, (3)
purport to indemnify any person for (a) such person's violations of federal or
state securities laws or environmental laws, or (b) any obligation to the extent
such obligation arises from or is a result of any Lender's or any Agent's own
negligence, (4) purport to grant to Agents or Lenders the right to offset
special deposits of TNP or TGC II against any of the Obligations, (5) purport to
establish or satisfy certain factual standards or conditions (e.g., standards of
"commercial reasonableness" or "reasonable care" under Article 9 of the Code) in
a manner not permitted by Section 9.501 of the Code, (6) purport to sever
unenforceable provisions from the Opinion Documents, to the extent that the
enforcement of remaining provisions would frustrate the fundamental intent of
the parties to such documents; (7) provide that TNP or TGC II has waived Agents'
and Lenders' duties of reasonable care and disposition of Collateral which may
be imposed by Sections 9.207 and 9.504 of the Code, (8) restrict access to legal
or equitable remedies, or (9) purport to waive any claim of TNP or TGC II
against Agents or any Lender arising out of, or in any way related to, the
Opinion Documents. We advise you that the inclusion of such provisions in the
Opinion Documents does not render void or invalidate the obligations and
liabilities of TNP or TGC II under other provisions of such documents.
C. In rendering the opinion expressed in paragraph 4 above, we express no
opinion as to the enforceability of those provisions of the Guarantee Agreement
that (1) state or mean that the Guarantee Agreement shall not be impaired,
adversely affected or released by any of the following (a) any action taken by
Agents or any Lender in bad faith, for the purpose of or with the effect of,
impairing any of Guarantor's rights of subrogation, reimbursement, contribution,
indemnity or exoneration against TNP, any other guarantor or collateral for the
obligations guaranteed or (b) a legal determination that the obligations
guaranteed are void as a result of illegality, or (2) provide that Guarantor has
waived (i) notices that may be required and that are not subject to waiver under
Section 9.504 of the Code, or (ii) any duties of reasonable care and disposition
of collateral that may be imposed upon Agents or Lenders by Sections 9.207 and
9.504 of the Code. We note that a guarantor, as a "debtor" for the purposes of
Article 9 of the Code, may not validly waive those duties and obligations of a
secured party to the "debtor" under Article 9 of the Code and as otherwise
rendered nonwaivable by Sections 9.501 and 1.102 of the Code.
D. No opinion is expressed herein as to (1) the status of title to any of the
Collateral, (2) whether TNP and TGC II have "rights in the Collateral" as that
term in used in Section 9.203 of the Code, (3) the priority of any security
interests, (4) the creation or perfection of any security interest in property
excluded from coverage of the Code pursuant to Sections 9.102 and 9.104 of the
Code or any proceeds of any of such property, (5) the creation or perfection of
liens and security interests in the Collateral insofar as the laws of a
jurisdiction other than the States of New York or Texas govern the creation or
perfection of such liens and security interests, or (6) the creation or
perfection of liens and security interests in the Collateral that is not
described in the Opinion Documents.
E. We express no opinion as to the validity or enforceability of any provision
contained in any of the Opinion Documents that (1) purports to preclude the
amendment, waiver, release or discharge of obligations except by an instrument
in writing, (2) relates to the subject matter jurisdiction of the Federal courts
of the United States of America sitting in New York City to adjudicate any
controversy relating to any of the Opinion Documents, (3) purports to waive or
otherwise restrict or deny access to claims, causes of action or remedies that
may be asserted in any suit or other proceeding, (4) allows Lenders to institute
foreclosure proceedings, or to exercise any similar right, without notice to the
person or entity signatory thereto or bound thereby or (5) relates to the
appointment of a receiver, to the extent that appointment of a receiver is
governed by applicable statutory requirements, and to the extent that such
provision may not be in compliance with such requirements.
F. With respect to our opinion in paragraph 2(b), we express no opinion
regarding the statutes and ordinances, the administrative decisions, and the
rules and regulations of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at the
federal, state or regional level), and any judicial decisions to the extent they
deal with any of the foregoing.
G. With respect to the opinion set forth in paragraph 9, we express no opinion
as to whether TNP or TGC II is a "special investment company" for the purposes
of Rule 3a-1 promulgated pursuant to the Investment Company Act of 1940, as
amended.
H. With respect to indemnification of environmental liabilities, we note that
although courts have generally upheld contractual indemnification agreements,
see, e.g., Marmon Group, Inc. v. Rexnord, Inc., 822 F.2d 31 (7th Cir. 1987)
(complaint stated cause of action under indemnity provision of sales contract),
Hays v. Mobil Oil Corp., 736 F. Supp. 387, 393 (D. Mass. 1990) (indemnity
clauses are permitted under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") and Joslyn Manufacturing Company v.
T.L. James & Company Inc., 836 F.Supp. 1264 (D. La. 1993) (in a footnote, the
district court stated without discussion that indemnification provisions were
enforceable under Section 107(e)(1)), several decisions have held that certain
agreements do not cover statutory liability under CERCLA unless the agreement
"clearly and unequivocally" expresses an intent to address such liability. See
e.g., Southland Corp. v. Ashland Oil, Inc., 696 F.Supp. 994, 1000 (contract
provisions did not specify in clear enough terms that the parties intended to
include CERCLA statutory recovery actions in the two year cut-off of liability
under the "survival" clause). One court, however, has recently interpreted
Section 107(e)(1) of CERCLA to prohibit any contractual transfer of CERCLA
liability between two potentially responsible parties. In Harley-Davidson, Inc.
v. Minstar, Inc., 837 F.Supp. 978 (E.D. Wisc. 1993), the court held that, under
appropriate principals of statutory interpretation, Section 107(e)(1) of CERCLA
precludes the use of any indemnification, hold harmless or similar agreement to
contractually transfer the liability of one potentially responsible party to
another potentially responsible party. But see also, A.M. International, Inc. v.
International Forging Equipment, 743 F.Supp. 525 (N.D. Ohio 1990), aff'd in part
and rev'd in part, 982 F.2nd 989 (6th Cir., 1993). If the rule in
Harley-Davidson is generally followed by other courts, indemnification for
CERCLA liabilities between potentially responsible parties would not be
permitted. The United States Supreme Court has not considered this issue. While
we believe that the view expressed in the Joslyn case is the better
interpretation of Section 107(e)(1), our opinion regarding the enforceability of
the Opinion Documents (to the extent such opinion relates to the enforceability
of indemnification obligations covering environmental liabilities) is subject to
any subsequent definitive judicial resolution of the present conflicting views
of the courts on this issue.
I. We express no opinion as to the enforceability of exculpatory provisions (or
their corresponding indemnity provisions) contained in the Opinion Documents
which purport to exculpate or indemnify Agents or Lenders for their own tortious
acts, or if Agents or Lenders should exceed their authority under the Opinion
Documents.
J. The qualification of any opinion or statement herein by the use of the words
"to our knowledge" means that during the course of representation as described
in this opinion, no information has come to the attention of the attorneys of
this firm involved in the transaction evidenced by the Opinion Documents that
would give such attorneys current actual knowledge of the existence of the facts
so qualified. Except as set forth herein, we have not undertaken any
investigation to determine the existence of such facts and no inference as to
our knowledge thereof shall be drawn from the fact of our representation of any
party or otherwise.
K. We express no opinion as to any matters which may be, or which purport to be,
governed by any law of any jurisdiction other than the federal laws of the
United States of America, the laws of the State of New York and the laws of the
State of Texas.
L. This opinion is limited to the matters expressly set forth herein, and no
opinion is implied or may be inferred beyond the matters expressly stated
herein. This opinion is solely for the information of the addressees hereof, and
is not to be quoted in whole or in part or otherwise referred to (except in a
list of closing documents), nor is it to be filed with any governmental agency
or other person without our prior written consent. Other than the addressees
hereof, no one is entitled to rely on this opinion. This opinion is based on our
knowledge of the law and facts as of the date hereof. We assume no duty to
communicate with you with respect to any matter which comes to our attention
hereafter.
Very truly yours,
HAYNES AND BOONE, L.L.P.
HAYNES AND BOONE, L.L.P.
EXHIBIT A
Material Contracts Relating to TNP One
1. Fuel Supply Agreement, dated November 18, 1987, between Phillips Coal
Company and TNMP (Exhibit 10(j) to Form 10-K of TNMP for the year ended
December 31. 1987. File No. 2-97230).
2. Amendment No. 1, dated as of April 1, 1988, to the Fuel Supply Agreement
dated November 18, 1987, between Phillips Coal Company and TNMP.
3. Amendment No. 2, dated as of November 29, 1994, between Walnut Creek Mining
Company and TNMP, to the Fuel Supply Agreement dated November 18, 1987,
between Phillips Coal Company and TNMP, effective as of January 1, 1995.
4. Unit I First Amended and Restated Project Loan and Credit Agreement, dated
as of January 8, 1992 (the "Unit I Credit Agreement"), among TNP, Texas
Generating Company ("TGC"), the banks named therein as Banks (the "Unit I
Banks") and the Chase Manhattan Bank (National Association), as Agent for
the Unit I Banks (the "Unit I Agent"), amending and restating the Project
Loan and Credit Agreement among such parties dated as of December 1, 1987
(Exhibit 10(c) to Form 10-K of TNMP for the year ended December 31, 1991.
File No. 2-97230).
5. Participation Agreement, dated as of January 8, 1992, among the banks named
therein as Banks, the parties named therein as Participants and the Unit I
Agent (Exhibit 10(c)1 to Form 10-K of TNMP for the year ended December 31,
1991, File No. 2-97230).
6. Amendment No. 1, dated as of September 21, 1993, to the Unit I Credit
Agreement (Exhibit 10(b)2 to Form 10-K of TNMP for the year ended December
31, 1993, File No. 2-97230).
7. Assignment and Security Agreement, dated as of January 8, 1992, among TGC
and the Unit I Agent, for the benefit of the Secured Parties, as defined in
the Unit I Credit Agreement, amending and restating the Assignment and
Security Agreement among such parties dated as of December 1, 1987 (Exhibit
10(d) to Form 10-K of TNMP for the year ended December 31, 1991, File No.
2-97230).
8. Assignment and Security Agreement, dated December 1, 1987, executed by TNMP
in favor of the Unit I Agent for the benefit of the Secured Parties, as
defined therein (Exhibit 10(u) to Form 10-K of TNMP for the year ended
December 31, 1987, File No. 2-97230).
9. Amended and Restated Subordination Agreement, dated as of October 1, 1988,
among TNMP, Continental Illinois National Bank and Trust Company of Chicago
and the Unit I Agent, amending and restating the Subordination Agreement
among such parties dated as
HAYNES AND BOONE, L.L.P.
of December 1, 1987 (Exhibit 10(uu) to Form 10-K of TNMP for the
year ended December 31, 1988, File No. 2-97230).
10. Mortgage and Deed of Trust (With Security Agreement and UCC Financing
Statement for Fixture Filing), dated to be effective as of December 1,
1987, and executed by Project Funding Corporation ("PFC"), as Mortgagor, to
Donald H. Snell. as Mortgage Trustee. for the benefit of the Secured
Parties, as defined therein (Exhibit 10(ee) to Form 10-K of TNMP for the
year ended December 31, 1987, File No. 2-97230).
11. Supplemental Mortgage and Deed of Trust (With Security Agreement and UCC
Financing Statement for Fixture Filing), executed by TGC, as Mortgagor, on
January 27, 1992, to be effective as of December 1, 1987, to Donald H.
Snell, as Mortgage Trustee, for the benefit of the Secured Parties, as
defined therein (Exhibit 10(g)4 to Form 10-K of TNMP for the year ended
December 31, 1991, File No. 2-97230).
12. First TGC Modification and Extension Agreement, dated as of January 24.
1992, among the Unit I Banks, the Unit I Agent, TNMP and TGC (Exhibit
10(g)1 to Form 10-K of TNMP for the year ended December 31, 1991, File No.
2-97230).
13. Second TGC Modification and Extension Agreement. dated as of January 27,
1992, among the Unit I Banks, the Unit I Agent, TNMP and TGC (Exhibit
10(g)2 to Form 10K of TNMP for the year ended December 31, 1991, File No.
2-97230).
14. Third TGC Modification and Extension Agreement, dated as of January 27,
1992, among the Unit I Banks, the Unit I Agent, TNMP and TGC (Exhibit
10(g)3 to Form 10-K of TNMP for the year ended December 31, 1991, File No.
2-97230).
15. Fourth TGC Modification and Extension Agreement, dated as of September 29,
1993, among the Unit 1 Banks, the Unit I Agent, TNMP and TGC (Exhibit
10(g)5 to Form 10-K of TNMP for the year ended December 31, 1993, File No.
2-97230).
16. Fifth TGC Modification and Extension Agreement, dated as of September 29,
1993, among the Unit I Banks, the Unit I Agent. TNMP and TGC (Exhibit
10(g)6 to Form 10-K of TNMP for the year ended December 31, 1993. File No.
2-97230).
17. Indemnity Agreement, made as of the 1st day of December, 1987, by
Westinghouse. CE and Zachry, as Indemnitors, for the benefit of the Secured
Parties. as defined therein (Exhibit 10(ff) to Form 10-K of TNMP for the
year ended December 31, 1987, File No. 2-97230).
18. Second Lien Mortgage and Deed of Trust (With Security Agreement) executed
by TNMP, as Mortgagor, to Donald H. Snell, as Mortgage Trustee, for the
benefit of the Secured Parties, as defined therein (Exhibit 10(jj) to Form
10-K of TNMP for the year ended December 31, 1987, File No. 2-97230).
-2-
HAYNES AND BOONE, L.L.P.
19. Correction Second Lien Mortgage and Deed of Trust (with Security
Agreement), dated as of December 1, 1987, executed by TNMP, as Mortgagor.
to Donald H. Snell, as Mortgage Trustee, for the benefit of the Secured
Parties. as defined therein (Exhibit 10(vv) to Form 10-K of TNMP for the
year ended December 31, 1988, File No. 2-97230).
20. Second Lien Mortgage and Deed of Trust (with Security Agreement)
Modification, Extension and Amendment Agreement, dated as of January 8,
1992. executed by TNMP to Donald H. Snell, as Mortgage Trustee, for the
benefit of the Secured Parties, as defined therein (Exhibit 10(i)2 to Form
10-K of TNMP for the year ended December 31, 1991, File No. 2-97230),
21. TNP Second Lien Mortgage Modification No. 2, dated as of September 21,
1993, executed by TNMP to Donald H. Snell, as Mortgage Trustee, for the
benefit of the Secured Parties, as defined therein (Exhibit 10(h)3 to Form
10-K of TNMP for the year ended December 31, 1993, File No. 2-97230).
22. Agreement for Conveyance and Partial Release of Liens, made as of the 1st
day of December, 1987 by PFC and the Unit I Agent for the benefit of TNMP
(Exhibit 10(kk) to Form 10-K of TNMP for the year ended December 31, 1987.
File No. 2-97230).
23. Inducement and Consent Agreement, dated as of June 15, 1988, between
Phillips Coal Company, Kiewit Texas Mining Company, TNMP, Phillips
Petroleum Company and Peter Kiewit Son's. Inc. (Exhibit 10(nn) to Form 10-K
of TNMP for the year ended December 31, 1988, File No. 2-97230).
24. Assumption Agreement, dated as of October 1, 1988, executed by TGC, in
favor of the Issuing Bank, as defined therein, the Unit I Banks, the Unit I
Agent and the Depositary, as defined therein (Exhibit 10(ww) to Form 10-K
of TNMP for the year ended December 31, 1988, File No. 2-97230).
25. Guaranty, dated as of October 1, 1988, executed by TNMP and given in
respect of the TGC obligations under the Unit I Credit Agreement, (Exhibit
10(xx) to Form 10-K of TNMP for the year ended December 31, 988, File No.
2-97230).
26. First Amended and Restated Facility Purchase Agreement, dated as of January
8, 1992, among TNMP, as the Purchaser, and TGC, as the Seller, amending and
restating the Facility Purchase Agreement among such parties dated as of
October 1, 1988, (Exhibit 10(n) to Form 10-K of TNMP for the year ended
December 31, 1991, File No. 2-97230).
27. Operating Agreement, dated as of October 1, 1988, among, TNMP and TGC
(Exhibit 10(zz) to Form 10-K of TNMP for the year ended December 31, 1988,
File No. 2-97230).
- 3 -
HAYNES AND BOONE, L.L.P.
28. Unit 2 First Amended and Restated Project Loan and Credit Agreement, dated
as of January 8, 1991 (the "Unit 2 Credit Agreement"), among TNMP, Texas
Generating Company II ("TGC II"), the banks named therein as Banks (the
"Unit 2 Banks") and The Chase Manhattan Bank (National Association), as
Agent for the Unit 2 Banks (the "Unit 2 Agent"), amending and restating the
Project Loan and Credit Agreement among such parties dated as of October 1,
1988 (Exhibit 10(q) to Form 10-K of TNMP for the year ended December 31,
1991, File No. 2-97230).
29. Amendment No. 1, dated as of September 21, 1993, to the Unit 2 Credit
Agreement (Exhibit 10(o) to Form 10-K of TNMP for the year ended December
31, 1993, File No. 2-91230).
30. Assignment and Security Agreement, dated as of January 8, 1992, among, TGC
II and the Unit 2 Agent, for the benefit of the Secured Parties, as defined
in the Unit 2 Credit Agreement, amending and restating the Assignment and
Security Agreement among such parties dated as of October 1, 1988 (Exhibit
10(r) to Form 10-K of TNMP for the year ended December 31, 1991, File No.
2-97230).
31. Assignment and Security Agreement, dated as of October 1, 1988, executed by
TNMP in favor of the Unit 2 Agent for the benefit of the Secured Parties,
as defined therein (Exhibit 10(jjj) to Form 10-K of TNMP for the year ended
December 31, 1988, File No. 2-97230).
32. Subordination Agreement, dated as of October 1, 1988, among TNMP,
Continental Illinois National Bank and Trust Company of Chicago and the
Unit 2 Agent (Exhibit 10 (mmm) to Form 10-K of TNMP for the year ended
December 31, 1988, File No. 297230).
33. Mortgage and Deed of Trust (With Security Agreement and UCC Financing
Statement for Fixture Filing), dated to be effective as of October 1, 1988,
and executed by Texas PFC, Inc., as Mortgagor, to Donald H. Snell, as
Mortgage Trustee. for the benefit of the Secured Parties, as defined
therein (Exhibit 10(uuu) to Form 10-K of TNMP for the year ended December
31, 1988, File No. 2-97230).
34. First TGC II Modification and Extension Agreement. dated as of January 24,
1992, among the Unit 2 Banks, the Unit 2 Agent, TNMP and TGC II (Exhibit
10(u)2 to Form 10-K of TNMP for the year ended December 31, 1991, File No.
2-97230).
35. Second TGC II Modification and Extension Agreement, dated as of January 27,
1992, among the Unit 2 Banks, the Unit 2 Agent, TNMP and TGC II (Exhibit
10(u)2 to Form 10-K of TNMP for the year ended December 31, 1991, File No.
2-97230).
-4-
HAYNES AND BOONE, L.L.P.
36. Third TGC II Modification and Extension Agreement, dated as of January 27,
1992, among the Unit 2 Banks, the Unit 2 Agent, TNMP and TGC II (Exhibit
10(u)2 to Form 10-K of TNMP for the year ended December 31, 199 1, File No.
2-97230).
37. Fourth TGC II Modification and Extension Agreement, dated as of September
29, 1992, among the Unit 2 Banks, the Unit 2 Agent, TNMP and TGC II
(Exhibit 10(s)2 to Form 10-K of TNMP for the year ended December 31, 1993,
File No. 2-97230).
38. Fifth TGC II Modification and Extension Agreement, dated as of June 15,
1994, among the Unit 2 Banks, the Unit 2 Agent, TNMP and TGC II (Exhibit
10(s)5 to Form 10-Q of TNMP for the quarter ended June 30, 1994, File No.
2-97230).
39. Release and Waiver of Liens and Indemnity Agreement, made effective as of
the 1st day of October, 1988, by a consortium composed of Westinghouse, CE,
and Zachary (Exhibit 10(vvv) to Form 10-K of TNMP for the year ended
December 31. 1988. File No. 297230).
40. Second Lien Mortgage and Deed of Trust (With Security Agreement), dated as
of October 1, 1988, and executed by TNMP, as Mortgagor, to Donald H. Snell,
as Mortgagor Trustee, for the benefit of the Secured Parties, as defined
therein (Exhibit 10(www) to Form 10-K of TNMP for the year ended December
31, 1988, File No. 2-97230).
41. Second Lien Mortgage and Deed of Trust (with Security Agreement)
Modification, Extension and Amendment Agreement, dated as of January 8,
1992, executed by TNMP to Donald H. Snell, as Mortgage Trustee, for the
benefit of the Secured Parties. as defined therein (Exhibit 10(w)1 to Form
10-K of TNMP for the year ended December 3 1, 1991, File No. 2-97230).
42. TNP Second Lien Mortgage Modification No. 2, dated as of September 21,
1993, executed by TNMP to Donald H. Snell, as Mortgage Trustee, for the
benefit of the Secured Parties, as defined therein (Exhibit 10(u)2 to Form
10-K of TNMP for the year ended December 31, 1993. File No. 2-97230).
43. Intercreditor and Nondisturbance Agreement, dated as of October 1, 1988,
among PFC, Texas PFC, Inc., TNMP, the Project Creditors, as defined
therein, and the Collateral Agent, as defined therein (Exhibit 10(xxx) to
Form 10-K of TNMP for the year ended December 31, 1988, File No. 2-97230).
44. Amendment #1, dated as of January 8, 1992, to the Intercreditor and
Nondisturbance Agreement, dated as of October 1, 1988, among TGC, TGC II,
TNMP, the Unit I Banks, the Unit 2 Banks and The Chase Manhattan Bank
(National Association) in its capacity as collateral agent for the Unit I
Banks and the Unit 2 Banks (Exhibit 10(x) to Form 10-K of TNMP for the year
ended December 31, 1991, File No. 2-97230).
-5-
HAYNES AND BOONE, L.L.P.
45. Amendment No. 2, dated as of September 21, 1993. to the Intercreditor and
Nondisturbance Agreement, among TGC, TGC II, TNMP. the Unit I Banks. the
Unit 2 Banks and The Chase Manhattan Bank (National Association) in its
capacity as collateral agent for the Unit I Banks and the Unit 2 Banks
(Exhibit 10(v)2 to Form 10-K of TNMP for the year ended December 31, 1993,
File No. 2-97230).
46. Grant of Reciprocal Easements and Declaration of Covenants Running with the
Land, dated as of the 1st day of October, 1988, between PFC and Texas PFC.
Inc. (Exhibit10(yyy) to Form 10-K of TNMP for the year ended December 31,
1988, File No. 2-97230).
47. Non-Partition Agreement, dated as of May 30, 1990, among, TNMP, TGC and The
Chase Manhattan Bank (National Association), as Agent for the Banks which
are parties to the Unit I Credit Agreement (Exhibit 10(ss) to Form 10-K of
TNMP for the year ended December 31, 1990, File No. 2-97230).
48. Assumption Agreement, dated July 26, 199 1, to be effective as of May 31,
1991, by TGC II in favor of the Issuing Bank, the Unit 2 Banks, the Unit 2
Agent and the Depositary, as defined therein (Exhibit 10(kkk) to Amendment
No. 1 to File No. 33-41903).
49. Guaranty, dated July 26, 1991, to be effective as of May 31, 1991, by TNMP
and given in respect of the TGC II 0bligations under the Unit 2 Credit
Agreement (Exhibit 10(lll) to Amendment No. 1 to File No. 33-41903).
50. First Amended and Restated Facility Purchase Agreement, dated as of January
8, 1992, among TNMP, as the Purchaser, and TGC II, as the Seller, amended
and restating the Facility Purchase Agreement among such parties dated July
26, 1991, to be effective as of May 31, 1991 (Exhibit 10(dd) to Form 10-K
of TNMP for the year ended December 31, 1991, File No. 2-97230).
51. Amendment No. 1 to the Unit 2 First Amended and Restated Facility Purchase
Agreement, dated as of September 21, 1993, among TNMP, as the Purchaser,
and TGC II, as the Seller (Exhibit 10(aa)1 to Form 10-K of TNMP for the
year ended December 31, 1993, File No. 2-97230).
52. Operating Agreement, dated July 26, 1991, to be effective as of May 31,
1991, between TNMP and TGC II (Exhibit 10(nnn) to Amendment No. 1 to File
No. 33-41903).
53. Non-Partition Agreement, executed July 26, 1991, to be effective as of May
31, 1991, among TNMP, TGC II and The Chase Manhattan Bank (National
Association) (Exhibit 10(ppp) to Amendment No. 1 to File No. 33-41903).
-6-
HAYNES AND BOONE, L.L.P.
Power Supply Contracts
54. Contract dated May 12, 1976 between TNMP and Houston Lighting & Power
Company (Exhibit 5(a), File No. 2-9353).
55. Amendment, dated January 4, 1989, to the Contract dated May 12, 1976
between TNMP and Houston Lighting & Power Company (Exhibit 10(cccc) to Form
10-K of TNMP for the year ended December 31, 1988, File No. 2-7230).
56. Contract dated May 1, 1986 between TNMP and Texas Electric Utilities
Company, amended September 29, 1986, October 24, 1986 and February 21, 1987
(Exhibit 10(c) of Form 8 applicable to Form 10-K of TNMP for the year ended
December 31, 1986. File No. 2-97230).
57. Amended and Restated Agreement for Electric Service dated May 14, 1990
between TNMP and Texas Utilities Electric Company (Exhibit 10(vv) to Form
10-K for the year ended December 31, 1990, File No 2-97230).
58. Amendment, dated April 19, 1993, to Amended and Restated Agreement for
Electric Service, dated May 14, 1990, as Amended between TNMP and Texas
Utilities Electric Company (Exhibit 10(ii)l to Form S-2 Registration
Statement, filed on July 19. 1993. File No. 33-66232).
59. Contract dated June 11, 1984 between TNMP and Southwestern Public Service
Company (Exhibit 10(d) of Form 8 applicable to Form 10-K of TNMP for the
year ended December 31, 1986, File No. 2 -97230).
60. Contract dated April 27, 1977 between TNMP and West Texas Utilities Company
amended April 14, 1982. April 19, 1983, May 18, 1984 and October 21, 1986
(Exhibit 10(e) of Form 8 applicable to Form 10-K of TNMP for the year ended
December 31, 1986, File No. 2-97230).
61. Contract dated April 29, 1987 between TNMP and El Paso Electric Company
(Exhibit 10(f) of Form 8 applicable to Form 10-K of TNMP for the year ended
December 31, 1986, File No. 2-97230).
62. Contract dated February 28, 1974, amended May 13, 1974, November 26, 1975,
August 26, 1976 and October 7, 1980 between TNMP and Public Service Company
of New Mexico (Exhibit 10(g) of Form 8 applicable to Form 10-K of TNMP for
the year ended December 31, 1986, File No. 2-97230).
63. Amendment, dated February 22, 1982, to the Contract dated February 28,
1974, amended May 13, 1974, November 26, 1975, August 26, 1976 and October
7, 1980 between
-7-
HAYNES AND BOONE, L.L.P.
TNMP and Public Service Company of New Mexico (Exhibit 10(iiii) to Form
10-K of TNMP for the year ended December 31, 1988, File No. 2-97230).
64. Amendment, dated February 8, 1988, to the Contract dated February 28, 1974,
amended May 13, 1974, November 26, 1975, August 26, 1976, and October 7,
1980 between TNMP and Public Service Company of New Mexico (Exhibit
10(jjjj) to Form 10-K of TNMP for the year ended December 31, 1988, File
No. 2-97230).
65. Amended and Restated Contract for Electric Service, dated April 29, 1988,
between TNMP and Public Service Company of New Mexico (Exhibit 10(xx)3 to
Amendment No. 1 to File No. 33-41903).
66. Contract dated December 8, 1981 between TNMP and Southwestern Public
Service Company amended December 12, 1984, December 2, 1985 and December 9,
1986 (Exhibit 10(h) of Form 8 applicable to Form 10-K of TNMP for the year
ended December 31, 1986, File No. 2-97230).
67. Amendment, dated December 12, 1988, to the Contract dated December 8. 1981
between TNMP and Southwestern Public Service Company amended December 12,
1984, December 2, 1985 and December 19, 1986 (Exhibit 10(llll) to Form 10-K
of TNMP for the year ended December 31, 1988, File No. 2-97230).
68. Amendment, dated December 12, 1990, to the Contract dated December 8, 1981
between TNMP and Southwestern Public Service Company (Exhibit 19(t) to Form
10-K of TNMP for the year ended December 31, 1990, File No. 2-97230).
69. Contract dated August 31, 1983, between TNMP and Capitol Cogeneration
Company, Ltd. (including letter agreement dated August 14, 1986) (Exhibit
10(i) of Form 8 applicable to Form 10-K of TNMP for the year ended December
31, 1986, File No. 297230).
70. Agreement Substituting a Party, dated May 3, 1988, among Capitol
Cogeneration Company, Ltd., Clear Lake Cogeneration Limited Partnership and
TNMP (Exhibit 10(nnnn) to Form 10-K of TNMP for the year ended December 31,
1988, File No. 297230).
71. Letter Agreements, dated May 30, 1990 and August 28, 1991, between Clear
Lake Cogeneration Limited Partnership and TNMP (Exhibit 10(oo)2 to Form
10-K of TNMP for the year ended December 31, 1992, File No. 2-97230).
72. Notice of Extension Letter, dated August 31, 1992, between Clear Lake
Cogeneration Limited Partnership and TNMP (Exhibit 10(oo)3 to Form 10-K of
TNMP for the year ended December 31, 1992, File No. 2-97230).
-8-
+
HAYNES AND BOONE, L.L.P.
73. Scheduling Agreement, dated September 15, 1992, between Clear Lake
Cogeneration Limited Partnership and TNMP (Exhibit 10(oo)4 to Form 10-K of
TNMP for the year ended December 31, 1992, File No. 2-97230).
74. Interconnection Agreement between TNMP and Plains Electric Generation and
Transmission Cooperative, Inc. dated July 9, 1984, (Exhibit 100) of Form 8
applicable to Form 10-K of TNMP for the year ended December 31, 1986, File
No. 2-97230).
75. Interchange Agreement between TNMP and El Paso Electric Company dated April
29, 1987, (Exhibit 10(l) of Form 8 applicable to Form 10-K of TNMP for the
year ended December 31, 1986, File No. 2-97230).
76. Amendment No. 1, dated November 21, 1994, to the Interchange Agreement
between TNMP and El Paso Electric Company dated April 29, 1987.
77. DC Terminal Participation Agreement between TNMP and El Paso Electric
Company dated December 8, 1981 amended April 29, 1987 (Exhibit 10(m) of
Form 8 applicable to Form 10-K of TNMP for the year ended December 31,
1986, File No. 2-97230).
78. 1996 Firm Capacity & Energy Sale Agreement between TNMP and TEP dated
December 20, 1994, effective as of January 1, 1996.
Employment Contracts
79. Texas-New Mexico Power Company Executive Agreement for Severance
Compensation Upon Change in Control, executed November 11, 1993, between
Sector Vice President and Chief Financial Officer and TNMP (Pursuant to
Instruction 2 of Reg. 229.601(a), accompanying this document is a schedule:
(i) identifying documents substantially identical to the document which
have been omitted from the Exhibits; and (ii) setting forth the material
details in which such omitted documents differ from the document) (Exhibit
10(pp) to Form 10-K of TNMP for the year ended December 31, 1993, File No.
2-97230).
80. Texas-New Mexico Power Company Key Employee Agreement for Severance
Compensation Upon Change in Control. executed November 11, 1993, between
Assistant Treasurer and TNMP (Pursuant to Instruction 2 of Reg. 229.601(a),
accompanying this document is a schedule: (i) identifying documents
substantially identical to the document which have been omitted from the
Exhibits; and (ii) setting forth the material details in which such omitted
documents differ from the document) (Exhibit 10(qq) to Form 10-K of TNMP
for the year ended December 31, 1993, File No. 2-97230).
- 9 -
EXHIBIT G-1-A
MICHAEL D. BLANCHARD
ATTORNEY AT LAW
4100 INTERNATIONAL PLAZA
P.O. BOX 2943
FORT WORTH, TEXAS 76113
(817) 731-0099
November 3, 1995
Chemical Bank
individually and as Administrative
Agent under the TNP Credit
Agreement referred to below
270 Park Avenue
New York, NY 10017
The Lenders from time to time
under the TNP Credit Agreement
The Chase Manhattan Bank
(National Association), as agent
under the Existing Facility
Agreement referred to in the
TNP Credit Agreement
One Chase Manhattan Plaza
New York, NY 10005
Ladies and Gentlemen:
I am the general counsel of Texas-New Mexico Power Company, a Texas
corporation ("TNP"), and Texas Generating Company II, a Texas corporation and
wholly owned subsidiary of TNP ("TGC II"), and have served in such capacity in
connection with the transactions contemplated by (i) the Assignment and
Amendment Agreement dated as of November 3, 1995 (the "Assignment Agreement")
among TNP, TGC II, the Existing Facility Banks, the Original Collateral Agent,
the Original Agent, the Lenders, the Administrative Agent, and the Collateral
Agent (each as defined therein), (ii) the Revolving Credit Agreement dated as of
November 3, 1995 (the "TNP Credit Agreement") among TNP, each of the lenders
that is a signatory thereto (the "Lenders"), and Chemical Bank, as
administrative agent and collateral agent for the Lenders (in such capacities,
the "Administrative Agent" and the "Collateral Agent", respectively), (iii) the
Bond Agreement dated as of November 3, 1995 (the "Bond Agreement") by TNP in
favor of Chemical Bank, as Collateral Agent, (iv) the Supplemental Indenture
dated as of November 3, 1995 (the "Supplemental Indenture") pursuant to which
the Bonds (as defined in the Bond Agreement) have been issued, (v) the Bonds (as
defined in the Bond Agreement), (vi) the Note Pledge Agreement dated as of
November 3, 1995 (the "Note Pledge Agreement") by TNP in favor of the Collateral
Agent, (vii) the Guarantee and Pledge Agreement dated as of November 3, 1995
(the "Guarantee Agreement") by TGC II in favor of the Collateral Agent, (viii)
the Sixth TGC II Modification and Extension Agreement dated as of November 3,
1995 (the "Sixth TGC II Modification") among TGC II, TNP, and the Secured
Parties (as defined therein), (ix) the TNP Second Lien Mortgage Modification No.
3 dated as of November 3, 1995 (the "TNP Mortgage Modification No. 3") by TNP
for the benefit of the Secured Parties (as defined therein), (x) the Assignment
of TGC II Mortgage Lien dated as of November 3, 1995 (the "Assignment of TGC II
Lien") by The Chase Manhattan Bank (National Association), as Agent and as
Collateral Agent (each as defined therein) in favor of Chemical Bank, as agent
for TNP under the Existing Facility (pursuant to the Assignment Agreement), and
as agent for the Replacement Note Holder under the Existing Facility Agreement,
(xi) the Collateral Transfer of Notes, Rights and Interests dated as of November
3, 1995 (the "TGC II Collateral Transfer") between TNP and the Administrative
Agent and the Collateral Agent, (xii) the Assignment of TNP Second Mortgage Lien
dated as of November 3, 1995 (the "Assignment of TNP Lien") by The Chase
Manhattan Bank (National Association), as Agent and as Collateral Agent (each as
defined therein) in favor of Chemical Bank, as agent for TNP under the Existing
Facility (pursuant to the Assignment Agreement), and as agent for the
Replacement Note Holder under the Existing Facility Agreement, (xiii) the
Collateral Transfer of Notes, Rights and Interests dated as of November 3, 1995
(the "TNP Collateral Transfer") between TNP and the Administrative Agent and the
Collateral Agent, (xiv) Amendment No. 1 dated as of November 3, 1995, to the TNP
Security Agreement (as defined in the Existing Facility Agreement) (the "TNP
Security Agreement Amendment"), and (xv) financing statements naming TNP and TGC
II, as applicable, as debtor, and TNP and the Collateral Agent, as applicable,
as secured party, which are to be filed in the filing offices of the Secretary
of State of the State of Texas and the county clerk's office for Robertson
County, Texas (such filing offices collectively referred to as the "Filing
Offices" and such financing statements as the "Financing Statements") (each of
the agreements, instruments, and documents referred to in the foregoing clauses
(i) through (xv) being collectively called the "Opinion Documents"). Unless
otherwise defined herein, terms defined in the TNP Credit Agreement are used
herein as therein defined. Except where the context otherwise requires, words
importing the singular include the plural and vise versa.
In rendering the opinions expressed below, I have examined (a) the
Opinion Documents, the Existing Facility Agreement and each of the other
Existing Facility Project Documents and Existing Facility Security Documents,
(b) such corporate records of TNP and TGC II, agreements, instruments, and
documents which affect or purport to affect the obligations of TNP or TGC II
under the Opinion Documents, the Existing Facility Agreement, the Existing
Facility Project Documents, and the Existing Facility Security Documents, (c)
the TNP Bond Indenture, (d) the various orders of the New Mexico Public Utility
Commission and the Federal Energy Regulatory Commission related to the
transactions contemplated by the Opinion Documents and such other documents as I
have deemed necessary as a basis for the opinions expressed below. In my
examination, except as relates to the execution by TNP or TGC II of any of the
Opinion Documents, I have assumed the genuineness of all signatures and the
legal capacity of natural persons, the authenticity of documents submitted to me
as originals, and the conformity with authentic original documents of all
documents submitted to me as copies. When relevant facts were not independently
established, I have relied upon statements of government officials and upon
representations made in or pursuant to the Opinion Documents and certificates of
appropriate representatives of TNP or TGC II.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as I have deemed necessary as a basis for the opinions
expressed below, I am of the opinion that:
1. Each of TNP and TGC II is, and was at the time of execution of each
Existing Facility Document, a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Texas and presently has, and
had at the time of execution of each Existing Facility Document, the necessary
corporate power, authority, and legal right to execute, deliver, and perform
each of the Existing Facility Documents to which it is party.
2. The execution, delivery, and performance by each of TNP and TGC II
of the Existing Facility Documents to which it is a party have been, and were at
the time of execution of such Existing Facility Documents, duly authorized by
all necessary corporate action and do not, and did not at the time of execution
of such Existing Facility Documents, (a) require any consent or approval of the
shareholders of either TNP or TGC II or of the trustee under the TNP Bond
Indenture or any holder of any interest in any of the bonds issued and
outstanding under the TNP Bond Indenture or of the First Debenture Trustee under
the First Secured Debenture Indenture (except, as to the First Debenture
Trustee, such consent as may have been obtained at the time of the execution of
such Existing Facility Documents) or any holder of any of the First Secured
Debentures outstanding under the First Secured Debenture Indenture , each as
presently in effect, or as in effect at the time of execution of such Existing
Facility Documents, as the case may be, (b) violate any provision of law, rule,
regulation, or any order, writ, judgment, injunction, decree, determination or
award of any Governmental Authority, or any provision of the articles or bylaws
of TNP or TGC II, or the TNP Bond Indenture or the First Secured Debenture
Indenture, each as currently in effect, or as in effect at the time of execution
of such Existing Facility Documents, as the case may be, (c) result in a breach
of, or constitute a default or require any consent under, any indenture or loan
or credit agreement to which TNP or TGC II is a party or by which it or its
properties are, or were at the time of execution of such Existing Facility
Documents, as the case may be, bound or (d) result in or require the imposition
of any Lien (other than a Lien permitted under Section 6.2 of the TNP Credit
Agreement) upon or with respect to any property now owned, or owned at the time
of execution of such Existing Facility Documents, as the case may be, or
hereafter, or thereafter, as the case may be, acquired by TNP or TGC II. Neither
TNP nor TGC II is, or was at the time of execution of such Existing Facility
Documents, as the case may be, in breach of or in default under any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any agreement or instrument mentioned in the foregoing which breach or default
could reasonably be expected to have a material adverse effect on its business.
3. Each of TNP and TGC II has duly executed and delivered each of the
Existing Facility Documents to which it is a party.
4. All actions, consents, approval, registrations, or filings with or
any other action by any Governmental authority necessary to be obtained by TNP
or TGC II under applicable Texas and Federal laws and regulations (including,
without limitation, those promulgated by the PUCT or the Federal Energy
Regulatory Commission) in connection with (a) the due execution, delivery, and
performance by each of TNP and TGC II of its obligations and the exercise of its
rights under, the TNP Credit Agreement, the Assignment Agreement, each of the
other Opinion Documents and each of the Existing Facility Documents and the
incurrence of the indebtedness and obligations to be incurred by TNP and TGC II
thereunder, and (b) the grant of the Liens created pursuant to the Existing
Facility Security Documents and the Pledge Agreements, have been duly obtained
or made and are in full force and effect.
5. The Order of the PUCT in Docket No. 6992 of 1987, authorizing TNP to
construct, own, and operate the Project (with TGC II as the owner thereof as
contemplated by the Existing Facility Project Documents) remains in full force
and effect, is final, and is not subject to further administrative proceedings
or appeal periods. To my knowledge, there is no investigation, action, suit, or
proceeding pending or threatened against TNP or TGC II which seeks, or may
reasonably be expected, to rescind, terminate, modify, or suspend any approval
by any Governmental Authority or which may impede or delay any such approval.
6. None of the Administrative Agent, the Collateral Agent or any of the
Lenders, solely by reason of any extension of loans under the TNP Credit
Agreement or by reason of the execution, delivery, or performance of any of the
Opinion Documents or the other Existing Facility Documents, will be or be
subject to regulation as an "electric utility", "electrical corporation",
"electric company", "electric utility company", an "electric utility holding
company", "public service company", or "holding company" or a subsidiary or
affiliate of any of the foregoing under either (i) the Federal Power Act, as
amended, (ii) the Public Utility Holding Company Act of 1935, as amended, or
(iii) any Texas law.
7. Neither TNP nor TGC II is subject to regulation under the Public
Utility Holding Company Act of 1935, as amended, other than pursuant to Section
9(a)(2) thereof.
This opinion is solely for the information of the addressees hereof,
and is not to be quoted in whole or in part or otherwise referred to (except in
a list of closing documents), nor is it to be filed with any governmental agency
or other person without my prior written consent. Other than the addressees
hereof, no one is entitled to rely on this opinion. This opinion is based on my
knowledge of the law and facts as of the date hereof. I assume no duty to
communicate with you with respect to any matter which comes to my attention
hereafter.
Very truly yours,
MICHAEL D. BLANCHARD
EXHIBIT G-2
SNELL, BANOWSKY & TRENT
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS
200 CRESCENT OURT, SUITE 1000
DALLAS, TEXAS 750201
DONALD H. SNELL (214) 871-3515
TELECOPIER (214) 871-3517
November 3, 1995
Chemical Bank
individually and as Administrative Agent under
the TNP Credit Agreement referred to below
270 Park Avenue
New York, New York 10017
The Lenders from time to time under the TNP Credit Agreement
Dear Sirs:
the TNP Credit Agreement dated as of November 3, 1995 ("TNP Credit
Agreement") by and among TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation
("TNP"), the Lenders, and CHEMICAL BANK, as administrative agent and collateral
agent for the Lenders ("Administrative Agent" and "Collateral Agent",
respectively), (ii) the Assignment and Amendment Agreement dated as of November
3, 1995 (the "Assignment Agreement") among TNP, TEXAS GENERATING COMPANY II, a
Texas corporation and wholly owned subsidiary of TNP ("TGC II"), the Existing
Facility Banks, the Original Collateral Agent, the Original Agent, the Lenders,
the Administrative Agent and the Collateral Agent (each as defined in the
Assignment Agreement), (iii) the Bond Pledge Agreement dated as of November 3,
1995 (the "Bond Pledge Agreement") by TNP in favor of the Collateral Agent, (iv)
the Supplemental Indenture dated as of November 3, 1995 (the "Supplemental
Indenture") pursuant to which the Pledged Bonds (as defined in the Bond Pledge
Agreement) have been issued, (v) the Pledged Bonds (as defined in the Bond
Pledge Agreement, (vi) the Note Pledge Agreement dated as of November 3, 1995
(the "Note Pledge Agreement") by TNP in favor of the Collateral Agent, (vii) the
Guarantee and Pledge Agreement dated as of November 3, 1995 (the "Guarantee
Agreement") by TGC II in favor of the Collateral Agent, (viii) the Sixth TGC II
Modification and Extension Agreement dated as of November 3, 1995 (the "Sixth
TGC II Modification") among TGC II, TNP and the Secured Parties (as defined
therein), (ix) the Amendment No. 1 dated as of November 3, 1995 (the "TNP
Security Agreement Amendment") to the TNP Security Agreement (as defined in the
Existing Facility Agreement), (x) the TNP Second Lien Mortgage Modification No.
3 dated as of November 3, 1995 (the "TNP Second Lien Mortgage Modification No.
3") by TNP for the benefit of the Secured Parties (as defined therein), (xi) the
Assignment of TGC II Mortgage Lien dated as of November 3, 1995 (the "Assignment
of TGC II Lien") by The Chase Manhattan Bank (National Association), as Agent
and as Collateral Agent (each as defined therein) in favor of Chemical Bank, as
agent for TNP under the Existing Facility Agreement (pursuant to the Assignment
Agreement), and as agent for the Replacement Note Holder under the Existing
Facility Agreement, (xii) the Collateral Transfer of Notes, Rights and Interests
dated as of November 3, 1995 (the "TNP Collateral Transfer-Robertson County")
between TNP and the Administrative Agent and the Collateral Agent, (xiii) the
Assignment of TNP Second Mortgage Lien dated as of November 3, 1995 (the
"Assignment of TNP Lien") by The Chase Manhattan Bank (National Association), as
Agent and as Collateral Agent (each as defined therein) in favor of Chemical
Bank, as agent for TNP under the Existing Facility Agreement (pursuant to the
Assignment Agreement), and as agent for the Replacement Note Holder under the
Existing Facility Agreement, (xiv) the Collateral Transfer of Notes, Rights and
Interests dated as of November 3, 1995 (the "TNP Collateral Transfer-Secretary
of State") between TNP and the Administrative Agent and the Collateral Agent,
and (xv) financing statements naming TNP and TGC II, as applicable, as debtor
and TNP and the Collateral Agent, as applicable, as secured party, which are to
be filed in the filing offices of the Secretary of State of the State of Texas
and the County Clerk's Office for Robertson County, Texas (each of the foregoing
agreements, instruments and documents referred to in the foregoing clauses (i)
through (xiv) being collectively called the "Opinion Documents"). Unless
otherwise defined herein, terms defined in the TNP Credit Agreement are used
herein as therein defined.
We have made such investigations regarding matters of law and examined such
of the Opinion Documents, Existing Facility Project Documents and Existing
Facility Security Documents as we deemed necessary or appropriate, including,
but not limited to, executed counterparts of the following:
Mortgage and Deed of Trust (with Security Agreement
and UCC Financing Statement for Fixture Filing) ("TGC II
Mortgage") dated to be effective as of October 1, 1988,
executed by TPFC for the benefit of the Banks;
First TGC II Modification and Extension Agreement
executed by Donald H. Snell, as Mortgage Trustee, the Agent,
the Collateral Agent, TGC II and TNP ("First TGC II
Modification") dated as of January 24, 1992;
Second TGC II Modification and Extension Agreement
executed by the Agent, the Collateral Agent, TGC II and TNP
("Second TGC II Modification") dated as of January 27, 1992;
Third TGC II Modification and Extension Agreement
executed by the Agent, the Collateral Agent, TGC II and TNP
("Third TGC II Modification") dated as of January 27, 1992;
Fourth TGC II Modification and Extension Agreement
executed by the Agent, the Collateral Agent, TGC II and TNP
("Fourth TGC II Modification") dated as of September 29, 1993;
Fifth TGC II Modification and Extension Agreement
executed by the Agent, the Collateral Agent, TGC II and TNP
("Fifth TGC II Modification") dated as of June 15, 1994;
(the First TGC II Modification, Second TGC II Modification, Third TGC II
Modification, Fourth TGC II Modification and Fifth TGC II Modification are
hereinafter collectively called the "TGC II Mortgage Modifications"; and the
Mortgage Trust Estate defined in the TGC II Mortgage and TGC II Mortgage
Modifications is hereinafter called the "TGC II Mortgage Trust Estate").
Second Lien Mortgage and Deed of Trust (with Security
Agreement) ("TNP Second Lien Mortgage") dated as of October 1,
1988, executed by TNP in favor of Donald H. Snell as Mortgage
Trustee for the benefit of the Secured Parties;
Second Lien Mortgage and Deed of Trust (with
Security Agreement) Modification, Extension and Amendment
Agreement ("TNP Second Lien Mortgage Modification No. 1")
dated as of January 8, 1992, executed by TNP in favor of
Donald H. Snell, as mortgage trustee for the benefit of the
Secured Parties; and
Second Lien Mortgage and Deed of Trust (with
Security Agreement) Modification, Extension and Amendment
Agreement No. 2 ("TNP Second Lien Mortgage Modification No. 2"
and, together with the Unit 2 TNP Second Lien Mortgage
Modification No. 1, the "TNP Second Lien Mortgage
Modifications"; and the Mortgage Trust Estate defined in the
TNP Second Lien Mortgage and TNP Second Lien Mortgage
Modifications herein called the "TNP Mortgage Trust Estate").
In stating our opinions, we have assumed the due authorization, execution
and delivery of the above described documents by each party thereto, the
genuineness of all signatures on all documents, and the authority of all persons
signing each of the above described documents on behalf of the parties thereto,
the authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or photostatic copies. Furthermore, we have assumed that
the Opinion Documents described in subparagraphs (viii) through (xiv) of the
first paragraph of this letter will be promptly and properly recorded in the
appropriate records of Robertson County, Texas or the Office of the Secretary of
State of the State of Texas, as the case may be.
Based and relying solely upon the foregoing, and subject to the
comments and exceptions hereinafter stated, we are of the opinion that:
The TGC II Mortgage, as modified by the TGC II Mortgage
Modifications, each of which has been recorded in the Public
Records of Robertson County, Texas, and the TNP Second Lien
Mortgage, as modified by the TNP Second Lien Mortgage
Modifications, each of which has been recorded as a security
instrument with the Office of the Secretary of State of the
State of Texas, constitute, and the TGC II Mortgage and the
TNP Second Lien Mortgage, as hereafter modified on the Closing
Date (when such documents are executed and delivered in
exchange for the contemplated consideration) by the Sixth TGC
II Modification and the TNP Second Lien Mortgage Modification
No. 3, respectively, will constitute the legal, valid and
binding obligations of the parties thereto, enforceable
against such parties in accordance with their respective terms
and effective to create the liens they purport to create,
except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or moratorium or other
similar laws or equitable principles relating to the
enforcement of creditors' rights generally and by general
principles of equity regardless of whether enforcement of any
obligation therein mentioned is sought in a proceeding in
equity or at law.
The Sixth TGC II Mortgage Modification is in proper
form (a) for execution under the laws of the State of Texas,
(b) for recording in the Public Records of Robertson County,
Texas, and (c) for the extension of the Lien evidenced by the
TGC II Mortgage.
The provisions of the TNP Security Agreement
Amendment are sufficient to create in favor of the Collateral
Agent a valid security interest in TNP's interest in the
Collateral referred to therein and in which a security
interest may be created pursuant to Article 9 of the Texas
Business and Commerce Code.
The TNP Second Lien Mortgage Modification No. 3 is
in proper form (a) for execution under the laws of the State
of Texas, (b) for recording as a security instrument relating
to the granting of a security interest by a utility with the
Office of the Secretary of State of the State of Texas, and
(c) for the extension of the Lien evidenced by the TNP Second
Lien Mortgage.
The Assignment of TGC II Lien is in proper form (a)
for execution under the laws of the State of Texas, (b) for
recording in the Public Records of Robertson County, Texas,
and (c) for evidencing of record the assignment of all of the
rights, title, interest, security interests and assignments of
the Agent and Collateral Agent in and to the TGC II Mortgage
and the TGC II Mortgage Trust Estate.
The Assignment of TNP Lien is in proper form (a) for
execution under the laws of the State of Texas, (b) for
recording as a security instrument assigning a security
interest by a utility with the Office of the Secretary of
State of the State of Texas, and (c) for evidencing of record
the assignment of all of the Agent's and Collateral Agent's
right, title, interest, liens, security interests and
assignments in and to the TNP Second Lien Mortgage.
The TNP Collateral Transfer - Robertson County is in
proper form (a) for execution under the laws of the State of
Texas, (b) for recording in the Public Records of Robertson
County, Texas, and (c) for evidencing of record the transfer
of the Collateral by TNP to the Administrative Agent and the
Collateral Agent to secure the Obligations.
The Collateral Transfer - Secretary of State is in
proper form (a) for execution under the laws of the State of
Texas, (b) for recording as a security instrument relating to
the granting of a security interest by a utility with the
Office of the Secretary of State of the State of Texas, and
(c) to evidence of record the transfer of the Collateral by
TNP to the Administrative Agent and the Collateral Agent as
security for the Obligations.
The execution, delivery and performance by TNP
and/or TGC II of the TNP Credit Agreement, the Assignment
Agreement and each of the other Opinion Documents to which
it/they are a part has not and will not adversely affect or
impair the lien created by the TGC II Mortgage.
None of the Administrative Agent, the Collateral
Agent or any of the Lenders shall, solely as a result of the
financing evidenced by the TNP Credit Agreement, or by the
exercise of any rights under the Note Pledge Agreement and
thereafter under the TGC II Mortgage or the TNP Second Lien
Mortgage become subject to any registration or qualification
requirements or any tax imposed by the State of Texas or any
political subdivision thereof. In this regard, Article
1396-8.01 of the Texas Miscellaneous Corporation Laws Act,
provides, in part, that "a foreign corporation shall not be
considered to be conducting affairs in this State, for the
purposes of this Act, by reason of carrying on in this State
any one (1) or more of the following activities: ... (6)
creating evidence of debt, mortgages, or liens on real or
personal property ... (7) securing or collecting debts to it
or enforcing any rights in property securing the same".
However, if in the exercise of such rights, the Administrative
Agent, the Collateral Agent or any of the Lenders take title
to any of the TGC Mortgage Trust Estate, the TNP Mortgage
Trust Estate and/or any other of the Collateral, then the
Administrative Agent, Collateral Agent or any such Lender, as
the case may be, may be required to qualify to do business in
the State of Texas.
We call your attention to the fact that effective
September 1, 1993, Section 35.51 addressing the Rights of
Parties to Choose Law Applicable to Certain Transactions (the
"Texas Choice of Law Statute") was added to the Business and
Commerce Code in the State of Texas. Pursuant to the Texas
Choice of Law Statute, with certain limited exceptions, if the
parties to a "qualified transaction" (as such term is defined
in the Texas Choice of Law Statute) agree in writing that the
law of a particular jurisdiction governs an issue relating to
the "transaction" (as such term is defined in the Texas Choice
of Law Statute), including the validity or enforceability of
an agreement relating to the transaction or a provision of the
agreement, and the transaction bears a reasonable relation to
that jurisdiction, the law, other than conflict of laws rules,
of that jurisdiction governs the issue regardless of whether
the application of that law is contrary to a fundamental or
public policy of the State of Texas or of any other
jurisdiction. Moreover, with certain limited exceptions, if
the parties to a qualified transaction agree in writing that
the law of a particular jurisdiction governs the
interpretation or construction of an agreement relating to the
transaction or a provision of the agreement, the law, other
than conflict of laws rules, of that jurisdiction governs that
issue regardless of whether the transaction bears a reasonable
relation to that jurisdiction. Pursuant to subsection (a) of
the Texas Choice of Law Statute, a "qualified transaction" is
a transaction under which a party:
pays or receives, or is obligated to pay or entitled to receive,
consideration with an aggregate value of at least $1,000,000.00; or
lends, advances, borrows or receives, or is obligated to lend or advance or
is entitled to borrow or receive, funds or credit with an aggregate value of at
least $1,000,000.00.
While we have been unable to locate any cases applying, enforcing,
construing or interpreting the Texas Choice of Law Statute or the definition of
a "qualified transaction" and consequently cannot provide an unqualified opinion
with respect to the enforceability of the choice of law provisions of the
Opinion Documents, we are of the opinion that a Texas state court (or a federal
court applying Texas law) in a properly presented case applying Texas law should
enforce the choice of law provisions of the Opinion Documents choosing and
applying New York law as the law governing the Opinion Documents, to the extent
the Opinion Documents provide that they are to be governed by New York law.
We express no opinion as to the status of title to the TGC II Mortgage
Trust Estate, the TNP Trust Estate or any of the other Collateral, or related
personal property and fixtures, or as to the relative priority of the liens and
security interests intended to be continued and preserved by the Sixth TGC II
Modification, the TNP Security Agreement Amendment and the TNP Second Lien
Mortgage Modification No. 3. Furthermore, we express no opinion as to whether
activities other than those contemplated by the Opinion Documents and the
Existing Facility Project Documents and Existing Facility Security Documents
conducted by the Administrative Agent or any Lender in the State of Texas, if
any, will constitute transacting business in the State of Texas, requiring the
Administrative Agent or any such Lender to qualify as a foreign corporation in
the State of Texas.
For purposes of the opinions set forth hereinabove, we have assumed
that:
All the parties to the Opinion Documents and the Existing
Facility Project Documents and Existing Facility Security
Documents, are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
organization and are duly qualified under such laws to engage
in the transactions contemplated by such Documents.
The Opinion Documents and the Existing Facility
Project Documents and Existing Facility Security Documents
have been duly authorized, executed and delivered by the
Administrative Agent and the Lenders, to the extent required
and constitute legal, valid and binding obligations of the
Administrative Agent and the Lenders, enforceable against such
parties in accordance with their respective terms; and that
the Agent and the Lenders have the requisite corporate power
and authority to perform their respective obligations under
the Documents.
This opinion is limited to the matters expressly set forth herein and
no opinion is to be inferred or may be implied beyond the matters expressly so
stated.
We are licensed to practice law only in the State of Texas. The
opinions expressed herein are based solely on the laws of the State of Texas,
and we express no independent opinion with respect to the laws of any other
state, including, but not limited to, the laws of the State of New York.
This opinion is provided to you solely for your benefit. Without our
prior written consent, this opinion may not be quoted in whole or in part or
otherwise referred to in any report or document or furnished to any person or
entity other than you or your counsel. This opinion is based on our knowledge of
the law and facts as of the date hereof. We assume no duty to communicate with
you with respect to any matter which comes to our attention hereafter.
Respectfully submitted,
SNELL, BANOWSKY & TRENT,
A Professional Corporation
By:
-----------------------------
Donald H. Snell,
For the Corporation
DHS:mdc
EXHIBIT G-3
RUBIN, KATZ, SALAZAR, ALLEY & ROUSE
A Professional Corporation
ATTORNEYS AT LAW
James B. Alley, Jr.*
Leonard S. Katz** Street Address:
Owen C. Rouse III** 123 East Marcy, Suite 200
James S. Rubin Santa Fe, New Mexico 87501
Donald M. Salazar(degree)
Mailing Address:
Frank T. Herdman* Post Office Drawer 250
Serina M. Garst(degree) Santa Fe, New Mexico 87504
November 3, 1995
*Also admitted in New York Telephone (505) 982-3610
**Also admitted in Colorado Facsimile (505) 988-1286
(degree)Also admitted in California
Chemical Bank
individually and as
Administrative Agent
under the TNP Credit
Agreement referred to below
270 Park Avenue
New York, New York 10017
The Lenders from time
time under the TNP
Credit Agreement
RE: TNP Credit Agreement
Ladies and Gentlemen:
We have acted as New Mexico counsel to Texas-New Mexico Power Company,
a Texas corporation ("TNP"), since 1993. During the period 1978 to 1993, the
undersigned individual also acted as New Mexico counsel to TNP as a member of a
different law firm. During this period from 1978 to date, the scope of my
representation has been limited to the specific matters referred to me by TNP
and has included all matters before governmental or regulatory agencies of New
Mexico with respect to the activities of TNP as a public utility under the New
Mexico Public Utility Act and material litigation and claims against TNP in the
state and federal courts in New Mexico. The files of TNP in our office contain
the full and complete record of all proceedings involving TNP before the New
Mexico Public Utility Commission and in any material litigation in the state and
federal courts in New Mexico during this period. To our knowledge after due
inquiry, we have been employed as counsel for all material matters of TNP in New
Mexico for the periods described above.
Insofar as the law of the State of New Mexico and the law of the United
States of America, as it applies to the opinions expressed in this letter, are
concerned, we have acted as special New Mexico counsel to TNP and Texas
Generating Company II, a Texas corporation and wholly owned subsidiary of TNP
("TGC II"), in connection with the transactions contemplated by (i) the
Assignment and Amendment Agreement dated as of November 3, 1995 (the "Assignment
Agreement") among TNP, TGC II, the Existing Facility Banks, the Original
Collateral Agent, the Original Agent, the Lenders, the Administrative Agent and
the Collateral Agent (each as defined therein), (ii) the Revolving Credit
Agreement dated as of November 3, 1995 (the "TNP Credit Agreement") among TNP,
each of the lenders that is a signatory thereto (the "Lenders") and Chemical
Bank, as administrative agent and collateral agent for the Lenders (in such
capacities, the "Administrative Agent" and the "Collateral Agent",
respectively), (iii) the Bond Pledge Agreement dated as of November 3, 1995,
(the "Bond Pledge Agreement") by TNP in favor of the Collateral Agent, (iv) the
Supplemental Indenture dated as of November 3, 1995 (the "Supplemental
Indenture") pursuant to which the Pledged Bonds (as defined in the Bond Pledge
Agreement) have been issued, (v) the Pledged Bonds (as defined in the Bond
Pledge Agreement), (vi) the Note Pledge Agreement dated as of November 3, 1995
(the "Note Pledge Agreement") by TNP in favor of the Collateral Agent, (vii) the
Guarantee and Pledge Agreement dated as of November 3, 1995 (the "Guarantee
Agreement") by TGC II in favor of the Collateral Agent, (viii) the Sixth TGC II
Modification and Extension Agreement dated as of November 3, 1995 (the "Sixth
TGC II Modification") among TGC II, TNP and the Secured Parties (as defined
therein ), (ix) the TNP Second Lien Mortgage Modification No. 3 dated as of
November 3, 1995 (the "TNP Mortgage Modification No. 3") by TNP for the benefit
of the Secured Parties (as defined therein), (x) the Assignment of TGC II
Mortgage Lien dated as of November 3, 1995 (the "Assignment of TGC II Lien") by
The Chase Manhattan Bank (National Association), as Agent and as Collateral
Agent (each as defined therein) in favor of TNP, (xi) the Collateral Transfer of
Notes, Rights and Interests dated as of November 3, 1995 (the "TNP Collateral
Transfer-Robertson County") between TNP and the Administrative Agent and the
Collateral Agent, (xii) the Assignment of TNP Second Mortgage Lien dated as of
November 3, 1995 (the "Assignment of TNP Lien") by The Chase Manhattan Bank
(National Association,), as Agent and as Collateral Agent (each as defined
therein) in favor of TNP. (xiii) the Collateral Transfer of Notes, Rights and
Interests dated as of November 3, 1995 (the "TNP Collateral Transfer-Secretary
of State") between TNP and the Administrative Agent and the Collateral Agent,
(xiv) The Amendment No. 1 to TNP Security Agreement dated as of November 3, 1995
(the "Amendment No. 1 to TNP Security Agreement"), and (xv) financing statements
naming TNP and TGC II, as applicable, as debtor, and TNP and the Collateral
Agent as applicable, as secured party, which are to be filed in the filing
offices of the Secretary of State of the State of Texas and the county clerk's
office for Robertson County, Texas (such filing offices collectively referred to
as the "Filing Offices" and such financing statements as the "Financing
Statements" (each of the foregoing agreements, instruments and documents
referred to in the foregoing clauses (i) through (xv) being collectively called
the "Opinion Documents").
Unless otherwise defined herein, terms defined in the TNP Credit
Agreement are used herein as therein defined. Except where the context otherwise
requires, words importing the singular include the plural and vice versa.
In rendering the opinions expressed below, we have examined (a) the TNP
Credit Agreement and each of the other Opinion Documents and (b) such corporate
records of TNP and TGC II, agreements, instruments and documents in the files of
TNP and TGC II in our office which affect or purport to affect the obligations
of TNP or TGC II under the Opinion Documents, (c) the Certificate of Comparison
for TNP dated October 19, 1995, issued by the State Corporation Commission of
the State of New Mexico which certifies that a Certificate of Authority was
issued to TNP on May 1, 1963 (collectively, the "Certificate of Comparison and
Authority"), and such other documents as we have deemed necessary as a basis for
the opinions expressed below. In our examination, we have assumed the
genuineness of all signatures and the authenticity of documents submitted to us
as originals and the conformity with authentic original documents of all
documents submitted to us as copies. When relevant facts were not independently
established, we have relied upon such statements of government officials
expressly referred to in this letter and upon representations made in or
pursuant to the Opinion Documents and certificates of appropriate
representatives of TNP or TGC II.
Despite any other express or implied statement in this letter, each of
the opinions expressed in this letter is subject to the following further
qualifications, conditions or assumptions, whether or not such opinions refer to
such qualifications, conditions or assumptions:
1. As to the good standing of TNP in New Mexico, we have relied solely
on the Certificate of Good Standing for TNP dated October 19, 1995, issued by
the State Corporation Commission of the State of New Mexico (the "Certificate of
Good Standing");
2. As to our opinion that the State of New Mexico does not require that
TGC II be authorized to transact business in New Mexico as a foreign
corporation, we have relied primarily on the Certificate of TNP and TGC II dated
November 3, 1995, signed by Michael D. Blanchard (the "TNP/TGC II Certificate"),
but to our knowledge after due inquiry, we are aware of no facts that conflict
with the factual assertions stated in the TNP/TGC II Certificate.
3. We have not made an independent inquiry into the law of any
jurisdiction other than the State of New Mexico and the political subdivisions
of the State of New Mexico and the United States of America, insofar as the
Federal law of the United States of America applies to the opinions expressed in
this letter. To the extent that matters discussed in this letter relate to or
are dependent on the application of Texas law to the transactions contemplated
by the Opinion Documents, to which TNP or TGC II is or is intended to be a party
or to the status, power and authority of TNP or TGC II, we have relied solely on
(i) the opinion letter from Haynes & Boone, addressed to you dated the date
hereof, (ii) the Certificates of Comparison and Authority, (iii) the Certificate
of Good Standing, and (iv) the TNP/TGC II Certificate. To the extent that
matters discussed in this opinion are dependent on the application of law of any
other jurisdiction, we state no opinion.
4. Each of the parties to the Opinion Documents other than TNP and TGC
II, and each of the entities having an interest, directly or indirectly, in any
of the parties to the Opinion Documents, is duly organized or formed, validly
existing and in good standing in its respective state or nation of organization
or incorporation.
5. Each of the parties to the Opinion Documents other than TNP and TGC
II, and each of the entities having an interest, directly or indirectly, in any
of such parties and executing the Opinion Documents on behalf of such parties,
has full power, authority and legal rights under the laws of its respective
state or nation of organization or incorporation to execute and deliver the
Opinion Documents to which each of such entities is a party, or on behalf of any
such party each of the entities executed the Opinion Documents.
6. Where the phrase "to our knowledge after due inquiry" appears, we
have reviewed the Opinion Documents to which TNP or TGC II is a party and such
other instruments as are specifically referred to in this letter, and we have
reviewed the files of TNP and TGC II in our offices, and we have made inquiries
of the appropriate officers of TNP and TGC II, but we have conducted no further
independent investigation and have made no independent inquiries of others.
We have also reviewed executed originals or copies, certified to our
satisfaction, of such other documents, corporate records of TNP and TGC II,
certificates of public officials and of corporate officers of TNP and TGC II,
agreements, instruments and documents in the files of TNP and TGC II in our
offices related to the matters handled by us for TNP and TGC II since 1978 and
referred to above, which affect or purport to affect the obligations of TNP and
TGC II under the Opinion Documents to which TNP or TGC II is a party, as we have
deemed necessary for the opinions expressed in this letter.
In stating these opinions, we have assumed the due authorization,
execution, issuance and delivery by each party thereto, the genuineness of all
signatures, and the authority of all persons signing the Opinion Documents to
which TNP or TGC II is a party on behalf of the parties thereto, the
authenticity of all documents submitted to us as originals and the conformity to
authentic original documents of all documents certified to us as copies.
Based on the foregoing, which includes such investigations as we have
deemed necessary, and subject to the further qualifications set forth below, we
are of the opinion that:
1. TNP is in good standing as a foreign corporation under the laws of
the State of New Mexico and has the necessary corporate power, corporate
authority and legal right in such State to make and perform the Opinion
Documents to which it is or is intended to be a party. No further filing,
recordation, publishing or other act is necessary in connection with the
existence of TNP or the conduct of the business of TNP in the State of New
Mexico.
2. TGC II does not presently conduct business in the State of New
Mexico such that the State of New Mexico would require that TGC II become
authorized to transact business in the State of New Mexico as a foreign
corporation.
3. The making and performance by TNP and TGC II of the TNP Credit
Agreement and the other Opinion Documents to which each is, or is intended to
be, a party do not and will not (i) violate any provision of law, rule or
regulation or, to our knowledge after due inquiry, any order, writ, judgment,
injunction, decree, determination or award presently in effect in the State of
New Mexico which have applicability to TNP or TGC II or the Project.
4. Except as set forth in the attached Schedule A, no approvals,
consents, orders, or other actions by any governmental or regulatory agencies of
the State of New Mexico are required to authorize the execution and delivery by
TNP or TGC II of the TNP Credit Agreement and the other Opinion Documents nor to
authorize the consummation by TNP or TGC II of the transactions contemplated by
the Opinion Documents. To our knowledge after due inquiry, no investigation,
action, suit or proceeding is pending or threatened against TNP or TGC II in the
State of New Mexico which seeks, or may reasonably be expected, to rescind,
terminate, modify or suspend any Government Approval.
5. To our knowledge after due inquiry, no action, suit or proceeding at
law or in equity or by or before any governmental or regulatory authority,
court, arbitral, tribunal or other body in the State of New Mexico is now
pending or threatened which could reasonably be expected to materially and
adversely affect the financial condition, assets, or operations of TNP or TGC II
or the ability of TNP or TGC II to perform its obligations under the Opinion
Documents to which TNP or TGC II is or is intended to be a party.
6. A New Mexico court, or a Federal court applying conflict of law
rules of the State of New Mexico, would give effect to the choice of law
provision contained in each Opinion Document to which TNP or TGC II is or is
intended to be a party stating that such Opinion Document (excluding matters
relating to title to property and security interests therein) is to be governed
by the laws of the State of New York in the case of an Opinion Document stated
to be governed by the laws of the State of New York, or in the case of an
Opinion Document stated to be governed by the laws of the State of Texas, by the
laws of the State of Texas. With respect to our conflict of law rules opinion,
we have assumed that the principal place of business and the site of the chief
executive offices of TNP and TGC II are in the State of Texas, that the
principal place of business and the site of the chief executive office of
Chemical Bank is in the State of New York, that the negotiations leading up to
the signing of the TNP Credit Agreement and the other Opinion Documents took
place in several states by telephone, telephonic transmissions and face-to-face
meetings both inside and outside the State of Texas and the State of New York,
but not in the State of New Mexico, that the last signature of a party to the
TNP Credit Agreement and the other Opinion Documents is the last act necessary
to form the agreements contemplated by the TNP Credit Agreement and the other
Opinion Documents, and that the TNP Credit Agreement and the other Opinion
Documents were delivered by TNP or TGC II in the State of New York.
These opinions are limited to the matters expressly stated in this
letter, and no opinion is inferred or may be implied beyond the matters
expressly stated in this letter. These opinions are being delivered to you, as
addressee at the direction of TNP with the intent that you, as addressee, rely
on these opinions. This letter does not constitute a guarantee of the TNP Credit
Agreement or the other Opinion Documents or any of the obligations or other
matters referred to or opined upon in this letter, and by rendering the opinions
as provided in this letter we are not guarantying or insuring the TNP Credit
Agreement or the other Opinion Documents or any of the obligations or other
matters referred to or opined upon in this letter. This opinion is solely for
the internal information and assistance of the Administrative Agent, the
Collateral Agent and the Lenders, as an interpretation of the law of the State
of New Mexico applicable to the transactions contemplated by the Opinion
Documents as of the date of this letter and may not be relied upon or quoted by
anyone else for any purpose whatsoever, nor may copies be delivered to any other
person or filed with any governmental agency or corporation, without our prior
written consent, except that copies of this letter may be furnished to Haynes &
Boone and to Cravath, Swaine & Moore, who may rely upon these opinions as if
this letter were separately addressed to them. We make no undertaking to
supplement this opinion if facts or circumstances come to our attention or
changes in the law occur after the date of this letter which could affect this
opinion.
Very truly yours,
RUBIN, KATZ, SALAZAR, ALLEY & ROUSE
A Professional Corporation
By
-------------------------------------
Donald M. Salazar
SCHEDULE A
At the time TNP and TGC II execute the TNP Credit Amendment and other Opinion
Documents (herein referred to as the Amended Class I and Class II transactions),
TNP must give written notification of such Amended Class I and Class II
transactions to the New Mexico Public Utility Commission ("NMPUC") within five
days after such Amended Class I and Class II transactions, in accordance with
the provisions of Section 62-6-19 NMSA 1978 of the New Mexico Public Utility Act
and NMPUC Rule 450.
After providing such written notification, Section 62-6-19 NMSA 1978 provides
that in order to assure reasonable and proper utility service at fair, just and
reasonable rates, the NMPUC may investigate the Amended Class I and Class II
transactions to determine the reasonableness of the cost and contract conditions
to TNP in such Amended Class I and Class II transactions and, if TNP fails to
carry its burden to produce evidence and information as is sufficient to
demonstrate that such Amended Class I and Class II transactions have resulted in
reasonable cost and contract conditions to TNP, the NMPUC may issue orders
consistent with the authority granted to the NMPUC under the New Mexico Public
Utility Act to assure the provision of such service at such rates.
EXHIBIT H
[FORM OF SIXTH TGC II MODIFICATION AND EXTENSION AGREEMENT]
SIXTH TGC II MODIFICATION AND EXTENSION AGREEMENT
ATTENTION ROBERTSON COUNTY, TEXAS RECORDER:
RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:
The Chase Manhattan Bank (National Association)
In care of DONALD H. SNELL
Snell, Banowsky & Trent
200 Crescent Court, Suite 1000
Dallas, Texas 75201
THE STATE OF TEXAS
COUNTY OF ROBERTSON
SIXTH TGC II MODIFICATION AND EXTENSION AGREEMENT
THIS SIXTH TGC II MODIFICATION AND EXTENSION AGREEMENT (this
"Agreement") is made as of November 3, 1995, among the banks (the "Banks") which
are parties to that certain Unit 2 First Amended and Restated Project Loan and
Credit Agreement dated as of January 8, 1992 (the "Existing Facility Credit
Agreement"), The Chase Manhattan Bank (National Association), as agent for the
Banks and the Replacement Note Holder (in such capacity, together with its
successors in such capacity, the "Agent") (the Banks, the Replacement Note
Holder and the Agent collectively herein called the "Secured Parties"),
TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation ("TNP"), and TEXAS
GENERATING COMPANY II, a Texas corporation ("TGC II"), Unless otherwise defined
herein, the capitalized terms used herein shall have the meanings given to those
terms in the Existing Facility Agreement defined in paragraph D of the recitals.
WITNESSETH:
Recitals:
A. Certain of the Banks, The Chase Manhattan Bank (National
Association), as agent, Texas PFC, Inc., a Delaware corporation ("TPFC") and TNP
entered into the Project Loan and Credit Agreement dated as of October 1, 1988
(as amended from time to time, the "Project Credit Agreement") pursuant to which
the Banks made Loans, prior to the Alternative Assumption Date, to TPFC and,
thereafter, to the Borrower in a maximum outstanding aggregate principal amount
of TWO HUNDRED EIGHTY EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
($288,500,000).
SIXTH TGC II MODIFICATION AND EXTENSION AGREEMENT
B. The Alternative Assumption Date occurred as of May 31, 1991. Certain of
the obligations of TPFC under the terms of the Project Credit Agreement were
assumed by the Borrower pursuant to that certain Assumption Agreement recorded
in Volume 566 at Page 252 of the Public Records of Robertson County, Texas. The
TGC II Mortgage Trust Estate was conveyed by TPFC to the Borrower pursuant to
that certain Conveyance and Bill of Sale dated effective as of May 31, 1991,
recorded in Volume 566 at Page 283 of the Public Records of Robertson County,
Texas.
C. The Obligations under the terms of the Project Credit Agreement were
secured, in part, by the terms, provisions, liens and security interests of that
certain TGC II Mortgage and Deed of Trust (with Security Agreement and UCC
Financing Statement for Fixture Filing), dated as of October 1, 1988 (the "TGC
II Mortgage") which was filed of record on October 4, 1988 in Volume 521 at Page
601 of the Public Records of Robertson County, Texas. The TGC II Mortgage covers
certain property as more particularly described therein.
D. The parties to the Project Credit Agreement entered into an agreement in
principle in connection with certain amendments thereto. To implement such
amendments, the parties entered into the Existing Facility Credit Agreement
which was amended by the First Amendment thereto dated as of September 21, 1993
(the "First Amendment") among such parties (the Existing Facility Credit
Agreement, as so amended and as further amended from time to time, the "Existing
Facility Agreement").
E. TGC II conveyed a 75.75/288.5 undivided interest in the TGC II Mortgage
Trust Estate to TNP pursuant to that certain Conveyance and Bill of Sale dated
as of September 29, 1993 and recorded in Volume 601 at Page 164 of the Public
Records of Robertson County, Texas. By the partial release of liens, recorded in
Volume 601 at page 207 of the Public Records of Robertson County, Texas, and
filed with the Secretary of State of the State of Texas, the Agent released from
the TGC II Mortgage the undivided interest which was purchased by TNP.
F. In connection with the execution of the Existing Facility Credit
Agreement and the First Amendment, TNP, TGC II and the Secured Parties executed
and delivered the (I) First TGC II Modification and Extension Agreement dated as
of January 24, 1992 and caused it to be recorded in Volume 573 at Page 484 of
the Public Records of Robertson County, Texas, (ii) the Second TGC II
Modification and Extension Agreement dated as of January 27, 1992 and caused it
to be recorded in Volume 573 at Page 511 of the Public Records of Robertson
County, Texas, (iii) the Third TGC II Modification and Extension Agreement dated
as of January 27, 1992 and caused it to be recorded in Volume 573 at Page 525 of
the Public Records of Robertson County, Texas, (iv) the Fourth TGC II
Modification and Extension Agreement dated as of September 29, 1993 and caused
it to be recorded in Volume 601 at Page 87 of the Public Records of Robertson
County, Texas and (v) the Fifth TGC II Modification and Extension Agreement
dated as of June 15, 1994 and caused it to be recorded in Volume 614 at Page 224
of the Public Records of Robertson County, Texas in each case as a memorial of
certain modifications of, amendments to or occurrence of events under the
Existing Facility Credit Agreement and the First Amendment and to confirm the
validity and priority of the liens, security interest and assignments of the TGC
II Mortgage securing the Obligations.
G. TNP is entering into a revolving credit facility agreement dated the
date hereof (the "TNP Credit Agreement") with certain Lenders (the "Lenders")
and Chemical Bank, as administrative agent and collateral agent for the Lenders.
It is a condition precedent to the execution of the TNP Credit Agreement that
(a) the Existing Facility Agreement be amended as described in the Assignment
Agreement (as defined in the TNP Credit Agreement) and (b) the parties hereto
execute and deliver to Chemical Bank this Agreement.
H. TNP, TGC II and the Secured Parties have modified the terms of the
Existing Facility Agreement as set forth in the Assignment Agreement and have
executed, delivered and caused this Agreement to be filed of record as a
memorial of the occurrence of such modifications and to confirm the validity and
priority of the liens, security interests and assignments of the TGC II Mortgage
securing the Obligations.
I. The Agent is authorized by Section 15.01 of the Existing Facility
Agreement to execute and deliver this Agreement.
Agreements
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, TNP, TGC II and the Agent, on behalf
of the Secured Parties, agree as follows:
1. Effectiveness of Certain Modifications to the Existing Facility
Agreement in the form of the Assignment Agreement. The terms of the Existing
Facility Agreement are amended and modified pursuant to the Assignment
Agreement. The amendments to the Existing Facility Agreement include (I)
rescheduling the amounts and dates of certain repayments, including the
extension of the Final Maturity Date on the Loans payable to the Banks to the
Maturity Date (as defined in the TNP Credit Agreement) and (ii) amending certain
covenants (collectively, the "Subject Provisions"). As of the date hereof, the
aggregate principal amount of Project Loans outstanding under the Existing
Facility Agreement is $147,750,000. In addition, there remains outstanding under
the Existing Facility Agreement $65,000,000 of Replacement Loans evidenced by
the Replacement Note.
2. Effect of Modification. The Obligations as described in the Existing
Facility Agreement arer secured by the liens, securtiy interests and assignments
of the TGC II Mortgage and the other Security Documents and the First Amendment
Security Documents. The validity and priority of the liens, security interests
and assignments of the TGC II Mortgage shall not be extinguished, impaired,
reduced, released, or adversely affected by the terms of this Agreement or the
execution of the Assignment Agreement.
3. Extension of Rights and Liens. TGC II hereby extends all rights, titles,
liens, security
interests, assignments, powers and privileges securing the Obligaitons as
described in the Existing Facility Agreement by virture of the TGC II Mortgage
until all such Obligations have been paid in full and agrees that the execution
of this Agreement shall in no manner impair the rights, titles liens, security
interests, assignments, powers and privileges existing by virtue of the TGC II
Mortgage as they are extended and modified hereby.
4. Joinder of Guarantor. TNP, as Guarantor under the TNP Guaranty, hereby
(I) consents to the execution, delivery and performance by TGC II of this
Agreement, the Assignment Agreement and any amendment to any Project Document,
Security Document or First Amendment Security Document to which TGC II is or is
intended to be a party and the consummation of the transactions contemplated
hereby and thereby, (ii) agrees that the TNP Guaranty shall remain in full force
and effect after giving effect to such transactions and (iii) acknowledges that
there are no claims or offsets against, or defenses or counterclaims to, the TNP
Guaranty.
5. Successors and Assigns. This Agreement shall be binding upon, and inure
to the benefit of, the successors and assigns of TNP, TGC II, and the Agent, for
the benefit of the Secured Parties; provided, however, nothing contained in this
Section is intended to authorize TNP or TGC II to assign any of the Obligaitons
or to sell any of the TGC II aMortgage Trust Estate except in accordance with
the Existing Facility Agreement and the Facility Purchase Agreement.
6. Counterparts. This Agreement 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 may execute this Agreement by signing
any such counterpart.
EXECUTED as of the date first hereinabove written.
SECURED PARTIES:
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS AGENT,
By:
----------------------------------
Title
TGC II:
TEXAS GENERATING COMPANY II, a Texas corporation,
By:
-----------------------------------
Title:
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:__________________
Title:
The undersigned is a party to this Agreement for the sole purpose of agreeing to
the provisions of Section 4 to this Agreement.
TNP:
TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation
BY: ___________________
Title:
STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the ____ day of November,
1995, by --------------------------- , ------------------------------- of THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Agent.
-----------------------------
NOTARY PUBLIC in and for
the State of NEW YORK
My Commission Expires:
- ------------------------------------------------------------------
Typed or Printed Name of Notary
STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the_____ day of November,
1995, by -----------------------------------------------------------------------
of THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Collateral Agent.
-----------------------------------------
NOTARY PUBLIC in and for
the State of NEW YORK
My Commission Expires:
----------------------------------------
Typed or Printed Name of Notary
STATE OF TEXAS
COUNTY OF ______________
This instrument was acknowledged before me on the _______ day of November,
1995, by ------------------------------------------------------------------- of
TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation, on behalf of said
corporation.
------------------------------------------
NOTARY PUBLIC in and for
the State of TEXAS
My Commission Expires:
- -------------------------------------------------------------------
Typed or Printed Name of Notary
STATE OF TEXAS
COUNTY OF ______________
This instrument was acknowledged before me on the _______ day of November,
1995, by ------------------------------------------------------------------- of
TEXAS GENERATING COMPANY II, a Texas corporation, on behalf of said corporation.
------------------------------------------
NOTARY PUBLIC in and for
the State of TEXAS
My Commission Expires:
- -------------------------------------------------------------------
Typed or Printed Name of Notary
EXHIBIT I
[Form of TNP Second Lien Mortgage Modification No. 3]
TNP SECOND LIEN MORTGAGE MODIFICATION NO. 3
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. 3
THIS SECOND LIEN MORTGAGE AND DEED OF TRUST (WITH SECURITY AGREEMENT)
MODIFICATION, EXTENSION AND AMENDMENT AGREEMENT NO. 3 ("TNP Second Lien Mortgage
Modification No. 3") dated as of November 3, 1995, 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: Chief Financial Officer, to DONALD H. SNELL, having an office at
Suite 1000, 200 Crescent Court, Dallas, Texas 75201, as mortgage trustee
("Mortgage Trustee"), for the benefit of the Secured Parties, as described in
the Credit Agreement (as hereinafter defined). Unless otherwise described or
defined herein, all terms used in this TNP Second Lien Mortgage Modification No.
3 shall have the same meanings herein as are assigned to such terms in that
certain Unit 2 Second Amended and Restated Project Loan and Credit Agreement
dated as of January 8, 1992 as amended, supplemented or otherwise modified from
time to time, the "Existing Facility 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 Holder (the "Agent").
W I T N E S S E T H:
Recitals
A. In connection with the Project Loan and Credit Agreement dated as of
October 1, 1988 (as amended from time to time, the "Project Credit Agreement")
among certain of the Banks, the Chase Manhattan Bank (National Association), as
agent, the Mortgagor, and Texas PFC, Inc., a Delaware corporation, 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 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 Bond 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 I 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
"TNP Second Lien Mortgage Modification No. 1"), to among other things, further
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. The parties to the Project Credit Agreement entered into an
agreement in principle in connection with certain amendments thereto. To
implement such amendments, the parties entered into the Unit 2 First Amended and
Restated Project Loan and Credit Agreement dated as of January 8, 1992 (the
"Unit 2 Credit Agreement") which was amended pursuant to the First Amendment
thereto dated as of September 21, 1993 (the "First Amendment") among such
parties (the Unit 2 Credit Agreement, as so amended, the "Existing Facility
Agreement").
H. 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).
I. On September 21, 1993, pursuant to the Facility Purchase Agreement
(as defined in the Unit 1 Credit Agreement), Mortgagor purchased an additional
undivided 65/345 interest in the Robertson County Property (including Unit 1
located thereon).
J. On September 21, 1993, 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).
K. Although all of the undivided interests described in Recitals G, H
and I were subject to the liens of the TNP Second Lien Mortgage by reason of
provision to that effect therein, the parties desired to reflect this fact of
record.
L. 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 No. 1 dated as of January 8,
1992 and caused it to be filed with the Secretary of State of the State of
Texas.
M. Borrower, Mortgagor and the Agent, on behalf of the Secured Parties,
agreed, as set forth in the First Amendment, to modify the terms of the Unit 2
Credit Agreement in order to permit Mortgagor and Borrower to secure Permitted
Collateralized Indebtedness (as defined in the First Amendment) 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. In connection
with the First Amendment, Borrower, Mortgagor and the Agent executed that
certain Second Lien Mortgage and Deed of Trust (with Security Agreement)
Modification, Extension and Amendment Agreement No. 2 (the "TNP Second Lien
Mortgage Modification No. 2"; together with the TNP Second Lien Mortgage
Modification No. 1, the "TNP Second Lien Mortgage Modifications") dated as of
September 21, 1993 to confirm the validity and priority of the liens, security
interests and assignments of the TNP Second Lien Mortgage.
N. Mortgagor is entering into a revolving credit facility agreement
dated the date hereof (the "TNP Credit Agreement") with certain lenders (the
"Lenders") and Chemical Bank, as administrative agent and collateral agent for
the Lenders. It is a condition precedent to the execution of the TNP Credit
Agreement that (a) the Existing Facility Agreement be amended as described in
the Assignment Agreement (as defined in the TNP Credit Agreement) and (b) the
parties hereto execute and deliver this TNP Second Lien Mortgage Modification
No. 3.
O. Borrower, Mortgagor and the Agent, or behalf of the Secured Parties
have modified the terms of the Existing Facility Agreement as set forth in the
Assignment Agreement and have executed, delivered and caused this TNP Second
Lien Mortgage Modification No. 3 to be filed of record as a memorial of the
occurrence of such modifications and to confirm the validity and priority of the
liens, security interests and assignments of the TNP Second Lien Mortgage.
P. The Agent is authorized by Section 15.01 of the Existing Facility
Agreement to execute and deliver this TNP Second Lien Mortgage Modification No.
3.
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
Modifications, is hereby modified and extended as follows:
1. Modification of Terms of the Existing Facility Agreement. The terms
of the Existing Facility Agreement are amended and modified pursuant to the
Assignment Agreement. The amendments to the Existing Facility Agreement include
(i) rescheduling the amounts and dates of certain repayments, including the
extension of the Final Maturity Date on the Loans payable to the Banks to the
Maturity Date (as defined in the TNP Credit Agreement) and (ii) amending certain
covenants (collectively, the "Subject Provisions"). As of the date hereof, the
aggregate principal amount of Project Loans outstanding under the Existing
Facility Agreement is $147,750,000. In addition, there remain outstanding under
the Existing Facility Agreement $65,000,000 of Replacement Loans evidenced by
the Replacement Note.
2. Effect of Modification. The Loans, whether evidenced by Project
Notes or the Replacement Note, and all other Obligations as described in the
Existing Facility Agreement are secured by the liens, security interests and
assignments of the TNP Second Lien Mortgage and the other Security Documents.
The validity and 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. 3 or the execution of the Assignment Agreement or the TNP
Credit Agreement.
3. 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 Existing Facility 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. 3 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.
4. No Merger. Neither the Borrower nor the Mortgagor intend that there be
and there shall not in any event be,
a merger of any of the liens, security interests and assignments of the TNP
Second Lien Mortgage with the title or
interest of the Mortgagor by virtue of the assignments contained in the
Assignment Agreement (as defined in the TNP
Credit Agreement) and the parties expressly provide that each such interest
in such liens, security interests and
assignments on the one hand and title to the TNP Second Lien Mortgage, as
modified, on the other, be and remain at all
times separate and distinct with all such validity and priority that existed
prior to the execution of the Assignment
Agreement and this TNP Second Lien Mortgage Modification No. 3.
5. Joinder of Guarantor. Contemporaneously with the execution and
delivery of this TNP Second Lien Mortgage Modification No. 3, 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. 3 and the Existing Facility Agreement, 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 Assignment
Agreement or the TNP Credit Agreement and this TNP Second Lien Mortgage
Modification No. 3, 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. 3 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 Existing Facility Agreement and the
Facility Purchase Agreement.
7. Counterparts. This TNP Second Lien Mortgage Modification No. 3 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. 3 by signing any
such counterpart.
EXECUTED as of the date first hereinabove written.
SECURED PARTIES:
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Agent
By:________________________________
Title:
MORTGAGOR:
TEXAS-NEW MEXICO POWER COMPANY, a Texas
corporation
By:________________________________
Title:
The undersigned hereby consents and agrees to the foregoing pursuant to Section
l(c) of the Intercreditor Agreement as defined in the Existing Facility
Agreement.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Collateral Agent
By:
Title:
STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the ____ day of November,
1995, by --------------------------- , ------------------------------- of THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Agent.
-----------------------------
NOTARY PUBLIC in and for
the State of NEW YORK
My Commission Expires:
- ------------------------------------------------------------------
Typed or Printed Name of Notary
STATE OF NEW YORK
COUNTY OF NEW YORK
This instrument was acknowledged before me on the_____ day of November,
1995, by -----------------------------------------------------------------------
of THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Collateral Agent.
-----------------------------------------
NOTARY PUBLIC in and for
the State of NEW YORK
My Commission Expires:
-----------------------------------------
Typed or Printed Name of Notary
STATE OF TEXAS
COUNTY OF ______________
This instrument was acknowledged before me on the _______ day of November,
1995, by ------------------------------------------------------------------- of
TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation, on behalf of said
corporation.
------------------------------------------
NOTARY PUBLIC in and for
the State of TEXAS
My Commission Expires:
- -------------------------------------------------------------------
Typed or Printed Name of Notary
EXHIBIT J
ASSIGNMENT AND AMENDMENT AGREEMENT
dated as of November 3, 1995, among
TEXAS-NEW MEXICO POWER COMPANY, a Texas
corporation ("TNP"); TEXAS GENERATING
COMPANY II, a Texas corporation ("TGC II");
the financial institutions listed in
Schedule I hereto in their respective
capacities as parties to the Existing
Facility Agreement referred to below (the
"Existing Facility Banks"), including THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
("Chase"), in its capacity as agent for the
Existing Facility Banks and the Replacement
Note Holder under the Existing Facility
Agreement defined below (in such capacity,
the "Original Agent"), including its
capacity as agent for the Existing Facility
Banks and the Replacement Note Holder under
the Existing Facility Security Documents (as
defined in the TNP Credit Agreement defined
below) (hereinafter in such capacity
referred to as the "Original Collateral
Agent"); the lenders (the "Lenders") party
to the TNP Credit Agreement, as defined
below; and CHEMICAL BANK ("Chemical"), as
administrative agent and collateral agent
for the Lenders (in such capacities, the
"Administrative Agent" and the Collateral
Agent", respectively).
Preliminary Statement
A. Certain of the parties hereto entered into the Project Loan
and Credit Agreement, dated as of October 1, 1988 (the "Unit 2 Original Credit
Agreement"), by and among TNP, Texas PFC, Inc. ("TPFC"), Algemene Bank Nederland
N.V., the Houston Agency, as issuing bank (the "Issuing Bank"), certain of the
Existing Facility Banks (the "Prior Unit 2 Banks") and the Original Agent. The
initial loans under the Unit 2 Original Credit Agreement were made on October 4,
1988. Subsequent to such date, certain of the parties hereto entered into the
following amendments to the Unit 2 Original Credit Agreement: Amendment No. 1
dated as of May 1, 1989; and Amendment No. 2 dated as of May 31, 1991 (the Unit
2 Original Credit Agreement, as amended by the foregoing amendments, being
called the "Unit 2 Prior Credit Agreement"). Capitalized terms used but not
otherwise defined in the introductory paragraph hereof or in this Preliminary
Statement shall have the meanings ascribed to such terms in Section 1.01 of the
Existing Facility Agreement referred to in paragraph (G) of this Preliminary
Statement.
B. Certain of the parties hereto entered into the Project Loan
and Credit Agreement, dated as of December 1, 1987 (the "Unit 1 Original Credit
Agreement"), by and among TNP, Project Funding Corporation ("PFC"), Westpac
Banking Corporation ("Westpac"), as issuing bank, the banks party thereto (the "
Prior Unit 1 Banks") and Chase, as agent. The initial loans under the Unit 1
Original Credit Agreement were made on December 3, 1987. Subsequent to such
date, certain of the parties to the Unit 1 Original Credit Agreement entered
into the following amendments thereto: Amendment No. 1 dated as of July 1, 1988;
Amendment No. 2 dated as of August 26, 1988; Amendment No. 3 dated as of October
1, 1988; Amendment No. 4 dated as of May 1, 1989; Amendment No. 5 dated as of
May 30, 1990; Amendment No. 6 dated as of October 22, 1990; and the letter
agreements dated September 20, 1991 and September 23, 1991 (the Unit 1 Original
Credit Agreement, as amended by the foregoing amendments, being called the "Unit
1 Prior Credit Agreement" and, together with the Unit 2 Prior Credit Agreement,
the "Prior Credit Agreements").
C. The Preliminary Acceptance Date occurred as of May 31,
1991, and on that date, pursuant to the terms of the TGC II Assumption
Agreement, TGC II assumed certain of the obligations and liabilities of TPFC
under the Unit 2 Prior Credit Agreement and the other Project Documents to which
TPFC was a party. Thus, the Alternative Assumption Date occurred as of May 31,
1991, and as a result of such assumption, TPFC transferred ownership of Unit 2
to TGC II.
D. On September 30, 1991, TNP canceled the commercial paper
program provided for in the Unit 2 Prior Credit Agreement and requested that the
Issuing Bank terminate the letter of credit supporting commercial paper notes
issued thereunder. As a result, the provisions of the Unit 2 Prior Credit
Agreement pertaining to the Issuing Bank and commercial paper notes have become
inoperative and the Issuing Bank no longer acts as issuing bank thereunder.
E. TNP, the Prior Unit 2 Banks and the Prior Unit 1 Banks
entered into an agreement in principle dated as of November 7, 1991 (as modified
on November 15, 1991) in connection with certain amendments to the Prior Credit
Agreements for, among other things, the extension of certain scheduled repayment
dates, the payment and prepayment by TGC II and the purchase by TNP of Project
Loans and increases in interest rates and fees thereunder. The Prior Unit 1
Banks entered into the Unit I First Amended and Restated Project Loan and Credit
Agreement dated as of January 8, 1992 (the "Unit 1 Credit Agreement") among TNP,
Texas Generating Company, as successor in interest to PFC, the banks party
thereto (the "Unit 1 Banks") and Chase, as agent, in order to effect the
agreement in principle. Simultaneously with the execution of the Unit 1 Credit
Agreement, the Prior Unit 2 Banks entered into the Unit 2 First Amended and
Restated Project Loan and Credit Agreement dated as of January 8, 1992 (the
"Unit 2 Credit Agreement") among TNP, TGC II, the Original Unit 2 Banks and the
Original Agent. The Unit 2 Credit Agreement became effective on January 24,
1992, upon the satisfaction of the conditions precedent thereto as set out in
Section 8.01 thereof.
F. On January 27, 1992, TNP and TGC II satisfied the
conditions in Section 8.02 of the Unit 2 Credit Agreement to cause the
occurrence of the Extension Date (as defined therein). TNP issued its Series T
Bonds and its First Secured Debentures Due January 15, 1999, and applied the net
proceeds thereof to, among other things, purchase pro rata from the Unit 1 Banks
$65,000,000 of the loans outstanding under the Unit 1 Credit Agreement and to
purchase pro rata from the Original Unit 2 Banks $65,000,000 of the loans
outstanding under the Unit 2 Credit Agreement. The loans acquired by TNP from
the Original Unit 2 Banks were, automatically upon their purchase by TNP,
converted into the First Replacement Loan, evidenced by the First Replacement
Note that is secured pursuant to the Security Documents pari passu with the
other Obligations under the Unit 2 Credit Agreement and the other Project
Documents. The First Secured Debentures are secured by TNP's pledge of the First
Replacement Note to the First Debenture Trustee (the "Replacement Note Holder")
under the First Secured Debenture Indenture. As a result of the pledge of the
First Replacement Note, the First Secured Debentures indirectly share pari passu
in the Original Unit 2 Banks' Collateral.
G. The parties to the Unit 2 Credit Agreement entered into
Amendment No. 1 thereto ("Amendment No. 1") dated as of September 21, 1993 (the
Unit 2 Credit Agreement, as amended by Amendment No. 1, being called the
"Existing Facility Agreement") in order (i) to provide, among other things, for
the extension of certain scheduled repayment dates and the prepayment by TGC II
of $75,750,000 of Existing Project Loans and (ii) to facilitate TNP's or TGC
II's indirectly securing certain additional debt securities with the Collateral.
H. By virtue of the First Debenture Trustee Consent, the Replacement Note
Holder consented to the extent required to the provisions of Amendment No. 1.
I. Simultaneously with the execution of Amendment No. 1, the
parties to the Unit 1 Credit Agreement entered into Amendment No. 1 thereto (as
amended, the "Amended Unit 1 Credit Agreement") in order to effect amendments to
the Unit 1 Credit Agreement providing, among other things, for the purchase by
TNP of additional loans thereunder.
J. The funds necessary for the payments and prepayments of
Existing Project Loans pursuant to Amendment No. 1 and the Amended Unit 1 Credit
Agreement were provided in part by the issuance by TNP of new first mortgage
bonds in an aggregate principal amount of $100,000,000 under the TNP Bond
Indenture and available cash.
K. TNP is entering into a revolving credit agreement (the "TNP
Credit Agreement") with certain lenders (the "Lenders") and Chemical Bank, as
Administrative Agent and Collateral Agent for the Lenders. It is a condition
precedent to the effectiveness of the TNP Credit Agreement that (a) TGC II
borrow and have outstanding under the Existing Facility Agreement Project Loans
in an aggregate principal amount equal to $147,750,000, (b) the Existing
Facility Agreement be amended as provided herein, (c) TGC II transfer to TNP, in
satisfaction of intercompany indebtedness owed by it to TNP, the proceeds of
borrowings made under the Existing Facility Agreement on the Effective Date
which, together with the borrowings to be made on the Effective Date pursuant to
the TNP Credit Agreement, will be sufficient to provide the necessary funds for
the purchase contemplated by the following clause (d), (d) TNP purchase from the
Existing Facility Banks all of the Project Loans under the Existing Facility
Agreement and (e) TNP pledge to Chemical Bank, as Collateral Agent, the Project
Loans and all of the promissory notes evidencing the same, and all rights and
interests of TNP under the Existing Facility Agreement and the other Existing
Facility Documents.
L. TNP has requested that the Existing Facility Banks, the
Original Agent and the Original Collateral Agent assign and transfer their
interests under the Existing Facility Agreement and certain related documents to
TNP, the Administrative Agent and the Collateral Agent, respectively. TNP
desires to purchase all Project Loans outstanding under the Existing Facility
Agreement and the Administrative Agent and the Collateral Agent desire to accept
the transfer of such interests. The Existing Facility Banks, the Original Agent
and the Original Collateral Agent desire to effect the foregoing assignments and
transfers and to be released from their obligations under the Existing Facility
Agreement.
M. The parties hereto desire that the guarantee of, and
security interests securing, the obligations under the Existing Facility
Agreement and such related documents continue to guarantee and secure
obligations under the Existing Facility Agreement after the amendments described
in Section 1.02 and the assignments described in Section 1.03. The parties
hereto desire to effect the transactions provided for herein, all upon the terms
and subject to the conditions set forth herein.
Accordingly, the parties hereto hereby agree as follows:
I. ASSIGNMENT AND AMENDMENT
SECTION 1.01. Effective Date; Funding Memorandum. (a) The
Effective Date (as defined in Article III) shall be specified by TNP as provided
in paragraph (b) below and shall be a Business Day as of which all the
conditions specified in Article III shall have been (or shall be) satisfied.
(b) TNP shall provide written notice proposing a date as the
Effective Date at least three Business Days prior thereto to the Administrative
Agent, which shall send copies of such notice to the Lenders, and to the
Original Agent, which shall send copies of such notice to the Existing Facility
Banks. At least three Business Days prior to the Effective Date, TNP shall
provide to the Original Agent and the Administrative Agent a funding memorandum
(the "Funding Memorandum") setting forth (x) with respect to the Existing
Facility Agreement, the amount of all outstanding Project Loans thereunder as of
the Effective Date, and (y) the respective amounts to be paid to and received by
the Existing Facility Banks on the Effective Date pursuant to Sections 1.05(c)
and (d).
SECTION 1.02. Amendments to Existing Facility Agreement.
Subject to the conditions set forth in Article III, on the Effective Date,
immediately prior to the consummation of the assignments referred to in Section
1.03, the Existing Facility Agreement shall be amended as follows:
(a) by adding the following definitions to Section 1.01 in the appropriate
alphabetical order:
"Assignment and Amendment Agreement" shall mean the
Assignment and Amendment Agreement substantially in the form
of Exhibit J to the TNP Credit Agreement.
"TNP Credit Agreement" shall mean the Revolving
Credit Facility Agreement dated as of November 3, 1995 among
TNP, the lenders party thereto and Chemical Bank, as
Administrative Agent for the lenders, as amended, modified or
otherwise supplemented from time to time.
(b) by deleting from Section 1.01 the definition for the term "Final
Maturity Date" and replacing it with the following:
"Final Maturity Date" shall mean November 3, 2000.
(c) by deleting from Section 1.01 the definition of "Available Amount".
(d) by deleting subsection 4.02(b)(iii) in its entirety;
(e) by amending subsection 4.05(b)(ii) by adding the following sentence at
the end thereof:
"Notwithstanding the foregoing, the transactions
contemplated by the Assignment and Amendment Agreement and the
TNP Credit Agreement, including the borrowings under this
Agreement, the assignment of the Project Notes to TNP and the
pledge thereof to the collateral agent for the benefit of the
Lenders under the TNP Credit Agreement, shall be expressly
permitted under this subsection 4.05(b)(ii), and the
obligations under the TNP Credit Agreement may be indirectly
secured by the Collateral as contemplated therein, and the
requirements of paragraphs (c) through (i) of this Section
4.05 shall not apply to such transactions."
(f) by deleting subsections 5.02(b)(i)(A), (B) and (C), subsections
5.02(b)(iv) and (vi), Section 9.33 and Section 9.34 in their entirety;
(g) by amending clause (a) of Section 7.05, to insert the words "or
purchase by TNP" after the words "or Conversion" and by amending subclause (i)
of Section 7.05 by inserting the words "(including upon any such purchase)"
after the words "the amount so paid";
(h) by deleting from Section 10.21(b) the phrase ", and for the period from
January 1, 1993 until the provisions of Section 9.33 hereof have been
terminated, Available Amount (including the components thereof),";
(i) by amending Section 10.08 by (i) adding a new clause (e) which shall
read in its entirety as follows:
"(e) any guaranty of the obligations of TNP under the TNP Credit Agreement;
provided that the obligations of TGC II under any such guaranty in respect of
the principal amount of (i) borrowings by TNP and (ii) payments on the Project
Loans shall in no event exceed $150,000,000 in the aggregate."
and (ii) relettering clause (e) as clause (f); and
(j) by amending Section 10.11 by adding the following clause at the end
thereof:
"; provided, that, notwithstanding the foregoing, the
transactions contemplated by the Assignment and Amendment
Agreement and the TNP Credit Agreement shall be expressly
permitted hereunder."
Other than as set forth in Section 1.03, the interests, rights and obligations
of TNP under the Project Documents shall be limited to those set forth in the
Existing Facility Agreement, as amended hereby, and the Project Documents, the
Security Documents and the First Amendment Documents, each as defined in the
Existing Facility Agreement (collectively, the "Existing Facility Documents"),
as amended (if applicable), and all the Existing Facility Documents shall
continue in their original or amended form, as applicable, in full force and
effect for the benefit of TNP and the Replacement Note Holder and all references
in any thereof to the Existing Facility Agreement or to any Existing Facility
Document shall be deemed references to the Existing Facility Agreement or to
such Existing Facility Document, as amended hereby (if applicable), and as
hereafter amended, supplemented or otherwise modified from time to time.
SECTION 1.03. Assignments. (a) Subject to the conditions set
forth in Article III and the payment by TNP to the Original Agent of all amounts
required to be paid under Section 1.05(c), effective as of the Effective Date,
(i) each of the Existing Facility Banks hereby assigns and transfers to TNP,
without recourse, representation or warranty (other than as expressly set forth
in Article II), all its Project Loans and all its related rights and interests
under (x) the Existing Facility Agreement and (y) the Existing Facility
Documents, and (ii) The Chase Manhattan Bank (National Association), in its
capacities as the Original Agent and the Original Collateral Agent,
respectively, hereby resigns in favor of, and assigns all its rights under the
Existing Facility Agreement and the Existing Facility Documents, without
recourse or warranty, to Chemical Bank, and Chemical Bank hereby accepts such
assignment and agrees to serve as Agent and Collateral Agent under the Existing
Facility Agreement and the Existing Facility Security Documents. The purchase
price to be paid by TNP for the Project Loans and all such rights and interests
to be purchased by it shall be the amount payable under Section 1.05(c).
Notwithstanding the foregoing, (i) the Existing Facility Banks shall retain the
exclusive right under the Existing Facility Agreement to receive and retain the
payments referred to in Section 1.05(c) and (ii) the Existing Facility Banks,
the Original Agent and the Original Collateral Agent shall retain on a
non-exclusive basis all their rights under the Existing Facility Agreement and
the Existing Facility Documents (which rights shall also be vested in TNP, the
Administrative Agent and the Collateral Agent) in respect of indemnification and
expense reimbursement obligations for any and all losses, damages, expenses or
similar amounts which they may have sustained or incurred or may hereafter
sustain or incur in connection with the transactions contemplated by the
Existing Facility Agreement and the Existing Facility Documents, including under
Sections 7, 13 and 14 of the Existing Facility Agreement, which shall survive
the amendment of the Existing Facility Agreement. Solely for purposes of Section
7.05 of the Existing Facility Agreement, the assignments and purchases of the
Project Loans on the Effective Date shall be treated as if they were prepayments
of such Loans. In implementation of the foregoing, the Existing Facility Banks
agree to deliver to the Original Agent, who will deliver to TNP on the Effective
Date, all promissory notes issued to the Existing Facility Banks under the
Existing Facility Agreement (the "Original Notes") duly endorsed to TNP and
delivered to the Collateral Agent, on behalf of the Lenders, together with duly
executed instruments of transfer satisfactory to TNP and the Lenders and the
Collateral Agent.
(b) Subject only to the effectiveness of the assignment to TNP
of the Project Loans and the related rights and interests of the Existing
Facility Banks pursuant to paragraph (a) above, TNP hereby assumes and agrees to
perform and be bound by all the provisions of and obligations of the Existing
Facility Banks under the Existing Facility Agreement and the Existing Facility
Documents. Without limiting the foregoing, TNP expressly agrees with Chase, in
its capacity as Collateral Agent under the Intercreditor Agreement, for the
benefit of the Project Creditors (as defined in the Intercreditor Agreement), to
be bound as a Project Creditor by and comply with the provisions of the
Intercreditor Agreement.
(c) As a result of the assignments and agreements provided for
in paragraph (a) above, Chemical, as Agent and Collateral Agent under the
Existing Facility Agreement and the Security Documents, will be the nominal
agent of (i) TNP in its capacity as a lender and holder of Project Loans under
the Existing Facility Agreement and (ii) the Replacement Note Holder in its
capacity as holder of the First Replacement Note under the Existing Facility
Agreement. TNP acknowledges that it is purchasing the Project Loans solely in
order to pledge the same to Chemical as Collateral Agent under the Note Pledge
Agreement (as defined in and pursuant to the TNP Credit Agreement) and for the
benefit of Chemical and the Lenders under such Agreement, and agrees that
Chemical shall have no fiduciary or other obligations to TNP in its capacity as
Agent or Collateral Agent under the Existing Facility Agreement or the Security
Documents, other than any obligations expressly set forth in the Note Pledge
Agreement (as such term is defined in the TNP Credit Agreement). Without
limiting the foregoing, TNP agrees that Chemical may take or omit to take, in
its capacity as Agent and Collateral Agent, any such actions as it shall be
requested to take or omit to take by the Lenders or any of them, or as it may
deem to be in the best interests of the Lenders (including Chemical) or in its
own best interests as Agent and Collateral Agent, regardless of the effects or
potential effects of such actions or omissions upon the rights or interests of
TNP, and that Chemical shall have no liability to TNP for the consequences of
any such actions or omissions. Nothing in this paragraph shall in any way affect
the obligations of Chemical to the Replacement Note Holder in its capacity as
Agent or Collateral Agent under the Existing Facility Agreement or the Existing
Facility Security Documents.
(d) In connection with the assignments provided for in
paragraph (a) above, Chase and Chemical hereby waive the assignment fees that
would otherwise be payable under Section 16.01 of the Existing Facility
Agreement.
SECTION 1.04 Consents and Releases. (a) TNP and TGC II each
hereby consent and agree to the transactions to be effected pursuant to Sections
1.02 and 1.03 and hereby release, effective on the Effective Date, the Existing
Facility Banks from all their obligations under the Existing Facility Agreement
and the Existing Facility Documents. From and after the Effective Date, the
Existing Facility Banks shall have no further rights to or interest in any of
the Collateral. TNP and TGC II each acknowledge that the Lenders are not
assuming the obligations of the Existing Facility Banks under the Existing
Facility Agreement and agree that the obligations of the Lenders shall be
limited to those set forth in the TNP Credit Agreement.
(b) Each of the Existing Facility Banks and the Replacement
Note Holder hereby authorizes and instructs Chase in its capacities as Original
Agent and Original Collateral Agent to execute and deliver (i) this Agreement,
(ii) the Sixth TGC II Modification and Extension Agreement made as of November
3, 1995 among the Original Agent, the Original Collateral Agent, TNP and TGC II,
(iii) the TNP Second Lien Mortgage Modification No. 3 dated as of November 3,
1995 between TNP, the Original Agent and the Original Collateral Agent, (iv) the
Assignment of TGC II Mortgage Lien made as of November 3, 1995 by the Original
Agent and the Original Collateral Agent to and in favor of Chemical Bank, as
Agent under the Existing Facility Documents, (v) the Assignment of TNP Second
Mortgage Lien made as of November 3, 1995 by the Original Agent and the Original
Collateral Agent to and in favor of Chemical Bank, as Agent under the Existing
Facility Documents and (vi) such other instruments, documents, certificates and
agreements, and to take such other action, as may be reasonably necessary or
proper to accomplish the assignments contemplated by this Agreement.
SECTION 1.05. Payments. Subject to the conditions set forth in Article III
hereof, on the Effective --------- Date:
(a) TGC II shall transfer to TNP proceeds of borrowings under
the Existing Facility Agreement which, together with the proceeds of the
borrowing provided for in (b) below, will provide the necessary funds for the
payments required to be made by TNP under (c) below;
(b) TNP shall borrow $43,000,000.00 under the TNP Credit
Agreement;
(c) TNP shall pay to the Original Agent, in the manner
provided in the Funding Memorandum, an amount equal to the sum of (i)
the aggregate principal amount of all Project Loans outstanding under
the Existing Facility Agreement (whether or not then due), (ii) all
accrued and unpaid interest on all Project Loans outstanding under the
Existing Facility Agreement (whether or not then due) and (iii) without
limitation of Section 1.03, all fees and other amounts, including any
break funding costs arising as a result of the payments provided for
herein (to the extent provided in the Funding Memorandum), accrued
(whether or not then due) under the Existing Facility Agreement or any
Existing Facility Document and unpaid;
(d) the Original Agent shall forthwith distribute the amounts
received by it pursuant to paragraph (c) above to the Existing Facility Banks in
the manner required under the Existing Facility Agreement; and
(e) TNP shall pay to the Administrative Agent, in the manner
provided in Section 2.16 of the TNP Credit Agreement for distribution
to the Lenders in accordance with the TNP Credit Agreement, all fees
and other amounts payable to the Lenders pursuant to Article III hereof
on the Effective Date.
The parties acknowledge that certain break funding costs under
the Existing Facility Agreement may not have been notified to TGC II, and TGC II
agrees to pay such costs in accordance with the Existing Facility Agreement.
II. REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of Existing
Facility Banks. (a) Each of the Existing Facility Banks represents and warrants,
as of the Effective Date, to TNP, the Lenders, the Administrative Agent and the
Collateral Agent that it is the beneficial and record owner of the Project Loans
to be assigned by it as contemplated by Section 1.03, that it has not sold,
transferred or created any participating interest in or lien upon such Project
Loans (except participating interests which will terminate upon the assignment
provided for in Section 1.03) and that the Notes being delivered by it pursuant
to Article III are the only Notes evidencing such Project Loans.
(b) Each of the Existing Facility Banks represents and
warrants to TNP, TGC II, the Lenders and the Administrative Agent that it has
the power and authority to execute, deliver and perform its obligations under
this Agreement and that this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforceability of creditors'
rights generally and by general principles of equity.
SECTION 2.02. Representations and Warranties of the
Administrative Agent and the Collateral Agent and Lenders. Each of the
Administrative Agent, the Collateral Agent and the Lenders represents and
warrants to TNP, TGC II and the Existing Facility Banks that it has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and that this Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforceability
of creditors' rights generally and by general principles of equity.
SECTION 2.03. Representations and Warranties of TNP and TGC
II. Each of TNP and TGC II represents and warrants to the Existing Facility
Banks, the Lenders, the Administrative Agent and the Collateral Agent that (a)
it has the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and that this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforceability of creditors' rights generally and by general principles of
equity, and (b) this Agreement and the consummation of the transactions
contemplated hereby will not (i) violate (A) any provision of law, statute, rule
or regulation, or of the certificate of incorporation or by-laws of such party,
(B) any order of any governmental authority or (C) any provision of any
indenture or other material agreement or other instrument to which such party is
bound, (ii) result in a breach of or constitute (alone or with notice or lapse
of time or both) a default under any such indenture, agreement or instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to
any property or assets of such party other than as contemplated hereby, by the
TNP Credit Agreement or by the Existing Facility Documents. No action, consent
or approval of, registration or filing with or any other action by, any
governmental authority or the Replacement Note Holder, other than those that
have previously been obtained and disclosed in writing to the Administrative
Agent, is or will be required in connection with this Agreement and the
transactions contemplated hereby.
III. CONDITIONS
The transactions contemplated by Sections 1.02, 1.03, 1.04 and
1.05 shall become effective only upon the satisfaction, on a single date (the
"Effective Date") on or prior to November 3, 1995, of the following conditions:
(a) the Administrative Agent shall have received one or more counterparts
of this Agreement executed by each of the parties hereto;
(b) the Existing Facility Banks shall have delivered the
Original Notes, endorsed in favor of TNP, to the Original Agent, and
such Original Notes shall be available for delivery as provided in
Section 1.03; and
(c) the TNP Credit Agreement shall have been executed and
delivered by the parties thereto and shall have become effective, and
each condition precedent set forth in Section 4.1 or 4.2 of the TNP
Credit Agreement shall have been satisfied.
IV. MISCELLANEOUS
SECTION 4.01. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
SECTION 4.02. Effect of Modification. The Obligations (as
defined in the Existing Facility Agreement) are secured by the liens, security
interests and assignments of the TGC II Mortgage, the TNP Second Lien Mortgage
and the other Security Documents and guaranteed by TNP under the TNP Guaranty.
The validity and priority of the liens, security interests and assignments of
the TGC II Mortgage, the TNP Second Lien Mortgage and the other Security
Documents, and the validity and enforceability of the TNP Guaranty, shall not be
extinguished, impaired, reduced, released, or adversely affected by the terms of
this Agreement or the TNP Credit Agreement.
SECTION 4.03. Extension of Rights and Liens. Each of TGC II
and TNP hereby extends all rights, titles, liens, security interests,
assignments, powers and privileges securing the Obligations by virtue of the TGC
II Mortgage, the TNP Second Lien Mortgage and the other Security Documents, as
the case may be, until all of such Obligations have been paid in full and agrees
that the execution of this Agreement or the TNP Credit Agreement shall in no
manner impair the rights, titles, liens, security interests, assignments, powers
and privileges existing by virtue of the TGC II Mortgage, the TNP Second Lien
Mortgage or the other Security Documents, as they are extended and modified
hereby or by agreements and instruments executed pursuant to the terms hereof.
SECTION 4.04. Joinder of Guarantor; No Merger. (a) TNP, as
guarantor under the TNP Guaranty, hereby (i) consents to the execution, delivery
and performance by TGC II of this Agreement and any amendment to any Project
Document or Security Document to which TGC II is or is intended to be a party
and the consummation of the transactions contemplated hereby and thereby, (ii)
agrees that the TNP Guaranty shall remain in full force and effect after giving
effect to such transactions and (iii) acknowledges that there are no claims or
offsets against, or defenses or counterclaims to, the TNP Guaranty.
(b) Neither TNP nor any of the other parties to this Agreement intend that there
be and there shall not in any event be, a merger of any of the rights or
interests of the Secured Parties under the terms of the TNP Guaranty with the
rights or interests of TNP in and to the TNP Guaranty by virtue of the
assignments and purchases contemplated hereby, and the parties expressly provide
that such rights and interests of the Secured Parties on the one hand, and the
rights and interests of TNP on the other, be and remain at all times separate
and distinct with all such rights and obligations continuing to guarantee the
Obligations.
SECTION 4.05. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 4.06. Amendment. This Agreement may be waived, modified or amended
only by a written agreement executed by TNP, TGC II, the Original Agent and the
Administrative Agent.
SECTION 4.07. Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same agreement. Delivery
of an executed counterpart of a signature page of this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 4.08. Expenses; Indemnity. (a) Each of TGC II and TNP
agrees to pay all reasonable out-of-pocket expenses incurred by (i) the
Administrative Agent in connection with the preparation of this Agreement, the
TNP Credit Agreement and the other documents contemplated hereby and thereby
(whether or not the transactions hereby or thereby contemplated shall be
consummated), (ii) any Existing Facility Bank, the Original Agent, any Lender or
the Administrative Agent in connection with any action which may be instituted
by any Person against any of them in respect of the foregoing, or as a result of
any transaction arising from the foregoing and (iii) the Administrative Agent in
connection with the preparation of any amendments to or waivers or consents of
or under this Agreement or the TNP Credit Agreement or other documents
contemplated hereby or thereby including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent. TNP agrees that
it shall indemnify each Existing Facility Bank, the Original Agent, each Lender
and the Administrative Agent from and hold such parties harmless against any
documentary taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery of this Agreement.
(b) Each of TGC II and TNP agrees to indemnify each Existing
Facility Bank, the Original Agent, each Lender and the Administrative Agent and
its directors, officers, employees and agents (each such Person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including, without
limitation, reasonable counsel fees and expenses, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the preparation, execution and delivery of this Agreement, the TNP Credit
Agreement and the other documents contemplated hereby or thereby, the
performance by the parties hereto or thereto of their respective obligations
hereunder or thereunder and the consummation of the transactions contemplated
hereby or thereby or (ii) any funding or other costs incurred by the Existing
Facility Banks or the Lenders in the event the Effective Date does not occur on
the date proposed by TNP; provided, however, that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 4.08 shall survive and
remain operative and in full force and effect regardless of whether or not the
transactions contemplated hereby are consummated or such consummation is
delayed, and regardless of the amendment of the Existing Facility Agreement, the
purchase of the Project Loans, the termination of this Agreement or the TNP
Credit Agreement, the invalidity or unenforceability of any term or provision of
this Agreement, the Existing Facility Agreement or any agreement referred to
therein, the TNP Credit Agreement or any agreement referred to therein or the
Original Notes, or any investigation made by or on behalf of any Indemnitee. All
amounts due under this Section 4.08 shall be payable on written demand therefor
accompanied by evidence in reasonable detail sufficient to identify the nature
and amount of the expense so incurred.
SECTION 4.09. No Novation. Neither this Agreement nor the
execution, delivery or effectiveness of the TNP Credit Agreement shall
extinguish the obligations for the payment of money outstanding under the
Existing Facility Agreement or discharge or release the Lien or priority of any
Security Document or any other security therefor. Nothing herein contained shall
be construed as a substitution or novation of the obligations outstanding under
the Existing Facility Agreement or instruments securing the same, which shall
remain in full force and effect, except to the extent modified hereby or by
instruments executed pursuant hereto. Nothing in this Agreement, the TNP Credit
Agreement, or any other document contemplated hereby or thereby shall be
construed as a release or other discharge of any Borrower or any Guarantor or
any Pledgor or any Assignor or any Mortgagor under any Existing Facility
Document from any of its obligations and liabilities as a "Borrower",
"Guarantor" or "Pledgor" under the Existing Facility Agreement or the Existing
Facility Documents. Each of the Existing Facility Agreement and the Existing
Facility Documents shall remain in full force and effect except to any extent
modified hereby or in connection herewith. Notwithstanding any provision of this
Agreement or the TNP Credit Agreement, the provisions of Sections 13 and 14 of
the Existing Facility Agreement, including all defined terms used therein, will
continue to be effective as to all matters arising out of or in any way related
to facts or events existing or occurring prior to the Effective Date.
SECTION 4.10. Certain Agreements. Each of TNP and TGC II
agrees that (a) for all purposes of the TNP Credit Agreement, the transactions
contemplated by this Agreement shall be deemed to constitute "Transactions" as
defined in the TNP Credit Agreement. It is understood and agreed by all parties
hereto that in the event that the assignments provided for in Section 1.03 do
not occur for any reason, then the amendments to the Existing Facility Agreement
provided for herein shall be null and void. TNP and TGC II agree that any
obligations of TGC II on account of interest on the Pledged Notes (as defined in
the TNP Credit Agreement) shall be cancelled until the occurrence of an Event of
Default (as defined in the TNP Credit Agreement) at which time and at all times
thereafter such Pledged Notes shall bear interest at the rates, and payable in
the manner, provided in the Existing Facility Agreement with payments to be
delivered to and held by the Collateral Agent for application in accordance with
the provisions of the Note Pledge Agreement (as defined in the TNP Credit
Agreement).
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first above written.
TEXAS-NEW MEXICO POWER COMPANY,
by /s/ Patrick L. Bridges
Name: Patrick L. Bridges
Title: Treasuer
TEXAS GENERATING COMPANY II,
by /s/ M. S. Cheema
Name: M. S. Cheema
Title: Vice President
THE CHASE MANHATTAN BANK, N.A., individually as an Existing Facility Bank
and as Original Agent and Original Collateral Agent,
by /s/ Thomas L. Casey
Name: Thomas L. Casey
Title: Vice President
CHEMICAL BANK, individually as a Lender and as Administrative Agent
and Collateral Agent,
by /s/ Jane Ritchie
Name: Jane Ritchie
Title: Vice President
Existing Facility Banks
ABN AMRO BANK N.V., HOUSTON AGENCY,
by /s/ Michael N. Oakes
Name: Michael N. Oakes
Title: Vice President
by /s/ M. A. Tribolet
Name: M. A. Tribolet
Title: Group Vice President
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
by
/s/ Robert Eaton
Name: Robert Eaton
Title: Vice President
THE BANK OF NEW YORK,
by
/s/ Ian K. Stewart
Name: Ian K. Stewart
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
by
/s/ A. S. Norsworthy
Name: A. S. Norsworthy
Title: Assistant Agent
CREDIT SUISSE,
by
/s/ David Worthington
Name: David Worthington
Title: Member of Senior Management
by
/s/ Marilou Palenzuela
Name: Marilou Palenzuela
Title: Member of Senior Management
FLEET BANK OF MASSACHUSETTS, N.A.,
by
/s/ Brian O'Connor
Name: Brian O'Connor
Title: Vice President
NATIONSBANK OF TEXAS, N.A.,
by
/s/ Bryan L. Diers
Name: Bryan L. Diers
Title: Senior Vice President
PROSPECT STREET SENIOR PORTFOLIO, L.P.,
by PROSPECT STREET SENIOR LOAN CORP., Managing General Partner,
by
/s/ Dana E. Erikson
Name: Dana E. Erikson
Title: Vice President
UNION BANK,
by
/s/ John M. Edmonston
Name: John M. Edmonston
Title: Vice President
WESTPAC BANKING CORPORATION,
by
/s/ George Alexander
Name: George Alexander
Title: Vice President
BANK AUSTRIA AKTIENGESELLSCHAFT
(Succesor in Interest to Z - LNDERBANK
AUSTRIA A.G.),
by
/s/ Mark Nolan /s/ J. Anthony Seay
Name: Mark Nolan Anthony Seay
Title: Assistant Vice President Vice President
Voting Participants under Chase Credit Agreement
CHRISTIANA BANK,
by
/s/ Justin F. McCarty, III
Name: Justin F. McCarty, III
Title: Vice President
by
/s/ Hans Chr. Kjelsrud
Name: Hans Chr. Kjelsrud
Title: Vice President
THE NIPPON CREDIT BANK, LTD.,
by
/s/ James J. Pasquale
Name: James J. Pasquale
Title: Senior Manager
Lenders under the TNP Credit Agreement
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Rita M. Cahill
Name: Rita M. Cahill
Title: Vice President
THE BANK OF MONTREAL,
by
/s/ Julia B. Buthman
Name: Julia B. Buthman
itle: Director
THE BANK OF NEW YORK,
by
/s/ Ian K. Stewart
Name: Ian K. Stewart
Title: Senior Vice President
CIBC, INC.,
by
/s/ Robert S. Lyle
Name: Robert S. Lyle
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by
/s/ Robert Ivosevich
Name: Robert Ivosevich
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.,
by
/s/ Bryan L. Diers
Name: Bryan L. Diers
Title: Senior Vice President
THE NIPPON CREDIT BANK, LTD.,
by
/s/ James J. Pasquale
Name: James J. Pasquale
Title: Senior Manager
UNION BANK,
by
/s/ John M. Edmonston
Name: John M. Edmonston
Title: Vice President
EXHIBIT K
[FORM OF ASSIGNMENT OF TGC II MORTGAGE LIEN]
ATTENTION: ROBERTSON COUNTY, TEXAS RECORDER
RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO:
Chemical Bank
In care of Donald H. Snell, Esq.
Snell, Banowsky & Trent
200 Crescent Court, Suite 1000
Dallas, Texas 75201
ASSIGNMENT OF TGC II MORTGAGE LIEN
THE STATE OF TEXAS, )
) ss.:
COUNTY OF ROBERTSON,)
THIS ASSIGNMENT OF TGC II MORTGAGE LIEN ("Assignment") is made
as of November 3, 1995, by THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) as
Agent for the Banks and the Replacement Note Holder (in such capacity, on behalf
of the Secured Parties, together with its successors in such capacity, herein
called the "Assignor") to, and in favor of CHEMICAL BANK, as agent for Texas-New
Mexico Power Company ("TNP") under the Existing Facility Agreement (as defined
in Paragraph A of the Recitals) (pursuant to the Assignment Agreement described
in paragraph E of the Recitals), and as agent for the Replacement Note Holder
under the Existing Facility Agreement (in such capacities, the "Assignee").
Unless otherwise defined herein, the capitalized terms used herein shall have
the meanings given to those terms in the TNP Credit Agreement, defined in
Paragraph E of the Recitals, or the Existing Facility Agreement, defined in
Paragraph A of the Recitals, as applicable.
WITNESSETH
A. Certain of the Banks, the Chase Manhattan Bank (National
Association) as Agent, TEXAS PFC, INC., a Delaware corporation ("TPFC") and TNP
entered into the Project Loan and Credit Agreement dated as of October 1, 1988
(as amended and restated from time to time, the "Existing Facility Agreement")
pursuant to which the Banks made Loans, prior to the Alternative Assumption Date
to TPFC, and thereafter, to TEXAS GENERATING COMPANY II, a Texas corporation
("TGC II"), in a maximum outstanding aggregate principal amount of TWO HUNDRED
EIGHTY-EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($288,500,000.00).
B. The Obligations under the terms of the Existing Facility
Agreement were secured, in part, by the terms, provisions, liens, security
interests and assignments of that certain TGC II Mortgage and Deed of Trust
(with Security Agreement and UCC Financing Statement for Fixture Filing) dated
as of October 1, 1988 ("TGC II Mortgage"), which was filed of record on October
4, 1988 in Volume 521 at Page 601 of the Public Records of Robertson County,
Texas.
C. The Alternative Assumption Date occurred as of May 31,
1991. Certain of the obligations of TPFC under the terms of the Existing
Facility Agreement were assumed by TGC II pursuant to that certain Assumption
Agreement recorded in Volume 566 at Page 252 of the Public Records of Robertson
County, Texas. The TGC II Mortgage Trust Estate was conveyed by TPFC to TGC II
pursuant to that certain Conveyance and Bill of Sale effective as of May 31,
1991, recorded in Volume 566 at Page 283 of the Public Records of Robertson
County, Texas.
D. Subsequent to the execution and delivery of the TGC II
Mortgage, TNP, TGC II and the Assignor executed and delivered (i) the First TGC
II Modification and Extension Agreement dated as of January 24, 1992 and caused
it to be recorded in Volume 573 at Page 484 of the Public Records of Robertson
County, Texas, (ii) the Second TGC II Modification and Extension Agreement dated
as of January 27, 1992 and caused it to be recorded in Volume 573 at Page 511 of
the Public Records of Robertson County, Texas, (iii) the Third TGC II
Modification and Extension Agreement dated as of January 27, 1992 and caused it
to be recorded in Volume 573 at Page 525 of the Public Records of Robertson
County, Texas, (iv) the Fourth TGC II Modification and Extension Agreement dated
as of September 29, 1993 and caused it to be recorded in Volume 601 at Page 87
of the Public Records of Robertson County, Texas, (v) the Fifth TGC II
Modification and Extension Agreement dated as of June 15, 1994 and caused it to
be recorded in Volume 614 at Page 224 of the Public Records of Robertson County,
Texas, in each case as a memorial of certain modifications of, amendments to or
occurrences of events under the Existing Facility Agreement and to confirm the
validity and priority of the liens, security interests and assignments of the
TGC II Mortgage securing the Obligations.
E. TNP is entering into a Revolving Credit Facility Agreement
dated as of the date hereof ("TNP Credit Agreement") with certain Lenders
(herein so called) and Chemical Bank, as Administrative Agent and Collateral
Agent for the Lenders. It is a condition precedent to the execution of the TNP
Credit Agreement that, pursuant to the Assignment Agreement (as defined in the
TNP Credit Agreement), (i) the Existing Facility Agreement be further amended,
(ii) all of the Project Loans be purchased by TNP and (iii) all of the related
rights and interests under the Existing Facility Documents be assigned and
transferred to Assignee by the Assignor pursuant to this Assignment and the
Assignment Agreement, so that TNP may then pledge to Chemical Bank, as
Collateral Agent, the Project Loans, including all promissory notes evidencing
such Project Loans and all of TNP's interest in the Collateral, as security for
TNP's obligations under the TNP Credit Agreement.
F. TNP, TGC II and the Secured Parties have executed,
delivered and caused that certain Sixth TGC II Modification and Extension
Agreement to be filed of record as a memorial of the occurrence of such
modifications and amendments set forth in the Assignment Agreement, and to
confirm the validity and priority of the liens, security interests and
assignments of the TGC II Mortgage securing the Obligations, and Assignor, TNP
and Assignee now desire to execute, deliver and cause this Assignment to be
filed of record to memorialize the Assignment of the liens, security interests
and assignments of the TGC II Mortgage by the Assignor to the Assignee.
Agreements
NOW, THEREFORE, for and in consideration of the foregoing
recitals, together with the sum of Ten Dollars ($10.00) and other good and
valuable consideration, paid and delivered by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged and confessed, Assignor does
hereby SELL, ASSIGN, TRANSFER, CONVEY and DELIVER unto Assignee all of the
liens, security interests, assignments and all of the other rights and interests
of Assignor in, to and under the TGC II Mortgage and in and to the TGC II
Mortgage Trust Estate, TO HAVE AND TO HOLD the same unto Assignee, its
successors and assigns forever.
IN WITNESS WHEREOF, this Assignment has been executed by
Assignor in favor of Assignee effective as of the day and year first above
written.
ASSIGNOR:
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Agent and as Collateral Agent,
by________________________________
Name:
Title:
ASSIGNEE:
CHEMICAL BANK, as agent for
TNP under the Existing
Facility Agreement
(pursuant to the Assignment
Agreement), and as agent
for the Replacement Note
Holder under the Existing
Facility Agreement,
by________________________________
Name:
Title:
TNP:
TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation,
by________________________________
Name:
Title:
STATE OF NEW YORK,)
) ss.:
COUNTY OF NEW YORK,)
This instrument was acknowledged before me on this __ day of
November, 1995 by ________________________________ THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as Agent and as Collateral Agent.
----------------------------------
NOTARY PUBLIC in and for the State
of NEW YORK
[Notarial Seal]
STATE OF NEW YORK,)
) ss.:
COUNTY OF NEW YORK,)
This instrument was acknowledged before me on this __ day of
November, 1995 by ______________________________________ of CHEMICAL BANK.
--------------------------------
NOTARY PUBLIC in and for the
State of NEW YORK
[Notarial Seal]
STATE OF TEXAS,)
) ss.:
COUNTY OF ___________,)
This instrument was acknowledged before me on this __ day of
November, 1995 by ______________________________________ of TEXAS-NEW MEXICO
POWER COMPANY, a Texas corporation.
---------------------------------
NOTARY PUBLIC in and for the
State of TEXAS
[Notarial Seal]
EXHIBIT L
COLLATERAL TRANSFER OF NOTES,
RIGHTS AND INTERESTS
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ROBERTSON )
THAT, TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation, whose
mailing address is 4100 International Plaza, Fort Worth, Texas 76109, Attention:
Chief Financial Officer ("Debtor"), for a valuable and sufficient consideration
paid, the receipt of which is hereby acknowledged, and as security for the
herein described Obligations, hereby transfers, assigns and conveys unto
CHEMICAL BANK, a New York banking corporation, as Administrative Agent and as
Collateral Agent for the Lenders, whose mailing address is 270 Park Avenue, New
York, New York 10017, Attention: Jaimin Patel ("Secured Party"), the Collateral
as more particularly described in that certain Note Pledge Agreement dated of
even date herewith by and between the Debtor and the Secured Party ("Note Pledge
Agreement"). Unless otherwise defined herein, the capitalized terms used herein
shall have the meanings given to those terms in the Note Pledge Agreement or in
that certain Revolving Credit Facility Agreement ("Credit Agreement") of even
date herewith by and between the Debtor, the Lenders and the Secured Party, as
the case may be.
This transfer of Collateral is made to secure (a) the principal of and
interest on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, (b) all other monetary
obligations of the Debtor to the Lenders under the Loan Documents, and (c) all
obligations of the Debtor or any Subsidiary under any Interest Rate Protection
Agreement entered into with a Lender to protect against interest rate
fluctuations with respect to the Indebtedness under the Credit Agreement
(collectively, the "Obligations").
All of the terms and provisions of the Note Pledge Agreement are
incorporated herein and made a part hereof for all purposes.
THE LAW GOVERNING THIS SECURED TRANSACTION SHALL BE THE CODE AND OTHER
APPLICABLE LAWS OF THE STATE OF NEW YORK. ALL TERMS USED HEREIN WHICH ARE
DEFINED IN THE CODE SHALL HAVE THE SAME MEANING HEREIN AS IN THE CODE.
EXECUTED as of the ____ day of November, 1995.
DEBTOR:
TEXAS-NEW MEXICO POWER COMPANY,
a Texas corporation
By: _______________________
Name:__________________
Title:_________________
SECURED PARTY:
CHEMICAL BANK, as Administrative Agent and Collateral Agent for the Lenders
By: _______________________
Name:__________________
Title:_________________
THE STATE OF TEXAS )
)
COUNTY OF ________ )
BEFORE ME, the undersigned notary public, on this day personally
appeared _________________________________, of TEXAS-NEW MEXICO POWER COMPANY, a
Texas corporation, known to me to be the person and officer whose name is
subscribed to the foregoing instrument and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, and in the
capacity therein stated, and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ___ day of November, 1995.
----------------------------
NOTARY PUBLIC in and for
the State of TEXAS
My Commission Expires:
THE STATE OF NEW YORK)
)
COUNTY OF NEW YORK)
BEFORE ME, the undersigned notary public, on this day personally
appeared ______________________________________, ____________________________ of
CHEMICAL BANK, as Administrative Agent and Collateral Agent for the Lenders, a
______________________, known to me to be the person and officer whose name is
subscribed to the foregoing instrument and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, and in the
capacity therein stated, and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of November, 1995.
----------------------------
NOTARY PUBLIC in and for the
Sate of NEW YORK
My Commission Expires:
- ---------------------
The undersigned hereby (a) acknowledges receipt of a copy of the
Collateral Transfer of Notes, Rights and Interests dated as of November 3, 1995
by TEXAS-NEW MEXICO POWER COMPANY in favor of CHEMICAL BANK, as Administrative
Agent and Collateral Agent for the Lenders ("Collateral Transfer") and consents
to such Collateral Transfer effected, and the other transactions contemplated
thereby (including the exercise of any and all remedies provided for therein)
and (b) consents to the Collateral Transfer by Texas-New Mexico Power Company of
its rights under the Facility Purchase Agreement and the Operating Agreement.
TEXAS GENERATING COMPANY II, a TEXAS corporation
By: _________________________
Name:____________________
Title:___________________
Date: November __, 1995
Chemical Bank, in its capacity as Agent under the Existing
Facility Documents, acknowledges that the liens securing the Pledged Notes under
such Existing Facility Documents will continue to secure such Pledged Notes
following the pledge thereof to the Collateral Agent, and TNP's beneficial
interests in and to such liens are also intended to be pledged, pursuant to the
Note Pledge Agreement (it being understood that nothing herein shall diminish
the rights of the Replacement Note Holder as a secured party under the Existing
Facility Documents).
CHEMICAL BANK, as Agent,
by
--------------------------------
Name:
Title
November __, 1995
EXHIBIT M
[FORM OF ASSIGNMENT OF TNP SECOND LIEN MORTGAGE]
THIS INSTRUMENT ASSIGNS 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
ASSIGNMENT OF SECOND LIEN MORTGAGE AND
DEED OF TRUST (WITH SECURITY AGREEMENT)
THIS ASSIGNMENT OF SECOND LIEN MORTGAGE AND DEED OF TRUST (WITH
SECURITY AGREEMENT) ("Assignment") dated as of November 3, 1995 is entered into
by and between THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) as Agent for the
Banks and the Replacement Note Holder (in such capacity, on behalf of the
Secured Parties, together with its successors in such capacity, herein called
the "Assignor") and CHEMICAL BANK, as agent for Texas-New Mexico Power Company
("TNP") under the Existing Facility Agreement defined below (pursuant to the
Assignment Agreement described in paragraph N of the Recitals), and as agent for
the Replacement Note Holder under the Existing Facility Agreement (in such
capacities, "Assignee"). Unless otherwise described or defined herein, all terms
used in this Assignment shall have the same meanings herein as are assigned to
such terms in that certain Unit 2 Second Amended and Restated Project Loan and
Credit Agreement dated as of January 8, 1992 (as amended, supplemented or
otherwise modified from time to time the "Existing Facility Agreement") among
TNP, TEXAS GENERATING COMPANY II ("Borrower"), the Banks party thereto ("Banks")
and Assignor.
W I T N E S S E T H:
Recitals
A. In connection with the Project Loan and Credit Agreement dated as of
October 1, 1988 (as amended from time to time, the "Project Credit Agreement")
among certain of the Banks, the Chase Manhattan Bank (National Association), as
agent, TNP, and TEXAS PFC, INC., a Delaware corporation, TNP 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 DONALD H. SNELL, as Mortgage Trustee ("Mortgage
Trustee"), for the benefit of the Secured Parties, a second lien against
property of TNP 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 the 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 Bond 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 TNP.
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,
TNP purchased an undivided 30/345 interest in the Robertson County Property
(including Unit 1 located thereon) which interest was conveyed to Assignee 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 Project 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 TNP under that certain Guaranty
dated as of May 31, 1991 ("Guaranty") became effective and pursuant thereto, TNP
(sometimes hereinafter called "Guarantor") guarantees the Obligations that were
assumed by the Borrower.
F. On January 8, 1992, TNP and the Agent, on behalf of Secured Parties,
executed that certain Second Lien Mortgage and Deed of Trust (with Security
Agreement) Modification, Extension and Amendment Agreement (the "TNP Second Lien
Mortgage Modification No. 1"), to among other things, further 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 TNP would be
included as a part of the Second Lien Trust Estate.
G. The parties to the Project Credit Agreement entered into an
agreement in principle in connection with certain amendments thereto. To
implement such amendments, the parties entered into the Unit 2 First Amended and
Restated Project Loan and Credit Agreement dated as of January 8, 1992 (the
"Unit 2 Credit Agreement") which was amended pursuant to the First Amendment
thereto dated as of September 21, 1993 (the "First Amendment") among such
parties (the Unit 2 Credit Agreement, as so amended, the "Existing Facility
Agreement").
H. On January 27, 1992, pursuant to the Facility Purchase Agreement (as
defined in the Unit 1 Credit Agreement), TNP purchased an additional undivided
45/345 interest in the Robertson County, Property (including Unit 1 located
thereon).
I. On September 21, 1993, pursuant to the Facility Purchase Agreement
(as defined in the Unit 1 Credit Agreement), TNP purchased an additional
undivided 65/345 interest in the Robertson County Property (including Unit 1
located thereon).
J. On September 21, 1993, pursuant to the Facility Purchase Agreement, TNP
purchased an undivided 75.75/288.5 interest in the Unit 2 Property (including
Unit 2 located thereon).\
K. Although all of the undivided interests described in Recitals G, H
and I were subject to the liens of the TNP Second Lien Mortgage by reason of
provision to that effect therein, the parties desired to reflect this fact of
record.
L. TNP 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 TNP shall be
included as a part of the Second Lien Mortgage Trust Estate. TNP and the Agent,
on behalf of the Secured Parties, executed and delivered the TNP Second Lien
Mortgage Modification No. 1 dated as of January 8, 1992 and caused it to be
filed with the Secretary of State of the State of Texas.
M. Borrower, TNP and the Agent, on behalf of the Secured Parties,
agreed, as set forth in the First Amendment, to modify the terms of the Unit 2
Credit Agreement in order to permit TNP and Borrower to secure Permitted
Collateralized Indebtedness (as defined in the First Amendment) 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 Existing Facility Agreement. In
connection with the First Amendment, Borrower, TNP and the Agent executed that
certain Second Lien Mortgage and Deed of Trust (with Security Agreement)
Modification, Extension and Amendment Agreement No. 2 (the "TNP Second Lien
Mortgage Modification No. 2"); together with the TNP Second Lien Mortgage
Modification No. 1, the "TNP Second Lien Mortgage Modification") dated as of
September 21, 1993 to confirm the validity and priority of the liens, security
interests and assignments of the TNP Second Lien Mortgage.
N. TNP is entering into a revolving credit facility agreement dated the
date hereof (the "TNP Credit Agreement") with certain lenders (the "Lenders")
and Chemical Bank, as administrative agent and collateral agent for the Lenders.
It is a condition precedent to the execution of the TNP Credit Agreement that
(a) the Existing Facility Agreement be amended as described in the Assignment
Agreement (as defined in the TNP Credit Agreement) and (b) the parties hereto
execute and deliver this Assignment.
O. TNP, Assignee and the Assignor have executed, delivered and caused
this Assignment to be filed of record as a memorial of the occurrence of such
modifications and to confirm the assignment of the TNP Second Lien Mortgage by
Assignor to Assignee and their agreement that the validity and priority of the
liens, security interests and assignments of the TNP Second Lien Mortgage shall
continue and remain in full force and effect.
Agreements
NOW, THEREFORE, in consideration of the foregoing recitals, together
with the sum of Ten Dollars ($10.00) and other good and valuable consideration,
paid and delivered by Assignee to Assignor, the receipt and sufficiency of which
are hereby acknowledged and confessed, Assignor and Assignee hereby agree as
follows:
1. Assignment. Assignor does hereby sell, assign, transfer,
convey and deliver unto Assignee the TNP Second Lien Mortgage, and all
of Assignor's rights, interests, liens, security interests and
assignments thereunder and in and to the Second Lien Mortgage Trust
Estate, TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns forever.
2. No Merger. None of TNP, Assignor or Assignee intend that
there be, and there shall not in any event be, a merger of any of the
liens, security interests or assignments of the TNP Second Lien
Mortgage with the title or interest of TNP by virtue of the assignments
contained in the Assignment Agreement or the assignment contained
hereinabove, and the parties expressly provide that each such interest
in such liens, security interests and assignments on the one hand, and
title to the TNP Second Lien Mortgage, as modified, on the other hand,
be and remain at all times separate and distinct with all such validity
and priority that existed prior too the execution of the Assignment
Agreement and this Assignment.
3. Successors and Assigns. This Assignment shall be binding
upon the successors and assigns of the Assignor and the Assignee and
shall inure to the benefit of the successors and assigns of the
Assignee; provided, however, nothing contained in this Section 3 is
intended to authorize TNP to assign any of the Obligations or to sell
any of the Second Lien Mortgage Trust Estate except in accordance with
the Existing Facility Agreement and the Facility Purchase Agreement.
4. Counterparts. This Assignment 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 may execute this Assignment by signing
any such counterpart.
EXECUTED as of the date first hereinabove written.
ASSIGNOR:
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Agent and as
Collateral Agent
By:____________________________
Name:
Title:
ASSIGNEE:
CHEMICAL BANK, as agent for
TNP under the Existing
Facility Agreement
(pursuant to the Assignment
Agreement), and as agent
for the Replacement Note
Holder under the Existing
Facility Agreement,
By:____________________________
Name:
Title:
TNP:
TEXAS-NEW MEXICO POWER
COMPANY, a Texas corporation
By:_______________________
Name:
Title:
THE STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
This instrument was acknowledged before me on the ____ day of November,
1995, by ________________________________________ of THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as Agent and as Collateral Agent.
---------------------------------------------------------------------
NOTARY PUBLIC in and for The State of NEW YORK
My Commission Expires:
---------------------------------------------------------------------
Typed or Printed Name of Notary
THE STATE OF NEW YORK)
)
COUNTY OF NEW YORK )
This instrument was acknowledged before me on the _____ day of November,
1995, by______________________________________________ of CHEMICAL BANK, as
agent for TNP and the Replacement Note Holder.
---------------------------------------------------------------------
NOTARY PUBLIC in and for The State of NEW YORK
My Commission Expires:
--------------------------------------------------------------------- Typed
or Printed Name of Notary
THE STATE OF TEXAS)
)
COUNTY OF ________)
This instrument was acknowledged before me on the _____ day of November,
1995, by ___________________________________________ of TEXAS-NEW MEXICO POWER
COMPANY, a Texas corporation, on behalf of said corporation.
------------------------------------------------------------------- NOTARY
PUBLIC in and for The State of NEW YORK
My Commission Expires:
--------------------------------------------------------------------- Typed
or Printed Name of Notary
EXHIBIT N
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY
AND
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS
PURSUANT TO SUBCHAPTER 35A OF THE TEXAS BUSINESS AND COMMERCE CODE
COLLATERAL TRANSFER OF NOTES,
RIGHTS AND INTERESTS
THAT, TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation, whose
mailing address is 4100 International Plaza, Fort Worth, Texas 76109, Attention:
Chief Financial Officer ("Debtor"), for a valuable and sufficient consideration
paid, the receipt of which is hereby acknowledged, and as security for the
herein described Obligations, hereby transfers, assigns and conveys unto
CHEMICAL BANK, a New York banking corporation, as Administrative Agent and as
Collateral Agent for the Lenders, whose mailing address is 270 Park Avenue, New
York, New York 10017, Attention: Jaimin Patel ("Secured Party"), the Collateral
as more particularly described in that certain Note Pledge Agreement dated of
even date herewith by and between the Debtor and the Secured Party ("Note Pledge
Agreement"). The Collateral includes, but is not limited to, that certain Second
Lien Mortgage and Deed of Trust (with Security Agreement) and all of the rights,
titles, interests and liens of the beneficiary thereunder, which was filed with
the Secretary of State of the State of Texas on October 4, 1988, as Utility
Security Instrument No. 229147. Unless otherwise defined herein, the capitalized
terms used herein shall have the meanings given to those terms in the Note
Pledge Agreement or in that certain Revolving Credit Facility Agreement ("Credit
Agreement") of even date herewith by and between the Debtor, the Lenders and the
Secured Party, as the case may be.
This transfer of Collateral is made to secure (a) the principal of and
interest on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, (b) all other monetary
obligations of the Debtor to the Lenders under the Loan Documents, and (c) all
obligations of the Debtor or any Subsidiary under any Interest Rate Protection
Agreement entered into with a Lender to protect against interest rate
fluctuations with respect to the Indebtedness under the Credit Agreement
(collectively, the "Obligations").
All of the terms and provisions of the Note Pledge Agreement are
incorporated herein and made a part hereof for all purposes.
THE LAW GOVERNING THIS SECURED TRANSACTION SHALL BE THE CODE AND OTHER
APPLICABLE LAWS OF THE STATE OF NEW YORK. ALL TERMS USED HEREIN WHICH ARE
DEFINED IN THE CODE SHALL HAVE THE SAME MEANING HEREIN AS IN THE CODE.
EXECUTED as of the______________- day of November, 1995.
DEBTOR:
TEXAS-NEW MEXICO POWER COMPANY, a Texas corporation
By:____________________________
Name:
Title:
SECURED PARTY:
CHEMICAL BANK, as Administrative Agent and Collateral Agent for the Lenders
By:___________________________
Name:
Title:
THE STATE OF TEXAS )
)
COUNTY OF ______________)
BEFORE ME, the undersigned notary public, on this day personally appeared
___________________________________________________________________ of TEXAS-NEW
MEXICO POWER COMPANY, a Texas corporation, known to me to be the person and
officer whose name is subscribed to the foregoing instrument and acknowledged to
me that he executed the same for the purposes and consideration therein
expressed, and in the capacity therein stated, and as the act and deed of said
corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ______ day of November,
1995.
-------------------------------- NOTARY PUBLIC in and for the State of
TEXAS
My Commission Expires:
- -------------------------
THE STATE OF NEW YORK )
)
COUNTY OF NEW YORK)
BEFORE ME, the undersigned notary public, on this day personally appeared
______________________________________________ of CHEMICAL BANK, as
Administrative Agent and Collateral Agent for the Lenders, a
______________________ known to me to be the person and officer whose name is
subscribed to the foregoing instrument and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, and in the
capacity therein stated, and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of November, 1995.
------------------------------- NOTARY PUBLIC in and for the State of NEW
YORK
My Commission Expires:
- ----------------------
The undersigned hereby (a) acknowledges receipt of a copy of the
Collateral Transfer of Notes, Rights and Interests dated as of November 3, 1995
by TEXAS-NEW MEXICO POWER COMPANY in favor of CHEMICAL BANK, as Administrative
Agent and Collateral Agent for the Lenders ("Collateral Transfer") and consents
to such Collateral Transfer effected, and the other transactions contemplated
thereby (including the exercise of any and all remedies provided for therein)
and (b) consents to the Collateral Transfer by Texas-New Mexico Power Company if
its rights under the Facility Purchase Agreement and the Operating Agreement.
TEXAS GENERATING COMPANY II,
a Texas corporation
By:____________________________
Name:
Title:
Date: November ___, 1995
Chemical Bank, in its capacity as Agent under the Existing
Facility Documents, acknowledges that the liens securing the Pledged Notes under
such Existing Facility Documents will continue to secure such Pledged Notes
following the pledge thereof to the Collateral Agent, and TNP's beneficial
interests in and to such liens are also intended to be pledged, pursuant to the
Note Pledge Agreement (it being understood that nothing herein shall diminish
the rights of the Replacement Note Holder as a secured party under the Existing
Facility Documents).
CHEMICAL BANK, as Agent,
by
----------------------------
Name:
Title
November __, 1995
EXHIBIT O
FORM OF AMENDMENT NO. 1 TO TNP SECURITY AGREEMENT
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
AMENDMENT NO. 1 (this "Amendment") dated as
of November 3, 1995, to the Assignment and Security
Agreement dated as of October 1, 1988 (as the same
has been or may hereafter be amended, restated,
supplemented, modified or waived from time to time,
the "Security Agreement") between TEXAS-NEW MEXICO
POWER COMPANY, a Texas corporation ("TNP" or the
"Assignor") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), in its capacity as agent (the "Agent")
under the Credit Agreement referred to below for the
benefit of the Secured Parties (as defined in the
Credit Agreement).
A. Reference is made to the Unit 2 First Amended and Restated Project
Loan and Credit Agreement dated as of January 8, 1992 (as amended, restated,
supplemented, modified or waived from time to time, the "Credit Agreement"),
among Texas Generating Company II, a Texas corporation ("TGC II"), the Assignor,
the banks party thereto (the "Banks") and The Chase Manhattan Bank (National
Association) as agent for the Banks and the Replacement Note Holder.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Credit Agreement.
C. Assignor is entering into a revolving credit agreement (the "TNP
Credit Agreement") with certain lenders (the "Lenders") and Chemical Bank
("Chemical"), as Administrative Agent and Collateral Agent for the Lenders. It
is a condition precedent to the effectiveness of the TNP Credit Agreement that
the Assignor shall have executed this Amendment.
D. In connection with execution of the TNP Credit Agreement, (i) TGC II
borrowed and had outstanding under the Credit Agreement Project Loans in an
aggregate principal amount equal to $147,750,000 and (ii) the Assignor, TGC II,
the Banks, the Agent, the Lenders and Chemical have entered into an Assignment
and Amendment Agreement (the "Assignment Agreement") pursuant to which (a) the
Credit Agreement was amended as provided therein, (b) TGC II transferred to the
Assignor, in satisfaction of intercompany indebtedness owed by it to by the
Assignor, the proceeds of borrowings made under the Credit Agreement on the
Closing Date (as defined in the TNP Credit Agreement), together with the
borrowings to be made on such Closing Date pursuant to the TNP Credit Agreement,
which would be sufficient to provide the necessary funds for the purchase
contemplated by the following clause, (c) the Assignor purchased from the Banks
all of the outstanding Project Loans (and related rights and interests) under
the Credit Agreement and (d) the Original Agent and the Original Collateral
Agent (each as defined in the Assignment Agreement) assigned all of their rights
to Chemical (in such capacity herein called the "Successor Agent").
Accordingly, the Successor Agent and the Assignor agree as follows:
SECTION 1. Grant of Security Interest. As security for the
payment or performance when due of the Obligations, now existing or hereafter
arising, the Assignor hereby pledges, assigns and transfers to the Agent, for
the ratable benefit of the Secured Parties, and grants to the Agent for the
ratable benefit of the Secured Parties, a lien on and security interest in, all
of the Assignor's right, title and interest, whether now owned or hereafter
acquired, in, to and under the Operating Agreement; as such agreement may be
amended, supplemented or otherwise modified from time to time, including,
without limitation, (a) all rights of the Assignor to receive moneys due and to
become due under or pursuant to the Operating Agreement, (b) all rights of the
Assignor to receive proceeds of any condemnation or taking, indemnity, warranty
or guaranty with respect to the Operating Agreement, (c) all claims of the
Assignor for damages arising out of or for breach of or default under the
Operating Agreement and (d) subject to Section 12(i), the right of the Assignor
to terminate, amend, supplement or modify the Operating Agreement, to perform
thereunder and to complete performance and otherwise exercise remedies
thereunder.
SECTION 2. Amendment to Section 2. Section 2(a)(A) of the
Security Agreement is hereby amended by (a) deleting the word "and" at the end
of clause (iii), (b) adding a new clause (iv) to read in its entirety as
follows:
"(iv) the Operating Agreement, and ",
and (c) renumbering existing clause (iv) as clause (v).
SECTION 3. Amendment to Section 12. Section 12 of the Security
Agreement is hereby amended by adding thereto a new paragraph (i) which shall
read in its entirety as follows:
"(i) if any Event of Default under the Credit Agreement or a
Default or an Event of Default under and as defined in the Revolving
Credit Facility Agreement dated as of November 3, 1995 among the
Assignor, the lenders party thereto (the "Lenders") and Chemical Bank,
as administrative agent and collateral agent for the lenders (in such
capacities, the "Administrative Agent" and the "Collateral Agent",
respectively) shall have occurred and be continuing, the Collateral
Agent, without demand of performance or other demand, advertisement or
notice of any kind to or upon the Assignor or any other person (all and
each of which demands, advertisements and/or notices are hereby
expressly waived), may terminate the Operating Agreement. The
Collateral Agent agrees that in the event it terminates the Operating
Agreement pursuant to this Section 12(i), it will negotiate in good
faith with the Assignor with respect to permitting the Assignor to
purchase power on market terms; provided that nothing herein shall
require the Collateral Agent to take any action that in its judgment
would not be in the best interests of the Lenders.
SECTION 4. Representations and Warranties. Assignor represents
and warrants to the Successor Agent and the other Secured Parties that (a) the
representations and warranties made by Assignor in the Security Agreement are
true and correct on and as of the date hereof and (b) this Amendment has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
SECTION 5. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument. This Amendment
shall become effective when the Successor Agent shall have received counterparts
of this Amendment that, when taken together, bear the signatures of the Assignor
and the Successor Agent.
SECTION 6. Full Force and Effect. Except as expressly supplemented hereby,
the Security Agreement shall remain in full force and effect.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 8. Severability. In case any one or more of the
provisions contained in this Amendment should be held invalid, illegal or
unenforceable in any respect, neither party hereto shall be required to comply
with such provision for so long as such provision is held to be invalid, illegal
or unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Security Agreement shall not in any way
be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 9. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 15 of the Security Agreement.
SECTION 10. Expenses. Assignor agrees to reimburse the Successor Agent for
its reasonable out-of-pocket expenses in connection with this Amendment,
including the reasonable fees, other charges and disbursements of counsel for
the Successor Agent.
IN WITNESS WHEREOF, Assignor and the Successor Agent have been duly
executed this Amendment to the Security Agreement as of the day and year first
above written.
TEXAS-NEW MEXICO POWER COMPANY,
by
-----------------------------------
Name:
Title:
CHEMICAL BANK, as Successor Agent,
by
-----------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED:
TEXAS GENERATING COMPANY II,
by
---------------------------
Name:
Title:
THE STATE OF TEXAS )
)
COUNTY OF ROBERTSON )
This instrument was acknowledged before me on the ___ day of November,
1995, by ____________ , ________ of TEXAS-NEW MEXICO POWER COMPANY, a Texas
corporation, on behalf of said corporation.
------------------------------ NOTARY PUBLIC in and for the State of TEXAS
My Commission Expires:
-------------------------------------------------------------------------
Typed or Printed Name of Notary
THE STATE OF TEXAS )
)
COUNTY OF ROBERTSON )
This instrument was acknowledged before me on the ___ day of November,
1995, by ______________ , of TEXAS GENERATING COMPANY II, a Texas corporation,
on behalf of said corporation.
----------------------------------- NOTARY PUBLIC in and for the State of
TEXAS My Commission Expires:
- --------------------------------------
- -----------------------------------
Typed or Printed Name of Notary
THE STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
This instrument was acknowledged before me on the _____ day of
November,1995, by______________,_________________________ of CHEMICAL BANK, a
New York banking corporation, on behalf of said corporation.
--------------------------- NOTARY PUBLIC in and for the Sate of NEW YORK
My Commission Expires:
- ---------------------------------------------------------------
Typed or Printed Name of Notary
Schedule 2.01
Commitments
Name and Address of Lender Contact Person
and Telecopy Number
Commitment
Chemical Bank
270 Park Avenue
New York, NY 10017 Mr. Jaimin Patel
Vice President
(212) 270-2555 $ 22,000,000
Bank of Boston
100 Federal Street
Mailstop 01-08-82
Boston, MA 02110 Mr. Michael Kane
Managing Director
(617) 434-3652 $ 14,500,000
Bank of Montreal
700 Louisiana, Suite 4400
Houston, TX 77002 Ms. Julie Buthman
Vice President
(713) 223-4007 $ 14,500,000
The Bank of New York
One Wall Street, 19th Floor
New York, NY 10286 Mr. Nathan Howard
Vice President
(212) 635-7923 $ 17,500,000
CIBC, Inc.
200 West Madison, Suite 2300
Chicago, IL 60606 Mr. Robert Lyle
Managing Director
(312) 750-0927 $ 17,500,000
Credit Lyonnais
500 North Akard, Suite 3210
Dallas, TX 75201 Ms.Karen Watson
Vice President
(214) 954-3312 $ 14,500,000
NationsBank of Texas, N.A.
901 Main Street, 64th Floor
Dallas, TX 75202 Mr. Bryan L. Diers
Senior Vice President
(214) 508-3943 $ 17,500,000
The Nippon Credit Bank, Ltd
245 Park Avenue, 30th Floor.
New York, NY 10167 Mr. Doron Sabag
Vice President
(212) 490-3895 $ 14,500,000
Union Bank
445 South Figueroa Street
15th Floor
Los Angeles, CA 90071 Mr. David Musicant
Assistant Vice President
(213) 236-4096 $ 17,500,000
TOTAL $ 150,000,000
SCHEDULE 3.6
Changes
During 1994, Phillips Petroleum's Sweeny, Texas, refinery contracted with CSW
Energy to construct a 300-megawatt cogeneration plant. If constructed, this
plant is expected to begin operations in 1998. The refinery accounted for
approximately $29 million of Borrower's 1994 operating revenues ($9 million in
base revenues). Revenues attributable to the refinery may be impacted adversely
if the cogeneration facility is constructed. Borrower's goal is to retain
Phillips Petroleum as a customer and to lower overall system operating costs
through negotiation with Phillips Petroleum and CSW Energy. Although Borrower
cannot predict the ultimate outcome of the process or its impact on Borrower,
Borrower and Phillips Petroleum are discussing arrangements through which
Borrower may retain electric service to Phillips Petroleum.
SCHEDULE 3.8
Subsidiaries and percentage ownership interest therein of Borrower
Texas Generating Company - l,000 shares common stock, no par value, 100%
owned by Borrower
Texas Generating Company II - l,000 shares common stock, no par value,
100% owned by Borrower
SCHEDULE 3.9
1. Revocation proceedings concerning 1991 private letter ruling from the
Internal Revenue Service confirming that Unit 1 of the TNP One generating plant
was property eligible for investment tax credit.
2. A. Joseph Burch v. Coastal Spray Company and Texas-New Mexico Power Company,
Cause No. 92CV1094, 212th Judicial District Court, Galveston County, Texas.
Plaintiff is claiming property damages to land due to drifting of herbicides
sprayed on Texas-New Mexico Power Company R.O.W. adjacent to plaintiff's
property. No amount of damages has been stated.
3. Billie Neumann v. Coastal Spray Company and Texas-New Mexico Power Company,
Cause No. 92CV0998, 10th Judicial District Court, Galveston, County, Texas.
Plaintiff is claiming property damages to land and animals due to herbicide
spraying on Texas-New Mexico Power Company R.O.W. adjacent to Plaintiff's
property. No amount of damages has been stated. Discovery continues.
4. James P. Entrekin v. Coastal Spray Company and Texas-New Mexico Power
Company, Cause No. 92CV0953, 10th Judicial District Court, Galveston County,
Texas. Plaintiff is claiming property damages to land and Arabian horses due to
herbicide spraying on Texas-New Mexico Power Company R.O.W. adjacent to
Plaintiff's property. No amount of damages has been stated. Discovery continues.
5. Ralph Fellers v. Texas-New Mexico Power Company, *Consolidated with Davis and
Hurst, Cause No. 94-30074-211, 211th Judicial District Court, Denton County,
Texas. Plaintiff is claiming property damages in the amount of $160,000 due to
environmental contamination of land located in Denton County, Texas.
6. H. Eugene Davis v. Texas-New Mexico Power Company, *Consolidated with Fellers
and Hurst, Cause No. 94-30074-211, 211th Judicial District Court, Denton County,
Texas. Plaintiff is claiming property damages due to environmental contamination
of land located in Denton County, Texas. No amount of damages has been stated.
7. Harold Hurst v. Texas-New Mexico Power Company, *Consolidated with Fellers
and Davis, Cause No. 94-30074-211, 211th Judicial District Court, Denton County,
Texas. Plaintiff is claiming property damages due to environmental contamination
of land located in Denton County, Texas. No amount of damages has been stated.
8. Texas-New Mexico Power Company v. PPM America, Inc. and Bank of
America-Illinois, No. 495-CV-738-A, in the United States District Court,
Northern District of Texas, Fort Worth Division. Declaratory judgment action
concerning redemption of the Borrower's Series T first mortgage bonds with
proceeds from the sale of its Panhandle properties under threat of condemnation
by local municipalities.
SEE ALSO SCHEDULE 3.17
SCHEDULE 3.17
Environmental Matters
1. Transformers and capacitors that may contain polychlorinated biphenyls
("PCBs"). Borrower does not know the concentration of PCBs, if any, in each and
every transformer and capacitor owned or operated by Borrower. If a transformer
or capacitor that contains dielectric fluid with a PCB concentration in excess
of 50 parts per million leaks into the environment and thereby contaminates the
water or soil, then Borrower would be liable for clean up and remediation costs.
Depending upon the location and magnitude of such an occurrence, the costs could
be significant.
In addition, Borrower contracts with licensed companies to pick up and
transport transformers and capacitors that contain over 50 parts per million
PCBs. Borrower reasonably believes that these companies perform their service in
accordance with applicable laws and regulations. However, if one of these
companies has violated an applicable law or regulation, then Borrower could be
held responsible for fines and damages resulting from improper handling,
transport, storage, treatment, or disposal of the PCB-contaminated items.
Borrower believes that the probability of such a situation occurring is remote.
If such an event occurred, however, the fines and damages for which Borrower
would be responsible could be significant.
2. Remediation at 300 Crews Way, West Columbia, Brazoria County, Texas. In
September, 1990, Borrower hired an environmental consultant to remove two
underground storage tanks at Borrower's former construction center site in West
Columbia. Based on sample results from the soil and water near the tank hold
area, Borrower installed 12 monitoring wells and, in April 1993, began "pump and
treat" technology to treat the groundwater. To date, no significant progress
toward "clean" status has been made, the "plume" of contamination has not been
defined to the TNRCC's satisfaction, and Borrower has paid almost $300,000 to
the consultant. Borrower recently terminated the consultant and hired an
environmental engineering firm to assess the progress of the remediation, define
the plume of contamination, if any, and recommend alternatives to the "pump and
treat" technology. Borrower anticipates that remediation efforts will continue
for at least another year at a cost of at least $100,000. Borrower cannot
reasonably predict the duration or total cost of remediation efforts at this
time.
3. Davis Utility Hydraulics, Inc., Highway 121, Lewisville, Denton County,
Texas; Notice of Violation from Texas Natural Resource Conservation Commission
("TNRCC") and Pending Litigation. In July 1992, Borrower received a Notice of
Violation from the TNRCC indicating a release of Hazardous Materials at the
Borrower's former construction center location in Lewisville, Texas. Borrower
immediately hired an environmental consultant to begin excavation of the
allegedly contaminated area, conduct soil and water sampling, and install
monitoring wells. Borrower has cooperated fully with TNRCC and has submitted to
TNRCC the sample results and reports it requires. The landowners of three
separate but adjacent tracts have sued Borrower in state district court in
Denton County, Texas, for damages in contract and tort, and Borrower has hired
outside counsel to defend these suits. To date, Borrower has spent approximately
$300,000 in connection with the remediation activities at the Lewisville site.
However, based on results of recent soil and water sampling, Borrower believes
that it will not be liable for the landowners' claims and that the TNRCC will
permit Borrower to cease its remediation efforts at the site within the next six
months.
SCHEDULE 3.18
Insurance maintained by Borrower
SCHEDULE 3.19
Insurance maintained by Borrower