EXHIBIT 10.16
First
Security
Bank MODIFICATION AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$4,000,000 04-10-2000 9001 0032687 45917
Borrower: New Mexico Utilities, Inc. Lender: First Security Bank of New Mexico, N.A.
4700 Irving Blvd., Suite 201 Corporate Banking
Albuquerque, NM 87114 40 First Plaza Center NW
Albuquerque, NM 87102
First Security Bank of New Mexico, N.A. ("Lender") has extended the credit (the
"Loan") to New Mexico Utilities, Inc. (individually and collectively "Borrower")
pursuant to a promissory note dated December 10, 1997 (the "Note") in the stated
principal amount of $4,000,000.00. The Loan is unsecured.
The Note and any loan agreements, guaranties, subordinations, Collateral
Documents and other instruments and documents executed in connection therewith,
together with any previous modifications to any of these instruments or
documents shall be referred to as the "Loan Documents".
Borrower has requested certain modifications to the Loan Documents and Lender is
willing to grant such modifications on the following terms and conditions:
1. Provided that all conditions stated herein are satisfied, the terms of
the Loan Documents are hereby modified as follows:
Modifications to the Terms of the Note
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The maturity date of the Note is extended to April 10, 2000,
This Agreement does not constitute a repayment or extinguishment of
the Note, but only a modification thereof.
Other Modifications to the Loan Documents:
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The Loan Documents shall be amended as follows:
The following Year 2000 (Y2K) language is made a part of the Loan
Documents:
Each Borrower shall take all action that may be necessary or
desirable, or that Bank may reasonably request, in order to
ensure that the Borrower, its affiliates, and all customers,
suppliers and vendors that are material to the Borrower's
business, become Year 2000 Compliant on or before August 1, 1999.
Such acts shall include, without limitation, (I) performing a
comprehensive inventory, review and assessment of all Borrower's
systems and adopting a detailed plan, with itemized budget and
timetable, for the remediation, monitoring and testing of such
systems, and (ii) making a detailed inquiry of all material
customers, suppliers, and vendors to ascertain whether such
entities are aware of the need to be Year 2000 Compliant and are
taking all appropriate steps to become Year 2000 Compliant on a
timely basis. Borrower shall, promptly upon request, provide to
bank such certifications or other evidence of Borrower's
compliance with the terms of this section as Bank may from time
to time reasonably require.
"Year 2000 Compliant" shall mean, in regard to any entity, that
all software, hardware, firmware, equipment, goods or systems
used by or material to the business operations or financial
condition of such entity will properly perform date sensitive
functions before, during and after January 1, 2000. Such date
sensitive functions shall include, without limitation, (a)
interpretation of years greater than 1999, (b) process date data
from, into, and between dates before January 1, 12000 and dates
on or after January 1, 2000, (c) recognizing numbers such as 99
as an actual date rather than indefinite or unknown information,
(d) recognizing that the year 2000 is a leap year, and (e)
transferring data between systems that used different methods to
make the system Year 2000 Compliant.
2. As preconditions to the terms of this Agreement, Borrower shall
complete or provide the following
Borrower shall pay or shall have paid all reasonable fees, costs, and
expenses, of whatever kind or nature, incurred by Lender in connection
with this Agreement, including but not limited to attorney's fees,
lien search fees, title reports and pollicies, and recording and
filing fees.
3. It is the intention and agreement of Borrower and Lender that: (I) all
collateral security in which Lender has acquired a security interest
or other lien pursuant to the Loan Documents shall continue to serve
as collateral security for payment and performance of all the
obligations of the Borrower under the Loan Documents, and (iii) all
agreements, representations, warranties and covenants contained in the
Loan Documents are hereby reaffirmed in full by borrower except as
specifically modified by this Agreement
4. Borrower hereby acknowledges that: (I) the Loan Documents are in full
force and effect, as modified by this Agreement, and (ii) by entering
into this Agreement, Lender does not waive any existing default or any
default hereafter occurring or become obligated to waive any condition
or obligation under the Loan Documents.
5. Borrower hereby acknowledges that Borrower has no claim, demand,
lawsuit, cause of action, claim for relief, remedy, or defense against
enforcement of the Loan Documents that could be asserted against
Lender, its affiliates, directors, officers, employees, or
representations, commitments, statements or warranties, including
without limitation any such conduct arising out of or in any way
connected with the Loan Documents. Notwithstanding the foregoing,
Borrower hereby waives, releases and relinquishes any and all claims,
demands, lawsuits, causes of action, claims for relief, remedies or
defenses against enforcement of the Loan Documents that could be
asserted against Lender, its affiliates, directors, officers,
employees or agents, whether known or unknown.
6. In addition to this Agreement, the Loan Documents, and any additional
documents that this Agreement requires, this finance transaction may
include other written closing documentation such as resolutions,
waivers, certificates, financing statements, filings, statements
closing or escrow instructions, loan purpose statements, and other
documents that Lender may customarily use in such transactions. Such
documents are incorporated herein by this reference. All the documents
to which this paragraph makes reference express, embody and supercede
any previous understandings, agreements, or promises (whether oral or
written) with respect to this finance transaction, and represent the
final expression of the agreement between Lender and Borrower, the
terms and conditions of which cannot hereafter by contradicted by any
oral understanding (if any) not reduced to writing and identified
above.
WRITTEN AGREEMENTS. Borrower acknowledges that Borrower is aware of the
provisions of Section 58-6-5 NMSA 1978 Comp, which requires a contact,
promise or commitment to loan money or to grant, extend, or renew credit or
any modification thereof, in an amount greater that twenty-five thousand
dollars ($25,000), not primarily for personal, family or household
purposes, to be in wiring and signed by the party to be charged or that
party's authorized representative.
Effective as of April 10, 1999.
LENDER:
First Security Bank of New Mexico, N.A.
By: /s/ J. CHESLEY STEEL
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Authorized Officer
BORROWERS:
New Mexico Utilities, Inc.
By: /s/ ROBERT L. SWARTWOUT By: /s/ WILLIAM C. JASURA
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Robert L. Swartwout, President William C. Jasura, Secretary
AFFIRMATION OF GUARANTORS, GRANTORS, AND SUBORDINATORS
Each of the following Guarantors, Grantors, Subordinators, and other
parties to the Loan Documents hereby acknowledges and consents to the
foregoing Modification Agreement and affirms and restates each of their
respective liabilities, obligations, and agreements set forth in the Loan
Documents. In addition, the following specifically agree to continuing
their respective guaranties and subordinations as to any increase in the
principal amount of the Loan and specifically agree that the Collateral
Documents secure any increase in the principal amount of the Loan. Each of
the following also hereby give the same assurances, representations,
waivers, releases, and relinquishments given by Borrower in paragraph 5 of
the Modification Agreement as if it were restated as part of this
affirmation.
GUARANTORS:
Southwest Water Company
By: /s/PETER J. MOERBEEK
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Peter J. Moerbeek, Vice President Finance/Chief Financial Officer
By: /s/STEPHEN J. MUZI
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Stephen J. Muzi, Corporate Controller