SETTLEMENT AGREEMENT
AGREEMENT, dated as of November 2, 1989, among Public Service Company
of New Mexico, a New Mexico corporation ("PNM"), the lender parties hereto (the
"Lenders") and Chemical Bank as agent (the "Agent") and collateral agent (the
"Collateral Agent").
Background
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▇. ▇▇▇▇▇▇▇ Resources, Inc., a New Mexico corporation and a wholly-owned
subsidiary of PNM ("▇▇▇▇▇▇▇"), certain of the Lenders and the Agent are parties
to a Credit Agreement dated as of June 28, 1988 (as amended, overridden and in
effect from time to time, the "Credit Agreement").
▇. ▇▇▇▇▇▇▇, the Lenders, the Agent and the Collateral Agent are parties to
a Master Collateral Agreement dated as of June 28, 1988 (as amended, overridden
and in effect from time to time, the "Master Collateral Agreement"). All terms
defined in or by reference in the Master Collateral Agreement and not otherwise
defined herein or by reference herein are used herein with the meanings as so
defined.
▇. ▇▇▇▇▇▇▇, the Lenders, the Agent and the Collateral Agent are parties to
a Consent and Override Agreement dated as of May 1, 1989 (as amended and in
effect from time to time, the "Consent and Override Agreement").
D. The Agent, the Collateral Agent and the Lenders assert that PNM is
liable in respect of the principal, interest, expenses (including without
limitation attorneys' fees and expenses) and other amounts due from ▇▇▇▇▇▇▇
(such obligations of ▇▇▇▇▇▇▇, the "Debt") under the Credit Agreement, the Master
Collateral Agreement , the Security Documents and the Existing Agreements. The
principal amount of the Debt as of May 1, 1989 (excluding expenses and that
portion of the principal amount of the Chemical Note attributable to accrued but
unpaid interest on the note of MCB Financial Group, Inc. ("MCB Financial"),
dated December 10, 1986, in favor of Chemical Bank) was $127,910,639.00. As of
the Effective Time, the amount of such principal outstanding (after giving
effect to the payment to the Collateral Agent referred to in paragraph F hereof,
but before giving effect to the payments to the Collateral Agent referred to in
Sections 1.2 and 3.1(a) hereof) was $63,308,146.
E. PNM denies the assertions of the Agent, the Collateral Agent and the
Lenders described in paragraph D above and asserts that PNM (i) could not
lawfully have guaranteed any indebtedness of ▇▇▇▇▇▇▇ without the prior approval
of the New Mexico Public Service Commission, (ii) did not in fact guarantee the
Debt and (iii) therefore has no liability in respect of the Debt. PNM further
asserts that (i) the Lenders were aware of the applicable New Mexico laws and
regulations regarding a guaranty by a utility at the time ▇▇▇▇▇▇▇ incurred the
Debt and therefore priced their respective loan transactions with ▇▇▇▇▇▇▇ on a
stand-alone basis, (ii) that, given a reasonable period of time in which to
dispose of its assets, except for the notes (the "BCD Pledged Notes") of
Bellamah Community Development ("Bellamah") pledged by ▇▇▇▇▇▇▇ to the Collateral
Agent pursuant to the Note Pledge Agreement, ▇▇▇▇▇▇▇ will be able to pay
substantially all of the principal amount of the Debt and (iii) if the BCD
Pledged Notes are repaid in full, then such Debt will be fully repaid.
F. Prior to the Effective Time, PNM purchased from ▇▇▇▇▇▇▇ for $9,000,000
(the "Exel Payment") the common stock of Exel Limited, a Cayman Islands
corporation ("Exel"), owned by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ retained $3,250,000 from the
Exel Payment and remitted the balance thereof to the Collateral Agent, which
distributed such balance to the Lenders in accordance with the Consent and
Override Agreement.
G. In order to avoid the expense and uncertainty of any protracted
litigation over the validity of their respective positions, and in an effort to
improve the relationship between PNM and the Lenders, PNM, on the one hand, and
the Agent, the Collateral Agent and the Lenders, on the other, desire to enter
into this Agreement to compromise and settle, on the terms and conditions
described herein, all claims, rights and causes of action which each has or may
have against the other in respect of the Debt.
Terms and Conditions
--------------------
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in reliance upon the mutual
undertakings of the parties hereto, PNM, the Agent, the Collateral Agent and the
Lenders hereby agree as follows:
I. TRANSACTIONS AT EFFECTIVE TIME. Prior to or simultaneously with the execution
and delivery of this Agreement by all of the parties hereto (the "Effective
Time"), the following shall occur:
1.1 Secretary's Certificate. PNM shall deliver to the Agent, the Collateral
Agent and the Lenders a certificate of the Secretary of PNM, dated the date on
which the Effective Time occurs, and certifying that (a) attached thereto is a
true, correct and complete copy of resolutions duly adopted by the full Board of
Directors of PNM, authorizing the execution, delivery and performance of this
Agreement by PNM and (b) such resolutions have not been modified, rescinded or
amended and are in full force and effect.
1.2 Tax Payment. PNM shall pay to ▇▇▇▇▇▇▇ a tax sharing payment in the
amount of $6,500,000 in immediately available funds for immediate payment to the
Collateral Agent for distribution to the Lenders in accordance with the Consent
and Override Agreement.
II. MUTUAL RELEASES.
2.1 PNM Release. Effective as of the Effective Time, the Agent, the
Collateral Agent and each Lender hereby release and discharge PNM, ▇▇▇▇▇ Venture
Capital Corp. ("Utech"), Exel and each Subsidiary and Affiliate of PNM
(excluding ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Affiliated (as hereinafter defined)) and all
past, present and future shareholders, directors, officers, agents,
representatives, attorneys, advisors, employees, successors and assigns of PNM,
Utech, Exel and each Subsidiary and Affiliate of PNM (PNM and such individuals
(there being no individuals excluded regardless of affiliation with ▇▇▇▇▇▇▇ or
any ▇▇▇▇▇▇▇ Affiliate) and non-excluded entities, the "PNM Releases") from any
and all actions, causes of action, suits, debts, guaranties, covenants,
contracts, agreements, promises, damages, claims and demands whatsoever, under
the laws of the United States or of any state, in equity, or otherwise (the
"Lender Claims"), which the Agent, the Collateral Agent and such Lender ever
had, now have or hereafter can, shall or may have against any one or more of the
PNM Releases, with respect to all Lender Claims arising out of or related to the
Debt or the circumstances of the incurrence thereof by ▇▇▇▇▇▇▇, other than any
Lender Claim (a) resulting from the failure of PNM to perform its obligations
under this Agreement or the breach of any representation or warranty of PNM set
forth in this Agreement or in any instrument or document delivered pursuant
hereto, (b) against ▇▇▇▇▇▇▇, Republic Holding Company ("Republic Holding"),
Bellamah, any of the Affiliated Subsidiaries or any other direct or indirect
Subsidiary of ▇▇▇▇▇▇▇ (each such entity, a "▇▇▇▇▇▇▇ Affiliate") or (c) in the
case of Union Bank, in respect of any letters of credit issued by Union Bank for
the account of MCB Financial.
2.2 Agent, Collateral Agent and Lender Releases. Effective as of the
Effective Time, PNM hereby releases and discharges the Agent, the Collateral
Agent, each Lender and all past, present and future shareholders, directors,
officers, agents, representatives, attorneys, advisors, employees, successors
and assigns of each of the Agent, the Collateral Agent and such Lender (the
Agent, the Collateral Agent, such Lender and such other individuals and
entities, the "Lender Releasees") from any and all actions, causes of action,
suits, debts, guaranties, covenants, contracts, agreements, promises, damages,
claims and demands whatsoever, under the laws of the United States or of any
state, in equity, or otherwise (the "PNM Claims"), which PNM ever had, now has
or hereafter can, shall or may have against any one or more of the Lender
Releasees, with respect to all PNM Claims arising out of or related to the Debt,
the circumstances of the incurrence thereof by ▇▇▇▇▇▇▇ or the relationship
between any Lender Releasee and ▇▇▇▇▇▇▇ prior to, at the time of or following
such incurrence, other than any PNM Claim resulting from the failure of the
Agent, the Collateral Agent or such Lender to perform its obligations under this
Agreement or the breach of any representation or warranty of the Agent, the
Collateral Agent or such Lender set forth in this Agreement or in any instrument
or document delivered pursuant hereto.
2.3 Sole Remedy. In the event that any party hereto shall fail to perform
its obligations hereunder, the sole remedy for such failure shall be to recover
damages for the breach of the provisions of this Agreement requiring such
performance.
III. PNM DAMAGE PAYMENTS AND RECAPTURE.
3.1 Schedule of Payments. In consideration of the release set forth in
Section 2.1 hereof, PNM will make payments to the Collateral Agent for
distribution to the Lenders in accordance with the Consent and Override
Agreement as set forth below.
(a) Contemporaneously with or prior to the Effective Time, PNM
will pay in immediately available funds as damages to the
Collateral Agent for distribution to the Lenders in accordance
with the Consent and Override Agreement the difference between
$15,356,520 and the aggregate amount of all payments received and
retained by the Lenders on the Debt on or after October 31, 1989
other than proceeds of any sale, assignment or other disposition
of all or a portion of (i) ▇▇▇▇▇▇▇' interest in the Santa Fe
County Ranch Resort, (ii) the shares of common stock of Republic
Savings Bank, F.S.B. ("Republic Savings"), owned by Republic
Holding, (iii) the shares of preferred stock of Republic Savings
owned by ▇▇▇▇▇▇▇ or (iv) the shares, rights and interests
comprising ▇▇▇▇▇▇▇' venture capital portfolio (the "Venture
Capital Interests"), including without limitation the capital
stock of ▇▇▇▇▇▇▇ Ventures, Inc., Pulse Systems, Inc., DH
Technology, Inc. and Convex Computers, Inc. owned by ▇▇▇▇▇▇▇ and
any warrants and royalty rights relating thereto.
(b) No later than December 29, 1989, PNM will pay in immediately
available funds as damages to the Collateral Agent for
distribution to the Lenders in accordance with the Consent and
Override Agreement the difference between $32,856,520 and the
aggregate amount of all payments received and retained by the
Lenders on the Debt on or after October 31, 1989.
(c) No later than March 31, 1990, PNM will pay in immediately
available funds as damages to the Collateral Agent for
distribution to the Lenders in accordance with the Consent and
Override Agreement the difference between ($37,566,520 and the
aggregate amount of all payments received and retained by the
Lenders on the Debt on or after October 31, 1989.
(d) No later than June 30, 1990, PNM will pay in immediately
available funds as damages to the Collateral Agent for
distribution to the Lenders in accordance with the Consent and
Override Agreement the difference between $53,211,520 and the
aggregate amount of all payments received and retained by the
Lenders on the Debt on or after October 31, 1989.
(e) No later than December 31, 1990, PNM will pay in immediately
available funds as damages to the Collateral Agent for
distribution to the Lenders in accordance with the Consent and
Override Agreement the difference between $57,396,520 and the
aggregate amount of all payments received and retained by the
Lenders on the Debt on or after October 31, 1989.
3.2 Treatment of Certain Amounts; Non-Cash Payments.
(a) For purposes of (i) Section 3.1 hereof, all payments received
by the Collateral Agent from PNM and used to pay the
out-of-pocket expenses (including without limitation attorneys'
fees and expenses) of the Agent, the Collateral Agent or the
Lenders shall be deemed to have been received and retained by the
Lenders and (ii) Sections 3.1 and 3.4 hereof, all sums received,
prior to November 2, 1989, by the Collateral Agent from ▇▇▇▇▇▇▇
or from any liquidation of ▇▇▇▇▇▇▇' assets or other collateral
for the Debt and used to pay the out-of-pocket expenses
(including without limitation attorneys' fees and expenses) of
the Collateral Agent or attorneys' fees and expenses incurred by
the Lenders shall not be deemed to have been received and
retained by the Lenders.
(b) The Agent, the Collateral Agent and the Lenders hereby agree
not to accept any payment on the Debt other than in cash without
the prior written consent of PNM, except to the extent that any
such non-cash payment is, directly or indirectly, a distribution
pursuant to a Bankruptcy Case (as hereinafter defined). In the
event that any such non-cash distribution is received or proposed
to be received on the Debt pursuant to a Bankruptcy Case, the
parties hereto will consult in good faith as to appropriate
arrangements (and will endeavor to implement any such
arrangements in good faith) for protecting, preserving,
retaining, managing, realizing on, maintaining and distributing
the property so received, in order to effectuate equitably the
intent and purpose of the sharing and recapture arrangements
contemplated in Section 3.4 hereof. No non-cash distribution
received by the Collateral Agent or the Lenders shall be treated
as a payment received and retained by the Collateral Agent or the
Lenders, except that any net cash proceeds realized, received and
retained by the Collateral Agent or the Lenders on such
distribution shall be treated as received and retained by the
Collateral Agent and the Lenders at the time of such realization
and receipt. Unless otherwise agreed to by the parties, the
Collateral Agent may hold any such non-cash distribution on
behalf of the parties, as their interests may appear, until
realization thereon.
3.3 Adjustments. In the event that ▇▇▇▇▇▇▇, any ▇▇▇▇▇▇▇ Affiliate, any
successor to or creditor of ▇▇▇▇▇▇▇ or such ▇▇▇▇▇▇▇ Affiliate, any trustee,
receiver, conservator or other person acting on behalf of ▇▇▇▇▇▇▇, such ▇▇▇▇▇▇▇
Affiliate or the estate, creditors or equity holders of ▇▇▇▇▇▇▇ or such ▇▇▇▇▇▇▇
Affiliate or any regulator of any of the foregoing, shall at any time recover
from any Lenders or the Collateral Agent any sums (other than sums received from
PNM pursuant to Section 3.1 hereof) treated as having been received and retained
by the Lenders or the Collateral Agent under Sections 3.1 and 3.4 hereof or any
sums in respect of which the Collateral Agent has made remittances to PNM
pursuant to such Section 3.4, (a) the amount of any such recovery will be
treated as never having been received and retained by the Lenders and never
having been received by the Collateral Agent on the Debt for purposes of such
Sections 3.1 and 3.4 and (b) unless such recovery is found by a final,
non-appealable order of a court of competent jurisdiction to be due to the
misconduct of the Lenders or the Collateral Agent (which misconduct shall not
include actions or omissions (x) attributable to the transactions contemplated
by this Agreement or any instrument or document executed or delivered in
connection with this Agreement at or after the Effective Time and (y) occurring
prior to the Effective Time and of which PNM or any Subsidiary or Affiliate
thereof (including, without limitation, ▇▇▇▇▇▇▇ and any ▇▇▇▇▇▇▇ Affiliate) had
knowledge prior to the Effective Time), PNM will pay promptly, without interest,
(i) in the case of any such recovery from the Collateral Agent, to the
Collateral Agent or (ii) in the case of any such recovery from any Lenders, to
the Collateral Agent for distribution to such Lenders in proportion to the
respective amounts of such recoveries from each of such Lenders, in each case an
amount equal to the amount, if any, which PNM would have owed under such Section
3.1 as of the date of such recovery if the Lenders had not received and retained
the sums recovered (or in the case of recovery of a sum in respect of which a
remittance was made to PNM, the amount of such remittance). Any payment by PNM
(a) pursuant to clause (b) (i) of the immediately preceding sentence may,
notwithstanding anything in the Credit Agreement, the Master Collateral
Agreement or the Consent and Override Agreement to the contrary, be retained by
the Collateral Agent and not distributed to the Lenders (but only if the
Collateral Agent shall have previously distributed, in accordance with the
Consent and Override Agreement or this Agreement, as applicable, the sums in
respect of which the recovery from the Collateral Agent was made) and (b)
pursuant to either clause (b) (i) or clause (b) (ii) of the immediately
preceding sentence will be treated as having been received and retained by the
Lenders for purposes of such Sections 3.1 and 3.4. To the extent that PNM is not
required to make a payment under this Section 3.3 in respect of any such sums
recovered from the Collateral Agent or any Lender (other than because of
misconduct), the Lenders will make appropriate arrangements in order to share
the amount of any such recovery pro rata.
3.4 Recapture. (a) Subject to Sections 3.2, 3.3 and 3.4(b) hereof, if
at any time the Agent, the Collateral Agent or the Lenders shall have received
and retained $115,540,000 after May 1, 1989 on the Debt from any source,
including without limitation payments from PNM under Section 3.1 hereof, the
Collateral Agent shall remit promptly to PNM as a refund of a portion of the
damages paid by PNM amounts equal to any sums subsequently received by the
Collateral Agent in respect of the Debt or of any interest in the residual value
of ▇▇▇▇▇▇▇ allocated to the Lenders in connection with the ▇▇▇▇▇▇▇ Restructuring
Agreement (as hereinafter defined), but only to the following extent: (a) 100%
of the sums so received by the Collateral Agent from any source other than any
(i) distribution or other realization (a "Bellamah Distribution") of any nature
in respect of ▇▇▇▇▇▇▇' claims against or direct or indirect equity interest in
Bellamah or the obligations of Bellamah under the Guarantee Agreement (as
defined in the Credit Agreement), (ii) sale, assignment or other disposition (a
"Bellamah Sale") of assets of Bellamah or of such claims, equity interest or
obligations or (iii) distribution of ▇▇▇▇▇▇▇' residual cash on December 31, 1990
and December 31, 1991 (or on such other dates as agreed to by ▇▇▇▇▇▇▇ and the
Lenders) as contemplated in any term sheet or agreement then in effect for the
restructuring of ▇▇▇▇▇▇▇' obligations to the Lenders (the "▇▇▇▇▇▇▇ Restructuring
Agreement") and (b) 50% of the sums so received by the Collateral Agent from any
Bellamah Distribution or Bellamah Sale, in each case until PNM has been fully
reimbursed, without interest, for any payments it has made to the Collateral
Agent under Sections 3.1 (b), (c), (d) or (e) or Section 3.3 hereof. Any of the
foregoing sums received by the Collateral Agent in respect of the Debt and on
account of which the Collateral Agent (i) is required to make payment to PNM
pursuant to the immediately preceding sentence shall be paid by the Collateral
Agent to PNM and not distributed to the Lenders and (ii) is not required to make
such payment to PNM shall be distributed by the Collateral Agent to the Lenders
in accordance with the Consent and Override Agreement.
(b) Notwithstanding anything in Section 3.4 (a) hereof to the contrary,
if the Debt has been fully repaid prior to the time at which PNM has been fully
reimbursed in accordance with such Section 3.4 (a), the payment to which PNM
would be entitled from the Collateral Agent under such Section 3.4 (a) in
respect of sums received by the Collateral Agent on account of a Bellamah
Distribution or Bellamah Sale shall be limited so as to ensure that, after
giving effect to such payment and the retention by the Collateral Agent of sums
in respect thereof pursuant to the second sentence of such Section 3.4 (a), the
Lenders receive 50% of the value of such Bellamah Distribution or Bellamah Sale.
3.5 PNM Waiver of Claims in ▇▇▇▇▇▇▇' Bankruptcy or Reorganization. In
the event that ▇▇▇▇▇▇▇ shall voluntarily or involuntarily become the subject of
a case under Title 11 of the United States Code (a "Bankruptcy Case"), to the
extent that PNM may have or be deemed to have a claim against ▇▇▇▇▇▇▇ in any
such Bankruptcy Case, PNM agrees with the Lenders that PNM will waive any such
claim but only to the extent that such claim may arise or be deemed to arise in
relation to any obligation of or payment by PNM on account of or measured by
antecedent debt of ▇▇▇▇▇▇▇ in respect of which antecedent debt payment was made
by ▇▇▇▇▇▇▇ between ninety days and one year before the filing of such Bankruptcy
Case.
IV. REPRESENTATIVES AND WARRANTIES.
4.1 PNM Representations and Warranties. PNM represents and warrants to the
Agent, the Collateral Agent and the Lenders that (a) PNM is authorized to
execute, deliver and perform this Agreement, (b) PNM's execution, delivery and
performance of this Agreement does not violate any law, statute, ordinance,
rule, regulation, charter, bylaw or agreement to which PNM is subject or by
which PNM is bound, (c) the persons executing and delivering this Agreement and
each instrument or document delivered pursuant hereto on PNM's behalf are
authorized to do so and (d) this Agreement constitutes the legal, valid and
binding obligation of PNM, enforceable against PNM in accordance with its terms.
4.2 Lender Representations and Warranties. Each Lender hereby separately
represents and warrants to PNM that (a) such Lender is authorized to execute,
deliver and perform this Agreement, (b) such Lender's execution, delivery and
performance of this Agreement does not violate any law, statute, ordinance,
rule, regulation, charter, bylaw or agreement to which such Lender is subject or
by which such Lender is bound, (c) the persons executing and delivering this
Agreement and each instrument or document delivered pursuant hereto on such
Lender's behalf are authorized to do so, (d) this Agreement constitutes the
legal, valid and binding obligation of such Lender, enforceable against such
Lender in accordance with its terms and (e) such Lender has not assigned or
granted any participation in its portion of the Debt (other than any such
participation assigned or granted to another Lender pursuant to the Sharing
Agreement dated as of July 28, 1989 among the Lenders).
4.3 Agent and Collateral Agent Representatives and Warranties. Each of the
Agent and the Collateral Agent hereby separately represents and warrants to PNM
that (a) it is authorized to execute, deliver and perform this Agreement, (b)
its execution, delivery and performance of this Agreement does not violate any
law, statute, ordinance, rule, regulation, charter, bylaw or agreement to which
it is subject or by which it is bound, (c) the persons executing this Agreement
and each instrument or document delivered pursuant hereto on its behalf are
authorized to do so and (d) this Agreement constitutes the legal, valid and
binding obligation of the Agent or the Collateral Agent, as the case may be,
enforceable against the Agent or the Collateral Agent, as the case may be, in
accordance with its terms.
V. LENDER CONSENT AND WAIVER
5.1 Specified Asset Sales. The Lenders agree to waive compliance (a) in the
case of the Banks, with all provisions of the Loan Documents and (b) in the case
of each Existing Creditor, with all provisions of the Existing Agreements to
which such Existing Creditor is a party, in each case to the extent and only to
the extent necessary to permit the sale of any of the following assets of
▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Affiliate for cash at or above the prices listed
therefor, free and clear of any and all claims, liens, charges and encumbrances
in favor of, or created by or through, the Lenders, so long as the proceeds of
any such sales are promptly remitted by ▇▇▇▇▇▇▇ to the Collateral Agent for
distribution in accordance with the provisions of this Agreement:
Asset Minimum Price
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Santa Fe County Ranch Resort $ 7,200,000
(as a whole or in parcels at not
less than $4,000 per acre)
Venture Capital Interests $ 2,000,000
Frontier First Partners $ 554,000
Common and preferred stock
of Republic Savings $ 10,800,000
5.2 Miscellaneous Asset Sales. The Lenders agree to waive compliance
(a) in the case of the Banks, with all provisions of the Loan Documents and (b)
in the case of each Existing Creditor, with all provisions of the Existing
Agreements to which such Existing Creditor is a party, in each case to the
extent and only to the extent necessary to permit the sale or disposition of, or
other realization on, any asset of ▇▇▇▇▇▇▇ (other than ▇▇▇▇▇▇▇' claims against
or direct or indirect equity interest in Bellamah) not identified in Section 5.1
hereof, including without limitation the preferred stock of Sunbelt Mining
Company, Inc. and all of ▇▇▇▇▇▇▇' artwork, office furnishings and equipment,
free and clear of any and all claims, liens, charges and encumbrances in favor
of, or created by or through, the Lenders. The Lenders agree that ▇▇▇▇▇▇▇ shall
have the right to retain the proceeds of any such sales, dispositions or other
realizations subject to the provisions of the ▇▇▇▇▇▇▇ Restructuring Agreement
(or any amendments or modifications thereto) relating to the subsequent
expenditure and/or distribution of such proceeds by ▇▇▇▇▇▇▇.
VI. MISCELLANEOUS
6.1 Notices. Notices and other communications in connection herewith
shall be in writing and shall be delivered (which delivery may be effected by
telecopy, facsimile transmission, telex, graphic scanning or other telegraphic
communications equipment), mailed or addressed.
(a) if to PNM, at ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇) Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Senior
Vice President, with copies to (i) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., Public
Service Building, P.O. Drawer AA, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq. and (ii) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇),
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq; and
(b) if to the Agent, the Collateral Agent or any Lender, at its address
set forth on Schedule 1 hereto, with a copy to Wachtell, Lipton, ▇▇▇▇▇
& ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopy no. (212)
371-1658), Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
6.2 Successors and Assigns. 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, including without limitation the holder of
any participation in the Debt assigned or granted by any Lender; and all
covenants, promises and agreements by or on behalf of PNM, the Agent, the
Collateral Agent or any Lender that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns.
6.3 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS MADE AND
WHOLLY PERFORMED WITHIN THAT STATE.
6.4 Waivers; Amendments. (a) No waiver of any provision of this
Agreement or consent to any departure by PNM, the Agent, the Collateral Agent or
any Lender therefrom shall in any event be effective unless the same shall be
authorized as provided in Section 6.4 (b) hereof, 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 PNM, the Agent, the Collateral Agent or any
Lender in any case shall entitle PNM, the Agent, the Collateral Agent or such
Lender, as the case may be, 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 an agreement or agreements in writing
entered into by PNM, the Agent, the Collateral Agent and the Lenders.
6.5 Counterparts and Signatures. This Agreement 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 contract. This Agreement
shall be deemed executed and delivered by any party hereto if a copy or
facsimile of a signature page hereof executed by such party is delivered to the
Collateral Agent in accordance with Section 6.1 hereof.
6.6 Headings. Article and section headings used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.
6.7 Entire Settlement. (a) Subject to the next succeeding sentence,
this Agreement constitutes the entire settlement and supersedes all other prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof. The Lenders will take all steps
necessary and appropriate on the part of the Lenders in good faith to consummate
the arrangements contemplated by (i) the October 31, 1989 term sheet (the
"▇▇▇▇▇▇▇ Term Sheet") entitled "Restructuring of All Senior and Subordinated
Indebtedness (the "Debt") of ▇▇▇▇▇▇▇ Resources, Inc. ("▇▇▇▇▇▇▇")" and (ii)
paragraph IV of the October 4, 1989 term sheet entitled "Principal Terms of
Comprehensive Settlement between Public Service Company of New Mexico ("PNM")
and the Lenders (the "Lenders") to ▇▇▇▇▇▇▇ Resources, Inc. ("▇▇▇▇▇▇▇"). The
Lenders and PNM understand and agree that (i) the ▇▇▇▇▇▇▇ Term Sheet is
satisfactory to the Lenders in all material respects, (x) except with respect to
certain issues (substantially intercreditor in nature) relating to the
uniformity of interest rates on the respective portions of the Debt and (y) so
long as the Lenders receive not less than 25% of any residual cash or cash
equivalents of ▇▇▇▇▇▇▇ allocated in the manner described in paragraph 1(d) of
the ▇▇▇▇▇▇▇ Term Sheet, and (ii) in the event that this Agreement conflicts with
any provision of the ▇▇▇▇▇▇▇ Restructuring Agreement relating directly to PNM or
its rights or obligations hereunder, the provisions of this Agreement shall
control. Notwithstanding the foregoing, the contractual obligations of the
Lenders with respect to the terms set forth in the term sheets referred to above
shall be only as stated in the definitive documentation executed and delivered
by all parties thereto in connection with the evidencing of the arrangements
contemplated by such term sheets.
(b) The Agent, the Collateral Agent and the Lenders hereby agree to
modify the Consent and Override Agreement by deleting Section 2.3(c) thereof in
its entirety. Except as otherwise provided in the immediately preceding
sentence, the Consent and Override Agreement shall continue in full force and
effect in accordance with the provisions thereof.
6.8 Use of Agreement. Neither this Agreement nor any instrument or
document delivered in connection herewith, nor any of the terms hereof or
thereof, nor any negotiations or proceedings in connection herewith or
therewith, nor any actions taken pursuant hereto or thereto, shall constitute or
be construed as or be deemed to be evidence of an admission on the part of any
party hereto of the truth or falsity of any of the claims or assertions made by
any party hereto or the merit, or lack thereof, of any defenses thereto, nor
shall this Agreement or any such instrument or document, or any of the terms
hereof or thereof, or any negotiations or proceedings in connection herewith or
therewith, be offered or received in evidence, or otherwise used in any
proceeding, against any party hereto, except with respect to the enforcement of
this Agreement.
6.9 Further Assurances. PNM, the Agent, the Collateral Agent and the
Lenders shall each from time to time do and perform any other act, and shall
each execute, acknowledge, deliver, file, register, deposit and record any and
all further instruments, required by law or reasonably requested by any party
hereto for the purpose of proper protection, to the satisfaction of such party,
of the rights or interests of such party or for the purpose of carrying out the
intention of this Agreement.
6.10 Confidentiality. Each party hereto separately agrees that such
party and its employees, agents and attorneys shall not, except (a) as may be
required by law, regulation or order of government authority or (b) in
connection with the enforcement of this Agreement, disclose or communicate the
substance or terms of this Agreement to any other person without the prior
written consent of all parties hereto, which consent shall not be unreasonably
withheld. Each party hereto separately grants to each other party hereto consent
to disclose the provisions of this Agreement to such other party's attorneys,
financial or lending institutions, outside auditors and regulatory authorities.
6.11 Defense of Certain Proceedings. Promptly upon receipt by the
Agent, the Collateral Agent or any Lender of notice of the commencement of any
action or proceeding seeking any recovery described in Section 3.3 hereof or
challenging the validity or priority of any lien securing the Debt (other than
in respect of the BCD Pledged Notes), the Agent, the Collateral Agent or such
Lender, as in the case may be, will notify PNM of such commencement (a
"commencement Notice"). PNM will be entitled to participate in the defense of
any such action or proceeding, and, to the extent that it may elect by written
notice delivered to the Agent, the Collateral Agent and the affected Lenders
promptly after receiving a Commencement Notice, to assume the defense thereof.
In any case, counsel for the Agent, the Collateral Agent, the affected Lenders
and, if it chooses to participate in or assume the defense, PNM will be a single
law firm selected by the Collateral Agent after consultation with the affected
Lenders, such counsel to be reasonably satisfactory to PNM, and PNM shall pay
the reasonable fees and expenses of such counsel; provided, however, (i) if PNM
shall, within ten days after receiving a Commencement Notice, give notice to the
Collateral Agent that PNM has determined not to participate in or assume the
defense of any such action or proceeding, the cost of any such defense by the
Agent, the Collateral Agent or the Lenders shall not be at the expense of PNM
and (ii) if the Collateral Agent after consultation with the Lenders reasonably
concludes that there may be legal defenses available to the Agent, the
Collateral Agent or the Lenders which are different from or additional to those
available to PNM, or that it would be inappropriate for the counsel selected by
the Collateral Agent to represent, in respect of a particular legal or factual
issue or otherwise, both PNM, on the one hand, and the Agent, the Collateral
Agent and the Lenders, on the other, the Collateral may after consultation with
the Lenders select additional, separate counsel, but not at the expense of PNM,
to represent the Agent, the Collateral Agent and the affected Lenders. The
Agent, the Collateral Agent and the Lenders will, to the extent reasonably
requested by PNM and at the expense of PNM, cooperate in good faith with PNM in
connection with the defense of any such action or proceeding but, in the absence
of any such reasonable request, will not be required to participate in any such
defense. None of the foregoing shall prevent PNM, the Agent, the Collateral
Agent or any Lender from retaining counsel, at its own expense, to represent its
individual interests.
6.12 Attorneys' Fees and Expenses. None of the Agent, the Collateral
Agent or the Lenders will be obligated to pay any attorneys' fees or expenses of
PNM, and, other than as set forth in Section 6.11 hereof, PNM will not be
obligated to pay any attorneys' fees and expenses of the Agent, the Collateral
Agent or the Lenders, in each case incurred in connection with the negotiation
or documentation of this Agreement or any instrument or document prepared or
delivered in connection herewith or otherwise in connection with the Debt;
provided, however, that such fees and expenses of the Agent, the Collateral
Agent and the Lenders may be paid from payments otherwise required to be made by
PNM to the Collateral Agent pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the day and year first above written.
PUBLIC SERVICE COMPANY
OF NEW MEXICO
By:
----------------------------------
Title:
CHEMICAL BANK
individually and as
Agent and Collateral Agent
By:
----------------------------------
Title:
THE BANK OF NEW YORK (formerly
known as Irving Trust Company
By:
----------------------------------
Title:
BARCLAYS BANK PLC
By:
----------------------------------
Title:
UNION BANK
By:
----------------------------------
Title:
FIRST NATIONAL BANK IN
ALBUQUERQUE
By:
----------------------------------
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
COMMERCIAL PAPER
INCORPORATED
By:
----------------------------------
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK
By:
----------------------------------
Title:
FIRST INTERSTATE BANK OF
ALBUQUERQUE
By:
----------------------------------
Title:
FIRST NATIONAL BANK OF
BELEN
By:
----------------------------------
Title:
Schedule 1
Addresses for Notice
Name; Address Telecopy Number
-------------- ---------------
Chemical Bank (212) 308-3825
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
The Bank of New York (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Barclays Bank PLC (▇▇▇) ▇▇▇-▇▇▇▇
Barclays Bank Building
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Union Bank (213) 236-4096
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
First National Bank in Albuquerque (▇▇▇) ▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Guaranty Trust Company (▇▇▇) ▇▇▇-▇▇▇▇
of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
First Interstate Bank of (▇▇▇) ▇▇▇-▇▇▇▇
Albuquerque
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
First National Bank of Belen (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Commercial Paper Incorporated
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
