THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is effective as of November 2, 2016 among PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the “Borrower”), the Lenders party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

WHEREAS, the Borrower, the Lenders party thereto and the Administrative Agent are parties to that certain Credit Agreement, dated as of October 31, 2011, as amended by the First Amendment to Credit Agreement, dated as of January 18, 2012 and the Second Amendment to Credit Agreement, dated as of December 17, 2014 (as so amended and as otherwise amended or modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower has requested a modification to the Credit Agreement as described below; and

WHEREAS, the Lenders party hereto are willing to agree to such modification, subject to the terms set forth herein as more fully set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.    Amendments to Credit Agreement.

(a)The definition of “Material Lease” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety.

(b)The following definitions in Section 1.1 of the Credit Agreement are amended and restated in their entirety to read as follows:

(c)The following definitions are hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order:

(d)Clause (d) in the definition of “Defaulting Lender” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

    

(e)Section 2.5(a) of the Credit Agreement is amended and restated in its entirety to read as follows:

(f)The following sentence is hereby added to the end of Section 3.16(c) of the Credit Agreement to read as follows:

(g)Section 6.18 and Section 6.19 of the Credit Agreement are hereby deleted in their entirety and replaced with the following:

(h)Section 7.2 of the Credit Agreement is amended and restated in its entirety to read as follows:

(i)Clause (o) of Section 8.5 of the Credit Agreement is amended to read as follows:

(j)A new Section 11.22 is hereby added to the Credit Agreement to read as follows:

(k)Schedule 6.18 and Schedule 6.19 to the Credit Agreement are hereby deleted in their entirety.

(l)Footnote 1 in Schedule 1 to Exhibit 7.1(c) to the Credit Agreement is hereby deleted.

2.    Extension.

Pursuant to Section 2.5(a) of the Credit Agreement, as amended by this Amendment, the Borrower has requested that the Maturity Date be extended for an additional year until October 31, 2021. By executing this Amendment, each Lender, other than SunTrust Bank, shall have consented to the requested extension of the Maturity Date until October 31, 2021. It is understood and agreed that, pursuant to Section 2.5(b) of the Credit Agreement, SunTrust Bank is a Non-Extending Lender and its Maturity Date with respect to the obligations owed to it remains October 31, 2020.

3.    Effectiveness.

This Amendment shall be effective as of November 2, 2016 upon satisfaction of the following conditions precedent:

(a)    Receipt by the Administrative Agent of copies of this Amendment duly executed by the Borrower, the Required Lenders and each Lender consenting to the extension of its Maturity Date.

(b)    Receipt by the Administrative Agent of the following:

(i)    Copies of the articles of incorporation of the Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its formation and copies of the bylaws of the Borrower certified by a secretary or assistant secretary (or the equivalent) of the Borrower to be true and correct as of the Third Amendment Effective Date.

(ii)    Copies of resolutions of the board of directors of the Borrower approving and adopting this Amendment, the transactions contemplated herein and authorizing execution and delivery hereof, certified by a secretary or assistant secretary (or the equivalent) of the Borrower to be true and correct and in full force and effect as of the Third Amendment Effective Date.

(iii)    An incumbency certificate of the Borrower certified by a secretary or assistant secretary (or the equivalent) of the Borrower to be true and correct as of the Third Amendment Effective Date.

(c)    Receipt by the Administrative Agent of opinions of counsel from counsel to the Borrower (which may include in-house counsel with respect to matters of New Mexico law), in form and substance acceptable to the Administrative Agent, addressed to the Administrative Agent and the Lenders and dated as of the Third Amendment Effective Date.

(d)    Receipt by the Administrative Agent of a true and correct copy of an order issued by the New Mexico Public Regulation Commission authorizing the Borrower to amend the Credit Agreement and extend the Maturity Date in accordance with this Amendment.

(e)    The Borrower shall have paid to the Administrative Agent, for the account of each Lender agreeing to extend its Maturity Date, as set forth in Section 2 above, a fee in an amount equal to 0.06% of such Lender’s Commitment.

(f)    The Borrower shall have paid to the Administrative Agent and Wells Fargo Securities, LLC, all fees due and payable to such Persons on the date hereof.

4.    Ratification of Credit Agreement. The term “Credit Agreement” as used in each of the Credit Documents shall hereafter mean the Credit Agreement as amended and modified by this Amendment. Except as herein specifically agreed, the Credit Agreement, as amended by this Amendment, is hereby ratified and confirmed and shall remain in full force and effect according to its terms. Each party hereto acknowledges and consents to the modifications set forth herein and agrees that, other than as explicitly set forth in Section 1 above, this Amendment does not impair, reduce or limit any of its obligations under the Credit Documents (including, without limitation, the indemnity obligations set forth therein) and that, after the date hereof, this Amendment shall constitute a Credit Document. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Credit Documents or constitute a waiver of any provision of any of the Credit Documents.

5.    Authority/Enforceability. The Borrower represents and warrants as follows:

(a)It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b)This Amendment has been duly executed and delivered by the Borrower and constitutes the Borrower’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c)Other than the filing of annual short-term financing plans with the New Mexico Public Regulation Commission in the normal course of business, and such Commission’s actions thereon, no consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by the Borrower of this Amendment, or, if required, any such consent, approval, authorization, order, filing, registration or qualification has been previously obtained or made.

6.    Representations and Warranties. The Borrower represents and warrants to the Lenders that (a) the representations and warranties of the Borrower set forth in Section 6 of the Credit Agreement are true and correct as of the date hereof, unless they specifically refer to an earlier date and except that, for purposes of the foregoing, the references to “December 31, 2013” in Section 6.7 of the Credit Agreement are hereby amended to “December 31, 2015,” (b) no event has occurred and is continuing which constitutes a Default or an Event of Default, and (c) it has no claims, counterclaims, offsets, credits or defenses to its obligations under the Credit Documents, or to the extent it has any, they are hereby released in consideration of the Lenders party hereto entering into this Amendment.

7.    No Conflicts. The Borrower represents and warrants that the execution and delivery of this Amendment, the consummation of the transactions contemplated herein and in the Credit Agreement (before and after giving effect to this Amendment), and the performance of and compliance with the terms and provisions hereof by the Borrower will not (a) violate, contravene or conflict with any provision of its articles or certificate of incorporation, bylaws or other organizational or governing document, (b) violate, contravene or conflict with any law, rule, regulation (including, without limitation, Regulation U and Regulation X), order, writ, judgment, injunction, decree or permit applicable to the Borrower, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties may be bound, the violation of which would have or would reasonably be expected to have a Material Adverse Effect or (d) result in or require the creation of any Lien upon or with respect to the Borrower’s properties.

8.    Counterparts/Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of executed counterparts by telecopy or by electronic format (pdf) shall be effective as an original.

9.    GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.