<SEC-DOCUMENT>0001108426-15-000133.txt : 20151123
<SEC-HEADER>0001108426-15-000133.hdr.sgml : 20151123
<ACCEPTANCE-DATETIME>20151123170951
ACCESSION NUMBER:		0001108426-15-000133
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20151123
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20151123
DATE AS OF CHANGE:		20151123

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PNM RESOURCES INC
		CENTRAL INDEX KEY:			0001108426
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				850019030
		STATE OF INCORPORATION:			NM
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32462
		FILM NUMBER:		151250392

	BUSINESS ADDRESS:	
		STREET 1:		414 SILVER AVE. SW
		CITY:			ALBUQUERQUE
		STATE:			NM
		ZIP:			87102-3289
		BUSINESS PHONE:		5052412700

	MAIL ADDRESS:	
		STREET 1:		414 SILVER AVE. SW
		STREET 2:		ATTN: MS 0905 - CATHY MARTINEZ
		CITY:			ALBUQUERQUE
		STATE:			NM
		ZIP:			87102-3289

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MANZANO CORP
		DATE OF NAME CHANGE:	20000303

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PUBLIC SERVICE CO OF NEW MEXICO
		CENTRAL INDEX KEY:			0000081023
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC & OTHER SERVICES COMBINED [4931]
		IRS NUMBER:				850019030
		STATE OF INCORPORATION:			NM
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06986
		FILM NUMBER:		151250393

	BUSINESS ADDRESS:	
		STREET 1:		414 SILVER AVE. SW
		CITY:			ALBUQUERQUE
		STATE:			NM
		ZIP:			87102-3289
		BUSINESS PHONE:		5058482700

	MAIL ADDRESS:	
		STREET 1:		414 SILVER AVE. SW
		CITY:			ALBUQUERQUE
		STATE:			NM
		ZIP:			87102-3289
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a11232015pnmcypressagreeme.htm
<DESCRIPTION>8-K
<TEXT>
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		<title>8-K</title>
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<a name="s56C8618C336F9048C0B635558750BCE3"></a><div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;</font></div></div><br><div style="line-height:120%;padding-left:1px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:99.27310488058151%;border-collapse:collapse;text-align:left;"><tr><td colspan="1"></td></tr><tr><td width="100%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:17px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">UNITED STATES</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Washington, D.C.  20549</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:17px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:17px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">FORM 8-K</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CURRENT REPORT</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:17px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:17px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">PURSUANT TO SECTION 13 OR 15(d) OF THE</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SECURITIES EXCHANGE ACT OF 1934</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:17px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-left:1px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:98.85773624091381%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td width="61%"></td><td width="21%"></td><td width="18%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:right;text-indent:1px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date of Report (Date of earliest event reported)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">November 23, 2015</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(November 20, 2015)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-left:1px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:99.06542056074767%;border-collapse:collapse;text-align:left;"><tr><td colspan="5"></td></tr><tr><td width="17%"></td><td width="5%"></td><td width="51%"></td><td width="4%"></td><td width="23%"></td></tr><tr><td colspan="5" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exact Name of Registrant as Specified</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Commission</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">in Charter, State of Incorporation,</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">I.R.S. 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#000000;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">001-32462</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">PNM Resources, Inc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">85-0468296</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(A New Mexico Corporation)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">414 Silver Ave. SW</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Albuquerque, New Mexico  87102-3289</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(505) 241-2700</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td 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style="font-family:inherit;font-size:10pt;font-weight:bold;">Item 1.01 Entry into a Material Definitive Agreement.</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As has been previously reported, Public Service Company of New Mexico (&#8220;PNM&#8221;), a wholly owned subsidiary of PNM Resources, Inc., leases interests in Units 1 and 2 of the Palo Verde Nuclear Generating Station (&#8220;PVNGS&#8221;) under arrangements entered into in 1985 and 1986 that are accounted for as operating leases.  </font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As previously reported, on January 13, 2014, PNM provided notice to three Unit 2 lessors, including Cypress Verde LLC and Cypress Second PV Partnership (together, &#8220;Cypress&#8221;), that it would exercise its fair market value purchase option at the end of the original lease terms.  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style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:44px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">10.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Sale Agreement 136 (PVNGS Unit 2 Lease) dated as of November 20, 2015, between Public Service Company of New Mexico and Cypress Verde LLC.</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:13px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td 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style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;text-indent:-144px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><br><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2</font></div></div><hr style="page-break-after:always"><a name="s56C8618C336F9048C0B635558750BCE3"></a><div></div><br><div style="line-height:138%;padding-bottom:13px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">SIGNATURE</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-left:1px;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:98.23468328141225%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="39%"></td><td width="61%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">PNM RESOURCES, INC.</font></div><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">PUBLIC SERVICE COMPANY OF NEW MEXICO</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(Registrants)</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date:  November 23, 2015</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">/s/ Joseph D. Tarry</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Joseph D. Tarry</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Vice President and Corporate Controller</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(Officer duly authorized to sign this report)</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#32;<br> <br>&#160;</font></div><br><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">3</font></div></div>	</body>
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex101saleagreement136confo.htm
<DESCRIPTION>EXHIBIT 10.1
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<a name="s8DF6AA1778C0B0A388A7262CDF6063BD"></a><div><div style="line-height:130%;padding-bottom:10px;text-align:right;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit 10.1</font></div></div><br><div style="line-height:120%;text-align:right;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;"><hr></div><div style="line-height:120%;text-align:right;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:Arial;font-size:14pt;">SALE AGREEMENT 136</font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:Arial;font-size:14pt;">(PVNGS Unit 2 Lease)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Dated as of November 20, 2015</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">between</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CYPRESS VERDE LLC,</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PUBLIC SERVICE COMPANY OF NEW MEXICO </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">and</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">but solely as Owner Trustee under the Trust Agreement </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">dated as of August 12, 1986 with Cypress Verde LLC</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">___________________________________________________</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Exercise of Purchase Option under Section 13(a) of the Facility Lease</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Sale and Leaseback of:</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;padding-left:12px;text-indent:0px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i)  a 1.36% Undivided Interest In Palo Verde Nuclear Generating Station (&#8220;PVNGS&#8221;) Unit 2,</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii)  a 0.4533333% Undivided Interest in Certain PVNGS Common Facilities and</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) a 0.3929067% Undivided Interest in the PVNGS Site</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;"><hr></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">SCHEDULED CLOSING: JANUARY 15, 2016</font></div><br><div></div><hr style="page-break-after:always"><a name="s74D765404D0E66312938262CDF73D6F4"></a><div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="96%"></td><td width="4%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">RECITALS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">1</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Article 1 DEFINITIONS AND RULES OF CONSTRUCTION</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">2</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 1.1. Appendix A.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">2</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 1.2. Other Capitalized Terms.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">2</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Article 2 PURCHASE AND SALE</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.1. Purchase and Sale.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.2. Payment of Option Purchase Price.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.3. Option Transactions; Instructions to Owner Trustee.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.4. PNM Confirmation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">7</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.5. Notice of Option Exercise.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">7</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 3 OPTION CLOSING; CONDITIONS TO OPTION CLOSING</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">7</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.1. Option Closing.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.2. Conditions Precedent to the Obligations of PNM.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) NRC Notice.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) Truth of Representations.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) Performance of Covenants.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) No Default.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) No Event of Loss or Deemed Loss Event.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">9</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) Items to be Delivered by Owner Participant.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">9</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.3 Conditions Precedent to the Obligations of Owner Trustee.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) Approvals.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) Truth of Representations.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) Performance of Covenants.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) Filings and Recordations.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) No Default.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">11</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) Items to be Delivered by PNM.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">11</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(g) Rescission.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">11</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(h) Outstanding Notes.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 4 REPRESENTATIONS AND WARRANTIES</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.1. Representations and Warranties of Owner Participant.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) Due Organization.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) Authority Relative to the Option Closing Documents.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">12</font></div></td></tr></table></div></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                                      </font><font style="font-family:Arial;font-size:12pt;">i</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s74D765404D0E66312938262CDF73D6F4"></a><div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="96%"></td><td width="4%"></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) No Violation of Law, etc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) Litigation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) Brokers.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) Options Interests.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.1. Representations and Warranties of PNM.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) Due Incorporation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) Authority Relative to the PNM Transfer Documents.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) No Violation of Law, etc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) Litigation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) Brokers.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) ERISA.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.3. Representations and Warranties of Manager.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">15</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.4. Limitation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">15</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 5 INDEMNIFICATIONS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.1. General Indemnification.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.2. Notice and Defense of Claims.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.3. Survival.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 6 COVENANTS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.1. Filings.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.2. Payment of Option Purchase Price.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.3.  Owner Participant&#8217;s Liens.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.4. No Shop Provision.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 7 MISCELLANEOUS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.1. Fees and Expenses.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.2. Notices.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.3. Entire Agreement; Amendments.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">19</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.4. Successors and Assigns.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.5. Governing Law.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.6. Counterparts.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.7. Severability.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.8. Headings.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.9. No Third-Party Beneficiaries.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.10. Further Assurances.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">21</font></div></td></tr></table></div></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                                      </font><font style="font-family:Arial;font-size:12pt;">ii</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s74D765404D0E66312938262CDF73D6F4"></a><div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="96%"></td><td width="4%"></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.11. Inconsistent Terms.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.12. Waiver.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.13. Status of Facility Lease and Other Lease Transaction Documents.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.14. Effective Date.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.15. Concerning USBNA.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.16. No Inference, Etc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">22</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                                      </font><font style="font-family:Arial;font-size:12pt;">iii</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s3F08F95532114892797E262CDF8DD0A7"></a><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">SALE AGREEMENT 136  <br>(PVNGS Unit 2 Lease)</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This SALE AGREEMENT 136 dated as of November 20, 2015 (this &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221;) is made between: </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) Cypress Verde LLC, a California limited liability company (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant</font><font style="font-family:Arial;font-size:11pt;">&#8221;);  </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(ii) PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM</font><font style="font-family:Arial;font-size:11pt;">&#8221;); and </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) U.S. BANK NATIONAL ASSOCIATION (successor to State Street Bank and Trust Company, successor to The First National Bank of Boston), not in its individual capacity, but solely as Owner Trustee (in such capacity, &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221;) under the Trust Agreement dated as of August 12, 1986 with Owner Participant (assignee of Cypress PV Partnership (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">CPVP</font><font style="font-family:Arial;font-size:11pt;">&#8221;), assignee of MFS Leasing Corp. (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">MFSLC</font><font style="font-family:Arial;font-size:11pt;">&#8221;)).</font></div><a name="s6FBC4DBB823D4FD6DEA0262CDFBCD41C"></a><div style="line-height:130%;padding-bottom:16px;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">RECITALS</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">A. Owner Participant holds all of the right, title and interest in and to:</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) 100% of the beneficial interest (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Beneficial Interest</font><font style="font-family:Arial;font-size:11pt;">&#8221;) in the Trust Estate (such term and the other capitalized terms used herein without definition having the respective meanings specified in Article I below), which Trust Estate includes, without limitation, the Undivided Interest and the Real Property Interest together with the Facility Lease (and together with all the other property constituting the Trust Estate, the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Subject Property</font><font style="font-family:Arial;font-size:11pt;">&#8221;), and </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) in its capacity as owner of the Beneficial Interest and in its own right, all contractual rights and obligations, if any, in, to and under the Lease Transaction Documents as Owner Participant.</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">B. Owner Trustee holds the right, title and interest in and to the Undivided Interest and the Real Property Interest and under the Assignment and Assumption that has become vested in it pursuant to the Purchase Documents, the Facility Lease and the other Lease Transaction Documents (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Interests</font><font style="font-family:Arial;font-size:11pt;">&#8221;) through the date immediately preceding the Purchase Date.</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#32;C.  By letter dated January 13, 2014, PNM provided notice of its irrevocable election to purchase (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Option Exercise</font><font style="font-family:Arial;font-size:11pt;">&#8221;) the Undivided Interest and Real Property Interest (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Property</font><font style="font-family:Arial;font-size:11pt;">&#8221;) pursuant to Section 13(a) of the Facility Lease.  Each of Owner Participant and Owner Trustee acknowledges that it received the Option Notice on the Notice Date. Following delivery of the Notice of Option Exercise, Section 13(a) of the Facility Lease requires that PNM and Owner Participant promptly agree upon the Fair Market Sales Value (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">FMSV</font><font style="font-family:Arial;font-size:11pt;">&#8221;) of the Option Property under the Facility Lease to be paid by the Lessee on the Option Closing Date, following the expiration of the Basic Lease Term on January 15, 2016.</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">D.  In the Letter Agreement, Owner Participant and PNM have reached agreement that:</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:54px;text-indent:-7px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the FMSV of the Undivided Interest is Forty Six Million Four Hundred and Thirty-Three Thousand Six Hundred and Thirty-One Dollars and Seventy-Three cents ($46,433,631.73) (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Undivided Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221;); and </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">1</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:130%;text-align:justify;padding-left:54px;text-indent:-7px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the FMSV of the Real Property Interest is Nineteen Thousand Seven Hundred and One Dollars and Sixty Cents ($19,701.60) (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Real Property Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221;).</font></div><div style="line-height:130%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">E. PNM desires to and shall purchase and assume, and Owner Participant desires to and shall cause Owner Trustee to sell and assign, the Option Interests on the Option Date on the terms and conditions set forth herein (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221;). This Agreement and the other Transfer Documents together comprise the Purchase Documentation (as defined in the Letter Agreement) in relation to the Option Interests. </font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:</font></div><a name="s80F0D1DB679DFDFAF15D262CE0003E7B"></a><div style="line-height:130%;padding-bottom:16px;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Article 1 DEFINITIONS AND RULES OF CONSTRUCTION</font></div><a name="sE07D07DEEDEFD6837D27262CE0124AB2"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 1.1. Appendix A.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The following capitalized terms used in this Agreement shall have the meanings set forth in this Article&#160;1.  Such definitions shall be equally applicable to both the singular and plural forms of the terms defined.  Unless otherwise defined in this Article&#160;1 or elsewhere in this Agreement, capitalized terms used in this Agreement shall have the meanings as set forth in Appendix A. The rules of construction stated in Appendix A shall apply equally to the use of defined terms in this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s795EF92D0A9C43EE7357262CE03A6DB5"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 1.2. Other Capitalized Terms.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Agreed Form</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the form agreed by the parties hereto.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Agreement&#8221;</font><font style="font-family:Arial;font-size:11pt;">&#32;shall have the meaning specified in the introductory paragraph to this Agreement, including the Agreed Form of all other Option Closing Documents. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Appendix A</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Appendix A to the Participation Agreement. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Beneficial Interest</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in clause (i) of Recital A.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">CEMC V</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Cypress Equipment Management Corporation V, a California corporation.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Claim Notice</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 5.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Deed</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Deed dated the Option Closing Date from Owner Trustee to PNM, including the authorization and direction of the Owner Participant, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Deed and Assignment</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Deed and Assignment of Beneficial Interest Trust No. 530 dated the Option Closing Date from Owner Trustee to PNM, including the endorsement of the Trust 530 Trustee, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Deed and Bill of Sale</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Deed and Bill of Sale dated the Option Closing Date between Owner Trustee and PNM, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">2</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Designated Account</font><font style="font-family:Arial;font-size:11pt;">&#8221; has the meaning set forth in Section 2.2.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Equity Portion of Basic Rent</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean, so long as no Indenture Default or Indenture Event of Default shall have occurred and be continuing, all payments of Basic Rent in excess of the amount then due and owing in respect of the principal of and premium, if any, and interest on all Notes outstanding.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">FERC Order</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Order Authorizing Disposition of Jurisdictional Facilities issued June 1, 2015, Federal Energy Regulatory Commission Docket No. EC15-107-000, 151 FERC &#182; 62,144, by the Director, Division of Electric Power Regulation&#8212;West pursuant to delegated authority.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">FMSV</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital C.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnified Party</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in Section&#160;5.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">HSR Act</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnifying Party</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in Section&#160;5.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Instructions to Trust 530 Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Instructions to Trust 530 Trustee dated the Option Closing Date from Arizona Public Service Company, substantially in the Agreed Form, with executed counterparts of the Deed and Assignment and the Nth Amended Affidavit appended thereto as Exhibit A and Exhibit B, respectively. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Joint Written Instructions</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 6.2. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Lease Indenture Release</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Discharge, Termination, and Release of Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated the Option Closing Date between Indenture Trustee and Owner Trustee, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Lease Termination Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Lease Termination Agreement dated the Option Closing Date between PNM, Owner Trustee and Owner Participant, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Lease Transaction Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Transaction Documents as defined in Appendix A.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Letter Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 7.14.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Option Exercise</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital C.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Rejection</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 2.5(ii).</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">NRC Notice</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean prior written notice from PNM of the Option Closing given as required by the License and in accordance with prior PNM practice with respect to similar notices previously given by PNM.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Nth Amended Affidavit</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Nth Amended Affidavit of Trustee Trust No. 530 completed and executed by the Trust 530 Trustee, substantially in the Agreed Form and bearing the numerical  designation  next  succeeding  the  number  of  the  then  most recent Amended Affidavit of </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">3</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Trustee Trust No. 530 completed and recorded in the Official Records of the Maricopa County Recorder by the Trust 530 Trustee.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the closing of the Option Transaction hereunder. The Option Closing shall occur on the Option Closing Date.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing Date</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean January 15, 2016. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean this Agreement, the Option Documents and all other documents, instruments, certificates and agreements executed and delivered pursuant to Section 3.2(f)(vi).</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Date Equity Portion of Basic Rent</font><font style="font-family:Arial;font-size:11pt;">&#8221; is Six Hundred and Ninety-Four Thousand Nine Hundred and Twenty-Six Dollars ($694,926.00).&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:83.18042813455658%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="50%"></td><td width="50%"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the Deed;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(vii) the Nth Amended Affidavit;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the Deed and Assignment;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(viii) the Reconveyance and Termination;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) the Deed and Bill of Sale;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ix) the Request to APS;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iv) the Lease Indenture Release;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(x) the Termination and Release; and</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(v) the Instructions to Trust 530 Trustee;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(xi) the Joint Written Instructions.</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(vi) the Lease Termination Agreement;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Interests</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital B.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Property</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital D.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Purchase Price</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Forty-Six Million Four Hundred and Fifty-Three Thousand Three hundred and Thirty-Three Dollars and Thirty-Three Cents ($46,453,333.33) which is the sum of (i) the Undivided Interest FMV and (ii) the Real Property Interest FMV.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital E.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Outstanding Notes</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Notes Outstanding on January 15, 2016 immediately prior to the payment of the final installment of principal and interest due on January 15, 2016: </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) Nonrecourse Promissory Note, Fixed Rate Series (due January 15, 2016) issued November 25, 1986(reflecting allonge dated September 27, 1996), $$209,000.00 [TRUST 7] of unpaid principal amount; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) Nonrecourse Promissory Note, 1996 Refunding Series (due January 15, 2016) issued as of July 15, 1996, $1,862,000.00 [Trust 7] of unpaid principal amount.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (i) of the introductory paragraph to this Agreement.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">4</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant Fees and Expenses</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning given such term in Section 7.1(a). </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant&#8217;s Lender</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 6.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant's Liens</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Liens against the Subject Property, the Option Interests, the Trust Estate or the Lease Indenture Estate (in each case, other than Permitted Liens) for which PNM is not responsible and which result from acts of, or any failure to act by, or as a result of claims against, the Owner Participant unrelated to the transactions contemplated by the Lease Transaction Documents or the Financing Documents.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant&#8217;s Loan Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 6.2.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (iii) of the introductory paragraph to this Agreement.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Participation Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean The Participation Agreement dated as of August 12, 1986 among Owner Participant (successor in interest by assignment), the Owner Trustee, PNM and the other parties thereto, as amended. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (ii) of the introductory paragraph to this Agreement.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Transfer Documents to which PNM is, or is to become, a party.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Real Property Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (ii) of Recital D.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Reconveyance and Termination</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Reconveyance and Termination of Assignment, Assumption and Further Agreement dated the Option Closing Date between Owner Trustee and PNM, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Request to APS</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Request to Arizona Public Service Company with respect to Trust 530 dated the Option Closing Date, substantially in the Agreed Form, with an executed counterpart of the Instructions to Trust 530 Trustee appended thereto as Appendix A.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Searches</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean searches (customary in form and scope in connection with new money loans secured by personal property located in California) performed by a third-party vendor for </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) tax and judgment liens against the Owner Trustee or the Owner Participant, and </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) UCC financing statements naming the Owner Trustee or the Owner Participant as debtor.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Specified Claims</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Claims by any Person arising by, through or under any act or omission of Owner Participant or any of its Affiliates that are Claims based in whole or in part on indebtedness of the Owner Participant or CEMC V or any of their respective Affiliates (excluding the Lease Transaction Documents) (whether secured or unsecured and recourse or non-recourse), remarketing rights, residual sharing arrangements or guarantees, options, servicing or administration rights, management contracts or other right or entitlement similar to the foregoing. </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">5</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Subject Property</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning given such term in clause (i) of Recital A.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Taxes</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority including, without limitation:  taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers&#8217; compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs&#8217; duties, tariffs, and similar charges.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Termination and Release</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Termination and Release (Participation Agreement and Trust Agreement) dated the Option Closing Date between Owner Participant and Owner Trustee, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the transactions described in the Transfer Documents. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean this Agreement and the Option Closing Documents. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Trust 530 Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean First American Title Insurance Company, as trustee of its Trust No. 530.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Undivided Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (i) of Recital D.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">USBNA</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in Section&#160;7.15(a).</font></div><a name="s74EA18CD6ED7507B330D262CE062BE08"></a><div style="line-height:130%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Article 2 PURCHASE AND SALE</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s1DA59FE17C3976895B29262CE0849400"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.1. Purchase and Sale.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The purchase and sale of the Option Properties shall be consummated on the Option Closing Date as required by the Lease Transaction Documents (taking into account this Agreement). </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sC2748EBB348E007B1063262CE0D8D8B2"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.2. Payment of Option Purchase Price. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Payment of the Option Purchase Price shall be made by PNM to Owner Trustee in immediately available funds, no later than noon, San Francisco time on the Option Closing Date, by wire transfer to the bank account specified in the Joint Written Instructions (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Designated Account</font><font style="font-family:Arial;font-size:11pt;">&#8221;).  </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8177924F4FCCFAEAE817262CE0EA0D4F"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#32;Section 2.3. Option Transactions; Instructions to Owner Trustee.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) This Agreement memorializes the binding agreement of PNM, on the one hand, and Owner Participant and the Owner Trustee, on the other hand with respect to the FMSV of the Option Property to be paid by the Lessee on the Option Closing Date in connection with consummating the Lessee&#8217;s irrevocable exercise of the Purchase Option contemplated by Section 13(b) of the Facility Lease and, in accordance with the requirements of Section 13(a) of the Facility Lease, the Lessee and the Owner</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">6</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Participant have agreed that the FMSV of the Undivided Interest and the Real Property Interest are the Undivided Interest FMV and the Real Property Interest FMV, respectively.</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) PNM, Owner Participant and the Owner Trustee acknowledge and agree that the Option Date Equity Portion of Basic Rent otherwise payable under the Facility Lease on the Option Closing Date has not been included in the Option Purchase Price, and such Option Date Equity Portion of Basic Rent will be due and payable on the Option Closing Date in accordance with the Lease Transaction Documents in addition to the Option Purchase Price, all of the foregoing being payable in immediately available funds on the Option Closing Date. </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) PNM represents and warrants to Owner Participant that the obligations of PNM detailed in this Section 2.3 have become effective for all purposes of the Transaction Documents without need for confirmation or further action of any sort by PNM&#8217;s Board of Directors.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) The Owner Participant hereby authorizes, directs and instructs the Owner Trustee to execute and deliver this Agreement and the other Transfer Documents, and to take any and all actions as may be necessary or appropriate to give effect to the terms of this Agreement and the other Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s096D74E1C8EB79F48DC4262CE10AFF47"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.4. PNM Confirmation. </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM confirms and agrees that it will remain responsible for: </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) all Supplemental Rent (taking into account Section 7.1(a)) in accordance with the provisions of the Lease Transaction Documents; and</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) all Taxes imposed upon or arising from the Transfer to PNM of the Undivided Interest and the Real Property Interest as required by the Lease Transaction Documents.</font></div><a name="sA64B31D139CF0DB461B9262CE14D28F0"></a><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.5. Notice of Option Exercise. </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Notwithstanding the execution and delivery of this Agreement, the Notice of Option Exercise shall remain irrevocable in accordance with its terms and the Facility Lease, and the failure of PNM to obtain any required consent or approval shall not relieve PNM of its obligation to purchase the Option Property on the Option Closing Date; </font><font style="font-family:Arial;font-size:11pt;font-style:italic;">provided</font><font style="font-family:Arial;font-size:11pt;">, that, in accordance with Section 13(a) of the Facility Lease, PNM&#8217;s irrevocable Notice of Option Exercise shall not be binding on the Owner Trustee (or Owner Participant) if: </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) an Event of Default shall have occurred under the Facility Lease and be continuing or an Event of Loss or a Deemed Event of Loss shall have occurred under the Facility Lease; and </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the Owner Trustee (at the express direction of Owner Participant) shall have given timely written notice (a &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Rejection</font><font style="font-family:Arial;font-size:11pt;">&#8221;) as required by the Facility Lease and Applicable Law of the events and circumstances on the basis of which the Owner Trustee has become entitled to not Transfer the Undivided Interest and the Real Property Interest to PNM in accordance with the Notice of Option Exercise.</font></div><a name="s2CE3E0A53FA451E6E1BD262CE15D6DE2"></a><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 3 OPTION CLOSING; CONDITIONS TO OPTION CLOSING</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">7</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s1365A70B54A415C4D175262CE1A11F36"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.1. Option Closing. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) The Option Closing shall be effective when:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(i) the Owner Trustee has received (A) the Option Date Equity Portion of Basic Rent and (B) the Option Purchase Price, each  in accordance with the Joint Written Instructions;</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(ii) the Outstanding Notes shall have been paid in full; and</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) the Purchase Documents shall have been executed and delivered by the parties thereto.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(b) The Closing shall take place via an electronic closing in which each party will execute and deliver to the other party via facsimile or electronic mail delivery separate counterparts of each document that such party is required to execute and deliver at Closing pursuant to the terms of this Agreement (each of which shall be deemed an original, but all of which together shall constitute one and the same instrument), or at such other place, time, date and in such other manner as shall be agreed between Owner Participant and PNM. Original signature pages shall be delivered following the Closing by reputable overnight courier to Timothy M. Toy, 88 East Main Street, Suite 341, Mendham, New Jersey 07945.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sD16C649714E9BA771D8D262CE1B0BA3C"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.2. Conditions Precedent to the Obligations of PNM. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The obligations of PNM to consummate the Option Transaction contemplated hereby are subject to the fulfillment (or waiver by PNM) on or prior to the Option Closing Date of each of the following conditions precedent:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s125845862CA36D4AB2BC262CE1D09AD9"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a)</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">NRC Notice</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The NRC Notice shall have been given. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s934943341D56FC2576B5262CE2248A58"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Truth of Representations</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The representations and warranties made by Owner Participant and Owner Trustee in the Option Closing Documents shall be true and correct in all material respects on and as of the Option Closing Date.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sCE95107CE65B28BC2602262CE2288879"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Performance of Covenants</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant and Owner Trustee shall have performed and complied in all material respects with all agreements and obligations required by the Option Closing Documents to be performed or complied with by Owner Trustee and/or Owner Participant prior to or at the Option Closing.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s0CC8E0C34D85108B6133262CE2585154"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Default</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No Indenture Default relating to the Owner Trustee shall have occurred and be continuing, other than an Indenture Default attributable to a Default or an Event of Default.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">8</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s2CD301EBF8C8B171F7D1262CE2844F16"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Event of Loss or Deemed Loss Event</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">An Event of Loss or a Deemed Loss Event shall not have been declared. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA4CF46E9B11AEB9A01EB262CE2B081E8"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">)</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Items to be Delivered by Owner Participant</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant shall have delivered (or caused to be delivered) to PNM:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Opinions</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) An opinion, dated the Option Closing Date, of counsel to the Owner Participant, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B) An opinion, dated the Option Closing date, of USBNA&#8217;s counsel, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Certificates</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) A certificate, dated the Option Closing Date, signed by the duly authorized manager of the Owner Participant substantially in the Agreed Form, certifying to: </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(1) the organizational documents and authorizing actions of Owner Participant and such manager(s); </font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(2) Searches and lender releases; and </font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(3) the authorization of the representatives of such manager(s) executing the Option Closing Documents and their authentic signatures. </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B) An officer's certificate of such manager(s), dated the Option Closing Date, certifying as to the fulfillment of the conditions specified in Sections 3.2(b), (c) and (d)  substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(C) A secretary's or assistant secretary's certificate, dated the Option Closing Date, signed by a duly authorized officer of USBNA substantially in the Agreed Form, certifying to the authorization of the representatives of USBNA executing the Transfer Documents and their authentic signatures.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Good Standing</font><font style="font-family:Arial;font-size:11pt;">.  A certificate of the appropriate governmental authority of the State of California dated a recent date, certifying as to the good standing of Owner Participant.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iv) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing Documents</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">9</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Executed copies of each of the Option Closing Documents to which Owner Trustee and/or Owner Participant are party. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(v) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Joint Written Instructions</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">An executed copy of the Joint Written Instructions.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(vi) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Additional Material</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Such other customary evidence as PNM shall have reasonably requested not later than Monday, December 15, 2015 that the transfer of the Option Interests are free and clear of Owner Participant&#8217;s Liens, Owner Trustee&#8217;s Liens and Specified Claims (provided that such date shall be Thursday, January 4, 2016 with respect to requests for other evidence that arise from matters shown in the Searches where the Searches were not provided to PNM not later than December 23, 2015).</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sAC97CA4F5C999E10FE7F262CE2CB98B1"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.3 Conditions Precedent to the Obligations of Owner Trustee. </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The obligations of Owner Trustee to consummate the Option Transaction are subject to the fulfillment (or waiver by Owner Participant) on or prior to the Option Closing Date of each of the following conditions precedent:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s6ECF5F7E0D783D1A1C33262CE2FE1F8B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Approvals</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The NRC Notice shall have been given and copies thereof and the FEC Order shall have been provided to the Owner Participant and the Owner Trustee. The FERC Order shall remain in full force and effect.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s998BE60A3DB1D17AF67F262CE34000B4"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Truth of Representations</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The representations and warranties made by PNM in the Option Closing Documents shall be true and correct in all material respects on and as of the Option Closing Date.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s178D861CCB1DE9995125262CE351E19D"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Performance of Covenants</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM shall have performed and complied in all material respects with all agreements and obligations required by the Option Closing Documents to be performed or complied with by PNM prior to or at the Option Closing.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s47E10BC5DF5A363648B2262CE3724113"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Filings and Recordations</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Trustee and PNM shall have made arrangements to amend or terminate the UCC financing statements and real property recordings filed in connection with the Transaction to the extent necessary or appropriate to reflect the transactions contemplated in the Option Closing Documents.</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">10</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s462326EC66C391549762262CE3A4EB64"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Default; No Event of Loss or Deemed Loss Event</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No Default or Event of Default shall have occurred and be continuing. An Event of Loss or a Deemed Loss Event shall not have been declared.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA3A1D79495B1572CED24262CE3E86BE5"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Items to be Delivered by PNM</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM shall have delivered to Owner Trustee and Owner Participant:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i)  </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Opinions</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) An opinion dated the Option Closing Date, of PNM's in-house counsel, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(B) An opinion of Law Offices of Timothy M. Toy, special counsel to PNM, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii)  </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Officer&#8217;s Certificates</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) A secretary's or assistant secretary's certificate, dated the Option Closing Date, signed by a duly authorized officer of PNM substantially in the Agreed Form, certifying to: </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(x) PNM&#8217;s organizational documents; and </font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(y) the authorization of the representatives of PNM executing the Option Closing Documents and their authentic signatures.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B)  An officer's certificate of PNM, dated the Option Closing Date, certifying as to the fulfillment of the conditions specified in Sections 3.3(a), (b), (c), (d) and (e) substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Good Standing</font><font style="font-family:Arial;font-size:11pt;">. A certificate of the appropriate Governmental Authority of the State of New Mexico, dated a recent date, certifying as to the good standing of PNM.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iv) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Purchase Price</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">and Option Date Equity Portion of Basic Rent</font><font style="font-family:Arial;font-size:11pt;">. The Option Purchase Price and the Option Date Equity Portion of Basic Rent shall have been received in the Designated Accounts.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(v) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">. Executed copies of each of the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s6B5C576A19363D49D06F262CE3F80904"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(g) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Rescission</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">If a Notice of Rejection shall have been given, it shall have been rescinded on or prior to the Option Closing Date.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">11</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="sE27402CC14573E838064262CE41853D0"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(h) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Outstanding Notes</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The registered holder of the Outstanding Notes, PVNGS Capital Trust, shall have caused the Outstanding Notes to be surrendered at the Indenture Trustee&#8217;s Office in connection with the making of the final payment thereon on January 15, 2016.</font></div><a name="sDA4903786E805D8003C5262CE44B1575"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 4 REPRESENTATIONS AND WARRANTIES</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s9006B41614BC22B6FAE3262CE48EA8DA"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.1. Representations and Warranties of Owner Participant. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant represents and warrants to the other parties hereto as of the date hereof that:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="s3EFBD54B57A48CA2BD82262CE49D5F51"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Due Organization</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant is an entity duly organized, validly existing and in good standing under the laws of the State of California, and has the power and authority to own, operate and lease its properties and assets and to carry on its business as it is currently conducted, and to perform its respective obligations under the Transfer Documents to which it is, or is to become, a party.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s57EED3174BFD87E079CB262CE4BE1F7B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Authority Relative to the Option Closing Documents</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The execution, delivery and performance by Owner Participant of its obligations pursuant to the Option Closing Documents to which it is, or is to become, a party have been duly authorized by all necessary action on the part of Owner Participant and each such Option Closing Document has been, or on the Option Closing Date will be, duly executed and delivered by Owner Participant and, on the Option Closing Date, will (assuming due authorization, execution and delivery by the other parties hereto and thereto) constitute the legal, valid and binding obligation of Owner Participant and Owner Trustee, as the case may be, enforceable against Owner Trustee and/or Owner Participant, as the case may be, in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA4455B9CE6316D2AB858262CE5126245"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Violation of Law, etc</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The  execution,  delivery  and  performance  by  Owner  Participant  of  its  obligations pursuant to the Transfer Documents to which it is, or will become, a party will not require any authorization or approval by, filing with, or notice to, any Governmental Authority, the absence of  which  would  prohibit  or  materially  interfere  with  the  transactions  contemplated  in  the Transfer Documents (except no representation or warranty is made as to any authorization, approval, notice or filing to which Owner Participant may be subject as a result of the nature, condition or use of Unit 2 or any Common Facilities, the License or to which Lessee is subject as a public utility whether in its capacity as lessee of the Undivided Interest, a beneficial owner of a trust estate that includes the Undivided Interest or otherwise). The execution, delivery and </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">12</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">performance by Owner Participant of its obligations pursuant to the Transfer Documents to which it is, or is to become, a party will not (i) violate or conflict with any Applicable Law, or (ii) violate, conflict with or constitute a default or result in a loss of rights under any provision of the organizational documents of Owner Participant or of any agreement or instrument to which Owner Participant is a party or by which it or its properties are bound, including, without limitation, any Transaction Document, if such violation, conflict, default or loss of rights would prohibit or materially interfere with the transactions contemplated in the Transfer Documents (except no representation or warranty is made as to (x) any Applicable Law to which Owner Participant may be subject as a result of the nature, condition or use of Unit 2 or any Common Facilities, the License or to which Lessee is subject as a public utility whether in its capacity as lessee of the Undivided Interest, a beneficial owner of a trust estate that includes the Undivided Interest or otherwise, (y) the Securities Act, the Securities Exchange Act or the Trust Indenture Act) or (z) as to the application to the transactions contemplated hereby of the HSR Act, or compliance therewith. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sCE92A4F011DEA5CE83DE262CE5153C4B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Litigation</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">There is no litigation or proceeding pending or, to the knowledge of Owner Participant, threatened against Owner Participant or Owner Trustee which, if adversely determined, would prohibit or materially interfere with the consummation by Owner Trustee of the transactions contemplated in the Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sBB1C8440D2817F5A318A262CE5462922"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Brokers</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No person or entity acting on behalf of Owner Participant or Owner Trustee is or will be entitled to any brokerage fee, commission, finder&#8217;s fee or financial advisory fee from PNM or any of its Affiliates in connection with the transactions contemplated in the Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s4FF689B398E56858A902262CE566BA82"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Options Interests</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The statements in Recital A of this Agreement are true and correct.  On the Closing Date, the Option Interest is being transferred to PNM free and clear of (x) all Owner Participant Liens and (y) all Specified Claims.&#160;&#160;&#160;&#160; </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sE596072397A98E35EA5B262CE5BE016E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.1. Representations and Warranties of PNM. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM hereby represents and warrants to the other parties hereto as of the date hereof that:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s61B87B42CF705F01C28E262CE5C349B1"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Due Incorporation</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New Mexico and has the corporate power and authority to own, operate and lease its properties and assets and carry on its business as it is currently conducted and to perform its respective obligations under the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">13</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="sB18CE1F874C3D6106CFD262CE5EC13CF"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Authority Relative to the PNM Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Not later than the Option Closing Date, the execution, delivery and performance by PNM of its obligations pursuant to the PNM Transfer Documents will have been duly authorized by all necessary corporate action on the part of PNM, and each PNM Transfer Document has been, or on the Option Closing Date will be, duly executed and delivered by PNM and, on the Option Closing Date, will constitute (assuming due authorization, execution and delivery by the other parties hereto and thereto) the legal, valid and binding obligation of PNM, enforceable against PNM in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s6F1FA04BBF15B6E0BAA0262CE62FF3B9"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Violation of Law, etc</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The execution, delivery and performance by PNM of its obligations pursuant to the PNM Transfer Documents will not require any authorization or approval (other than the FERC Order and the NMPSC Order) by, filing with, or notice (other than the NRC Notice) to, any governmental authority (including, without limitation, under the Atomic Energy Act, Federal Power Act, Nuclear Waste Act, Public Utility Holding Company Act, or any state energy or utility law or the regulations or orders thereunder), the absence of which would prohibit or materially interfere with the consummation of the transactions contemplated in the PNM Transfer Documents or can reasonably be expected to subject Owner Trustee, Owner Participant (or any Affiliate of either) to any liability or regulatory status or requirement. The execution, delivery and performance by PNM of its obligations pursuant to the PNM Transfer Documents will not (i) violate or conflict with any Applicable Law, or (ii) violate, conflict with or constitute a default or result in a loss of rights under any provision of the articles of incorporation, as amended, or bylaws of PNM or of any agreement or instrument to which PNM is a party or by which it or its properties are bound, if such violation, conflict, default or loss of rights would prohibit or materially interfere with the consummation of the transactions contemplated in the Option Closing Documents or can reasonably be expected to subject Owner Participant or Owner Trustee (or any Affiliate of either) to any liability or regulatory status or requirement.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF6581A5DDEBD382617B5262CE63F00A1"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Litigation</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">There is no litigation or proceeding pending or, to the knowledge of PNM, threatened, against PNM, which, if adversely determined, would prohibit or materially interfere with the consummation by PNM of the transactions contemplated in the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8D92F67C058BCA0833AC262CE6610ED2"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Brokers</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No person or entity acting on behalf of PNM is or will be entitled to any brokerage fee, commission, finder&#8217;s fee or financial advisory fee from Owner Participant or Owner Trustee (or any Affiliate of either) in connection with the transactions contemplated in the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sCA3F4DD7C070F06D4A3C262CE6B35401"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">ERISA</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">14</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM is not purchasing the Option Interests with the assets of an employee benefit plan (or its related trust) as defined in 29 U.S.C.  &#167; 1002(3), or with the assets of any plan (or related trust) as defined in Section&#160;4975(e)(i) of the Internal Revenue Code of 1986, as amended. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sD3197DCDB25D794B5587262CE6B8662D"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.3. Representations and Warranties of Manager. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CEMC V hereby represents and warrants to the other parties hereto as of the date hereof that: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) This Agreement is being entered into on behalf of Owner Participant. CEMC V is the manager of Owner Participant. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) CEMC V has full right, power and authority to enter into and perform this Agreement so as to bind Owner Participant without necessity of notice to, or consent, approval or other action by, any partner or member thereof, or any of its or their Affiliates, which shall not have been obtained and shall remain in full force and effect.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="sC1C3ECF00D87D906F318262CE6E7066B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:10.5pt;">Section 4.4. Limitation. </font><font style="font-family:Arial;font-size:11pt;">&#32;</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"></font><font style="font-family:Arial;font-size:10pt;">NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OF THE TRANSFER DOCUMENTS, THE OPTION INTERESTS ARE BEING SOLD ON AN &#8220;AS IS, WHERE IS&#8221; BASIS AND IN &#8220;WITH ALL FAULTS CONDITION,&#8221; AND THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION&#160;4.1 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER GUARANTEES, REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, OF OWNER PARTICIPANT OR THE OWNER TRUSTEE OF ANY KIND WHATSOEVER.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION&#160;4.1, OWNER PARTICIPANT AND THE OWNER TRUSTEE DO NOT, HAVE NOT AND SHALL NOT BE DEEMED (BY VIRTUE OF HAVING SOLD AND ASSIGNED THE OPTION INTERESTS TO PNM PURSUANT TO THE OPTION DOCUMENTS OR OTHERWISE) TO HAVE MADE, NOW OR HEREAFTER, AND, SUBJECT TO SUCH EXCEPTION, EACH OF OWNER PARTICIPANT AND THE OWNER TRUSTEE HEREBY EXPRESSLY DISCLAIMS, ANY GUARANTEE, REPRESENTATION OR WARRANTY, IN EACH CASE WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AS TO </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">(i) UNIT 2, THE COMMON FACILITIES, THE LICENSE, OR THE OPTION INTERESTS, </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">(ii) THE TRANSFER DOCUMENTS, </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">(iii) THE TRANSACTION, AND </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">(iv) THE SUBJECT PROPERTY, INCLUDING THE TITLE, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, QUALITY OF MATERIAL OR WORKMANSHIP, FITNESS FOR USE OR FOR A PARTICULAR PURPOSE, MAINTENANCE OR MARKETABILITY THEREOF, OR THE ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">NOR SHALL THE OWNER TRUSTEE OR OWNER PARTICIPANT BE RESPONSIBLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE), IT BEING AGREED </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">15</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">THAT ALL SUCH RISKS, AS AMONG THE OWNER TRUSTEE, OWNER PARTICIPANT AND PNM, SHALL BE BORNE BY PNM.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br></font></div><a name="s58B737E91DD3DD732361262CE726DBFC"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:10.5pt;"><font style="font-family:Arial;font-size:10.5pt;">ARTICLE 5 INDEMNIFICATIONS</font></div><div style="line-height:120%;text-align:justify;font-size:10.5pt;"><font style="font-family:Arial;font-size:10.5pt;"><br></font></div><a name="s9C565AF10182F08C5D9E262CE737FF69"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.1. General Indemnification. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Each party (other than the Owner Trustee) shall indemnify and hold harmless the other parties from any liability, loss, Claim, cause of action, proceeding, cost or expense, including reasonable attorneys&#8217; fees and expenses, which result from </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the incorrectness of any representation or breach of any warranty of the Indemnifying Party contained in any  Transfer Document; or </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the breach by the Indemnifying Party of any of its covenants or agreements contained in any Transfer Document.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="s6D01B19988896B0C572A262CE759D001"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.2. Notice and Defense of Claims. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">A party seeking indemnification pursuant to Section&#160;5.1 above (an &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnified Party</font><font style="font-family:Arial;font-size:11pt;">&#8221;) shall give prompt written notice (a &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Claim Notice</font><font style="font-family:Arial;font-size:11pt;">&#8221;) to the party from whom such indemnification is sought (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnifying Party</font><font style="font-family:Arial;font-size:11pt;">&#8221;) of the assertion of any Claim, or the commencement of any action, suit or proceeding, in respect of which indemnity may be sought hereunder and will give the Indemnifying Party such information with respect thereto as the Indemnifying Party may reasonably request, but no failure to give such notice shall relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual prejudice thereby). If the Indemnified Party defends any such action, suit or proceeding involving a third party, the Indemnifying Party shall have the right (but not the duty) to participate in the defense thereof, and to employ counsel, at its own expense, separate from counsel employed by the Indemnified Party in any such action. The Indemnifying Party shall be liable for the reasonable fees and expenses of one firm of attorneys, together with appropriate local counsel, employed by the Indemnified Party. Whether or not the Indemnified Party chooses to defend or prosecute any claim involving a third party, all the parties hereto shall cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials and appeals, as may be reasonably requested in connection therewith. The Indemnifying Party shall not be liable under Section&#160;5.1 for any settlement effected without its consent, which shall not be unreasonably withheld or delayed, of any claim, litigation or proceeding in respect of which indemnity may be sought hereunder. If the Indemnifying Party assumes the defense of a claim, no compromise or settlement of such claims may be effected by the Indemnifying Party without the Indemnified Party's written consent unless: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) there is no finding or admission of any violation of a legal requirement or any violation of the rights of any Person; and</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">16</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s5DAEFD9B76915A7EF1D6262CE78BAA4A"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.3. Survival.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The representations, warranties, indemnities and covenants of the parties hereto contained in the Transfer Documents shall survive the Option Closing. </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sE9C3432BD1A7004D2191262CE7B4A0BE"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 6 COVENANTS</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s9346B8EC7D09E6AC6640262CE7DE9908"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.1. Filings.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">On or promptly following the Option Closing Date, PNM:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) shall make all filings required by all Governmental Authorities, if any, relating to the transfer of the Option Interests; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) cause to be recorded or filed: </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) such of the Purchase Documents as are customarily recorded;</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) termination statements with respect to Uniform Commercial Code filings; and</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) an updated memorandum and disclosure for each of the Indenture Trustee and the Owner Trustee pursuant to Arizona Revised Statutes Section 33-404 (mandating disclosure of trust beneficiaries) appropriately reflecting the effect of the Purchase Documents (in the form customarily used and recorded with respect to the PNM and Arizona Public Service Company PVNGS Unit 1 and Unit 2 leases), substantially in the Agreed Forms. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sC2D8C11A9A3BD3BD76BF262CE800C5CA"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.2. Payment of Option Purchase Price. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant  has advised  PNM that Owner Participant  has completed a loan transaction with a lender (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant's Loan Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; and "</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant's Lender</font><font style="font-family:Arial;font-size:11pt;">") under which the obligations of Owner Participant shall be paid in full from the remaining cash flows arising from the Transaction (taking into account the obligations of PNM under this Agreement).  Upon closing of the Option Transaction, PNM shall pay the Option Purchase Price pursuant to joint written instructions  (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Joint Written Instructions</font><font style="font-family:Arial;font-size:11pt;">&#8221;) provided by Owner Participant and the Owner Trustee, which Joint Written Instructions shall include instructions to pay to Owner Participant&#8217;s Lender all amounts payable to Owner Participant&#8217;s Lender under Owner Participant's Loan Transaction.   The Joint Written Instructions shall be in form and substance reasonably satisfactory to PNM, Owner Participant and the Owner Trustee. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sE5D1FF4FC85008DF0EDF262CE8315766"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.3.  Owner Participant&#8217;s Liens. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The Owner Participant will not create or permit to exist, and, at its own cost and expense, will promptly take such action as may be necessary duly to discharge, all Owner Participant's Liens.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">17</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s2F0280595488104EE42D262CE8534E51"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.4. No Shop Provision. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">In consideration hereof and of the time and resources that the parties have devoted to this Agreement, and the various investigations and reviews undertaken by the parties, between May 1, 2014  and January 15, 2016, CEMC V and its subsidiaries, Affiliates, directors, officers, employees, representatives and agents will not, directly or indirectly, solicit, initiate, enter into or continue any discussions or transactions with, or encourage, or provide any information to any person or entity with respect to any proposal pursuant to which Owner Participant would sell the Beneficial Interest and/or any interest in the Transaction.</font></div><a name="s992B084181FDCDBA906B262CE8A749A9"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 7 MISCELLANEOUS</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s89C93BFCD5902D478EAC262CE8B89A8B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.1. Fees and Expenses.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) Owner Participant shall be solely responsible for all fees and expenses incurred by it in connection with the preparation, negotiation, execution and delivery of the Letter Agreement, this Agreement and the other Option Closing Documents, including fees and expenses of Owner Participant  and its Affiliates and their respective counsels (collectively, &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant  Fees and Expenses</font><font style="font-family:Arial;font-size:11pt;">&#8221;).  For avoidance of doubt, Owner Participant represents, warrants and agrees, on behalf of itself and each of its Affiliates, that the Owner Participant Fees and Expenses are not and shall not become items of Supplemental Rent.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) PNM shall be solely responsible for all fees and expenses incurred by PNM and its Affiliates in connection with the preparation, negotiation, execution and delivery of this Agreement the other Option Closing Documents, including fees and expenses of counsel to PNM, and, if required, any filing under the HSR Act (including any filing, other fees and expenses related thereto). </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#160;&#160;&#160;&#160;(c) In addition, PNM shall be solely responsible for: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the fees and expenses relating to</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(x) all filings, including fees and expenses relating to the recordation of PNM&#8217;s interest in the Option Interests as advised by PNM&#8217;s counsel, and </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(y) any third party and governmental consents, notices or filings required in connection with this Agreement and the Option Closing Documents; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the fees and expenses of the Owner Trustee, Loan Participant and Indenture Trustee (including, without limitation, their respective counsel) in connection with this Agreement, the other Option Closing Documents and the Lease Transaction Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF26D646A4A3CA25ABB66262CE8DB4D3B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.2. Notices.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">All notices and documents delivered hereunder and under each of the Transfer Documents shall be in writing, and shall be forwarded by Federal Express or other nationally recognized overnight courier, postage prepaid, or by facsimile (</font><font style="font-family:Arial;font-size:11pt;font-style:italic;">provided</font><font style="font-family:Arial;font-size:11pt;">&#32;receipt of the facsimile transmission is promptly confirmed) or personally delivered, and addressed as follows:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">18</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">If to Owner </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Participant</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Cypress Equipment Management Corporation V</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Bayside Plaza</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">188 The Embarcadero, Suite 420</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">San Francisco, CA  94105</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Attention: President</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No:  415-281-3021</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">With a copy to</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;Steven A. Cooper, Esq.</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Freeland Cooper &amp; Foreman LLP</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">150 Spear Street, Suite 1800</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">San Francisco, CA 94105</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Email: cooper@freelandlaw.com</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No: 415-495-4332</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">If to the Owner: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Trustee</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;U. S. Bank</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Corporate Trust services</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">EX-MA-FED</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">One Federal Street, 10</font><font style="font-family:Arial;font-size:11pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">th</sup></font><font style="font-family:Arial;font-size:11pt;">&#32;Floor </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Boston, Massachusetts 02110</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Attention of Mr. Andrew M. Sinasky, Vice President</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Email: </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">andrew.sinasky@usbank.com</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax: 617-603-6667</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">If to PNM</font><font style="font-family:Arial;font-size:11pt;">: &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Public Service Company of New Mexico</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">414 Silver Ave. SW</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Albuquerque, NM  87102-3289</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Attn:  Secretary</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No. (505) 241-2368</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">With a copy to</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;Charles L. Moore </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Associate General Counsel </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM Resources, Inc. </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">414 Silver Ave. SW MS 0805</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Albuquerque, New Mexico 87102-3289</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No: (505) 241-2338.</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Email:  </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Charles.Moore@pnmresources.com</font><font style="font-family:Arial;font-size:11pt;">&#32;</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA09F42FDBF5D47EA3DEF262CE90CFFF4"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.3. Entire Agreement; Amendments. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">19</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Except as otherwise specifically provided herein, the Option Closing Documents contain the entire agreement of the parties with respect to the subject matter hereof, and supersede all prior agreements and understandings between the parties (including, but without limitation, the Letter Agreement), whether written or oral. Neither this Agreement nor any other Option Closing Document may be amended or supplemented except by written instrument signed by the parties thereto.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sD11BF67151E2A5529FC0262CE92C266E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.4. Successors and Assigns. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sB1262A13CC09C2D5604C262CE95282AC"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.5. Governing Law.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the conflict of laws provisions thereof.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF0829CE9B0413EEDB56F262CE97F32C7"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.6. Counterparts.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original for all purposes, but all such counterparts shall constitute but one and the same instrument. Delivery by a party to this Agreement of an executed counterpart of a signature page to this Agreement by telecopy or portable document format (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PDF</font><font style="font-family:Arial;font-size:11pt;">&#8221;) shall be effective as delivery by such party of a manually executed counterpart of this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF59C26EFBD10BFE6C073262CE9A03E97"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.7. Severability. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Whenever possible, each provision of the Option Closing Documents will be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of any Option Closing Document is held to be prohibited by or invalid under Applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of such Option Closing Document, and the remainder of such provision and the remaining provisions of such Option Closing Document shall be interpreted, to the maximum extent possible, so as to conform to the original intent of the affected Option Closing Document and so long as the economic or legal substance of the transactions contemplated thereby is not affected in any manner materially adverse to any party. Upon such determination that any provision of any Option Closing Document is prohibited by or invalid under Applicable Law, the parties thereto shall negotiate in good faith to modify such Option Closing Document so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated thereby are consummated as originally contemplated to the greatest extent possible.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s94A025DA3C49022C3EE1262CE9F485CC"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.8. Headings.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The section and article headings contained herein are for convenience only and shall not be construed as part of this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s82579EEB75F88695BA70262CEA05DCEE"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.9. No Third-Party Beneficiaries.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">20</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The Transfer Documents are for the sole benefit of the parties thereto and USBNA and the specifically identified beneficiaries thereof and their permitted successors and assigns and nothing herein, express or implied, shall give or be construed to give to any person or entity, other than the parties to the Option Closing Documents and such beneficiaries and such successors and assigns, any legal or equitable rights thereunder.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sFE66FF386ED5E0ECA0A5262CEA27FFCE"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.10. Further Assurances.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a)  Each of the parties hereto agrees that, at the other party&#8217;s reasonable request and sole cost and expense, it shall do, execute, acknowledge and deliver, without representation, warranty or recourse, all such further acts, conveyances, assignments, transfers, documents and other assurances necessary, in the reasonable opinion of the requesting party, to effectuate the purposes and carry out the terms and intent of this Agreement and the other Option Closing Documents. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b)  PNM will permit Owner Participant and its authorized officers, employees, or representatives to have reasonable access, during PNM&#8217;s regular business hours, upon reasonable notice, to inspect and copy any of the Lease Transaction Documents:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) for the purpose of preparing financial statements, tax returns or similar items; </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) to resolve threatened or pending litigations or proceedings; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) for the purpose of preparing for tax audits, reports to shareholders or government agencies; </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;font-style:italic;">provided, however</font><font style="font-family:Arial;font-size:11pt;">, that nothing in this Section 7.10 shall require PNM to retain any documents longer than it would in the ordinary course of its business or to make available any privileged documents or information.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s6721D91DFC3C2C9874AE262CEA4F90CA"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.11. Inconsistent Terms.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;In the event of any inconsistency between any term or provision of this Agreement and any equivalent term in any other Transfer Document, the term or provision in this Agreement shall control.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sBF5E4B1705AE6F8AD67C262CEA7F277B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.12. Waiver.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Waiver by any party of any term, provision or condition of this Agreement shall not be construed to be a waiver of any other term, provision or condition. Failure or delay by any party to require performance of any provision of this Agreement should not affect or impair such party&#8217;s right to require full performance of such provision at any time thereafter.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sD0D3B626C5A31592094F262CEAAEFE54"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.13. Status of Facility Lease and Other Lease Transaction Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">With respect to the period prior to the Option Closing, nothing contained in this Agreement or any other instrument or agreement executed in connection herewith (except as otherwise expressly provided herein) is intended to be, or shall be interpreted or construed as, an amendment, modification or supplement to, or in any way to supersede, limit or otherwise waive, the Facility Lease or any other Lease  Transaction  Document,  or  shall  otherwise  restrict  or  impair  any  of  the rights, remedies or </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">21</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">privileges of Owner Participant or the Owner Trustee thereunder, it being expressly understood, acknowledged and agreed that (except as otherwise expressly provided herein) each of the Facility Lease and each other Transaction Document shall continue in full force and effect as though this Agreement had not been entered into by Owner Participant, Owner Trustee and PNM.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s43702A13C167E637B164262CEACCB3BD"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.14. Effective Date.  </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement shall be effective as of the date hereof except that, in accordance with the Letter Agreement dated May 1, 2014 among Owner Participant, the other owner participant identified therein, PNMR Development and Management Corporation, the Owner Trustee and the other owner trustee identified therein (together with the confirmation by PNM appended thereto) (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Letter Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221;) the following provisions of this Agreement shall be effective on and from May 1, 2014: Recital C, the definitions of &#8220;Option Purchase Price&#8221; and &#8220;Option Closing Documents&#8221; and Sections  2.3, 2.5,  6.4, 7.5, 7.6 and 7.13.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sDD8BD65F07EAB1B8EACD262CEAED512C"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.15. Concerning USBNA.  </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) U.S. Bank National Association (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">USBNA</font><font style="font-family:Arial;font-size:11pt;">&#8221;) is entering into this Agreement solely as successor Owner Trustee under the Trust Agreement and not in its individual capacity. Anything herein, in the other Transfer Documents or in the Transaction Documents to the contrary notwithstanding, all and each of the representations, warranties, undertakings and agreements herein or in any Transfer Document made on the part of the Owner Trustee are made and intended not as personal representations, warranties, undertakings and agreements by or for the purpose or with the intention of binding USBNA personally but are made and intended for the purpose of binding only the Trust Estate. Each of this Agreement and the other Transfer Documents is or will be executed and delivered by the Owner Trustee solely in the exercise of the powers expressly conferred upon it as trustee under the Trust Agreement; and no personal liability or responsibility is assumed hereunder or thereunder or shall at any time be enforceable against USBNA or any successor in trust or the Owner Participant on account of any representation, warranty, undertaking or agreement hereunder or under any Leases Transaction Document or any Transfer Document of the Owner Trustee, either expressed or implied, all such personal liability, if any, being expressly waived by PNM and Owner Participant, except that PNM or Owner Participant, or any Person claiming by, through or under each of them, making claim hereunder or under any other Option Transfer Document or any Lease Transaction Document, may look to the Trust Estate for satisfaction of the same and the Owner Trustee or its successor in trust, as applicable, shall be personally liable for its own gross negligence or willful misconduct. If a further successor owner trustee is appointed in accordance with the terms of the Trust Agreement, such successor owner trustee shall, without any further act, succeed to all the rights, duties, immunities and obligations of the Owner Trustee hereunder and the predecessor owner trustee shall be released from all further duties and obligations hereunder.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) USBNA will not create or permit to exist, and will, at its own cost and expense, promptly take such action as may be necessary duly to discharge, all Owner Trustee's Liens. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sCFEC9B94592B9C1167EE262CEB20E5A7"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.16. No Inference, Etc. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Each of the Undivided Interest FMV and the Real Property FMV has been agreed by the parties with each party utilizing certain assumptions and projections (which assumptions and projections may </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">22</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">or may not be assumptions and projections used in common with the other party) concerning the FMSV of the Undivided Interest and the FMSV of the Real Property Interest upon expiration of the Basic Lease Term. The parties intend that such assumptions and projections shall not be used for any purpose (including, but without limitation, establishing a FMSV for the Undivided Interest or the Real Property Interest or a FMSV of any property or service, or supporting or rebutting any calculation, determination or position concerning any FMSV, at any time, whether for purposes of option exercise, exercise of remedies, post-lease term operation and support or any other matter or circumstance) other than the specific purpose for which provision is made by this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;font-style:italic;">[Signature Pages Follow]</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">23</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Signature Page(s) for Sale Agreement 136 (PVNGS Unit 2) dated as of November 20, 2015</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:56px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the day and year first above written.</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:96.43221202854231%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="51%"></td><td width="49%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">OWNER PARTICIPANT 136:</font><font style="font-family:Arial;font-size:10pt;">&#160;<br> <br></font><font style="font-family:Arial;font-size:11pt;">CYPRESS VERDE LLC</font></div><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: Cypress Equipment Management Corporation V, its manager   </font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Peter E. Metzner_________</font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Peter E. Metzner</font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  President</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div></td></tr></table></div></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:32px;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">CEMC V:</font></div><div style="line-height:130%;text-align:left;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CYPRESS EQUIPMENT MANAGEMENT CORPORATION V </font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By:</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Peter E. Metzner_________</font><font style="font-family:Arial;font-size:11pt;">&#32;</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Peter E. Metzner</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  President</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">24</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Signature Page(s) for Sale Agreement 136 (PVNGS Unit 2) dated as of November 20, 2015</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM</font><font style="font-family:Arial;font-size:11pt;">:</font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:10pt;">&#32;<br> <br></font><font style="font-family:Arial;font-size:11pt;">PUBLIC SERVICE COMPANY OF NEW MEXICO</font></div><div style="line-height:130%;padding-bottom:32px;text-align:left;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:10pt;">&#32;<br></font><font style="font-family:Arial;font-size:11pt;">&#32;<br>By:</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">&#32;&#32;/s/ Elisabeth Eden&#160;&#160;&#160;&#160;</font><font style="font-family:Arial;font-size:11pt;">&#32;<br>Name:  Elisabeth Eden</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;">&#32;<br>Title:  Vice President  &amp; Treasurer</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">25</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:32px;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Signature Page(s) for Sale Agreement 136 (PVNGS Unit 2) dated as of November 20, 2015</font></div><div style="line-height:130%;padding-bottom:32px;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">THE OWNER TRUSTEE:</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement with Cypress Verde LLC,</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By:</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Andrew Sinasky________</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Andrew M. Sinasky</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  Vice President</font></div><div style="line-height:130%;padding-bottom:32px;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:312px;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 136 (PVNGS Unit 2) with Cypress Verde LLC                                                          </font><font style="font-family:Arial;font-size:12pt;">26</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div>	</body>
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<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>ex102saleagreement113confo.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
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<a name="sB17C42C55568C1B534942671AB255A61"></a><div><div style="line-height:130%;padding-bottom:10px;text-align:right;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit 10.2</font></div></div><br><div style="line-height:120%;text-align:right;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;"><hr></div><div style="line-height:120%;text-align:right;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:Arial;font-size:14pt;">SALE AGREEMENT 113</font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:Arial;font-size:14pt;">(PVNGS Unit 2 Lease)</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Dated as of November 20, 2015</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">between</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CYPRESS SECOND PV PARTNERSHIP</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PUBLIC SERVICE COMPANY OF NEW MEXICO </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">and</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">but solely as Owner Trustee under the Trust Agreement </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">dated as of August 12, 1986 with Cypress Second PV Partnership </font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">__________________________________________________</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Exercise of Purchase Option under Section 13(a) of the Facility Lease</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Sale and Leaseback of:</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i)  a 1.1333333% Undivided Interest In Palo Verde Nuclear Generating Station (&#8220;PVNGS&#8221;) Unit 2,</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii)  a 0.3777778% Undivided Interest in Certain PVNGS Common Facilities and</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) a 0.3274222% Undivided Interest in the PVNGS Site</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;"><hr></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">SCHEDULED CLOSING: JANUARY 15, 2016</font></div><br><div></div><hr style="page-break-after:always"><a name="s160F1D8916AE4E83A74E2671AB558DFC"></a><div></div><br><div style="line-height:120%;text-align:center;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="96%"></td><td width="4%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">RECITALS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">1</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Article 1 DEFINITIONS AND RULES OF CONSTRUCTION</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2</font></div><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 1.1. Appendix A.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 1.2. Other Capitalized Terms.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Article 2 PURCHASE AND SALE</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 2.1. Purchase and Sale.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 2.2. Payment of Option Purchase Price.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 2.3. Option Transactions; Instructions to Owner Trustee.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">6</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 2.4. PNM Confirmation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">7</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 2.5. Notice of Option Exercise.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">7</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">ARTICLE 3 OPTION CLOSING; CONDITIONS TO OPTION CLOSING</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 3.1. Option Closing.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 3.2. Conditions Precedent to the Obligations of PNM.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(a) NRC Notice.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(b) Truth of Representations.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(c) Performance of Covenants.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(d) No Default.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(e) No Event of Loss or Deemed Loss Event.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">9</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(f) Items to be Delivered by Owner Participant.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">9</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 3.3 Conditions Precedent to the Obligations of Owner Trustee.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(a) Approvals.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(b) Truth of Representations.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(c) Performance of Covenants.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(d) Filings and Recordations.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">10</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(e) No Default; No Event of Loss or Deemed Loss Event.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">11</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(f) Items to be Delivered by PNM.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">11</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(g) Rescission.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(h) Outstanding Notes.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">ARTICLE 4 REPRESENTATIONS AND WARRANTIES</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 4.1. Representations and Warranties of Owner Participant.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(a) Due Organization.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(b) Authority Relative to the Option Closing Documents.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr></table></div></div><div style="line-height:130%;padding-bottom:6px;text-align:left;padding-left:29px;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;i</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s160F1D8916AE4E83A74E2671AB558DFC"></a><div></div><br><div style="line-height:120%;text-align:center;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="96%"></td><td width="4%"></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(c) No Violation of Law, etc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(d) Litigation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(e) Brokers.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(f) Options Interests.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 4.1. Representations and Warranties of PNM.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(a) Due Incorporation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">13</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(b) Authority Relative to the PNM Transfer Documents.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(c) No Violation of Law, etc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(d) Litigation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(e) Brokers.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">14</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(f) ERISA.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">15</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 4.3. Representations and Warranties of Manager.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">15</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 4.4. Limitation.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">15</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">ARTICLE 5 INDEMNIFICATIONS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 5.1. General Indemnification.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 5.2. Notice and Defense of Claims.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 5.3. Survival.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">16</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">ARTICLE 6 COVENANTS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 6.1. Filings.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 6.2. Payment of Option Purchase Price.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 6.3.  Owner Participant&#8217;s Liens.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">17</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 6.4. No Shop Provision.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">ARTICLE 7 MISCELLANEOUS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.1. Fees and Expenses.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.2. Notices.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">18</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.3. Entire Agreement; Amendments.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">19</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.4. Successors and Assigns.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.5. Governing Law.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.6. Counterparts.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.7. Severability.20</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.8. Headings.20</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.9. No Third-Party Beneficiaries.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.10. Further Assurances.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">21</font></div></td></tr></table></div></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;ii</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s160F1D8916AE4E83A74E2671AB558DFC"></a><div></div><br><div style="line-height:130%;padding-bottom:6px;text-align:left;padding-left:14px;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="96%"></td><td width="4%"></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.11. Inconsistent Terms.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.12. Waiver.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.13. Status of Facility Lease and Other Lease Transaction Documents.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">21</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.14. Effective Date.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">22</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.15. Concerning USBNA.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">22</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 7.16. No Inference, Etc.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:6px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">22</font></div></td></tr></table></div></div><div style="line-height:130%;padding-bottom:6px;text-align:left;padding-left:14px;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;iii</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="sFC4A37C0B560774748EA2671AB79430D"></a><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">SALE AGREEMENT 113  <br>(PVNGS Unit 2 Lease)</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This SALE AGREEMENT 113 dated as of November 20, 2015 (this &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221;) is made between: </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) Cypress Second PV Partnership (a partnership of Cypress Second PV-A, LLC and Cypress Second PV-B, LLC), a California general partnership (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant</font><font style="font-family:Arial;font-size:11pt;">&#8221;);  </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(ii) PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM</font><font style="font-family:Arial;font-size:11pt;">&#8221;); and </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) U.S. BANK NATIONAL ASSOCIATION (successor to State Street Bank and Trust Company, successor to The First National Bank of Boston), not in its individual capacity, but solely as Owner Trustee (in such capacity, &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221;) under the Trust Agreement dated as of August 12, 1986 with Owner Participant (assignee of MFS Leasing Corp. (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">MFSLC</font><font style="font-family:Arial;font-size:11pt;">&#8221;), assignee of Beneficial Leasing Group, Inc. (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">BLGI</font><font style="font-family:Arial;font-size:11pt;">&#8221;))&#8221;. </font></div><a name="sC63F951DB5144D6193EC2671ABA95708"></a><div style="line-height:130%;padding-bottom:16px;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">RECITALS</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">A. Owner Participant holds all of the right, title and interest in and to:</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) 100% of the beneficial interest (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Beneficial Interest</font><font style="font-family:Arial;font-size:11pt;">&#8221;) in the Trust Estate (such term and the other capitalized terms used herein without definition having the respective meanings specified in Article I below), which Trust Estate includes, without limitation, the Undivided Interest and the Real Property Interest together with the Facility Lease (and together with all the other property constituting the Trust Estate, the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Subject Property</font><font style="font-family:Arial;font-size:11pt;">&#8221;), and </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) in its capacity as owner of the Beneficial Interest and in its own right, all contractual rights and obligations, if any, in, to and under the Lease Transaction Documents as Owner Participant.</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">B. Owner Trustee holds the right, title and interest in and to the Undivided Interest and the Real Property Interest and under the Assignment and Assumption that has become vested in it pursuant to the Purchase Documents, the Facility Lease and the other Lease Transaction Documents (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Interests</font><font style="font-family:Arial;font-size:11pt;">&#8221;) through the date immediately preceding the Purchase Date.</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#32;C.  By letter dated January 13, 2014, PNM provided notice of its irrevocable election to purchase (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Option Exercise</font><font style="font-family:Arial;font-size:11pt;">&#8221;) the Undivided Interest and Real Property Interest (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Property</font><font style="font-family:Arial;font-size:11pt;">&#8221;) pursuant to Section 13(a) of the Facility Lease.  Each of Owner Participant and Owner Trustee acknowledges that it received the Option Notice on the Notice Date. Following delivery of the Notice of Option Exercise, Section 13(a) of the Facility Lease requires that PNM and Owner Participant promptly agree upon the Fair Market Sales Value (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">FMSV</font><font style="font-family:Arial;font-size:11pt;">&#8221;) of the Option Property under the Facility Lease to be paid by the Lessee on the Option Closing Date, following the expiration of the Basic Lease Term on January 15, 2016.</font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">D.  In the Letter Agreement, Owner Participant and PNM have reached agreement that:</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;1</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:54px;text-indent:-7px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the FMSV of the Undivided Interest is Thirty Eight Million Six Hundred and Ninety-Four Thousand Five Hundred and Seventy-Nine Dollars and Seventy-Six Cents ($38,694,579.76) (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Undivided Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221;);and </font></div><div style="line-height:130%;text-align:justify;padding-left:54px;text-indent:-7px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the FMSV of the Real Property Interest is Sixteen Thousand Four Hundred and Seventeen Dollars and Fifty Cents ($16,417.50) (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Real Property Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221;).</font></div><div style="line-height:130%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">E. PNM desires to and shall purchase and assume, and Owner Participant desires to and shall cause Owner Trustee to sell and assign, the Option Interests on the Option Date on the terms and conditions set forth herein (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221;). This Agreement and the other Transfer Documents together comprise the Purchase Documentation (as defined in the Letter Agreement) in relation to the Option Interests. </font></div><div style="line-height:130%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:</font></div><a name="sFAC7FC7BDDA1E5CBB32D2671ABCB8252"></a><div style="line-height:130%;padding-bottom:16px;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Article 1 DEFINITIONS AND RULES OF CONSTRUCTION</font></div><a name="sA9005D386EEF0D58F4BB2671ABFC3178"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 1.1. Appendix A.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The following capitalized terms used in this Agreement shall have the meanings set forth in this Article&#160;1.  Such definitions shall be equally applicable to both the singular and plural forms of the terms defined.  Unless otherwise defined in this Article&#160;1 or elsewhere in this Agreement, capitalized terms used in this Agreement shall have the meanings as set forth in Appendix A. The rules of construction stated in Appendix A shall apply equally to the use of defined terms in this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s818597590C9B14ECFD1D2671AC20B4CD"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 1.2. Other Capitalized Terms.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Agreed Form</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the form agreed by the parties hereto.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Agreement&#8221;</font><font style="font-family:Arial;font-size:11pt;">&#32;shall have the meaning specified in the introductory paragraph to this Agreement, including the Agreed Form of all other Option Closing Documents. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Appendix A</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Appendix A to the Participation Agreement. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Beneficial Interest</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in clause (i) of Recital A.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">CEMC V</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Cypress Equipment Management Corporation V, a California corporation.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Claim Notice</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 5.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Deed</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Deed dated the Option Closing Date from Owner Trustee to PNM, including the authorization and direction of the Owner Participant, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Deed and Assignment</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Deed and Assignment of Beneficial Interest Trust No. 530 dated the Option Closing Date from Owner Trustee to PNM, including the endorsement of the Trust 530 Trustee, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;2</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Deed and Bill of Sale</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Deed and Bill of Sale dated the Option Closing Date between Owner Trustee and PNM, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Designated Account</font><font style="font-family:Arial;font-size:11pt;">&#8221; has the meaning set forth in Section 2.2.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Equity Portion of Basic Rent</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean, so long as no Indenture Default or Indenture Event of Default shall have occurred and be continuing, all payments of Basic Rent in excess of the amount then due and owing in respect of the principal of and premium, if any, and interest on all Notes outstanding.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">FERC Order</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Order Authorizing Disposition of Jurisdictional Facilities issued June 1, 2015, Federal Energy Regulatory Commission Docket No. EC15-107-000, 151 FERC &#182; 62,144, by the Director, Division of Electric Power Regulation&#8212;West pursuant to delegated authority.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">FMSV</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital C.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnified Party</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in Section&#160;5.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">HSR Act</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnifying Party</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in Section&#160;5.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Instructions to Trust 530 Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Instructions to Trust 530 Trustee dated the Option Closing Date from Arizona Public Service Company, substantially in the Agreed Form, with executed counterparts of the Deed and Assignment and the Nth Amended Affidavit appended thereto as Exhibit A and Exhibit B, respectively. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Joint Written Instructions</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 6.2. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Lease Indenture Release</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Discharge, Termination, and Release of Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated the Option Closing Date between Indenture Trustee and Owner Trustee, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Lease Termination Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Lease Termination Agreement dated the Option Closing Date between PNM, Owner Trustee and Owner Participant, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Lease Transaction Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Transaction Documents as defined in Appendix A.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Letter Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 7.14.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Option Exercise</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital C.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Rejection</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 2.5(ii).</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">NRC Notice</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean prior written notice from PNM of the Option Closing given as required by the License and in accordance with prior PNM practice with respect to similar notices previously given by PNM.</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;3</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Nth Amended Affidavit</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Nth Amended Affidavit of Trustee Trust No. 530 completed and executed by the Trust 530 Trustee, substantially in the Agreed Form and bearing the numerical designation next succeeding the number of the then most recent Amended Affidavit of Trustee Trust No. 530 completed and recorded in the Official Records of the Maricopa County Recorder by the Trust 530 Trustee.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the closing of the Option Transaction hereunder. The Option Closing shall occur on the Option Closing Date.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing Date</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean January 15, 2016. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean this Agreement, the Option Documents and all other documents, instruments, certificates and agreements executed and delivered pursuant to Section 3.2(f)(vi).</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Date Equity Portion of Basic Rent</font><font style="font-family:Arial;font-size:11pt;">&#8221; is Five Hundred and Fifty-Three Thousand Seven Hundred and Eight Dollars ($553,708.00).&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:82.71604938271605%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="50%"></td><td width="50%"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the Deed;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(vii) the Nth Amended Affidavit;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the Deed and Assignment;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(viii) the Reconveyance and Termination;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) the Deed and Bill of Sale;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ix) the Request to APS;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iv) the Lease Indenture Release;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(x) the Termination and Release; and</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(v) the Instructions to Trust 530 Trustee;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(xi) the Joint Written Instructions.</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(vi) the Lease Termination Agreement;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Interests</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital B.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Property</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital D.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Purchase Price</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Thirty-Eight Million Seven Hundred and Ten Thousand and Nine Hundred and Ninety-Seven Dollars and Twenty-Six Cents ($38,710,997.26), which is the sum of (i) the Undivided Interest FMV and (ii) the Real Property Interest FMV.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Recital E.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Outstanding Notes</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Notes Outstanding on January 15, 2016 immediately prior to the payment of the final installment of principal and interest due on January 15, 2016: </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) Nonrecourse Promissory Note, Fixed Rate Series (due January 15, 2016) issued November 25, 1986 (reflecting allonges dated September 27, 1996 and December 30, 1997), $301,000.00 [TRUST 8] of unpaid principal amount; </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) Nonrecourse Promissory Note, 1996 Refunding Series (due January 15, 2016) issued as of July 15, 1996, $62,000.00 [TRUST 8] of unpaid principal amount; and</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;4</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) Nonrecourse Promissory Note, 1997 Refunding Series (due January 15, 2016) issued as of July 15, 1997, $1,367,000.00 of unpaid principal amount.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (i) of the introductory paragraph to this Agreement.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant Fees and Expenses</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning given such term in Section 7.1(a). </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant&#8217;s Lender</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 6.2.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant's Liens</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Liens against the Subject Property, the Option Interests, the Trust Estate or the Lease Indenture Estate (in each case, other than Permitted Liens) for which PNM is not responsible and which result from acts of, or any failure to act by, or as a result of claims against, the Owner Participant unrelated to the transactions contemplated by the Lease Transaction Documents or the Financing Documents.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant&#8217;s Loan Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in Section 6.2.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (iii) of the introductory paragraph to this Agreement.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Participation Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean The Participation Agreement dated as of August 12, 1986 among Owner Participant (successor in interest by assignment), the Owner Trustee, PNM and the other parties thereto, as amended. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (ii) of the introductory paragraph to this Agreement.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Transfer Documents to which PNM is, or is to become, a party.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Real Property Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (ii) of Recital D.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Reconveyance and Termination</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Reconveyance and Termination of Assignment, Assumption and Further Agreement dated the Option Closing Date between Owner Trustee and PNM, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Request to APS</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Request to Arizona Public Service Company with respect to Trust 530 dated the Option Closing Date, substantially in the Agreed Form, with an executed counterpart of the Instructions to Trust 530 Trustee appended thereto as Appendix A.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Searches</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean searches (customary in form and scope in connection with new money loans secured by personal property located in California) performed by a third-party vendor for </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) tax and judgment liens against the Owner Trustee or the Owner Participant, and </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) UCC financing statements naming the Owner Trustee or the Owner Participant as debtor.</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;5</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Specified Claims</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean Claims by any Person arising by, through or under any act or omission of Owner Participant or any of its Affiliates that are Claims based in whole or in part on indebtedness of the Owner Participant or CEMC V or any of their respective Affiliates (excluding the Lease Transaction Documents) (whether secured or unsecured and recourse or non-recourse), remarketing rights, residual sharing arrangements or guarantees, options, servicing or administration rights, management contracts or other right or entitlement similar to the foregoing.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Subject Property</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning given such term in clause (i) of Recital A.</font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Taxes</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority including, without limitation:  taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers&#8217; compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs&#8217; duties, tariffs, and similar charges.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Termination and Release</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the Termination and Release (Participation Agreement and Trust Agreement) dated the Option Closing Date between Owner Participant and Owner Trustee, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Transaction</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean the transactions described in the Transfer Documents. </font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean this Agreement and the Option Closing Documents. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Trust 530 Trustee</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall mean First American Title Insurance Company, as trustee of its Trust No. 530.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Undivided Interest FMV</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning specified in clause (i) of Recital D.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">USBNA</font><font style="font-family:Arial;font-size:11pt;">&#8221; shall have the meaning set forth in Section&#160;7.15(a).</font></div><a name="sCAD83BF12420623E1A382671AC4E5916"></a><div style="line-height:130%;padding-bottom:16px;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Article 2 PURCHASE AND SALE</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sBDFDF7CDBD1C8076F98D2671AC722333"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.1. Purchase and Sale.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The purchase and sale of the Option Properties shall be consummated on the Option Closing Date as required by the Lease Transaction Documents (taking into account this Agreement). </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s9676978883A8C0252B942671ACA2B3FB"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.2. Payment of Option Purchase Price. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Payment of the Option Purchase Price shall be made by PNM to Owner Trustee in immediately available funds, no later than noon, San Francisco time on the Option Closing Date, by wire transfer to the bank account specified in the Joint Written Instructions (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Designated Account</font><font style="font-family:Arial;font-size:11pt;">&#8221;).  </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;6</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s5C28A0EECF1AB2BD274E2671ACC4A3F2"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#32;Section 2.3. Option Transactions; Instructions to Owner Trustee.</font></div><div style="line-height:130%;padding-bottom:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) This Agreement memorializes the binding agreement of PNM, on the one hand, and Owner Participant and the Owner Trustee, on the other hand with respect to the FMSV of the Option Property to be paid by the Lessee on the Option Closing Date in connection with consummating the Lessee&#8217;s irrevocable exercise of the Purchase Option contemplated by Section 13(b) of the Facility Lease and, in accordance with the requirements of Section 13(a) of the Facility Lease, the Lessee and the Owner Participant have agreed that the FMSV of the Undivided Interest and the Real Property Interest are the Undivided Interest FMV and the Real Property Interest FMV, respectively.</font></div><div style="line-height:130%;padding-bottom:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) PNM, Owner Participant and the Owner Trustee acknowledge and agree that the Option Date Equity Portion of Basic Rent otherwise payable under the Facility Lease on the Option Closing Date has not been included in the Option Purchase Price, and such Option Date Equity Portion of Basic Rent will be due and payable on the Option Closing Date in accordance with the Lease Transaction Documents in addition to the Option Purchase Price, all of the foregoing being payable in immediately available funds on the Option Closing Date. </font></div><div style="line-height:130%;padding-bottom:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) PNM represents and warrants to Owner Participant that the obligations of PNM detailed in this Section 2.3 have become effective for all purposes of the Transaction Documents without need for confirmation or further action of any sort by PNM&#8217;s Board of Directors.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) The Owner Participant hereby authorizes, directs and instructs the Owner Trustee to execute and deliver this Agreement and the other Transfer Documents, and to take any and all actions as may be necessary or appropriate to give effect to the terms of this Agreement and the other Transfer Documents.</font></div><a name="sF33D3800F6CF4789C70B2671ACF7E6DE"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.4. PNM Confirmation. </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM confirms and agrees that it will remain responsible for: </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) all Supplemental Rent (taking into account Section 7.1(a)) in accordance with the provisions of the Lease Transaction Documents; and</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) all Taxes imposed upon or arising from the Transfer to PNM of the Undivided Interest and the Real Property Interest as required by the Lease Transaction Documents.</font></div><a name="s28CDBB29B570864CD7D62671AD1AE311"></a><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 2.5. Notice of Option Exercise. </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Notwithstanding the execution and delivery of this Agreement, the Notice of Option Exercise shall remain irrevocable in accordance with its terms and the Facility Lease, and the failure of PNM to obtain any required consent or approval shall not relieve PNM of its obligation to purchase the Option Property on the Option Closing Date; </font><font style="font-family:Arial;font-size:11pt;font-style:italic;">provided</font><font style="font-family:Arial;font-size:11pt;">, that, in accordance with Section 13(a) of the Facility Lease, PNM&#8217;s irrevocable Notice of Option Exercise shall not be binding on the Owner Trustee (or Owner Participant) if: </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) an Event of Default shall have occurred under the Facility Lease and be continuing or an Event of Loss or a Deemed Event of Loss shall have occurred under the Facility Lease; and </font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the Owner Trustee (at the express direction of Owner Participant) shall have given timely written notice (a &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Notice of Rejection</font><font style="font-family:Arial;font-size:11pt;">&#8221;) as required by the Facility Lease and Applicable Law of</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;7</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">the events and circumstances on the basis of which the Owner Trustee has become entitled to not Transfer the Undivided Interest and the Real Property Interest to PNM in accordance with the Notice of Option Exercise.</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sE6F6C0754D73CE63643B2671AD49C55B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:10pt;">&#32;<br></font><font style="font-family:Arial;font-size:11pt;">ARTICLE 3 OPTION CLOSING; CONDITIONS TO OPTION CLOSING</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA057B30BF4AD468AD6DD2671AD6D4E51"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.1. Option Closing. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) The Option Closing shall be effective when:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(i) the Owner Trustee has received (A) the Option Date Equity Portion of Basic Rent and (B) the Option Purchase Price, each  in accordance with the Joint Written Instructions;</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(ii) the Outstanding Notes shall have been paid in full; and</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) the Purchase Documents shall have been executed and delivered by the parties thereto.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(b) The Closing shall take place via an electronic closing in which each party will execute and deliver to the other party via facsimile or electronic mail delivery separate counterparts of each document that such party is required to execute and deliver at Closing pursuant to the terms of this Agreement (each of which shall be deemed an original, but all of which together shall constitute one and the same instrument), or at such other place, time, date and in such other manner as shall be agreed between Owner Participant and PNM. Original signature pages shall be delivered following the Closing by reputable overnight courier to Timothy M. Toy, 88 East Main Street, Suite 341, Mendham, New Jersey 07945.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s2C2DEFE4838A5CA0E3C62671AD9CDEF4"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.2. Conditions Precedent to the Obligations of PNM. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The obligations of PNM to consummate the Option Transaction contemplated hereby are subject to the fulfillment (or waiver by PNM) on or prior to the Option Closing Date of each of the following conditions precedent:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8A813F7F94DFCC1556582671ADBFFE0A"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a)</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">NRC Notice</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The NRC Notice shall have been given. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8852797A268FC0D0CEE02671ADEF6122"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Truth of Representations</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The representations and warranties made by Owner Participant and Owner Trustee in the Option Closing Documents shall be true and correct in all material respects on and as of the Option Closing Date.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;8</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s36ED7C5799D55C7DD1182671AE12A953"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Performance of Covenants</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant and Owner Trustee shall have performed and complied in all material respects with all agreements and obligations required by the Option Closing Documents to be performed or complied with by Owner Trustee and/or Owner Participant prior to or at the Option Closing.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="sE299B5E1B15CBF169C7D2671AE411EF7"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Default</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No Indenture Default relating to the Owner Trustee shall have occurred and be continuing, other than an Indenture Default attributable to a Default or an Event of Default.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA0430EEE44E07A7C6A722671AE63AF36"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;text-indent:12px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Event of Loss or Deemed Loss Event</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">An Event of Loss or a Deemed Loss Event shall not have been declared. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s5E54F144295B65BEC2112671AE969356"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">)</font><font style="font-family:Arial;font-size:11pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Items to be Delivered by Owner Participant</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant shall have delivered (or caused to be delivered) to PNM:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Opinions</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) An opinion, dated the Option Closing Date, of counsel to the Owner Participant, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B) An opinion, dated the Option Closing date, of USBNA&#8217;s counsel, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Certificates</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) A  certificate, dated the Option Closing Date, signed by the duly authorized manager of each partner in the Owner Participant substantially in the Agreed Form, certifying to: </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(1) the organizational documents and authorizing actions of Owner Participant, the partners therein and such manager(s); </font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(2) Searches and lender releases; and </font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(3) the authorization of the representatives of such manager(s) executing the Option Closing Documents and their authentic signatures. </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B) An officer's certificate of such manager(s), dated the Option Closing Date, certifying as to the fulfillment of the conditions specified in Sections 3.2(b), (c) and (d)  substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;9</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(C) A secretary's or assistant secretary's certificate, dated the Option Closing Date, signed by a duly authorized officer of USBNA substantially in the Agreed Form, certifying to the authorization of the representatives of USBNA executing the Transfer Documents and their authentic signatures.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Good Standing</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) A certificate of the appropriate governmental authority of the State of California dated a recent date, certifying as to the good standing of each partner in Owner Participant; and </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B) a Statement of Partnership Authority on Form GP-1. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iv) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Closing Documents</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Executed copies of each of the Option Closing Documents to which Owner Trustee and/or Owner Participant are party. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(v) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Joint Written Instructions</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">An executed copy of the Joint Written Instructions.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(vi) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Additional Material</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Such other customary evidence as PNM shall have reasonably requested not later than Monday, December 15, 2015 that the transfer of the Option Interests are free and clear of Owner Participant&#8217;s Liens, Owner Trustee&#8217;s Liens and Specified Claims (provided that such date shall be Thursday, January 4, 2016 with respect to requests for other evidence that arise from matters shown in the Searches where the Searches were not provided to PNM not later than December 23, 2015).</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s6BE722572241493CA79F2671AEBA0621"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 3.3 Conditions Precedent to the Obligations of Owner Trustee. </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The obligations of Owner Trustee to consummate the Option Transaction are subject to the fulfillment (or waiver by Owner Participant) on or prior to the Option Closing Date of each of the following conditions precedent:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s960642AAF3EC4D03E6232671AEE8872E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Approvals</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:12pt;"><font style="font-family:Arial;font-size:11pt;">The NRC Notice shall have been given and copies thereof and the FEC Order shall have been provided to the Owner Participant and the Owner Trustee.</font><font style="font-family:Arial;font-size:12pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;">The FERC Order shall remain in full force and effect.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s91E7A13CF2DFDC14AF6F2671AF0D035E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Truth of Representations</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The representations and warranties made by PNM in the Option Closing Documents shall be true and correct in all material respects on and as of the Option Closing Date.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;10</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s7814913AC6770FCB2DEE2671AF3C9293"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Performance of Covenants</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM shall have performed and complied in all material respects with all agreements and obligations required by the Option Closing Documents to be performed or complied with by PNM prior to or at the Option Closing.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="sE9FD9842A0C99D449EF12671AF604667"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Filings and Recordations</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Trustee and PNM shall have made arrangements to amend or terminate the UCC financing statements and real property recordings filed in connection with the Transaction to the extent necessary or appropriate to reflect the transactions contemplated in the Option Closing Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA11510CF048BADD243FB2671AF90DD01"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Default; No Event of Loss or Deemed Loss Event</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:12pt;"><font style="font-family:Arial;font-size:11pt;">No Default or Event of Default shall have occurred and be continuing.</font><font style="font-family:Arial;font-size:12pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;">An Event of Loss or a Deemed Loss Event shall not have been declared.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8A838CBC8C9657FD563E2671AFB01828"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Items to be Delivered by PNM</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM shall have delivered to Owner Trustee and Owner Participant:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i)  </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Opinions</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) An opinion dated the Option Closing Date, of PNM's in-house counsel, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(B) An opinion of Law Offices of Timothy M. Toy, special counsel to PNM, substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii)  </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Officer&#8217;s Certificates</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(A) A secretary's or assistant secretary's certificate, dated the Option Closing Date, signed by a duly authorized officer of PNM substantially in the Agreed Form, certifying to: </font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(x) PNM&#8217;s organizational documents; and </font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:192px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(y) the authorization of the representatives of PNM executing the Option Closing Documents and their authentic signatures.</font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(B)  An officer's certificate of PNM, dated the Option Closing Date, certifying as to the fulfillment of the conditions specified in Sections 3.3(a), (b), (c), (d) and (e) substantially in the Agreed Form.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;11</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Good Standing</font><font style="font-family:Arial;font-size:11pt;">. A certificate of the appropriate Governmental Authority of the State of New Mexico, dated a recent date, certifying as to the good standing of PNM.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:12pt;"><font style="font-family:Arial;font-size:11pt;">(iv) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Option Purchase Price</font><font style="font-family:Arial;font-size:12pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">and Option Date Equity Portion of Basic Rent</font><font style="font-family:Arial;font-size:11pt;">. The Option Purchase Price and the Option Date Equity Portion of Basic Rent shall have been received in the Designated Accounts.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(v) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">. Executed copies of each of the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF5EAEBF292DD2385A6F32671AFE2D80E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(g) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Rescission</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">If a Notice of Rejection shall have been given, it shall have been rescinded on or prior to the Option Closing Date.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sBFEC60FE590FD1AB9A882671B0063520"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(h) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Outstanding Notes</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The registered holder of the Outstanding Notes, PVNGS Capital Trust, shall have caused the Outstanding Notes to be surrendered at the Indenture Trustee&#8217;s Office in connection with the making of the final payment thereon on January 15, 2016.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s92DEB1CB57633C7535B02671B0355CF0"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 4 REPRESENTATIONS AND WARRANTIES</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sFB8742DC29F6402C8BFF2671B0584D12"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.1. Representations and Warranties of Owner Participant. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant represents and warrants to the other parties hereto as of the date hereof that:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sE6C9DABE37544D4FA4732671B0892523"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Due Organization</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Owner Participant is an entity duly organized, validly existing and in good standing under the laws of the State of California, and has the power and authority to own, operate and lease its properties and assets and to carry on its business as it is currently conducted, and to perform its respective obligations under the Transfer Documents to which it is, or is to become, a party.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sC9D5B3EA2CE6A29C34FA2671B0AD6907"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Authority Relative to the Option Closing Documents</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The execution, delivery and performance by Owner Participant of its obligations pursuant to the Option Closing Documents to which it is, or is to become, a party have been duly authorized by all necessary action on the part of Owner Participant and each such Option Closing Document has been, or on the Option Closing Date will be, duly executed and delivered by Owner Participant and, on the Option Closing Date, will (assuming due authorization, execution and delivery by the other parties hereto and thereto) constitute the legal, valid and binding obligation of Owner Participant and Owner Trustee, as the case may be, enforceable against Owner Trustee and/or Owner Participant, as the case may be, in accordance with its </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;12</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s282B4C7D50F92F9CBBF12671B0DC4C6E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Violation of Law, etc</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The execution, delivery and performance by Owner Participant of its obligations pursuant to the Transfer Documents to which it is, or will become, a party will not require any authorization or approval by, filing with, or notice to, any Governmental Authority, the absence of which would prohibit or materially interfere with the transactions contemplated in the Transfer Documents (except no representation or warranty is made as to any authorization, approval, notice or filing to which Owner Participant may be subject as a result of the nature, condition or use of Unit 2 or any Common Facilities, the License or to which Lessee is subject as a public utility whether in its capacity as lessee of the Undivided Interest, a beneficial owner of a trust estate that includes the Undivided Interest or otherwise). The execution, delivery and performance by Owner Participant of its obligations pursuant to the Transfer Documents to which it is, or is to become, a party will not (i) violate or conflict with any Applicable Law, or (ii) violate, conflict with or constitute a default or result in a loss of rights under any provision of the organizational documents of Owner Participant or of any agreement or instrument to which Owner Participant is a party or by which it or its properties are bound, including, without limitation, any Transaction Document, if such violation, conflict, default or loss of rights would prohibit or materially interfere with the transactions contemplated in the Transfer Documents (except no representation or warranty is made as to (x) any Applicable Law to which Owner Participant may be subject as a result of the nature, condition or use of Unit 2 or any Common Facilities, the License or to which Lessee is subject as a public utility whether in its capacity as lessee of the Undivided Interest, a beneficial owner of a trust estate that includes the Undivided Interest or otherwise, (y) the Securities Act, the Securities Exchange Act or the Trust Indenture Act) or (z) as to the application to the transactions contemplated hereby of the HSR Act, or compliance therewith.. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s79C1A4D0E76AA3C659B82671B10125FD"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Litigation</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">There is no litigation or proceeding pending or, to the knowledge of Owner Participant, threatened against Owner Participant or Owner Trustee which, if adversely determined, would prohibit or materially interfere with the consummation by Owner Trustee of the transactions contemplated in the Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sEA4C4F24B18B4E7010F02671B12F8500"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Brokers</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No person or entity acting on behalf of Owner Participant or Owner Trustee is or will be entitled to any brokerage fee, commission, finder&#8217;s fee or financial advisory fee from PNM or any of its Affiliates in connection with the transactions contemplated in the Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sB626B902BB13710C989A2671B15922F1"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Options Interests</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;13</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The statements in Recital A of this Agreement are true and correct.  On the Closing Date, the Option Interest is being transferred to PNM free and clear of (x) all Owner Participant Liens and (y) all Specified Claims.&#160;&#160;&#160;&#160; </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8E185108A467FFD55F272671B183C23D"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.1. Representations and Warranties of PNM. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM hereby represents and warrants to the other parties hereto as of the date hereof that:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s373A03D1F4E6E40ADB0D2671B1A75119"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Due Incorporation</font><font style="font-family:Arial;font-size:11pt;">.  </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New Mexico and has the corporate power and authority to own, operate and lease its properties and assets and carry on its business as it is currently conducted and to perform its respective obligations under the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s79B14A8E18A465DFF4A82671B1D6C7C9"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;(b) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Authority Relative to the PNM Transfer Documents</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Not later than the Option Closing Date, the execution, delivery and performance by PNM of its obligations pursuant to the PNM Transfer Documents will have been duly authorized by all necessary corporate action on the part of PNM, and each PNM Transfer Document has been, or on the Option Closing Date will be, duly executed and delivered by PNM and, on the Option Closing Date, will constitute (assuming due authorization, execution and delivery by the other parties hereto and thereto) the legal, valid and binding obligation of PNM, enforceable against PNM in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s11F36FF39A0D595297762671B1FA472B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(c) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">No Violation of Law, etc</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The execution, delivery and performance by PNM of its obligations pursuant to the PNM Transfer Documents will not require any authorization or approval (other than the FERC Order and the NMPSC Order) by, filing with, or notice (other than the NRC Notice) to, any governmental authority (including, without limitation, under the Atomic Energy Act, Federal Power Act, Nuclear Waste Act, Public Utility Holding Company Act, or any state energy or utility law or the regulations or orders thereunder), the absence of which would prohibit or materially interfere with the consummation of the transactions contemplated in the PNM Transfer Documents or can reasonably be expected to subject Owner Trustee, Owner Participant (or any Affiliate of either) to any liability or regulatory status or requirement. The execution, delivery and performance by PNM of its obligations pursuant to the PNM Transfer Documents will not (i) violate or conflict with any Applicable Law, or (ii) violate, conflict with or constitute a default or result in a loss of rights under any provision of the articles of incorporation, as amended, or bylaws of PNM or of any agreement or instrument to which PNM is a party or by which it or its properties are bound, if such violation, conflict, default or loss of rights would prohibit or materially interfere with the consummation of the transactions contemplated in the Option Closing Documents or can reasonably be expected to subject Owner Participant or Owner Trustee (or any Affiliate of either) to any liability or regulatory status or requirement.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;14</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="sFD7C255F6AB2EEDDDC652671B229B129"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(d) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Litigation</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">There is no litigation or proceeding pending or, to the knowledge of PNM, threatened, against PNM, which, if adversely determined, would prohibit or materially interfere with the consummation by PNM of the transactions contemplated in the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s5E2BCD9FD17270C38AD42671B24C425F"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(e) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Brokers</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">No person or entity acting on behalf of PNM is or will be entitled to any brokerage fee, commission, finder&#8217;s fee or financial advisory fee from Owner Participant or Owner Trustee (or any Affiliate of either) in connection with the transactions contemplated in the PNM Transfer Documents.</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="s2D362DC171BDAEF102E62671B27DF9B1"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(f) </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">ERISA</font><font style="font-family:Arial;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM is not purchasing the Option Interests with the assets of an employee benefit plan (or its related trust) as defined in 29 U.S.C.  &#167; 1002(3), or with the assets of any plan (or related trust) as defined in Section&#160;4975(e)(i) of the Internal Revenue Code of 1986, as amended. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sBF29D23064E19F8A7A9A2671B2A1CDDC"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.3. Representations and Warranties of Manager. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CEMC V hereby represents and warrants to the other parties hereto as of the date hereof that: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) This Agreement is being entered into on behalf of Owner Participant. CEMC V is the manager of  each of the two partners in Owner Participant, Cypress Second PV-A LLC and Cypress Second PV-B LLC (collectively, the &#8220;Owner Participant Partners&#8221;). </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) CEMC V has full right, power and authority to enter into and perform this Agreement so as to bind Owner Participant and the Owner Participant Partners without necessity of notice to, or consent, approval or other action by, any partner or member thereof, or any of its or their Affiliates, which shall not have been obtained and shall remain in full force and effect.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8D188D4DB3E63F45A9272671B2D1DAD9"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 4.4. Limitation.  </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OF THE TRANSFER DOCUMENTS, THE OPTION INTERESTS ARE BEING SOLD ON AN &#8220;AS IS, WHERE IS&#8221; BASIS AND IN &#8220;WITH ALL FAULTS CONDITION,&#8221; AND THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION&#160;4.1 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER GUARANTEES, REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, OF OWNER PARTICIPANT OR THE OWNER TRUSTEE OF ANY KIND WHATSOEVER.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION&#160;4.1, OWNER PARTICIPANT AND THE OWNER TRUSTEE DO NOT, HAVE NOT AND SHALL NOT BE DEEMED (BY VIRTUE OF HAVING SOLD AND ASSIGNED THE OPTION INTERESTS TO PNM PURSUANT TO THE OPTION DOCUMENTS OR OTHERWISE) TO HAVE MADE, NOW OR HEREAFTER, AND, SUBJECT TO SUCH EXCEPTION, EACH OF OWNER PARTICIPANT AND THE OWNER TRUSTEE HEREBY EXPRESSLY DISCLAIMS, ANY GUARANTEE, REPRESENTATION OR WARRANTY, IN EACH CASE WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AS TO </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;15</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) UNIT 2, THE COMMON FACILITIES, THE LICENSE, OR THE OPTION INTERESTS, </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) THE TRANSFER DOCUMENTS, </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) THE TRANSACTION, AND </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iv) THE SUBJECT PROPERTY, INCLUDING THE TITLE, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, QUALITY OF MATERIAL OR WORKMANSHIP, FITNESS FOR USE OR FOR A PARTICULAR PURPOSE, MAINTENANCE OR MARKETABILITY THEREOF, OR THE ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">NOR SHALL THE OWNER TRUSTEE OR OWNER PARTICIPANT BE RESPONSIBLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE), IT BEING AGREED THAT ALL SUCH RISKS, AS AMONG THE OWNER TRUSTEE, OWNER PARTICIPANT AND PNM, SHALL BE BORNE BY PNM.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s1F52E47A3B85D84544F42671B2F2FFDD"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 5 INDEMNIFICATIONS</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sB4EFC6179ACE2D9497872671B3245F70"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.1. General Indemnification. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Each party (other than the Owner Trustee) shall indemnify and hold harmless the other parties from any liability, loss, Claim, cause of action, proceeding, cost or expense, including reasonable attorneys&#8217; fees and expenses, which result from </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the incorrectness of any representation or breach of any warranty of the Indemnifying Party contained in any  Transfer Document; or </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the breach by the Indemnifying Party of any of its covenants or agreements contained in any Transfer Document.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA024CF885EC6F6449F9D2671B3472D38"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.2. Notice and Defense of Claims. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">A party seeking indemnification pursuant to Section&#160;5.1 above (an &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnified Party</font><font style="font-family:Arial;font-size:11pt;">&#8221;) shall give prompt written notice (a &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Claim Notice</font><font style="font-family:Arial;font-size:11pt;">&#8221;) to the party from whom such indemnification is sought (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Indemnifying Party</font><font style="font-family:Arial;font-size:11pt;">&#8221;) of the assertion of any Claim, or the commencement of any action, suit or proceeding, in respect of which indemnity may be sought hereunder and will give the Indemnifying Party such information with respect thereto as the Indemnifying Party may reasonably request, but no failure to give such notice shall relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual prejudice thereby). If the Indemnified Party defends any such action, suit or proceeding involving a third party, the Indemnifying Party shall have the right (but not the duty) to participate in the defense thereof, and to employ counsel, at its own expense, separate from counsel employed by the Indemnified Party in any such action. The Indemnifying Party shall be liable for the reasonable fees and expenses of one firm of attorneys, together with appropriate local counsel, employed by the Indemnified Party. Whether or not the Indemnified Party chooses to defend or prosecute any claim involving a third party, all the parties hereto shall cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, and attend </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;16</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">such conferences, discovery proceedings, hearings, trials and appeals, as may be reasonably requested in connection therewith. The Indemnifying Party shall not be liable under Section&#160;5.1 for any settlement effected without its consent, which shall not be unreasonably withheld or delayed, of any claim, litigation or proceeding in respect of which indemnity may be sought hereunder. If the Indemnifying Party assumes the defense of a claim, no compromise or settlement of such claims may be effected by the Indemnifying Party without the Indemnified Party's written consent unless: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) there is no finding or admission of any violation of a legal requirement or any violation of the rights of any Person; and</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sC8EDC869D86372BB2B7A2671B3776917"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 5.3. Survival.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The representations, warranties, indemnities and covenants of the parties hereto contained in the Transfer Documents shall survive the Option Closing. </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF1E9F3DB4BCAEFCBF3D52671B39ABAB9"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 6 COVENANTS</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s63DB968D473165B86C6D2671B3CA78F0"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.1. Filings.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">On or promptly following the Option Closing Date, PNM:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) shall make all filings required by all Governmental Authorities, if any, relating to the transfer of the Option Interests; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) cause to be recorded or filed: </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) such of the Purchase Documents as are customarily recorded;</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) termination statements with respect to Uniform Commercial Code filings; and</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) an updated memorandum and disclosure for each of the Indenture Trustee and the Owner Trustee pursuant to Arizona Revised Statutes Section 33-404 (mandating disclosure of trust beneficiaries) appropriately reflecting the effect of the Purchase Documents (in the form customarily used and recorded with respect to the PNM and Arizona Public Service Company PVNGS Unit 1 and Unit 2 leases), substantially in the Agreed Forms. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sACB81E85253023F7B7342671B3EE5337"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.2. Payment of Option Purchase Price. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"></font><font style="font-family:Arial;font-size:10.9pt;">Owner Participant  has advised  PNM that Owner Participant  has completed a loan transaction with a lender (&#8220;</font><font style="font-family:Arial;font-size:10.9pt;text-decoration:underline;">Owner Participant's Loan Transaction</font><font style="font-family:Arial;font-size:10.9pt;">&#8221; and "</font><font style="font-family:Arial;font-size:10.9pt;text-decoration:underline;">Owner Participant's Lender</font><font style="font-family:Arial;font-size:10.9pt;">") under which the obligations of Owner Participant shall be paid in full from the remaining cash flows arising from the Transaction (taking into account the obligations of PNM under this Agreement).  Upon closing of the Option Transaction, PNM shall pay the Option Purchase Price pursuant to joint written instructions  (the </font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;17</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Joint Written Instructions</font><font style="font-family:Arial;font-size:11pt;">&#8221;) provided by Owner Participant and the Owner Trustee, which Joint Written Instructions shall include instructions to pay to Owner Participant&#8217;s Lender all amounts payable to Owner Participant&#8217;s Lender under Owner Participant's Loan Transaction.  The Joint Written Instructions shall be in form and substance reasonably satisfactory to PNM, Owner Participant and the Owner Trustee. </font></div><a name="s85628566A38B639CB7FB2671B41D43C4"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.3.  Owner Participant&#8217;s Liens. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The Owner Participant will not create or permit to exist, and, at its own cost and expense, will promptly take such action as may be necessary duly to discharge, all Owner Participant's Liens.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sC4149708F9C9F1F8B3A22671B4411E0F"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 6.4. No Shop Provision. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">In consideration hereof and of the time and resources that the parties have devoted to this Agreement, and the various investigations and reviews undertaken by the parties, between May 1, 2014  and January 15, 2016, CEMC V and its subsidiaries, Affiliates, directors, officers, employees, representatives and agents will not, directly or indirectly, solicit, initiate, enter into or continue any discussions or transactions with, or encourage, or provide any information to any person or entity with respect to any proposal pursuant to which Owner Participant would sell the Beneficial Interest and/or any interest in the Transaction.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sDB624678395A5D2367192671B472418B"></a><div style="line-height:130%;padding-bottom:10px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">ARTICLE 7 MISCELLANEOUS</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sA38C5349CC6ACF957E832671B4917133"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.1. Fees and Expenses.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) Owner Participant shall be solely responsible for all fees and expenses incurred by it in connection with the preparation, negotiation, execution and delivery of the Letter Agreement, this Agreement and the other Option Closing Documents, including fees and expenses of Owner Participant  and its Affiliates and their respective counsels (collectively, &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Owner Participant  Fees and Expenses</font><font style="font-family:Arial;font-size:11pt;">&#8221;).  For avoidance of doubt, Owner Participant represents, warrants and agrees, on behalf of itself and each of its Affiliates, that the Owner Participant Fees and Expenses are not and shall not become items of Supplemental Rent.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) PNM shall be solely responsible for all fees and expenses incurred by PNM and its Affiliates in connection with the preparation, negotiation, execution and delivery of this Agreement the other Option Closing Documents, including fees and expenses of counsel to PNM, and, if required, any filing under the HSR Act (including any filing, other fees and expenses related thereto). </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;&#160;&#160;&#160;&#160;(c) In addition, PNM shall be solely responsible for: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) the fees and expenses relating to</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(x) all filings, including fees and expenses relating to the recordation of PNM&#8217;s interest in the Option Interests as advised by PNM&#8217;s counsel, and </font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;18</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(y) any third party and governmental consents, notices or filings required in connection with this Agreement and the Option Closing Documents; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) the fees and expenses of the Owner Trustee, Loan Participant and Indenture Trustee (including, without limitation, their respective counsel) in connection with this Agreement, the other Option Closing Documents and the Lease Transaction Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sF03069065FC91753D3192671B4C4410E"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.2. Notices.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">All notices and documents delivered hereunder and under each of the Transfer Documents shall be in writing, and shall be forwarded by Federal Express or other nationally recognized overnight courier, postage prepaid, or by facsimile (</font><font style="font-family:Arial;font-size:11pt;font-style:italic;">provided</font><font style="font-family:Arial;font-size:11pt;">&#32;receipt of the facsimile transmission is promptly confirmed) or personally delivered, and addressed as follows:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">If to Owner </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Participant</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Cypress Equipment Management Corporation V</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Bayside Plaza</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">188 The Embarcadero, Suite 420</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">San Francisco, CA  94105</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Attention: President</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No:  415-281-3021</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">With a copy to</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;Steven A. Cooper, Esq.</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Freeland Cooper &amp; Foreman LLP</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">150 Spear Street, Suite 1800</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">San Francisco, CA 94105</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Email: cooper@freelandlaw.com</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No: 415-495-4332</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">If to the Owner: </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Trustee</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;U. S. Bank</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Corporate Trust services</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">EX-MA-FED</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">One Federal Street, 10</font><font style="font-family:Arial;font-size:11pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">th</sup></font><font style="font-family:Arial;font-size:11pt;">&#32;Floor </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Boston, Massachusetts 02110</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Attention of Mr. Andrew M. Sinasky, Vice President</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Email: </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">andrew.sinasky@usbank.com</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax: 617-603-6667</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">If to PNM</font><font style="font-family:Arial;font-size:11pt;">: &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Public Service Company of New Mexico</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">414 Silver Ave. SW</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Albuquerque, NM  87102-3289</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Attn:  Secretary</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No. (505) 241-2368</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">With a copy to</font><font style="font-family:Arial;font-size:11pt;">:&#160;&#160;&#160;&#160;Charles L. Moore </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Associate General Counsel </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">PNM Resources, Inc. </font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;19</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;padding-left:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">414 Silver Ave. SW MS 0805</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Albuquerque, New Mexico 87102-3289</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Fax No: (505) 241-2338.</font></div><div style="line-height:120%;text-align:justify;text-indent:144px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Email:  </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Charles.Moore@pnmresources.com</font><font style="font-family:Arial;font-size:11pt;">&#32;</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sDE512FBBE5C611173DF72671B4E9BB89"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.3. Entire Agreement; Amendments. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Except as otherwise specifically provided herein, the Option Closing Documents contain the entire agreement of the parties with respect to the subject matter hereof, and supersede all prior agreements and understandings between the parties (including, but without limitation, the Letter Agreement), whether written or oral. Neither this Agreement nor any other Option Closing Document may be amended or supplemented except by written instrument signed by the parties thereto.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s7F1B3E8D3D54EA05C9EA2671B518DB93"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.4. Successors and Assigns. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sB5760767417A561B68BA2671B53BA811"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.5. Governing Law.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the conflict of laws provisions thereof.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s84C3561ED5DA75A6CC032671B56B15CE"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.6. Counterparts.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original for all purposes, but all such counterparts shall constitute but one and the same instrument. Delivery by a party to this Agreement of an executed counterpart of a signature page to this Agreement by telecopy or portable document format (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PDF</font><font style="font-family:Arial;font-size:11pt;">&#8221;) shall be effective as delivery by such party of a manually executed counterpart of this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s9A7908800D84B78A92CF2671B58F78C4"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.7. Severability. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Whenever possible, each provision of the Option Closing Documents will be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of any Option Closing Document is held to be prohibited by or invalid under Applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of such Option Closing Document, and the remainder of such provision and the remaining provisions of such Option Closing Document shall be interpreted, to the maximum extent possible, so as to conform to the original intent of the affected Option Closing Document and so long as the economic or legal substance of the transactions contemplated thereby is not affected in any manner materially adverse to any party. Upon such determination that any provision of any Option Closing Document is prohibited by or invalid under Applicable Law, the parties thereto shall negotiate in good faith to modify such Option Closing Document so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated thereby are consummated as originally contemplated to the greatest extent possible.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;20</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="sDFE9E333A487C03E55302671B5BF4CD2"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.8. Headings.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The section and article headings contained herein are for convenience only and shall not be construed as part of this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s9DAFF91E96D8B59CC2C02671B5E446A0"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.9. No Third-Party Beneficiaries.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">The Transfer Documents are for the sole benefit of the parties thereto and USBNA and the specifically identified beneficiaries thereof and their permitted successors and assigns and nothing herein, express or implied, shall give or be construed to give to any person or entity, other than the parties to the Option Closing Documents and such beneficiaries and such successors and assigns, any legal or equitable rights thereunder.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sAEA9923545ABAAB9DE602671B612ED7D"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.10. Further Assurances.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a)  Each of the parties hereto agrees that, at the other party&#8217;s reasonable request and sole cost and expense, it shall do, execute, acknowledge and deliver, without representation, warranty or recourse, all such further acts, conveyances, assignments, transfers, documents and other assurances necessary, in the reasonable opinion of the requesting party, to effectuate the purposes and carry out the terms and intent of this Agreement and the other Option Closing Documents. </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b)  PNM will permit Owner Participant and its authorized officers, employees, or representatives to have reasonable access, during PNM&#8217;s regular business hours, upon reasonable notice, to inspect and copy any of the Lease Transaction Documents:</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(i) for the purpose of preparing financial statements, tax returns or similar items; </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(ii) to resolve threatened or pending litigations or proceedings; and </font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(iii) for the purpose of preparing for tax audits, reports to shareholders or government agencies; </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;font-style:italic;">provided, however</font><font style="font-family:Arial;font-size:11pt;">, that nothing in this Section 7.10 shall require PNM to retain any documents longer than it would in the ordinary course of its business or to make available any privileged documents or information.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sD78984A6C4F80FA1AE132671B63B723D"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.11. Inconsistent Terms.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#32;In the event of any inconsistency between any term or provision of this Agreement and any equivalent term in any other Transfer Document, the term or provision in this Agreement shall control.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s1D09DA3A49578E0EA3042671B667B401"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.12. Waiver.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Waiver by any party of any term, provision or condition of this Agreement shall not be construed to be a waiver of any other term, provision or condition. Failure or delay by any party to require performance of any provision of this Agreement should not affect or impair such party&#8217;s right to require full performance of such provision at any time thereafter.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;21</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s8D81DAECB41FFF1CD35F2671B6897F58"></a><div></div><br><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.13. Status of Facility Lease and Other Lease Transaction Documents.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">With respect to the period prior to the Option Closing, nothing contained in this Agreement or any other instrument or agreement executed in connection herewith (except as otherwise expressly provided herein) is intended to be, or shall be interpreted or construed as, an amendment, modification or supplement to, or in any way to supersede, limit or otherwise waive, the Facility Lease or any other Lease Transaction Document, or shall otherwise restrict or impair any of the rights, remedies or privileges of Owner Participant or the Owner Trustee thereunder, it being expressly understood, acknowledged and agreed that (except as otherwise expressly provided herein) each of the Facility Lease and each other Transaction Document shall continue in full force and effect as though this Agreement had not been entered into by Owner Participant, Owner Trustee and PNM.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="sD4F7EF269E60A604D0EB2671B6B869C4"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.14. Effective Date.  </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">This Agreement shall be effective as of the date hereof except that, in accordance with the Letter Agreement dated May 1, 2014 among Owner Participant, the other owner participant identified therein, PNMR Development and Management Corporation, the Owner Trustee and the other owner trustee identified therein (together with the confirmation by PNM appended thereto) (the &#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Letter Agreement</font><font style="font-family:Arial;font-size:11pt;">&#8221;) the following provisions of this Agreement shall be effective on and from May 1, 2014: Recital C, the definitions of &#8220;Option Purchase Price&#8221; and &#8220;Option Closing Documents&#8221; and Sections  2.3, 2.5,  6.4, 7.5, 7.6 and 7.13.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s8D4A734D3E95AE5D57DA2671B6DACED2"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.15. Concerning USBNA.  </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(a) U.S. Bank National Association (&#8220;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">USBNA</font><font style="font-family:Arial;font-size:11pt;">&#8221;) is entering into this Agreement solely as successor Owner Trustee under the Trust Agreement and not in its individual capacity. Anything herein, in the other Transfer Documents or in the Transaction Documents to the contrary notwithstanding, all and each of the representations, warranties, undertakings and agreements herein or in any Transfer Document made on the part of the Owner Trustee are made and intended not as personal representations, warranties, undertakings and agreements by or for the purpose or with the intention of binding USBNA personally but are made and intended for the purpose of binding only the Trust Estate. Each of this Agreement and the other Transfer Documents is or will be executed and delivered by the Owner Trustee solely in the exercise of the powers expressly conferred upon it as trustee under the Trust Agreement; and no personal liability or responsibility is assumed hereunder or thereunder or shall at any time be enforceable against USBNA or any successor in trust or the Owner Participant on account of any representation, warranty, undertaking or agreement hereunder or under any Leases Transaction Document or any Transfer Document of the Owner Trustee, either expressed or implied, all such personal liability, if any, being expressly waived by PNM and Owner Participant, except that PNM or Owner Participant, or any Person claiming by, through or under each of them, making claim hereunder or under any other Option Transfer Document or any Lease Transaction Document, may look to the Trust Estate for satisfaction of the same and the Owner Trustee or its successor in trust, as applicable, shall be personally liable for its own gross negligence or willful misconduct. If a further successor owner trustee is appointed in accordance with the terms of the Trust Agreement, such successor owner trustee shall, without any further act, succeed to all the rights, duties, immunities and obligations of the Owner Trustee hereunder and the predecessor owner trustee shall be released from all further duties and obligations hereunder.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;22</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">(b) USBNA will not create or permit to exist, and will, at its own cost and expense, promptly take such action as may be necessary duly to discharge, all Owner Trustee's Liens. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><a name="s2C63DCC958725357CC022671B70C32AB"></a><div style="line-height:130%;padding-bottom:10px;padding-top:2px;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Section 7.16. No Inference, Etc. </font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Each of the Undivided Interest FMV and the Real Property FMV has been agreed by the parties with each party utilizing certain assumptions and projections (which assumptions and projections may or may not be assumptions and projections used in common with the other party) concerning the FMSV of the Undivided Interest and the FMSV of the Real Property Interest upon expiration of the Basic Lease Term. The parties intend that such assumptions and projections shall not be used for any purpose (including, but without limitation, establishing a FMSV for the Undivided Interest or the Real Property Interest or a FMSV of any property or service, or supporting or rebutting any calculation, determination or position concerning any FMSV, at any time, whether for purposes of option exercise, exercise of remedies, post-lease term operation and support or any other matter or circumstance) other than the specific purpose for which provision is made by this Agreement.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;font-style:italic;">[Signature Pages Follow]</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;23</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Signature Page(s) for Sale Agreement 113 (PVNGS Unit 2) dated as of November 20, 2015</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:56px;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the day and year first above written.</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:98.14814814814815%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="50%"></td><td width="50%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">OWNER PARTICIPANT 113:</font></div><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CYPRESS SECOND PV PARTNERSHIP</font></div><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: Cypress Second PV-A LLC, a partner</font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: Cypress Equipment Management </font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;&#160;&#160;Corporation V, its manager</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Peter E. Metzner_____</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Peter E. Metzner</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  President</font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: Cypress Second PV-B LLC, a partner</font></div><div style="text-align:justify;padding-left:24px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: Cypress Equipment Management </font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;&#160;&#160;Corporation V, its manager</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Peter E. Metzner</font><font style="font-family:Arial;font-size:11pt;">_____</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Peter E. Metzner</font></div><div style="text-align:justify;padding-left:72px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  President</font></div><div style="text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div></td></tr></table></div></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:32px;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">CEMC V:</font></div><div style="line-height:130%;text-align:left;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">CYPRESS EQUIPMENT MANAGEMENT CORPORATION V </font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:12pt;"><font style="font-family:Arial;font-size:11pt;">By:</font><font style="font-family:Arial;font-size:12pt;">&#32;</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Peter E. Metzner</font><font style="font-family:Arial;font-size:11pt;">_____ </font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Peter E. Metzner</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  President</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;24</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Signature Page(s) for Sale Agreement 113 (PVNGS Unit 2) dated as of November 20, 2015</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">PNM</font><font style="font-family:Arial;font-size:11pt;">:</font></div><div style="line-height:130%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:10pt;">&#32;<br></font><font style="font-family:Arial;font-size:11pt;">PUBLIC SERVICE COMPANY OF NEW MEXICO</font></div><div style="line-height:130%;padding-bottom:32px;text-align:left;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:10pt;">&#32;<br></font><font style="font-family:Arial;font-size:11pt;">&#32;<br>By:</font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Elisabeth Eden&#160;&#160;&#160;&#160;</font><font style="font-family:Arial;font-size:11pt;">&#32;<br>Name: Elisabeth Eden <br>Title:  Vice President &amp; Treasurer</font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;25</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div></div><br><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:32px;text-align:center;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">Signature Page(s) for Sale Agreement 113 (PVNGS Unit 2) dated as of November 20, 2015</font></div><div style="line-height:130%;padding-bottom:32px;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">THE OWNER TRUSTEE:</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement with Cypress Second PV Partnership,</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">By: </font><font style="font-family:Arial;font-size:11pt;text-decoration:underline;">/s/ Andrew Sinasky__________</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Name:  Andrew M. Sinasky</font></div><div style="line-height:120%;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">Title:  Vice President</font></div><div style="line-height:130%;padding-bottom:32px;text-align:justify;padding-left:312px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:130%;padding-bottom:10px;padding-top:10px;text-align:justify;padding-left:312px;text-indent:96px;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:Arial;font-size:11pt;"><br></font></div><br><div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:9pt;">Sale Agreement 113 (PVNGS Unit 2) with Cypress Second PV Partnership</font><font style="font-family:Arial;font-size:12pt;">&#160;&#160;&#160;&#160;26</font></div><div style="line-height:130%;padding-bottom:10px;text-align:left;font-size:12pt;"><font style="font-family:Arial;font-size:12pt;"><br></font></div></div>	</body>
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