{"url_path":"/sec/txnm/8-k/2026-07-20/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement.","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-07-20","source_url":"https://www.sec.gov/Archives/edgar/data/1108426/0001108426-26-000042-index.html","accession_number":"0001108426-26-000042","cik":"0001108426","ticker":"TXNM","issuer_name":"TXNM ENERGY INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1108426/0001108426-26-000042-index.html","primary_entity_key":"0001108426","primary_entity_name":"TXNM ENERGY INC"},"word_count":1461,"has_tables":true,"body_markdown":"Item 1.01 Entry into a Material Definitive Agreement.\n\nAs previously disclosed, on May 18, 2025, TXNM Energy, Inc., a New Mexico corporation (“TXNM”), Troy ParentCo LLC, a Delaware limited liability company (the “Parent”), and Troy Merger Sub Inc., a New Mexico corporation and an indirect wholly owned subsidiary of Parent (the “Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into TXNM, with TXNM surviving the Merger as a direct wholly owned subsidiary of Parent (the “Merger”). Concurrently with the execution of the Merger Agreement, TXNM and Troy TopCo LP (“Purchaser”), a Delaware limited partnership, entered into a Stock Purchase Agreement dated May 18, 2025 (the “Stock Purchase Agreement”), pursuant to which Purchaser agreed to purchase 8 million newly issued shares of TXNM’s common stock at a price of $50.00 per share, representing an aggregate investment of $400 million (the “PIPE Transaction”). The PIPE Transaction closed in June 2025 and was intended to provide interim financing to support TXNM’s operations during the period preceding consummation of the Merger. Parent, Merger Sub and Purchaser are affiliates of Blackstone Infrastructure Partners L.P.\n\nAs previously disclosed, on July 2, 2026, the New Mexico Public Regulation Commission (“NMPRC”) issued a final order (the “Final Order”) declaring that (i) the PIPE Transaction is void and of no effect and (ii) TXNM, Public Service Company of New Mexico (“PNM”), Parent, and certain of their affiliates (the “Merger Parties”) must file a compliance report demonstrating how they have effectuated the unwinding of the PIPE Transaction.\n\nWaiver and Letter Agreement\n\nOn July 17, 2026, TXNM, Parent and Merger Sub entered into a Waiver (the “Waiver”) pursuant to Section 8.6 of the Merger Agreement. Pursuant to the Waiver, each of Parent and TXNM irrevocably waived its right to terminate the Merger Agreement and abandon the Merger pursuant to Section 8.1(c) of the Merger Agreement (relating to the failure of the Merger to occur by the End Date (as defined in the Merger Agreement)) prior to May 31, 2027 (such period, the “Waiver Period”). Each party further waived any right or claim to interpret the terms of the Merger Agreement, including references to the End Date, in a manner inconsistent with the Waiver Period. In addition, TXNM irrevocably waived $175 million of the $350 million termination fee payable by Parent under the Merger Agreement (the “Parent Termination Fee”) in the event the Parent Termination Fee becomes payable, such that the Parent Termination Fee, if and when payable, would be reduced to $175 million. This reduction does not affect certain cost and expense reimbursement or indemnification obligations of the parties under specified provisions of the Merger Agreement relating to access to information, debt financing cooperation, effect of termination, and expenses.\n\nOn July 17, 2026, Parent, Purchaser, TXNM, and Merger Sub entered into a letter agreement (the “Letter Agreement”) addressing certain consents, waivers, and undertakings in connection with the unwinding of the PIPE Transaction and the ongoing regulatory approval process for the Merger. Each party to the Letter Agreement irrevocably and unconditionally waived, to the extent the facts or circumstances giving rise thereto had actually occurred and were actually known to such parties as of the date of the Letter Agreement, (i) any actual or alleged breach of any representation, warranty, covenant or agreement of the Merger Agreement or the Stock Purchase Agreement arising on or prior to the date of the Letter Agreement and (ii) any claim that any such breach or alleged breach constitutes, contributed to, or shall be taken into account in any regard in determining whether there has been, is, or would reasonably be expected to be, a Company Material Adverse Effect, Parent Material Adverse Effect or a Legal Restraint (as those terms are defined in the Merger Agreement), or a breach of the Merger Agreement or the Stock Purchase Agreement (clauses (i) and (ii) collectively, the “Waived Breaches and Claims”), together with any right or claim to terminate the Merger Agreement under Section 8.1(b), 8.1(d)(i), 8.1(e)(i), or 8.1(g) thereof, as a result of, or based in whole or part on, the Waived Breaches and Claims. The Waived Breaches and Claims include, but are not limited to, (i) any breach or alleged breach or claim based on facts or circumstances giving rise thereto that had actually occurred and were actually known as of the date of the Letter Agreement arising out of the March 11, 2026 Order Directing Joint Applicants to Show Cause in Docket No. 25-00060-UT, the Recommended Decision for Show Cause Proceeding, dated June 8, 2026, issued by the Hearing Examiners for the NMPRC (Docket No. 25-00060-UT), or the Final Order, (ii) the absence of any NMPRC approval for the issuance and sale of TXNM’s common stock contemplated by the Stock Purchase Agreement, or (iii) the determination by the NMPRC that the Stock Purchase Agreement and the issuance and sale of TXNM’s common stock contemplated thereby are void. In the Letter Agreement, the parties acknowledge that they have mutually agreed on the course of action contemplated by the Letter Agreement, the Waiver and the letter delivered by Parent consenting to certain updates to the Company Disclosure Schedule (as defined in the Merger Agreement) (the “Consent Letter”) and that any delays or similar adverse consequences in the proceedings with, or required regulatory approval of, the NMPRC arising from the parties’ compliance with the Letter Agreement or the Waiver, shall not constitute a breach of the Merger Agreement or the Stock Purchase Agreement or a Company Material Adverse Effect, Parent Material Adverse Effect or Legal Restraint under the Merger Agreement. Except as expressly set forth in the Letter Agreement or the Waiver, the parties reserved all other rights under the Merger Agreement, and the Letter Agreement does not otherwise constitute a waiver, release, amendment, or modification of the Merger Agreement.\n\nIn the Letter Agreement, Parent also consented to TXNM entering into the TXNM 2026 Term Loan (as discussed herein) and issuing shares of its common stock resulting in $400 million of gross proceeds (the “Equity Financing”), provided that no such shares may be issued at an individual or aggregate price of less than $50.00 per share. TXNM agreed to use the net\n\nproceeds of the Equity Financing to repay the TXNM 2026 Term Loan discussed herein.\n\nThe above descriptions of the Waiver and the Letter Agreement are not complete and are qualified in their entirety by reference to the full text of the Waiver and the Letter Agreement, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.\n\nTXNM 2026 Term Loan\n\nOn July 17, 2026, TXNM entered into a $400 million term loan agreement (the “TXNM 2026 Term Loan”) with the lenders party thereto and Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent. The TXNM 2026 Term Loan is effective as of July 17, 2026 and has a maturity date of January 17, 2029. In accordance with the Letter Agreement, TXNM will draw the full amount under the TXNM 2026 Term Loan and pay such amount to Purchaser in full repayment of the $400 million previously paid by Purchaser under the Stock Purchase Agreement in connection with unwinding the PIPE Transaction as a result of the Final Order. TXNM agreed to use the proceeds of the TXNM 2026 Term Loan solely for this repayment and not for any other purpose. Amounts previously paid by TXNM to Purchaser as dividends on the shares of common stock purchased in the PIPE Transaction may be retained by Purchaser in lieu of interest on the amount so repaid.\n\nTXNM must pay interest on amounts borrowed under the TXNM 2026 Term Loan and must repay all amounts on or before the maturity date.\n\nThe TXNM 2026 Term Loan includes customary covenants, including a covenant that requires the maintenance of a consolidated debt-to-consolidated capitalization ratio of less than or equal to 0.70 to 1.00. The TXNM 2026 Term Loan also includes customary events of default, a cross-default provision, and a change-of-control provision. If an event of default occurs, Wells Fargo may declare the obligations outstanding under the TXNM 2026 Term Loan to be due and payable. Such acceleration will occur automatically in the event of an insolvency or bankruptcy default.\n\nThe above description of the TXNM 2026 Term Loan is not complete and is qualified in its entirety by reference to the entire TXNM 2026 Term Loan, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.\n\nWells Fargo and the other lenders perform normal banking (including as lenders under other facilities) and investment banking and advisory services from time to time for TXNM and its affiliates, for which each receives customary fees and expenses."}