Filed by Bowne Pure Compliance




Exhibit 4(y)(2)

[EXECUTION COPY]




AMENDMENT NO. 1

TO

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT




This AMENDMENT NO. 1, dated as of May 30, 2008 (this “Amendment”), is made by and among TUCSON
ELECTRIC POWER COMPANY, an Arizona corporation (the “Borrower”), the lenders listed on the
signature pages of this Amendment as “Lenders” (such lenders, together with their respective
permitted assignees from time to time, being referred to herein, collectively, as the “Lenders”),
and JPMORGAN CHASE BANK, N.A., as administrative agent for the Issuing Bank (as defined in the
Reimbursement Agreement referred to below) and the Lenders (in such capacity, the “Administrative
Agent”).



PRELIMINARY STATEMENT:




The Borrower, the Lenders, JPMorgan Chase Bank, N.A., as Issuing Bank, Union Bank of
California, N.A., as Syndication Agent, ABN AMRO Bank N.V., SunTrust Bank and Wells Fargo Bank,
National Association, as Co-Documentation Agents, and the Administrative Agent previously entered
into that certain Letter of Credit and Reimbursement Agreement, dated as of April 30, 2008 (the
“Existing Agreement”, as amended by this Amendment, the “Amended Agreement”, and as the Amended
Agreement may hereafter be amended, supplemented or otherwise modified from time to time, the
“Reimbursement Agreement”). The Borrower desires to amend the definition of Consolidated Total
Indebtedness contained in Section 1.01 of the Existing Agreement in certain particulars. Each of
the Borrower, the Required Lenders and the Administrative Agent has agreed to such amendment, on
the terms and conditions set forth herein. The parties therefore agree as follows (capitalized
terms used but not defined herein having the meanings assigned such terms in the Existing
Agreement):



SECTION 1. Amendment to Existing Agreement. The Existing Agreement is, effective as of the
date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2
hereof, hereby amended as follows:



(a) Consolidated Total Indebtedness. The definition of Consolidated Total Indebtedness
contained in Section 1.01 of the Existing Agreement is hereby amended by adding the following
proviso immediately preceding the period at the end thereof:




“provided, however, that there shall be disregarded for purposes of the
determination of Consolidated Total Indebtedness as of June 30, 2008 the aggregate
outstanding principal amount of the Borrower’s First Collateral Trust Bonds, 71/2% Series A
due 2008, and First Collateral Trust Bonds, 71/2% Series B due 2008 (collectively, the
“Collateral Trust Bonds”), provided that (1) cash in an amount sufficient
to repay in full the Collateral Trust Bonds on their maturity date of August 1, 2008 shall
have been irrevocably deposited in trust with The Bank of New York (as successor in trust
to Bank of Montreal Trust Company), as trustee (the “Bond Trustee”), for the
payment thereof on such maturity date, and (2) the Borrower shall have irrevocably
instructed the Bond Trustee to apply all such cash to the repayment of the Collateral
Trust Bonds on such maturity date”



 


 









 






SECTION 2. Conditions of Effectiveness of Amendment. The amendment to the Existing Agreement
set forth in Section 1 hereof shall become effective as of the date hereof when, and only when, the
Administrative Agent shall have received counterparts of this Amendment executed by the Borrower,
the Required Lenders and the Administrative Agent (in sufficient quantity for each party to have a
fully executed original).



SECTION 3. Representations and Warranties of the Borrower. The Borrower represents and
warrants as follows:



(a) The execution and delivery by the Borrower of this Amendment, and the performance by the
Borrower of this Amendment and the Amended Agreement, are within the Borrower’s organizational
powers and have been duly authorized by all necessary corporate and, if required, stockholder
action, and do not and will not (i) violate any Requirement of Law, (ii) violate or result in a
default under any indenture, agreement or other instrument binding upon the Borrower or any of its
Consolidated Subsidiaries or its assets, or give rise to a right thereunder to require any payment
to be made by the Borrower or any of its Consolidated Subsidiaries, or (iii) result in the creation
or imposition of any Lien on any asset of the Borrower or any of its Consolidated Subsidiaries,
except Liens created under the Loan Documents or under the Mortgage Indenture. This Amendment has
been duly executed and delivered by the Borrower.



(b) The execution and delivery by the Borrower of this Amendment, and the performance by the
Borrower of this Amendment and the Amended Agreement, do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority, except as set
forth in Section 3.03(a) of the Existing Agreement.



(c) Each of this Amendment and the Amended Agreement constitutes a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at
law.




(d) No Default or Event of Default has occurred and is continuing.


 


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SECTION 4. Reference to and Effect on the Existing Agreement. (a) Upon the effectiveness of
this Amendment: (i) each reference in the Existing Agreement to “this Agreement”, “hereunder”,
“hereof” or words of like import referring to the Existing Agreement shall mean and be a reference
to the Reimbursement Agreement; and (ii) each reference in any other Loan Document to “the
Reimbursement Agreement”, “thereunder”, “thereof” or words of like import referring to the Existing
Agreement shall mean and be a reference to the Reimbursement Agreement.



(b) Except as specifically amended or waived above, the Existing Agreement shall continue to
be in full force and effect and is hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, the Security Documents (when executed and delivered by the
Borrower pursuant to the Reimbursement Agreement) and all of the Collateral described therein do
and shall continue to secure the payment of all Obligations.



(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the Lenders, the Issuing Bank
or the Administrative Agent under the Existing Agreement or any other Loan Document, nor constitute
a waiver of any provision of the Existing Agreement or any other Loan Document.



SECTION 5. Costs and Expenses. The Borrower agrees to pay on demand all reasonable
out-of-pocket expenses of the Administrative Agent in connection with the preparation, negotiation,
syndication, execution and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees, charges and disbursements
of counsel to the Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities hereunder and thereunder, and all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender
(including, without limitation, the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender) in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of this Amendment.


 


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SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument. In furtherance of the foregoing, it is understood and
agreed that
signatures hereto submitted by facsimile transmission shall be deemed to be, and shall
constitute, original signatures.



SECTION 7. Governing Law. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of the New York.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]






 


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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written.



	 	 	 	 	 
	 	TUCSON ELECTRIC POWER COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	JPMORGAN CHASE BANK, N.A.,
 as
Administrative Agent and a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


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	 	UNION BANK OF CALIFORNIA, N.A., as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


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	 	ABN AMRO BANK N.V., as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


S-3









 






	 	 	 	 	 
	 	SUNTRUST BANK, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


S-4









 






	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


S-5









 






	 	 	 	 	 
	 	COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as
a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


S-6









 






	 	 	 	 	 
	 	COMPASS BANK, an Alabama banking corporation,
 as a
Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




 


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