Document:

Amendment No. 4 to Lease Agreement (Philip Morris)

    Exhibit
      10.1

    
 

    AMENDMENT
      NO. 4

    to

    LEASE
      AGREEMENT

    

    

      This
        AMENDMENT
        NO. 4,
        dated
        as of June 1, 2006, to Lease Agreement, dated as of December 1, 1985, between
        TUCSON
        ELECTRIC POWER COMPANY,
        an
        Arizona corporation (“TEP”), and SAN
        CARLOS RESOURCES INC.,
        an
        Arizona corporation (“San Carlos”), jointly and severally as Lessee (such term
        and all other capitalized terms used herein without definition having the
        meanings provided in Section 1 hereof), and WILMINGTON
        TRUST COMPANY,
        a
        Delaware corporation, and WILLIAM
        J. WADE
        (not in
        their respective individual capacities but solely as Owner Trustee and
        Cotrustee, respectively, under the Trust Agreement between such parties and
        Philip Morris Capital Corporation, as Owner Participant), as Lessor (this
“Lease
        Amendment”),

       

      W
        I T N E S S E T H

       

      WHEREAS,
        the
        Lessee and the Lessor have heretofore entered into a Lease Agreement, dated
        as
        of December 1, 1985, as duly recorded in the office of the County Recorder
        of
        Apache County, Arizona on January 8, 1986, in Docket 499 at Pages 50-184,
        as
        supplemented by a Lease Supplement dated December 31, 1985, as duly recorded
        in
        the aforesaid office in Docket 499 at Pages 453-470, as amended by Amendment
        No.
        1 to Lease Agreement, dated as of December 15, 1992, duly recorded in the
        aforesaid office in Docket 700 at Pages 318-344, as amended by Amendment
        No. 2
        to Lease Agreement, dated as of December 1, 1999, duly recorded in the aforesaid
        office in Docket 969 at Pages 1-10, and as amended by Amendment No. 3 to
        Lease
        Agreement, dated as of June 1, 2003, duly recorded in the aforesaid office
        on
        June 25, 2003 as Instrument No. 2003-05402, providing for the lease by the
        Lessor to the Lessee of the Leased Assets (such Lease Agreement, as so
        supplemented and amended and as further amended, modified or supplemented
        from
        time to time in accordance with the provisions thereof, being hereinafter
        referred to as the “Lease”),

       

      WHEREAS,
        the
        Lessee and the Lessor have agreed pursuant to a Refinancing Agreement, dated
        as
        of June 1, 2006 (as amended, modified or supplemented from time to time in
        accordance with the provisions thereof, the “Refinancing Agreement”), with the
        Owner Participant, the Loan Participants named therein, the Indenture Trustee
        and certain other parties to amend certain Operative Documents on the Amendment
        Date (as defined in the Refinancing Agreement),

       

      WHEREAS,
        the
        Lessee and Lessor have agreed to amend the Lease as contemplated
        herein,

       

      WHEREAS,
        Section
        31(b) of the Lease provides, among other things, that until the Lessee has
        received notice from the Indenture Trustee that the Lien of the Indenture
        on the
        Trust Indenture Estate has been released, no term of the Lease shall be amended
        without the consent of the Indenture Trustee, and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        pursuant to Section 15.1 of the Indenture, the Indenture Trustee has, at
        the
        direction and with the consent of each holder of a Secured Note, consented,
        by
        executing and delivering the Refinancing Agreement, to the amendments to
        the
        Lease set forth in this Lease Amendment,

       

      NOW
        THEREFORE,
        in
        consideration of the premises and of such other good and valuable consideration,
        the receipt and sufficiency of which are hereby acknowledged, the parties
        hereto
        agree as follows:

       

      Section
        1.  Definitions.

       

      (a)  General
        Definitions.
        Except
        as otherwise expressly provided herein or unless the context otherwise requires,
        capitalized terms used herein shall have the meanings set forth in Section
        1 of
        the Lease.

       

      (b)  Special
        Event of Loss.
        Clause
        (iii) of the definition of “Special
        Event of Loss”
        in
        Section 1 of the Lease is hereby amended in its entirety to read as
        follows:

       

      (iii)  
        [Deleted]

      

      Section
        2.  Prepayment
        Upon a Special Event of Loss.
        The
        first proviso to Section 11(a) of the Lease is hereby amended by deleting
        the
        phrase “a Special Event of Loss described in (iii) of the definition thereof or”
in its entirety.

       

      Section
        3.  Counterpart
        Execution. This
        Lease Amendment may be executed by the parties hereto in separate counterparts,
        each of which when so executed and delivered shall be deemed an original,
        but
        all such counterparts shall together constitute but one and the same instrument.
        The single executed original of this Lease Amendment which provides that
        it is
        the “original counterpart” and which contains the receipt therefor executed by
        the Indenture Trustee on or immediately following the signature page thereof
        shall evidence the monetary obligations of the Lessee hereunder and thereunder.
        To the extent, if any, that this Lease Amendment constitutes chattel paper
        (as
        such term is defined in the Uniform Commercial Code as in effect in any
        applicable jurisdiction), no security interest in this Lease Amendment may
        be
        created by the transfer or possession of any counterpart thereof other than
        the
        original counterpart and containing the receipt therefor executed by the
        Indenture Trustee on or immediately following the signature page
        thereof.

       

      Section
        4.  Ratification
        of the Lease.
        This
        Lease Amendment is an amendment to the Lease. As amended by this Lease
        Amendment, the Lease is in all respects ratified, approved and confirmed,
        and
        the Lease and this Lease Amendment shall together constitute one and the
        same
        instrument.

       

      Section
        5.  Governing
        Law.
        This
        Lease Amendment has been delivered in, and shall in all respects be governed
        by
        and construed in accordance with, the laws of the State of Arizona applicable
        to
        agreements made and to be performed entirely within such state, including
        matters of construction, validity and performance.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Section
        6.  Liabilities
        of Owner Participant.
        Sections
        23 and 31 of the Lease are hereby incorporated by reference mutatis
        mutandis
        in this
        Lease Amendment.

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned Lessee and Lessor have each caused this Lease Amendment to be duly
      executed and delivered and their corporate seals to be hereunto affixed and
      attested or witnessed by their respective officers thereunto duly authorized
      as
      of the day and year first above written.

     

    
      	 	
              TUCSON
                ELECTRIC POWER COMPANY,

                  as
                Lessee

               

               

            
	 	
              By:

            	_____________________________ 
	 	 	
                Name:

                Title:

               

            
	
              [seal]

               

              Attest:

               

            	 	 
	_______________________ 	 	 
	
              Assistant
                Secretary

            	 	 
	 	
              SAN
                CARLOS RESOURCES INC.

                  as
                Lessee

               

               

            
	 	
              By:

            	_____________________________ 
	 	 	
                Name:

                Title:

               

            
	
              [seal]

               

              Attest:

               

            	 	 
	_______________________ 	 	 
	
              Assistant
                Secretary

            	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              WILMINGTON
                TRUST COMPANY,

                  not
                in its
                individual capacity but solely as

                  Owner
                Trustee under the
                Trust Agreement,

                  as
                Lessor

               

               

            
	 	
              By:

            	_____________________________  
	 	 	
                Name:

                Title:

            
	
              [seal]

               

              Attest:

               

            	 	 
	_______________________  	 	 
	
              Title:

            	 	 
	 	_____________________________   
	 	
              WILLIAM
                J. WADE,

                  not
                in his
                individual capacity but solely as

                  Cotrustee
                under the Trust
                Agreement, as

                  Lessor

            
	
              Witness:

               

            	 	 
	_______________________ 	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Receipt
      of this original counterpart of the foregoing Amendment No. 4 to Lease Agreement
      is hereby acknowledged on
      this          day of June,
      2006.

    

    
      	 	
              THE
                BANK OF NEW YORK,

              as
                Indenture Trustee

               

               

            
	 	
              By:

            	_______________________ 
	 	 	
                Name:

                Title:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGEMENTS
      TO LEASE AMENDMENT

    

    

    STATE
      OF
      ARIZONA     )

                     )
      ss.:

    COUNTY
      OF
      PIMA      )

    

    The
      foregoing instrument was acknowledged before me this ____ day of June, 2006,
      by
      _________________, _________________ of TUCSON
      ELECTRIC POWER COMPANY,
      an
      Arizona corporation, on behalf of said corporation.

    
 

    ________________________

    Notary
      Public

    

    

    My
      Commission Expires:

    

    

    _____________________

    

    

    

    
      STATE
        OF
        ARIZONA     )

                       )
        ss.:

      COUNTY
        OF
        PIMA      )

    The
      foregoing instrument was acknowledged before me this _____ day of June, 2006,
      by
      _________________, _____________________ of SAN
      CARLOS RESOURCES INC.,
      an
      Arizona corporation, on behalf of said corporation.

    
 

    
      ________________________

      Notary
        Public

    

    

    

    My
      Commission Expires:

    

    

    _____________________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    STATE
      OF
      DELAWARE    )

                )
      ss.:

    COUNTY
      OF
      NEW CASTLE  )

    

    The
      foregoing instrument was acknowledged before me this _____ day of June, 2006,
      by
      __________________, __________________ of WILMINGTON
      TRUST COMPANY,
      a
      Delaware banking corporation, on behalf of said corporation.

    
 

    
      
        ________________________

        Notary
          Public

      

    

    

    

    My
      Commission Expires:

    

    

    _____________________

    

 

    
      STATE
        OF
        DELAWARE    )

                  )
        ss.:

      COUNTY
        OF
        NEW CASTLE  )

    The
      foregoing instrument was acknowledged before me this _____ day of June, 2006,
      by
WILLIAM
      J. WADE,
      an
      individual.

     

     

    
      
        ________________________

        Notary
          Public

      

    My
      Commission Expires:

    

    

    _____________________Amendment No. 4 to Lease Agreement (SELCO)

    Exhibit
      10.2

    
 

    AMENDMENT
      NO. 4

    to

    LEASE
      AGREEMENT

    

    

      This
        AMENDMENT
        NO. 4,
        dated
        as of June 1, 2006, to Lease Agreement, dated as of December 1, 1985, between
        TUCSON
        ELECTRIC POWER COMPANY,
        an
        Arizona corporation (“TEP”), and SAN
        CARLOS RESOURCES INC.,
        an
        Arizona corporation (“San Carlos”), jointly and severally as Lessee (such term
        and all other capitalized terms used herein without definition having the
        meanings provided in Section 1 hereof), and WILMINGTON
        TRUST COMPANY,
        a
        Delaware corporation, and WILLIAM
        J. WADE
        (not in
        their respective individual capacities but solely as Owner Trustee and
        Cotrustee, respectively, under the Trust Agreement between such parties and
        SELCO Service Corporation (as successor to IBM Credit LLC), as Owner
        Participant), as Lessor (this “Lease Amendment”),

       

      W
        I T N E S S E T H

       

      WHEREAS,
        the
        Lessee and the Lessor have heretofore entered into a Lease Agreement, dated
        as
        of December 1, 1985, as duly recorded in the office of the County Recorder
        of
        Apache County, Arizona on January 8, 1986, in Docket 499 at Pages 185-318,
        as
        supplemented by a Lease Supplement dated December 31, 1985, as duly recorded
        in
        the aforesaid office in Docket 499 at Pages 471-488, as amended by Amendment
        No.
        1 to Lease Agreement, dated as of December 15, 1992, duly recorded in the
        aforesaid office in Docket 700 at Pages 345-371, as amended by Amendment
        No. 2
        to Lease Agreement, dated as of December 1, 1999, duly recorded in the aforesaid
        office in Docket 968 at Pages 586-593, and as amended by Amendment No. 3
        to
        Lease Agreement, dated as of June 1, 2003, duly recorded in the aforesaid
        office
        on June 25, 2003 as Instrument No. 2003-05404, providing for the lease by
        the
        Lessor to the Lessee of the Leased Assets (such Lease Agreement, as so
        supplemented and amended and as further amended, modified or supplemented
        from
        time to time in accordance with the provisions thereof, being hereinafter
        referred to as the “Lease”),

       

      WHEREAS,
        the
        Lessee and the Lessor have agreed pursuant to a Refinancing Agreement, dated
        as
        of June 1, 2006 (as amended, modified or supplemented from time to time in
        accordance with the provisions thereof, the “Refinancing Agreement”), with the
        Owner Participant, the Loan Participants named therein, the Indenture Trustee
        and certain other parties to amend certain Operative Documents on the Amendment
        Date (as defined in the Refinancing Agreement),

       

      WHEREAS,
        the
        Lessee and Lessor have agreed to amend the Lease as contemplated
        herein,

       

      WHEREAS,
        Section
        31(b) of the Lease provides, among other things, that until the Lessee has
        received notice from the Indenture Trustee that the Lien of the Indenture
        on the
        Trust Indenture Estate has been released, no term of the Lease shall be amended
        without the consent of the Indenture Trustee, and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        pursuant to Section 15.1 of the Indenture, the Indenture Trustee has, at
        the
        direction and with the consent of each holder of a Secured Note, consented,
        by
        executing and delivering the Refinancing Agreement, to the amendments to
        the
        Lease set forth in this Lease Amendment,

       

      NOW
        THEREFORE,
        in
        consideration of the premises and of such other good and valuable consideration,
        the receipt and sufficiency of which are hereby acknowledged, the parties
        hereto
        agree as follows:

       

      Section
        1.  Definitions.

       

      (a)  General
        Definitions.
        Except
        as otherwise expressly provided herein or unless the context otherwise requires,
        capitalized terms used herein shall have the meanings set forth in Section
        1 of
        the Lease.

       

      (b)  Special
        Event of Loss.
        Clause
        (iii) of the definition of “Special
        Event of Loss”
        in
        Section 1 of the Lease is hereby amended in its entirety to read as
        follows:

       

      (iii)  
        [Deleted]

      

      Section
        2.  Prepayment
        Upon a Special Event of Loss.
        The
        first proviso to Section 11(a) of the Lease is hereby amended by deleting
        the
        phrase “a Special Event of Loss described in (iii) of the definition thereof or”
in its entirety.

       

      Section
        3.  Counterpart
        Execution. This
        Lease Amendment may be executed by the parties hereto in separate counterparts,
        each of which when so executed and delivered shall be deemed an original,
        but
        all such counterparts shall together constitute but one and the same instrument.
        The single executed original of this Lease Amendment which provides that
        it is
        the “original counterpart” and which contains the receipt therefor executed by
        the Indenture Trustee on or immediately following the signature page thereof
        shall evidence the monetary obligations of the Lessee hereunder and thereunder.
        To the extent, if any, that this Lease Amendment constitutes chattel paper
        (as
        such term is defined in the Uniform Commercial Code as in effect in any
        applicable jurisdiction), no security interest in this Lease Amendment may
        be
        created by the transfer or possession of any counterpart thereof other than
        the
        original counterpart and containing the receipt therefor executed by the
        Indenture Trustee on or immediately following the signature page
        thereof.

       

      Section
        4.  Ratification
        of the Lease.
        This
        Lease Amendment is an amendment to the Lease. As amended by this Lease
        Amendment, the Lease is in all respects ratified, approved and confirmed,
        and
        the Lease and this Lease Amendment shall together constitute one and the
        same
        instrument.

       

      Section
        5.  Governing
        Law.
        This
        Lease Amendment has been delivered in, and shall in all respects be governed
        by
        and construed in accordance with, the laws of the State of Arizona applicable
        to
        agreements made and to be performed entirely within such state, including
        matters of construction, validity and performance.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Section
        6. Liabilities
        of Owner Participant.
        Sections
        23 and 31 of the Lease are hereby incorporated by reference mutatis
        mutandis
        in this
        Lease Amendment.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned Lessee and Lessor have each caused this Lease Amendment to be duly
      executed and delivered and their corporate seals to be hereunto affixed and
      attested or witnessed by their respective officers thereunto duly authorized
      as
      of the day and year first above written.

     

    
      	 	
              TUCSON
                ELECTRIC POWER COMPANY,

                  as
                Lessee

               

               

            
	 	
              By:

            	_____________________________ 
	 	 	
                Name:

                Title:

               

            
	
              [seal]

               

              Attest:

               

            	 	 
	_______________________ 	 	 
	
              Assistant
                Secretary

            	 	 
	 	
              SAN
                CARLOS RESOURCES INC.

                  as
                Lessee

               

               

            
	 	
              By:

            	_____________________________ 
	 	 	
                Name:

                Title:

               

            
	
              [seal]

               

              Attest:

               

            	 	 
	_______________________ 	 	 
	
              Assistant
                Secretary

            	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              WILMINGTON
                TRUST COMPANY,

                  not
                in its
                individual capacity but solely as

                  Owner
                Trustee under the
                Trust Agreement,

                  as
                Lessor

               

               

            
	 	
              By:

            	_____________________________  
	 	 	
                Name:

                Title:

            
	
              [seal]

               

              Attest:

               

            	 	 
	_______________________  	 	 
	
              Title:

            	 	 
	 	_____________________________   
	 	
              WILLIAM
                J. WADE,

                  not
                in his
                individual capacity but solely as

                  Cotrustee
                under the Trust
                Agreement, as

                  Lessor

            
	
              Witness:

               

            	 	 
	_______________________ 	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Receipt
      of this original counterpart of the foregoing Amendment No. 4 to Lease Agreement
      is hereby acknowledged on
      this          day of June,
      2006.

    

    
      	 	
              THE
                BANK OF NEW YORK,

              as
                Indenture Trustee

               

               

            
	 	
              By:

            	_______________________ 
	 	 	
                Name:

                Title:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGEMENTS
      TO LEASE AMENDMENT

    

    

    STATE
      OF
      ARIZONA     )

                     )
      ss.:

    COUNTY
      OF
      PIMA      )

    

    The
      foregoing instrument was acknowledged before me this ____ day of June, 2006,
      by
      _________________, _________________ of TUCSON
      ELECTRIC POWER COMPANY,
      an
      Arizona corporation, on behalf of said corporation.

    
 

    ________________________

    Notary
      Public

    

    

    My
      Commission Expires:

    

    

    _____________________

    

    

    

    
      STATE
        OF
        ARIZONA     )

                       )
        ss.:

      COUNTY
        OF
        PIMA      )

    The
      foregoing instrument was acknowledged before me this _____ day of June, 2006,
      by
      _________________, _____________________ of SAN
      CARLOS RESOURCES INC.,
      an
      Arizona corporation, on behalf of said corporation.

    
 

    
      ________________________

      Notary
        Public

    

    

    

    My
      Commission Expires:

    

    

    _____________________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    STATE
      OF
      DELAWARE    )

                )
      ss.:

    COUNTY
      OF
      NEW CASTLE  )

    

    The
      foregoing instrument was acknowledged before me this _____ day of June, 2006,
      by
      __________________, __________________ of WILMINGTON
      TRUST COMPANY,
      a
      Delaware banking corporation, on behalf of said corporation.

    
 

    
      
        ________________________

        Notary
          Public

      

    

    

    

    My
      Commission Expires:

    

    

    _____________________

    

 

    
      STATE
        OF
        DELAWARE    )

                  )
        ss.:

      COUNTY
        OF
        NEW CASTLE  )

    The
      foregoing instrument was acknowledged before me this _____ day of June, 2006,
      by
WILLIAM
      J. WADE,
      an
      individual.

     

     

    
      
        ________________________

        Notary
          Public

      

    My
      Commission Expires:

    

    

    _____________________

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