AMENDMENT NO. 4 dated as of June 1, 2006 to TAX INDEMNITY AGREEMENT dated as of December 1, 1985 between PHILIP MORRIS CAPITAL CORPORATION beneficiary under a Trust Agreement dated as of December 1, 1985 with Wilmington Trust Company and William J....
Exhibit
10.4
AMENDMENT
NO. 4
dated
as
of June 1, 2006
to
dated
as
of December 1, 1985
between
XXXXXX
XXXXXX CAPITAL CORPORATION
beneficiary
under a Trust Agreement
dated
as
of December 1, 1985
with
Wilmington Trust Company
and
Xxxxxxx
X. Xxxx,
as
Owner
Trustee and Cotrustee, respectively,
Lessor
and
TUCSON
ELECTRIC POWER COMPANY,
and
SAN
XXXXXX RESOURCES INC.,
Lessee
_______________________________________
Common
Plant
Springerville
Generating Station
AMENDMENT
NO. 4
to
This
AMENDMENT
NO. 4
(this
“Amendment”),
dated
as of June 1, 2006 to TAX
INDEMNITY AGREEMENT,
dated as
of December 1, 1985, between TUCSON
ELECTRIC POWER COMPANY,
an
Arizona corporation, and SAN
XXXXXX RESOURCES INC.,
an
Arizona corporation, as Lessee (the “Lessee”),
and
XXXXXX
XXXXXX CAPITAL CORPORATION,
a
Delaware corporation (the “Owner
Participant”),
beneficiary under a Trust Agreement, dated as of December 1, 1985, with
Wilmington
Trust Company and
Xxxxxxx
X. Xxxx,
as
Owner Trustee and Cotrustee, respectively (the “Lessor”).
W
I T N E S S E T H
WHEREAS,
the
Owner Participant (or its predecessor in interest) and the Lessee entered into
a
Tax Indemnity Agreement, dated as of December 1, 1985, as amended by Amendment
No. 1, dated as of December 15, 1992, to Tax Indemnity Agreement dated as of
December 1, 1985, by Amendment No. 2, dated as of December 1, 1999, to Tax
Indemnity Agreement dated as of December 1, 1985 and by Amendment No. 3, dated
as of June 1, 2003 (such Tax Indemnity Agreement, as so amended and as further
amended, modified or supplemented from time to time, being referred to herein
as
the “Tax
Indemnity Agreement”);
WHEREAS,
the
Lessee, the Lessor, the Owner Participant and certain other parties have agreed
pursuant to an Refinancing Agreement, dated as June 1, 2006 (as amended,
modified or supplemented from time to time, the “Refinancing Agreement”) to
amend the Lease and the Indenture to permit a refinancing of the outstanding
Secured Notes on the Amendment Date (as defined in the Refinancing
Agreement);
WHEREAS,
the
Owner Participant and the Lessee wish to amend the Tax Indemnity Agreement
as
contemplated herein in order to reflect agreements and amendments contemplated
by the Refinancing Agreement;
NOW,
THEREFORE,
in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
Section
1. Definitions.
General.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings specified in the Tax Indemnity Agreement and the Indenture,
as amended and supplemented from time to time, including, without limitation,
by
Supplemental Indenture No. 3, dated as of June 1, 2003, and the Supplemental
Indenture No. 4, dated as of the date hereof.
Section
2. Additional
Definition. As
used
herein, Refinancing Agreement shall mean the Refinancing Agreement dated as
of
June 1, 2006, among Lessee, Owner Participant, Lessor and certain parties (as
such Refinancing Agreement may be amended, modified or supplemented from time
to
time).
Section
3. Indemnified
Losses.
(a)
Section 3.1(c) is hereby amended to read in its entirety as set forth
below:
“(c)
if,
as a result of the Lessee paying any Transaction Expenses (as defined in the
Refinancing Agreement), Transaction Expenses (as defined in the Refunding
Agreement) or Transaction Expenses (as defined in the 1999 Refunding Agreement)
the Owner Participant shall be required to include any amount in its gross
income; or”.
(c)
Section 3.1 is hereby amended by adding at the end of subsection (e) (i.e.
prior
to the phrase “(any of the events”) the following:
“;
or (f)
if, as a result of the Lessee paying any Supplemental Rent under Section 3(c)
of
the Lease with respect to payments contemplated by Section 2 of the Supplemental
Indenture No. 4, dated as of June 1, 2006, to the Indenture the Owner
Participant shall be required to include any amount in its gross
income”.
(d)
Section 3.1 is hereby amended by replacing the phrase “(any of the events
described in these subsections (a)(2), (b), (c), (d) or (e) being referred
to
hereinafter as a “Loss”)” with the following:
“(any
of
the events described in these subsections (a)(2), (b), (c), (d), (e) or (f)
being referred to hereinafter as a “Loss”)”.
Section
4. Counterpart
Execution.
This
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.
Section
5. Ratification
of the Tax Indemnity Agreement.
As
amended by this Amendment, the Tax Indemnity Agreement is in all respects
ratified, approved and confirmed, and the Tax Indemnity Agreement and this
Amendment shall together constitute one and the same instrument.
Section
6. Governing
Law.
This
Amendment has been delivered in, and shall in all respects be governed by,
construed in accordance with, the laws of the State of New York applicable
to
agreements made and to be performed entirely within such State, including such
laws applicable to matters of construction, validity and
performance.
Section
7. Representation
of Lessee. Lessee
represents that the rate of interest payable in respect of the Series 4 Notes
as
determined pursuant to Supplemental Indenture No. 4, dated as of June 1, 2006,
to the Indenture, including the use of Applicable Base Rate Margin and
Applicable Libor Margin that increase over time (i) represents an arm’s length
rate, (ii) is consistent with market practice for long-term floating rate
financings, and (iii) was determined without reference to federal income tax
considerations to any person.
2
IN
WITNESS WHEREOF,
the
Owner Participant and the Lessee have caused this Amendment to be duly executed
by their respective officers hereunto duly authorized as of the date set forth
above.
| TUCSON ELECTRIC POWER COMPANY | ||
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| By | ||
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Name |
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| Title: | ||
| SAN XXXXXX RESOURCES INC. | ||
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| By | ||
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Name |
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| Title: | ||
| XXXXXX XXXXXX CAPITAL CORPORATION | ||
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| By | ||
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Name: |
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| Title: | ||
