Exhibit 10.7
FOUR CORNERS PROJECT
CO-TENANCY AGREEMENT
AMENDMENT NO. 6
AMONG
ARIZONA PUBLIC SERVICE COMPANY
EL PASO ELECTRIC COMPANY
PUBLIC SERVICE COMPANY OF NEW MEXICO
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT
AND POWER DISTRICT
SOUTHERN CALIFORNIA EDISON COMPANY
TUCSON ELECTRIC POWER COMPANY
EXECUTED ORIGINAL
February 3, 2000
FOUR CORNERS PROJECT
CO-TENANCY AGREEMENT
AMENDMENT NO. 6
1 PARTIES:
The parties to this Amendment No. 6 to the Four Corners Project Co-Tenancy
Agreement are: ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation
(hereinafter referred to as "Arizona"); EL PASO ELECTRIC COMPANY, a Texas
corporation (hereinafter referred to as "El Paso"); PUBLIC SERVICE COMPANY
OF NEW MEXICO, a New Mexico corporation (hereinafter referred to as "New
Mexico"); SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT,
an agricultural improvement district, organized and existing under the laws
of the State of Arizona (hereinafter referred to as "Salt River Project");
SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (hereinafter
referred to as "Edison"); and TUCSON ELECTRIC POWER COMPANY, an Arizona
corporation, formerly known as Tucson Gas & Electric Company (hereinafter
referred to as "Tucson"), (collectively hereinafter referred to as the
"Participants").
2 RECITALS:
This Amendment No. 6 is made with reference to the following facts, among
others:
2.1 As of July 19, 1966, the Participants entered into the Four Corners
Project Co-Tenancy Agreement, which has since been amended by
Amendment Nos. 1 through 5 (as so amended hereinafter referred to as
the "Co-Tenancy Agreement").
2.2 The Participants wish to further amend the Co-Tenancy Agreement in
order to:
2.2.1 Revise Section 6.11 to require a selling Participant to give
written notice of any changes in ownership and to require the
Operating Agent to prepare for signature an amendment reflecting
such changes in ownership;
2.2.2 Revise Sections 5.27 and 9.5 to clarify that Participants may
only vote on actions or determinations relating to those portions
of the Four Corners Project in which they have an ownership
interest;
2.2.3 Permit a Participant to transfer in whole or in part its
undivided interests in the Four Corners Project to the parent of
such Participant or to a wholly owned subsidiary of such parent
without triggering Section 13; and
2.2.4 Shorten the notice periods specified in Section 13 and clarify
that a Participant's right of first refusal extends only to those
portions of the Four Corners Project in which they have an
ownership interest.
3 AGREEMENT:
In consideration of the mutual benefits to be derived from this Amendment
No. 6, the Participants agree as follows:
4 EFFECTIVE DATE:
This Amendment No. 6 shall be effective upon the date when executed by all
of the Participants.
5 DEFINITIONS
Section 5.27 of the Co-Tenancy Agreement is amended to read as follows: /
-2-
5.27 Participant(s)
One or more entities, including Arizona, El Paso, New Mexico, Salt
River Project, Edison and Tucson, with an ownership interest in the
Four Corners Project. Except with respect to any rights, benefits,
duties, or obligations expressly provided for in any Project
Agreement, a Participant's rights, benefits, duties, and obligations
under this Agreement are expressly limited to those rights, benefits,
duties, and obligations involving that portion of the Four Corners
Project in which the Participant has an ownership interest.
6 OWNERSHIP AND TITLES:
Section 6.11 of the Co-Tenancy Agreement is amended to read as follows:
6.11 In the event that any Participant transfers or assigns any of its
right, title or interest (collectively, "interest") in and to the Four
Corners Project in accordance with the terms and conditions of this
Co-Tenancy Agreement, the Participant assigning or transferring such
interest shall, upon completion of such transfer or assignment,
provide written notice to the other Participants and the Operating
Agent, as defined in the Operating Agreement, of any changes in the
interests of that Participant in the Four Corners Project. Upon
receipt of such notice, the Operating Agent shall prepare for
signature by the Participants an amendment to the Co-Tenancy Agreement
reflecting such changes.
7 COORDINATION COMMITTEE:
Section 9.5 of the Co-Tenancy Agreement is amended to read as follows:
-3-
9.5 Any action or determination of the Coordination Committee shall
require the affirmative vote of all Participants, acting through
their respective representatives, that have an ownership
interest in that portion of the Four Corners Project that is the
subject matter of the action to be taken or the determination to
be made. Only those Participants with an ownership interest in
the portion of the Four Corners Project that is the subject
matter of an action or determination may participate in
discussions relating to such actions or determinations;
provided, however, that this restriction shall apply only when
required by a regulatory authority with jurisdiction over the
Participant(s), an applicable code of conduct, or a
Participant's reasonable competitive concerns.
8 MORTGAGE AND TRANSFER OF PARTICIPANTS' INTEREST:
8.1 Section 12.3 of the Co-Tenancy Agreement is amended by adding new
Sections 12.3.6 and 12.3.7 to read as follows:
12.3 Each Participant shall have the right to transfer or assign all
or any portion of its respective rights, undivided titles and
interests in the Four Corners Project, in, to and under the
Project Agreements and/or in the Granted Lands and Leased Lands,
without the need for prior written consent of any other
Participant, at any time to any of the following:
12.3.1 To any corporation or other entity acquiring all or
substantially all of the property of such Participant; or
12.3.2 To any corporation or entity into which or with which such
Participant may be merged or consolidated; or
-4-
12.3.3 To any corporation or entity the stock or ownership of
which is wholly owned by a Participant; or
12.3.4 To any third party transferee in connection with a
financing by such Participant involving or relating to such
Participant's rights, titles and interests in the Four
Corners Project, in, to and under the Project Agreements
and/or in the Granted Lands and Leased Lands, without such
third party transferee assuming or becoming obligated in any
respect to perform any of the obligations of such
Participant pursuant to this Co-Tenancy Agreement, provided
that any and all such rights, titles and interests
transferred to such third party transferee are immediately
re-purchased by such Participant and are thereupon subject
to all of the provisions of this Co-Tenancy Agreement,
including, but not limited to, the "right of first refusal"
provisions of Section 13 hereof; or
12.3.5 To the Salt River Valley Water Users' Association, an
Arizona corporation, in the case of a transfer by Salt River
Project; or
12.3.6 To any corporation which owns all of the outstanding
common stock of a Participant, or in the case of a
Participant which has no common stock, to an entity which
owns all of the ownership interest of the Participant (the
corporation or entity shall be referred to herein as the
"Parent"); or
-5-
12.3.7 To any corporation or entity the common stock or other
ownership interest of which is wholly owned by the Parent of
such Participant.
8.2 A new Section 12.7 is added to read as follows:
12.7 Without implying that any provision other than Article 6 and
Article 7 herein allows a Participant to own an undivided
ownership interest in any component of the Four Corners Project
which is not the same as the undivided ownership interest such
Participant owns in every other component, each Participant shall
own the same undivided percentage interest in Unit 4 as in Unit
5.
9 RIGHT OF FIRST REFUSAL:
Sections 13.3, 13.4, 13.6, and 13.8 of the Co-Tenancy Agreement are amended
to read as follows:
13.3 At least one hundred eighty (180) days prior to its intended date to
Assign, and after its receipt of a bona fide written offer of the type
described in Section 13.1 above, the Participant desiring to Assign
its Transfer Interest shall serve written notice of its intention to
do so upon the remaining Participants who have an interest in that
portion of the Four Corners Project that is the subject of the
Transfer Interest in accordance with Section 23 of this Co-Tenancy
Agreement. Such notice to the remaining Participants shall contain the
approximate proposed date to Assign, the terms and conditions of said
bona fide written offer received by such Participant, and the terms
and conditions of the proposed assignment. The terms and conditions
contained in such notice shall be at least as favorable to the
-6-
remaining Participants as the terms and conditions of said bona fide
written offer, or may be the same terms and conditions as set forth in
said offer.
13.4 Each remaining Participant having an ownership interest in the portion
of Four Corners Project that is the subject of the Transfer Interest,
including the Outside Party if such Outside Party is a Participant,
shall signify its desire to purchase the entire Transfer Interest, or
any percentage interest therein, or not to purchase all or any
percentage interest therein, by serving written notice of its
intention upon the Participant desiring to Assign and upon the
remaining Participants pursuant to Section 23 hereof within one
hundred twenty (120) days after such service pursuant to Section 13.3
of the written notice of intention to Assign. Failure by a Participant
to serve notice as provided hereunder within the time period specified
shall be conclusively deemed to be notice of its intention not to
purchase any portion of the Transfer Interest.
13.6 If the remaining Participants, or any one or more of them, should
signify its or their intention under Section 13.4 to purchase less
than the entire Transfer Interest, the Participant desiring to Assign
shall serve written notice of this fact upon the remaining
Participants in accordance with Section 23 hereof within ten (10) days
after its receipt of the last of the written notices given pursuant to
Section 13.4 hereof, or after the expiration of the one hundred twenty
(120) day period referred to in Section 13.4 hereof, whichever is
earlier.
-7-
13.8 When intention to purchase the entire Transfer Interest has been
indicated by notices duly given hereunder by the applicable
Participant(s) desiring to purchase the Transfer Interest, the
Participants shall thereby incur the following obligations:
13.8.1 The Participant desiring to Assign and the Participant(s)
desiring to purchase the Transfer Interest shall be obligated
to proceed in good faith and with diligence to obtain all
required authorizations and approvals to Assign;
13.8.2 The Participant desiring to Assign shall be obligated to obtain
the release of any liens imposed by or through it upon any part
of the Transfer Interest, and to Assign the Transfer Interest
at the earliest practicable date thereafter; and
13.8.3 The Participant(s) desiring to purchase the Transfer Interest
shall be obligated to perform all terms and conditions required
of it or them to complete the purchase of the Transfer
Interest.
The purchase of the Transfer Interest shall be fully consummated
within eighteen (18) months following the date upon which all notices
required to be given under this Section 13 have been duly served,
unless the Participant(s) are then diligently pursuing applications to
appropriate regulatory bodies (if any) for required authorizations to
effect such assignment or are then diligently prosecuting or defending
appeals from orders entered or authorizations issued in connection
with such application, in which case the purchase of the Transfer
Interest shall be fully
-8-
consummated at the earliest possible date following issuance of the
requested authorization(s) or the resolution of any appeal.
10 Execution by Counterparts:
This Amendment No. 6 may be executed in any number of counterparts, and
upon execution by all Participants, the counterparts shall have the same
force and effect as an original instrument and as if all Participants had
signed the same instrument. Any signature page of this Amendment No. 6 may
be detached from any counterpart of this Amendment No. 6 without impairing
the legal effect of any signature thereon, and may be attached to another
counterpart of this Amendment No. 6 identical in form hereto but having
attached to it one or more signature pages.
11 EFFECT OF AMENDMENTS:
Except as specifically amended herein, this Co-Tenancy Agreement, as
previously amended, shall remain in full force and effect.
-9-
12 SIGNATURE CLAUSE:
The signatories hereto represent that they have been appropriately
authorized to enter into this Amendment No. 6 on behalf of the Participant
for whom they sign. This Amendment No. 6 is hereby executed as of this 3rd
day of February, 2000.
ARIZONA PUBLIC SERVICE COMPANY
By John R. Denman
--------------------------------------
Its Vice President - Fossil
-------------------------------------
EL PASO ELECTRIC COMPANY
By John C. Horne
--------------------------------------
Its Vice President - Generation
-------------------------------------
PUBLIC SERVICE COMPANY OF NEW MEXICO
By Patrick Goodman
--------------------------------------
Its Vice President - Power Production
-------------------------------------
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
ATTEST AND COUNTERSIGN By William P. Schrader
--------------------------------------
T. A. Lonon Its President
- -------------------------------- -------------------------------------
SOUTHERN CALIFORNIA EDISON COMPANY
By Harold Ray
--------------------------------------
Its Executive Vice President
-------------------------------------
TUCSON ELECTRIC POWER COMPANY
By Thomas A. Delawder
--------------------------------------
Its Vice President
-------------------------------------
-10-
STATE OF ARIZONA )
) ss
County of Maricopa )
The foregoing instrument was acknowledged before me this 21st day of April,
2000, by John R. Denman, Vice President, Fossil, Arizona Public Service Company,
on behalf of the corporation.
Christine A. LaBrash
----------------------------------------
Notary Public
My Commission Expires: August 29, 2003
[SEAL]
-11-
STATE OF TEXAS )
) ss
County of El Paso )
The foregoing instrument was acknowledged before me this 9th day of
February, 2000, by John C. Horne, Vice President - Generation of El Paso
Electric Company, on behalf of the corporation.
Hilda Vargas
----------------------------------------
Notary Public
My Commission Expires:
June 26, 2001
- ----------------------
[SEAL]
-12-
STATE OF NEW MEXICO )
) ss
County of San Juan )
The foregoing instrument was acknowledged before me this 4th day of
February, 2000, by Patrick Goodman, of Public Service Company of New Mexico, on
behalf of the corporation.
Beverly A. Olim
----------------------------------------
Notary Public
My Commission Expires:
1-16-2001
- ----------------------------
-13-
STATE OF ARIZONA )
) ss
County of Maricopa )
The foregoing instrument was acknowledged before me this 6th day of March,
2000, by William P. Schrader, President of Salt River Project Agricultural
Improvement and Power District, on behalf of the corporation.
Margaret A. Sullivan
----------------------------------------
Notary Public
My Commission Expires: September 16, 2001
[SEAL]
-14-
STATE OF CALIFORNIA )
) ss
County of Los Angeles )
The foregoing instrument was acknowledged before me this 9th day of Feb.,
2000, by Harold Ray, of Southern California Edison Company, on behalf of the
corporation.
Sarah C. Perez
----------------------------------------
Notary Public
My Commission Expires:
Aug. 6, 2001
- -------------------------------
[SEAL]
-15-
STATE OF ARIZONA )
) ss
County of Pima )
The foregoing instrument was acknowledged before me this 7th day of February,
2000, by Thomas A. Delawder, Vice President, Energy Resources of Tucson Electric
Power Company, on behalf of the corporation.
Bertha A. Kissinger
----------------------------------------
Notary Public
My Commission Expires:
Jan. 21, 2003
- ---------------------------------
[SEAL]
-16-