CROSS REFERENCE: LEASE AGREEMENT NO. 2
RECORDED IN VOLUME 205, PAGE 328, MONROE
COUNTY, GEORGIA, RECORDS, AND FIRST
SUPPLEMENT TO LEASE AGREEMENT NO. 2
RECORDED IN VOLUME 228, PAGE 111 OF THE
AFORESAID RECORDS.
SECOND SUPPLEMENT TO LEASE AGREEMENT NO. 2
This SECOND SUPPLEMENT TO LEASE AGREEMENT NO. 2 (this "Supplement") is
made and entered into as of December 17, 1997, between NATIONSBANK, N.A., a
national banking association and successor by merger to The Citizens and
Southern National Bank, acting through its agent, THE BANK OF NEW YORK, a state
banking corporation organized under the laws of the state of New York, not in
its individual capacity but solely as an Owner Trustee (together with its
successors and permitted assigns, the "Lessor") under the Trust Agreement No. 2,
dated December 30, 1985, among the Owner Participant and the Original Trustee
(each such term and all other capitalized terms used in this Supplement but not
defined have the meanings assigned to such terms in Section 1 of this
Supplement), and OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP
CORPORATION), an electric membership corporation organized under the laws of the
state of Georgia and formerly known as Oglethorpe Power Corporation (An Electric
Membership Generation & Transmission Corporation) and together with its
successors and permitted assigns, the "Lessee."
W I T N E S S E T H :
WHEREAS, on December 30, 1985, the Original Trustee and the Co-Owner
Trustee leased the Undivided Interest to the Lessee pursuant to the terms of the
Lease;
WHEREAS, the Original Trustee and the Co-Owner Trustee assigned all of
their right, title and interest in and to the Undivided Interest and the Lease
to the Georgia Trustee, and the Georgia Trustee assumed the obligations of the
Original Trustee and the Co-Owner Trustee thereunder on October 7, 1986 with the
consent of the Lessee and the Indenture Trustee, all pursuant to and in
accordance with Trust Supplement No. 2;
WHEREAS, in connection with such assignment and assumption, the Lease was
amended pursuant to the First Lease Supplement;
WHEREAS, the Georgia Trustee is an Owner Trustee pursuant to the Trust
Supplement No. 2 and the Lessor is the successor to Georgia Trustee;
WHEREAS, the Lessee, the Owner Participant, the Original Trustee, the
Lessor, the Indenture Trustee, the Loan Participant, the Original Funding
Corporation, the Funding Corporation, the Original Collateral Trust Trustee and
the Collateral Trust Trustee have entered into the Second Supplemental
Participation Agreement in connection with the issuance by the Lessor of the
Series 1997 Refunding Lessor Note to the Funding Corporation to refinance all of
the principal outstanding under the Outstanding Note;
WHEREAS, the Series 1997 Refunding Lessor Note will be secured under the
Restated Indenture;
WHEREAS, the Funding Corporation will issue the Facility Bonds to refund
the Outstanding Bonds, and the Series 1997 Refunding Lessor Note issued to such
corporation will secure the payment of the Facility Bonds under the terms of the
Collateral Trust Indenture; and
WHEREAS, the Lessor and the Lessee desire to amend the Lease in the manner
provided in this Second Lease Supplement in connection with (i) the issuance of
the Series 1997 Refunding Lessor Note to the Funding Corporation, and (ii) the
repayment of the Outstanding Note with the proceeds thereof;
NOW, THEREFORE, in consideration of the premises, the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions. Capitalized terms used in this Second Lease
Supplement, including the recitals, and not otherwise defined shall have the
meanings assigned to such terms in Appendix A to the Lease Agreement and
Appendix B to the First Lease Supplement unless the context or use clearly
indicates another or different meaning or intent, except for certain
modifications, amendments and additions to such definitions as set forth in
Appendix C to this Second Lease Supplement. Capitalized terms set forth in
Appendix C to this Second Lease Supplement shall have the respective meanings
assigned to such terms for all purposes hereof and under the Lease, as amended
hereby, and words importing the singular include the plural and vice versa.
SECTION 2. Supplemental Rent Payment. On the 1997 Refinancing Date, the
Lessee shall pay to the Lessor Supplemental Rent in the amount of Four Million
Six Hundred Five Thousand Eight Hundred Ten Dollars and Fifteen Cents
($4,605,810.15) in immediately available funds (the "1997 Supplemental Rent
Payment").
SECTION 3. Basic Rent. For purposes of determining the amount of Basic
Rent to be paid by Lessee to Lessor pursuant to Section 3.2 of the Lease, the
term "Schedule 1 to the Participation Agreement" shall mean the revised Schedule
1 to the Participation Agreement attached to the Second Supplemental
Participation Agreement.
SECTION 4. Amendment to Section 3.3. Section 3.3 of the Lease is hereby
amended by deleting such section in its entirety and substituting the following
in lieu thereof:
SECTION 3.3 Rent Differential. If, on any Rent Payment Date, any
amount of Additional Lessor Note Interest shall be due and payable under
the Series 1997 Refunding Lessor Note, the installment of Basic Rent on
such Rent Payment Date shall be increased by the amount of such Additional
Lessor Note Interest. The amount of additional Basic Rent payable under
this Section 3.3 shall be the "Rent Differential."
SECTION 5. Amendment to Section 10.2(b)(xii). Subsection 10.2(b)(xii)
of the Lease is hereby amended by deleting such subsection in its entirety and
substituting the following in lieu thereof:
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(xii) Coopers & Lybrand LLP or any other nationally recognized
accounting firm which shall become Lessee's regular outside auditors shall
confirm, to the reasonable satisfaction of Lessor, that the Cost of
Capital Improvements which are the subject of the Supplemental Financing,
when so financed, may be capitalized, rather than expensed, under the
Uniform System of Accounts and may be capitalized under section 263 of the
Code and the Regulations thereunder;
SECTION 6. Amendment to Article 14. Subsection (e) of Article 14 of the
Lease is hereby amended by deleting such subsection in its entirety and
substituting the following in lieu thereof:
(e) any "Event of Default" under Article VIII of the Oglethorpe
Indenture shall have occurred and be continuing and, as a result thereof,
any remedy permitted under such Article VIII shall have been exercised;
SECTION 7. Amendment to Section 18.1. Section 18.1 of the Lease is
hereby amended by deleting the words "REA" and "REA Mortgage" in such section
and substituting in lieu thereof the words "RUS" and "Oglethorpe Indenture,"
respectively.
SECTION 8. Effect. Except as expressly amended, supplemented and
modified hereby, the Lease and all terms and conditions thereof shall continue
in full force and effect, unmodified and unchanged. From and after the date of
delivery hereof, the Lease and all references thereto in any and all Operative
Documents shall mean and include the Lease as modified, amended and supplemented
hereby.
SECTION 9. Chattel Paper. The single executed original of this
Supplement marked "Original " and containing the receipt of Indenture Trustee
thereon shall be deemed to be the "Original " of this Supplement. To the extent
that this Supplement constitutes chattel paper, as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdictions, no
security interest in this Supplement may be created through the transfer or
possession of any counterpart other than the "Original."
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IN WITNESS WHEREOF, the parties hereto have each caused this Supplement to
be duly executed and sealed as of the date first above written.
LESSOR: NATIONSBANK, N.A., acting through its
Signed, sealed and delivered agent, THE BANK OF NEW YORK, not
this 17 day of December, in its individual capacity but solely a
1997, in the presence of: Owner Trustee under the Trust Agreement
identified herein, Lessor
/s/ Mark Bron By: /s/ Stefan Victory
- -------------------------------- -------------------------------------
Unofficial Witness Name: Stefan Victory
Title: Agent
/s/ Cherie S. White Attest: /s/ Peggy McWhorter
- -------------------------------- ---------------------------------
Notary Public Name: Peggy McWhorter
Title: Agent
My Commission Expires: April 9, 2001 [SEAL]
LESSEE: OGLETHORPE POWER
Signed, sealed and delivered CORPORATION (AN ELECTRIC
this 17 day of December, MEMBERSHIP CORPORATION),
1997, in the presence of: Lessee
/s/ Lynda L. Clark By: /s/ T.D. Kilgore
- -------------------------------- -------------------------------------
Unofficial Witness Name: T.D. Kilgore
Title: President and Chief
Executive Officer
/s/ Thomas J. Brendiar Attest: /s/ Patricia N. Nash
- -------------------------------- ---------------------------------
Notary Public Name: Patricia N. Nash
Title: Secretary
My Commission Expires: November 14, 2000 [SEAL]
APPENDIX C
DEFINITIONS NO. 2
"Additional Lessor Note Interest" shall have the meaning set forth in the
Series 1997 Refunding Lessor Note.
"Amendment No. 1 to the Tax Indemnification Agreement" means the Amendment
No. 1 to the Tax Indemnification Agreement No. 2, dated as of December 17,
1997, between the Lessee and the Owner Participant.
"Bankruptcy Act" has the meaning set forth in Section 4.1(d) of the Restated
Indenture.
"Collateral Trust Trustee" means SunTrust Bank, Atlanta, not in its
individual capacity but solely as trustee under the Collateral Trust
Indenture.
"Collateral Trust Indenture" means the Collateral Trust Indenture, dated as
of December 1, 1997, among Lessee, the Funding Corporation and the Collateral
Trust Trustee, as the same may be amended, modified or supplemented from time
to time in accordance with the provisions thereof and of the Participation
Agreement.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of December 17, 1997, among
Oglethorpe, the Funding Corporation and the Purchasers, as the same may be
amended, modified or supplemented from time to time in accordance with the
provisions thereof.
"Existing Participation Agreement" means the Original Participation Agreement
as amended, modified and supplemented by the First Supplemental Participation
Agreement.
"Facility Bonds" means the Serial Facility Bonds due June 30, 2011 issued by
the Funding Corporation pursuant to the Collateral Trust Indenture, comprised
of the Initial Series of Bonds and the Exchange Series of Bonds (both as
defined in the Collateral Trust Indenture).
"First Lease Supplement" means the First Supplement to Lease Agreement No. 2,
dated as of October 15, 1986, between the Lessor and the Lessee.
"First Supplemental Participation Agreement" means the Supplemental
Participation Agreement No. 2, dated as of October 9, 1986, among Lessee,
Owner Participant, the Original Trustee, the Georgia Trustee, the Indenture
Trustee, the Original Funding Corporation, the Original Collateral Trust
Trustee and the Loan Participant.
"Ford Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement, dated as of September 21, 1996, by and among Ford Motor
Credit Company, DFO Holding Company and DFO Partnership.
"Funding Corporation" means OPC Scherer 1997 Funding Corporation A, a
corporation organized under the laws of the state of Delaware.
"Indemnitee" shall mean Bank, Original Trustee, Wade, Co-Owner Trustee,
Georgia Bank, Georgia Trustee, Owner Participant, Indenture Trustee (both in
its individual capacity and its capacity as Indenture Trustee under the
Restated Indenture), the Collateral Trust Trustee, the Original Collateral
Trust Trustee, each holder of a note from time to time outstanding and the
respective successors, assigns, agents, officers, directors or employees of
any thereof and Affiliates of any of the foregoing."
"Indenture Trustee" means The Bank of New York Trust Company of Florida,
N.A., a national banking association, not in its individual capacity but
solely as indenture trustee under the Indenture, and each successor trustee
or co-trustee of the trusts created by the Indenture.
"Lease" means the Lease Agreement No. 2, dated as of December 30, 1985,
between the Lessor and the Lessee, as amended, modified and supplemented by
the First Lease Supplement and the Second Lease Supplement and as further
amended, modified and supplemented from time to time.
"1997 Refinancing Date" has the meaning assigned to such term in Section 2.03
of the Second Supplemental Participation Agreement.
"1997 Refinancing Documents" means the Second Supplemental Participation
Agreement, the Restated Indenture, the Series 1997 Refunding Lessor Note and
the Second Lease Supplement.
"1997 Refinancing Transaction Expenses" means the sum of (a) the aggregate of
the amounts referred to in clause (b) of the definition of "1997 Refinancing
Transaction Expenses" contained in Appendix C to each of the Other Second
Supplemental Participation Agreements, plus (b) all other fees, expenses,
disbursements and costs incurred by or on behalf of Owner Trustee, Owner
Participant, the Original Funding Corporation, the Funding Corporation, the
Indenture Trustee, the Original Collateral Trust Trustee or the Collateral
Trust Trustee in connection with the transactions contemplated by the 1997
Refinancing Documents on the 1997 Refinancing Date, including the Lessor's
Share of up to $110,000 of the fees and disbursements of counsel to the
Purchasers.
"1997 Supplemental Rent Payment" shall have the meaning set forth in Section
2 of the Second Lease Supplement.
"Offering Circular" means the Offering Circular, dated December 11, 1997, of
the Lessee relating to the Facility Bonds.
"Oglethorpe Indenture" means the Indenture, dated as of March 1, 1997,
between Lessee and SunTrust Bank, Atlanta, as indenture trustee, which
replaced the REA Mortgage, as the same may be hereafter supplemented,
modified or amended, and any new deed to secure debt, indenture or security
agreement placed on the property of the Lessee in substitution thereof. Any
reference to a section or provision of the REA Mortgage shall refer to the
successor section or provision in the Oglethorpe Indenture or any
supplemented, amended or successor deed to secure debt, indenture or security
agreement notwithstanding any change in the numbering or headings of such
sections or provisions.
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"Operative Documents" means the Participation Agreement, the Trust Agreement,
the Lease, the Deed and Bill of Sale, the Supporting Assets Lease, the
Supporting Assets Sublease, the Restated Indenture, the Series 1997 Refunding
Lessor Note, the Assignment, the REA Consent, the Co-Owners' Consent, the Tax
Indemnification Agreement, the Ownership Agreement, the Operating Agreement
and the Ford Assignment and Assumption Agreement.
"Original Collateral Trust Indenture" means the Collateral Trust Indenture,
dated as of October 15, 1986, among Lessee, Original Funding Corporation and
the Original Collateral Trust Trustee.
"Original Collateral Trust Trustee" means SunTrust Bank, Atlanta, formerly
known as the Trust Company Bank, not in its individual capacity but solely as
trustee under the Original Collateral Trust Indenture.
"Original Funding Corporation" means OPC Scherer Funding Corporation, a
Delaware corporation.
"Original Indenture Trustee" means Wachovia Bank of Georgia, National
Association, a national banking association, acting through its agent The
Bank of New York, a state banking corporation organized under the laws of the
State of New York, not in its individual capacity but solely as indenture
trustee under the Original Lease Indenture.
"Original Lease Indenture" means the Original Indenture, as supplemented by
the First Supplemental Indenture.
"Original Participation Agreement" means the Participation Agreement No. 2,
dated as of December 30, 1985, among Lessee, Owner Participant, Original
Trustee, and the Loan Participant.
"Other Leases" means all the leases of undivided interests in the Facility
(other than the Lease) between the Bank, in its capacity as trustee, and
Lessee, dated as of December 30, 1985, as the same have been or may be
amended, modified or supplemented thereafter.
"Other Second Supplemental Participation Agreements" means all supplemental
participation agreements, each dated as of the 1997 Refinancing Date, to
which Lessee and any of the Other Owner Participants are parties, relating to
the Refinancing contemplated to be consummated on the 1997 Refinancing Date
other than the Second Supplemental Participation Agreement.
"Outstanding Bonds" mean the Serial Facility Bonds due 1991, 1996 and 2011
issued by the Original Funding Corporation pursuant to, and Outstanding
under, the Indenture.
"Outstanding Bonds Redemption Date" means January 6, 1998.
"Outstanding Note" means the Note, dated October 15, 1986, issued to the
Original Funding Corporation pursuant to Section 2.4 of the Indenture.
"Participation Agreement" means the Original Participation Agreement as amended,
modified and supplemented by the First Supplemental Participation Agreement and
the Second
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Supplemental Participation Agreement, and as the same may be further amended,
modified or supplemented from time to time in accordance with the provisions
thereof.
"Premium Redemption Price" shall mean the redemption prices (each expressed
as a percentage principal amount) set forth in Schedule 2 to the Series 1997
Refunding Lessor Note.
"Purchase Agreement" means the Purchase Agreement, dated December 11, 1997,
among the Purchasers, Lessee and the Funding Corporation.
"Purchasers" shall mean Goldman, Sachs & Co. and the other Purchasers listed
on Schedule I to the Purchase Agreement.
"Restated Indenture" means the Amended and Restated Indenture of Trust, Deed
to Secure Debt and Security Agreement No. 2, dated as of December 1, 1997,
among the Owner Trustee and the Indenture Trustee.
"RUS" means the Rural Utilities Service, the successor to the REA.
"Second Lease Supplement" means the Second Supplement to Lease Agreement No.
2, dated as of the 1997 Refinancing Date, between the Lessee and the Owner
Trustee.
"Second Supplemental Participation Agreement" means the Supplemental
Participation Agreement No. 2, dated as of the 1997 Refinancing Date, among
Lessee, Owner Participant, the Owner Trustee, the Indenture Trustee, the Loan
Participant, the Original Funding Corporation, the Funding Corporation, the
Original Collateral Trust Trustee and the Collateral Trust Trustee.
"Series 1997 Refunding Lessor Note" means the Note created and established
pursuant to Section 2.4 of the Restated Indenture and issued to the Funding
Corporation pursuant to the Participation Agreement and any Note issued in
exchange or substitution thereof.
"Stipulated Interest Rate" shall mean the lesser of (i) two percent (2%) per
annum above the greater of (A) the published base rate of Citibank, N.A., in
New York, New York, in effect from time to time and (B) six and nine hundred
seventy-four thousandths percent (6.974%) per annum, and (ii) the highest
interest rate per annum permitted by Applicable Law.
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EXPLANATORY STATEMENT TO
SECOND SUPPLEMENT TO LEASE AGREEMENT NO. 2
Except as described below, the following agreements are substantially
similar in all material respects to Second Supplement to Lease Agreement No.
2, dated as of December 17, 1997, between NationsBank, N.A., acting through
its agent, The Bank of New York, as Owner Trustee under the Trust Agreement
No. 2, dated December 30, 1985, among DFO Partnership, as assignee of Ford
Motor Credit Company, as the Owner Participant, and the Original Trustee, as
Lessor, and Oglethorpe Power Corporation (An Electric Membership
Corporation), as Lessee ("Lease Agreement No. 2"):
1. Second Supplement to Lease Agreement No. 1, dated as of December 17,
1997, between NationsBank, N.A., acting through its agent, The Bank of
New York as Owner Trustee under the Trust Agreement No. 1, dated December
30, 1985, among IBM Credit Financing Corporation as the Owner
Participant, and the Original Trustee, as Lessor, and Oglethorpe Power
Corporation (An Electric Membership Corporation), as Lessee ("Lease
Agreement No. 1");
2. Second Supplement to Lease Agreement No. 3, dated as of December 17,
1997, between NationsBank, N.A., acting through its agent, The Bank of
New York, as Owner Trustee under the Trust Agreement No. 3, dated
December 30, 1985, among Chrysler Financial Corporation as the Owner
Participant, and the Original Trustee, as Lessor, and Oglethorpe Power
Corporation (An Electric Membership Corporation), as Lessee ("Lease
Agreement No. 3"); and
3. Second Supplement to Lease Agreement No. 4, dated as of December 17,
1997, between NationsBank, N.A., acting through its agent, The Bank of
New York, as Owner Trustee under the Trust Agreement No. 4, dated
December 30, 1985, among HEI Investment Corp. as the Owner Participant,
and the Original Trustee, as Lessor, and Oglethorpe Power Corporation (An
Electric Membership Corporation), as Lessee ("Lease Agreement No. 4").
The following sets forth the material differences between Lease Agreement
No. 2 and Lease Agreement No. 1, Lease Agreement No. 3 and Lease Agreement
No. 4:
1. The amount of the Supplemental Rent Payment set forth in Section 2 of
Lease Agreement No. 1, Lease Agreement No. 3 and Lease Agreement No. 4 is
$3,490,049.95, $4,633,243.03 and $6,111,638.60, respectively.