OGLETHORPE POWER CORPORATION
Serial Facility Bonds Due 2011
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Purchase Agreement
December 11, 1997
Goldman, Sachs & Co.,
As representatives of the Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
OPC Scherer 1997 Funding Corporation A, a Delaware corporation (the
"Funding Corporation"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the Purchasers named in Schedule I hereto (the
"Purchasers") an aggregate of $224,702,000 principal amount of the Serial
Facility Bonds due June 30, 2011 (the "Facility Bonds").
The Funding Corporation proposes to issue the Facility Bonds pursuant to
the provisions of a Collateral Trust Indenture, to be dated as of December 1,
1997 (the "Collateral Trust Indenture"), among Oglethorpe Power Corporation (An
Electric Membership Corporation), a Georgia electric membership corporation
("Oglethorpe"), the Funding Corporation and SunTrust Bank, Atlanta, a Georgia
banking corporation, as trustee (the "Collateral Trust Trustee"), the proceeds
of which are to be loaned by the Funding Corporation to Wilmington Trust Company
and Nationsbank, N.A., as Owner Trustees under four separate Trust Agreements,
each dated as of December 30, 1985, as heretofore supplemented and amended (in
such capacity, together with any other co-trustee appointed in accordance with
each such Trust Agreement, each a "Lessor").
The proceeds from the offering of the Facility Bonds will be loaned by the
Funding Corporation to the Lessors and will be used to finance the refunding of
certain nonrecourse debt of the Lessors incurred in connection with the sale and
leaseback transactions described in the Offering Circular referred to herein
(collectively, the "Sale and Leaseback Transactions").
Each Lessor used the proceeds of the non-recourse debt incurred by it in
connection with the Sale and Leaseback Transactions to finance a portion of the
purchase price and expenses related to the acquisition of an undivided interest
in Plant Robert W. Scherer Unit No. 2, an 818 MW coal-fired, steam electric
generating unit ("Unit No. 2") in accordance with the provisions of (i) the
Participation Agreement, dated December 30, 1985, among such Lessor, Oglethorpe,
the Owner Participant referred to in the Trust Agreement with such Lessor, The
Bank of New York Trust Company of Florida, N.A., as trustee (the "Lease
Indenture Trustee"), and CoBank ACB, formerly known as Columbia Bank for
Cooperatives ("CoBank") (each as subsequently amended and supplemented, a
"Participation Agreement"), and (ii) the Indenture of Trust, Deed to Secure Debt
and Security Agreement, dated December 30, 1985, between such Lessor and the
Lease Indenture Trustee (each as amended and supplemented, a "Lease Indenture").
Concurrently with the execution and delivery hereof, Oglethorpe and the
Funding Corporation intend to enter into a Second Supplemental Participation
Agreement with each Lessor, dated as of December 17, 1997 (collectively, the
"Supplemental Participation Agreements"), with the parties to each of the
Participation Agreements, the Collateral Trust Trustee and, with respect to
three Supplemental Participation Agreements, OPC Scherer Funding Corporation
(the "Original Funding Corporation") and the trustee of the collateral trust
indenture securing the bonds issued by the Original Funding Corporation. In
addition, in connection with the issuance and sale of the Facility Bonds,
Oglethorpe will enter into a Second Supplement to Lease Agreement, dated as of
December 17, 1997, with each Lessor substantially in the form attached to each
Supplemental Participation Agreement (collectively, the "Lease Supplements").
Each Lease Supplement amends and supplements the related Lease Agreement, dated
as of December 30, 1985, among such parties. Such Lease Agreements, as amended
and supplemented by the related Lease Supplements and otherwise, are referred to
herein collectively as the "Leases." Also, each Lessor and the Lease Indenture
Trustee will amend, supplement and restate each Lease Indenture in connection
with the issuance of the Facility Bonds pursuant to an Amended and Restated
Indenture of Trust, Deed to Secure Debt and Security Agreement, dated as of
December 1, 1997, among each Lessor and Lease Indenture Trustee (each such Lease
Indenture as amended, supplemented and restated, a "Restated Lease Indenture").
Each loan to a Lessor by the Funding Corporation will be evidenced by a separate
note (all such notes collectively, the "Series 1997 Refunding Lessor Notes").
Capitalized terms used herein but not otherwise defined have the meanings
set forth in the Supplemental Participation Agreements. The Facility Bonds are
more fully described in the Offering Circular (defined below).
Oglethorpe and the Funding Corporation wish to confirm their agreement with
the Purchasers and the Lessors in connection with the purchase of the Facility
Bonds by the Purchasers as follows:
1. Oglethorpe represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated December 1, 1997 (the
"Preliminary Offering Circular") and an Offering Circular, dated December 11,
1997 (the "Offering Circular") do not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading in any material respect; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished to Oglethorpe in writing by or
on behalf of the Purchasers through Goldman, Sachs & Co. expressly for use in
connection with the preparation thereof;
(b) Oglethorpe has been duly incorporated and is now validly existing and
in good standing as an electric membership corporation incorporated under Title
46 of the laws of the
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State of Georgia; Oglethorpe is duly authorized to transact business as a
foreign corporation in the State of Alabama and is in good standing as a foreign
corporation in the State of Alabama; and neither the character of the properties
owned by Oglethorpe nor the nature of the business transacted by it makes the
licensing or qualification of Oglethorpe as a foreign corporation necessary in
any state or jurisdiction other than Alabama;
(c) Each of the subsidiaries of Oglethorpe (the "Subsidiaries") has been
duly incorporated and is now validly existing and in good standing in the
jurisdiction of its incorporation, is duly authorized to transact business as a
foreign corporation and is in good standing in each jurisdiction where the
nature of the properties owned by it or the nature of the business transacted by
it makes the licensing or qualification of it as a foreign corporation
necessary;
(d) Oglethorpe has all requisite corporate power and authority to own and
operate its properties, to carry on its business as presently conducted, and to
enter into and perform its obligations under this Agreement, the Collateral
Trust Indenture, the Participation Agreements, the Leases and each other
Operative Document to which it is a party;
(e) No order, license, consent, authorization or approval of, or exemption
by, or the giving of notice to, or the registration with or the taking of any
other action in respect of, any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any other place,
is now, or under existing law in the future will be, necessary on Oglethorpe's
behalf to authorize its execution, delivery and performance of this Agreement,
the Collateral Trust Indenture, the Participation Agreements, the Leases and
each other Operative Document to which it is a party, or for the legality,
validity, binding effect or enforceability thereof, except (i) the consent of
the Rural Utilities Service ("RUS") to the Sale and Leaseback Transactions,
which has been obtained and remains in full force and effect, and the consent of
the RUS to the transactions contemplated hereby, (ii) a certificate for each
Lessor on Form U-7D with respect to the Public Utility Holding Company Act of
1935, as amended, which certificate has been duly executed and delivered and
filed under Rule 7(d) of the Securities and Exchange Commission (the
"Commission"), (iii) the consent of the RUS with respect to the exercise by
Oglethorpe of certain rights and options under the Participation Agreements and
Leases, (iv) such others as are set forth in Schedule 4 to each Participation
Agreement, which filings and recordings have been made and are in full force and
effect, and (v) such as may be required under existing law or regulations to be
obtained, given or accomplished from time to time in connection with the
maintenance or operation of Unit No. 2 and the Common Facilities, and which
shall have been obtained and shall be in full force and effect at the Time of
Delivery (as defined below);
(f) Neither (i) the execution and delivery of this Agreement, the
Collateral Trust Indenture, the Participation Agreements, the Leases nor any
other Operative Document to which it is a party, (ii) the performance of its
obligations hereunder or thereunder, nor (iii) its consummation of the
transactions contemplated hereby or thereby, will conflict with or result in any
breach of, or constitute a default under, or result in the creation or
imposition of any lien (other than liens permitted under the Leases) upon any of
its property or assets under, any applicable laws or any indenture, mortgage,
deed of trust or other instrument or agreement to which it is a party or by
which it may be bound or to which any of its property or assets may be subject,
or its articles of incorporation or by-laws, except that the consent of the RUS
is required prior to the Time of Delivery;
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(g) The execution, delivery and performance by Oglethorpe of this
Agreement has been duly authorized by all necessary corporate action and this
Agreement has been duly executed and delivered by Oglethorpe;
(h) The execution, delivery and performance by Oglethorpe of the
Collateral Trust Indenture, the Participation Agreements, the Leases and each
other Operative Document to which it is a party have been duly authorized by all
necessary corporate action. Each such other Operative Document has been, and
the Collateral Trust Indenture, the Participation Agreements and the Leases at
the time of delivery thereof and of each Supplemental Participation Agreement
and each Lease Supplement will be, duly executed and delivered by it and will
constitute its legal, valid and binding obligation enforceable against
Oglethorpe in accordance with its terms; provided, however, that (A) the
enforceability of such documents may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or similar laws
from time to time in effect affecting the enforcement of creditors' rights, by
other laws of general application affecting the rights of creditors and by
general equitable principles, (B) the enforceability of such documents may also
be limited by other applicable state and Federal laws and legal and equitable
principles and the availability of the remedy of specific performance or of
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought, and (C) no representation, warranty or
covenant is made as to the legality, validity or enforceability of the
provisions of such documents which purport to empower the holder thereof to
exercise its rights thereunder without notice to Oglethorpe or without a prior
judicial hearing;
(i) The execution, delivery and performance by Oglethorpe of this
Agreement, the Collateral Trust Indenture, the Participation Agreement, the
Leases and each other Operative Document to which it is a party do not require
any approval by the members of Oglethorpe (the "Members") or any approval or
consent of any trustee or holder of any indebtedness or other obligation except
such as will have been obtained and a copy thereof will have been delivered to
you on or prior to the Time of Delivery;
(j) Oglethorpe is not in default, and no condition exists that with notice
or lapse of time or both would constitute a default, under any mortgage, deed of
trust, indenture, or other instrument or agreement to which it is a party or by
which it or any of its properties or assets may be bound which could materially
adversely affect Oglethorpe's ability to perform its obligations under this
Agreement or the Operative Documents or its business prospects, financial
condition or results of operations, and it is not in violation of any applicable
laws in any material respect;
(k) Except for obligations in respect of $9,305,000 Development Authority
of Burke County Pollution Control Revenue Bonds (Oglethorpe Power Corporation
Vogtle Project), Series 1997C and $5,330,000 Development Authority of Monroe
County Pollution Control Revenue Bonds (Oglethorpe Power Corporation Scherer
Project), Series 1997A issued on December 10, 1997, and except as contemplated
herein or as contemplated or set forth in the Offering Circular, or as the
result of operations in the ordinary course of business, Oglethorpe, subsequent
to the dates as of which information is given in the Offering Circular and prior
to the date hereof, has not incurred any material liabilities or obligations,
direct or contingent; and that, except as contemplated or set forth in the
Offering Circular, subsequent to the dates as of which information is given in
the Offering Circular and prior to the date hereof, there has been no material
adverse change in the condition, financial or otherwise, of Oglethorpe;
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(l) There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, governmental agency or body, other than as
described in the Offering Circular known to Oglethorpe to be pending or
threatened against or affecting Oglethorpe nor to the best of the knowledge of
Oglethorpe is there any meritorious basis therefor, wherein an unfavorable
decision, ruling or finding would be reasonably expected to materially adversely
affect the consummation of the transactions contemplated by this Agreement or by
the Offering Circular or which, in any way, would be reasonably expected to
adversely affect the validity or enforceability of the Facility Bonds, the
Collateral Trust Indenture, this Agreement or any of the Operative Documents;
(m) On December 30, 1985, each Lessor received, and to the best of
Oglethorpe's knowledge, there is vested in each Lessor on the date hereof, good
and marketable title to its Undivided Interest and such Undivided Interest is
free and clear of all Liens other than Permitted Liens, and a good, valid and
enforceable leasehold interest in the Unit No. 2 Site Interest, the Global
Common Facilities Interest and the Local Common Facilities Interest free and
clear of all Liens other than Permitted Liens. The Liens referred to in clauses
(iii), (iv), (v), (viii) and (ix) (other than Liens referred to in such clause
(ix) which constitute Permitted Liens referred to in clause (vii) of the
definition thereof in each Participation Agreement) of the definition of
"Permitted Liens" in each Participation Agreement do not in the aggregate
materially affect or interfere with the occupancy, use or operation of Unit No.
2 or the Common Facilities for their intended purposes or the economic value,
utility or condition of Unit No. 2, the Common Facilities or the peaceful and
quiet use and possession by each of the Lessors of its Undivided Interest or the
exercise by each Lessor or a Lease Indenture Trustee, as assignee under the
respective Lease Indenture, of any of their rights under each Lease or any of
the Operative Documents. The Unit 2 Site and the Local Common Facilities Site
are owned in fee simple by Oglethorpe as tenant-in-common with Georgia Power
Company ("GPC"), Municipal Electric Authority of Georgia ("MEAG") and the City
of Dalton, Georgia ("Dalton"), in the respective percentages set forth in the
Ownership Agreement, and Oglethorpe, GPC, Dalton and MEAG, as tenants-in-common
in the respective percentages set forth in the Ownership Agreement, have good
and marketable and indefeasible title to the Local Common Facilities (other than
the Local Common Facilities Site), in each case free and clear of all Liens
(other than Permitted Liens). Other than the filings and recordation described
in Schedule 9 to each Participation Agreement, no other action was required and,
to the best of Oglethorpe's knowledge, no other action is now required,
including any action under any fraudulent conveyance statute, to protect such
title to each Lessor's Undivided Interest against the Claims of all Persons
whatsoever;
(n) To the best knowledge of Oglethorpe, Unit No. 2 and the Common
Facilities (other than certain Global Common Facilities to be used by one or
both of Unit No. 3 or Unit No. 4) were completed substantially in accordance
with the plans and specifications therefor, as amended from time to time.
All permits and licenses necessary for the commercial operation of Unit No. 2
(including the Undivided Interest) and the Common Facilities (other than any
thereof that are routine in nature or which cannot be obtained or normally
are not applied for, prior to the time they are required, and which
Oglethorpe has no reason to believe will not be timely obtained) are
described in Schedule 5 to each Participation Agreement and have been given,
granted, obtained or received. Unit No. 2 has been demonstrated to be capable
of operating at its Rated Capacity; and there is no event or condition
presently existing of which Oglethorpe is aware which would adversely affect
such capability or would cause an Event of Loss to occur;
(o) The rights granted or made available to each Lessor pursuant to the
Support Agreements, assuming due performance by the parties thereto, are
sufficient to enable each Lessor or the Lease Indenture Trustee (as assignee
under each Lease Indenture), from the
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Lessor Possession Date to the date of a Decommissioning Event, subject to and in
the manner provided by the terms and conditions of the Ownership Agreement and
the Operating Agreement and the other Operative Documents, together with the
other Co-Owners, to (a) maintain, repair, replace, renew, operate and dispose of
Unit No. 2, (b) have adequate ingress and egress from Unit No. 2 and the Common
Facilities and (c) deliver electricity generated thereby to the Points of
Interconnection;
(p) Oglethorpe believes that as of the 1997 Refinancing Date there are
currently available in the commercial market supplies of Coal of a quantity and
quality which should permit operation of Unit No. 2 at an average annual
utilization of 100% of its Rated Capacity for the period through 2025;
(q) The survey provided by Oglethorpe pursuant to Section 4.2(q) of each
Participation Agreement is an accurate description of the Unit No. 2 Site;
(r) Prior to the date hereof, neither Oglethorpe nor any of its affiliates
has taken any action which is designed to or which has constituted or which
might have been expected to cause or result in stabilization or manipulation of
the price of any security of Oglethorpe in connection with the offering of the
Facility Bonds;
(s) When the Facility Bonds are issued and delivered pursuant to this
Agreement, the Facility Bonds will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of Oglethorpe which are
listed on a national securities exchange registered under Section 6 of the
United States Securities Exchange Act of 1934, as amended or quoted in a U.S.
automated inter-dealer quotation system; and
(t) The accountants who have certified or shall certify the financial
statements included as part of the Offering Circular are to the knowledge of
Oglethorpe independent certified public accountants, as required by the Act.
2. The Funding Corporation represents and warrants to each of the
Purchasers that:
(a) The Facility Bonds have been duly and validly authorized and, when
authenticated by the Collateral Trust Trustee and issued, delivered and sold in
accordance with this Agreement and the Collateral Trust Indenture, will have
been duly and validly executed, authenticated, issued and delivered and
constitute valid and binding obligations of the Funding Corporation enforceable
in accordance with their terms, except (i) that such enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) that the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought; and the Facility Bonds are
entitled to the benefits of the lien and security provided by the Collateral
Trust Indenture;
(b) The Funding Corporation is a corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware and is
authorized by its certificate of incorporation to acquire and pledge the
Refunding Lessor Notes and issue and sell the Facility Bonds; the Funding
Corporation has not failed to obtain licenses, duly register or qualify to
conduct the business in which it is engaged in any jurisdiction in which such
failure would adversely affect its ability to pay the Facility Bonds when due;
and the Funding Corporation has no subsidiaries;
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(c) There are no legal or governmental proceedings pending or to the
knowledge of the Funding Corporation threatened to which the Funding
Corporation is a party or of which the business or property of the Funding
Corporation is the subject, and there is no contract or other document to
which the Funding Corporation is a party which is of a character required to
be described in the Offering Circular or to be filed as an exhibit to the
Offering Circular which is not described or filed as required;
(d) The Funding Corporation is not in violation of its certificate of
incorporation or bylaws or in default in the performance of any obligation,
agreement or condition contained in any contract or agreement to which it is
a party; the execution and delivery of this Agreement, the Supplemental
Participation Agreements and the Collateral Trust Indenture, the fulfillment
of the terms herein and therein set forth and the consummation of the
transactions herein and therein contemplated will not conflict with or
constitute a breach of, or default under, the certificate of incorporation or
bylaws of the Funding Corporation, or any agreement, indenture or other
instrument to which the Funding Corporation is a party or by which they are
bound, or any court decree applicable to the Funding Corporation;
(e) The execution, delivery and performance of this Agreement, the
Supplemental Participation Agreements and the Collateral Trust Indenture have
been duly authorized by all necessary corporate action, and each such
agreement at the time of delivery thereof will have been executed and
delivered by it and will constitute the valid and legally binding obligation
of the Funding Corporation enforceable in accordance with its terms except
(i) that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought; and
(f) The Funding Corporation is not, and after giving effect to the
offering and sale of the Facility Bonds, will not be an "investment company",
or an entity "controlled" by an "investment company", as such terms are
defined in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act").
3. Subject to the terms and conditions herein set forth, the Funding
Corporation agrees to issue and sell to each of the Purchasers, and each of
the Purchasers agrees, severally and not jointly, to purchase from the
Funding Corporation, at a purchase price of 100% of the principal amount
thereof, the principal amount of Facility Bonds set forth opposite the name
of such Purchaser in Schedule I hereto. At the time of such purchase and
sale, the Lessors shall pay to you, acting on behalf of the several
Purchasers, in immediately available funds, compensation equal to 0.65% of
the principal amount of the Facility Bonds sold.
4. Upon the authorization by you of the release of the Facility Bonds,
the several Purchasers propose to offer the Facility Bonds for sale upon the
terms and conditions set forth in this Agreement and the Offering Circular
and each Purchaser hereby represents and warrants to, and agrees with
Oglethorpe and the Funding Corporation that:
(a) It is an "accredited investor" within the meaning of Rule 501 under
the Securities Act of 1933, as amended (the "Act");
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(b) It has and will offer and sell the Facility Bonds only to persons
who are "qualified institutional buyers" ("QIBs") within the meaning of Rule
144A under the Act in transactions meeting the requirements of Rule 144A
under the Act; and
(c) It has not and will not offer or sell the Facility Bonds by any
form of general solicitation or general advertising, including but not
limited to the methods described in Rule 502(c) under the Act.
5. (a) The Facility Bonds to be purchased by each Purchaser hereunder
will be represented by one or more definitive global Facility Bonds in
book-entry form which will be deposited by or on behalf of the Funding
Corporation with The Depository Trust Company ("DTC") or its designated
custodian. The Funding Corporation will deliver the Facility Bonds to
Goldman, Sachs & Co., for the account of each Purchaser, against payment by
or on behalf of such Purchaser of the purchase price therefor by Federal wire
transfer of same-day funds, by causing DTC to credit the Facility Bonds to
the account of Goldman, Sachs & Co. at DTC. The Funding Corporation will
cause the certificates representing the Facility Bonds to be made available
to Goldman, Sachs & Co. for checking at least twenty-four hours prior to the
Time of Delivery at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on December 17, 1997 or such other time and
date as Goldman, Sachs & Co., Oglethorpe and the Funding Corporation may
agree upon in writing. Such time and date are herein called the "Time of
Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 9 hereof, including the
cross-receipt for the Facility Bonds and any additional documents requested
by the Purchasers pursuant to Section 9(k) hereof, will be delivered at such
time and date at the offices of Orrick, Herrington & Sutcliffe, LLP, 666
Fifth Avenue, New York, NY 10103 (the "Closing Location"), and the Facility
Bonds will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 1:00 p.m., New
York City time, on the New York Business Day next preceding the Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 5, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
6. Oglethorpe agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular without reasonable
notice thereof; and to furnish you with copies thereof;
(b) To furnish the Purchasers with copies of the Offering Circular and
each amendment or supplement thereto signed by an authorized officer of
Oglethorpe with the independent accountants' report or reports in the
Offering Circular, and any amendment or supplement containing amendments to
the financial statements covered by such report or reports, signed by the
accountants, and additional copies thereof in such quantities as you may from
time to time reasonably request, and if, at any time prior to the expiration
of the Exchange Offer (as defined in the Offering Circular), any event shall
have occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the
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circumstances under which they were made when such Offering Circular is
delivered, not misleading, or, if for any other reason it shall be necessary
or desirable during such same period to amend or supplement the Offering
Circular, to notify you and upon your request to prepare and furnish without
charge to each Purchaser and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended Offering Circular
or a supplement to the Offering Circular which will correct such statement or
omission or effect such compliance;
(c) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, Oglethorpe will not
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities that are substantially similar to the Facility
Bonds;
(d) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(e) At any time prior to the expiration of two years after the date of
the Offering Circular when Oglethorpe is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"), for the benefit
of holders from time to time of Facility Bonds, to furnish at its expense,
upon request, to holders of Facility Bonds and prospective purchasers of
securities information (the "Additional Issuer Information") satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Act;
(f) To furnish to the Representative and the Collateral Trust Trustee
as soon as practicable after the end of each fiscal year such number of
copies of Oglethorpe's annual report (including a balance sheet and
statements of income, capitalization and cash flows of Oglethorpe and its
consolidated subsidiaries certified by independent public accountants) as
they shall reasonably request;
(g) During a period of three years from the date of the Offering
Circular, to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any securities exchange on which any class of securities of Oglethorpe is
listed; and (ii) such additional information concerning the business and
financial condition of Oglethorpe as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of Oglethorpe and its subsidiaries are consolidated in
reports furnished to its Members generally or to the Commission);
(h) During the period of two years after the Time of Delivery,
Oglethorpe will not, and will not permit its "affiliates" (as defined in Rule
144 under the Act), the Funding Corporation or the Funding Corporation's
"affiliates" to, resell any of the Facility Bonds which constitute
"restricted securities" under Rule 144 that have been reacquired by any of
them; and
(i) Oglethorpe shall file and use its best efforts to cause to be
declared or become effective under the Securities Act, on or prior to 180
days after the Time of Delivery, a registration statement on Form S-4
providing for the registration of debt securities of the Funding Corporation,
with terms substantially identical to the Facility Bonds (the "Exchange
Securities"), and the exchange of the Facility Bonds for the Exchange
Securities, all in a manner
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which will permit persons who acquire the Exchange Securities to resell the
Exchange Securities pursuant to Section 4(1) of the Securities Act.
7. Oglethorpe and the Funding Corporation shall cooperate with you
and your counsel in connection with the registration or qualification of the
Facility Bonds for offer and sale by the Purchasers and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided
that in no event shall the Funding Corporation or Oglethorpe be obligated to
qualify to do business in any jurisdiction where the Funding Corporation or
Oglethorpe are not now so qualified or to take any action which would subject
the Funding Corporation or Oglethorpe to service of process, other than
service of process arising out of the offer or sale of the Facility Bonds, in
any jurisdiction where the Funding Corporation or Oglethorpe are not now so
subject. Oglethorpe and the Funding Corporation will apply the net proceeds
from the sale of the Facility Bonds substantially in accordance with the
description set forth in the Offering Circular.
8. Each Lessor covenants and agrees with the Purchasers that it will
pay or cause to be paid the following: (i) the fees, disbursements and
expenses of Oglethorpe's and the Funding Corporation's counsel and
accountants in connection with the issue of the Facility Bonds and all other
expenses in connection with the preparation, printing and filing of the
Preliminary Offering Circular and the Offering Circular and any amendments
and supplements thereto and the mailing and delivering of copies thereof to
the Purchasers and dealers; (ii) the cost of printing or producing any
Agreement Among Purchasers, this Agreement, the Collateral Trust Indenture,
the Blue Sky Memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase,
sale and delivery of the Facility Bonds; (iii) all expenses in connection
with the qualification of the Facility Bonds for offering and sale under
state securities laws as provided in Section 7 hereof, including the fees and
disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment
surveys; (iv) any fees charged by securities rating services for rating the
Facility Bonds; (v) the cost of preparing the Facility Bonds; (vi) the fees
and expenses of the Collateral Trust Trustee and any agent of the Collateral
Trust Trustee and the fees and disbursements of counsel for the Collateral
Trust Trustee in connection with the Facility Bonds; and (vii) all other
costs and expenses incident to the performance of its obligations or the
obligations of the Funding Corporation hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 10 and 13 hereof, the
Purchasers will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Facility Bonds by
them, and any advertising expenses connected with any offers they may make.
9. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties
and other statements of Oglethorpe and the Funding Corporation herein are, at
and as of the Time of Delivery, true and correct, the condition that
Oglethorpe and the Funding Corporation shall have performed all of their
obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) Orrick, Herrington & Sutcliffe LLP, counsel for the Purchasers,
shall have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
10
(b) Sutherland, Asbill & Brennan LLP, counsel for Oglethorpe, shall
have furnished to you their written opinion, dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) Oglethrope is an electric membership corporation duly organized,
validly existing and in good standing under the laws of the State of
Georgia, including the Georgia Electric Membership Corporation Act,
is duly authorized to transact business as a foreign corporation in
the State of Alabama and is in good standing as a foreign corporation
in the State of Alabama and has full corporate power to transact the
business in which it is engaged, and to execute, deliver and perform
its obligations under this Agreement, the Collateral Trust Indenture,
the Participation Agreements, the Leases, the Tax Indemnification
Agreement, the Ownership Agreement and the Operating Agreement to
which it is a party;
(ii) Neither the character of the properties owned or leased by Oglethorpe
nor the nature of the business transacted by it makes the licensing
or qualification of Oglethorpe as a foreign corporation necessary in
any state or jurisdiction other than Alabama;
(iii) The Collateral Trust Indenture has been duly and validly authorized,
executed and delivered by Oglethorpe and, assuming due authorization,
execution and delivery by the Funding Corporation and the Collateral
Trust Trustee, is a valid and binding agreement of Oglethorpe and the
Funding Corporation, enforceable in accordance with its terms;
(iv) This Agreement, the Supplemental Participation Agreements and the
Lease Supplements have been duly and validly authorized, executed and
delivered by Oglethorpe;
(v) Assuming the Facility Bonds have been duly and validly authorized and
executed by the Funding Corporation and due authentication by the
Collateral Trust Trustee, upon delivery to the Purchasers against
payment therefor in accordance with the terms hereof, the Facility
Bonds will have been validly issued and delivered, and will
constitute valid and binding obligations of the Funding Corporation
entitled to the benefits of the Collateral Trust Indenture;
(vi) No regulatory approval is required to be obtained by Oglethorpe in
connection with the execution and delivery of the Collateral Trust
Indenture, the Supplemental Participation Agreements and the Lease
Supplements, except such as has been obtained;
(vii) The execution and delivery by Oglethorpe of the Collateral Trust
Indenture, the Supplemental Participation Agreements and the Lease
Supplements, and the performance by Oglethrope of its obligations
therein do not and will not violate or constitute a default under the
Articles of Incorporation or Bylaws of Oglethorpe, as in effect at
the date of such opinion, and to our knowledge such execution,
delivery and performance do not violate or constitute a default
under any court order or any obligation of Oglethorpe for borrowed
money or any agreement under which any such obligation is
outstanding;
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(viii) There is no action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court or governmental agency
or body which to our knowledge is pending or threatened against or
affecting Oglethorpe and which would, in any way, be reasonably
expected to materially adversely affect either consummation by
Oglethorpe of the transactions contemplated by the Offering
Circular, or the validity of the Collateral Trust Indenture, the
Supplemental Participation Agreements and the Lease Supplements;
(ix) The statements contained in the Offering Circular under the captions
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business of Oglethorpe" and "Description of
Facility Bonds" insofar as such statements constitute summaries of
certain provisions of the Wholesale Power Contracts, the Facility
Bonds and the Collateral Trust Indentures, constitute fair summaries
of such provisions;
(x) Each of the separate Wholesale Power Contracts between Oglethorpe
and each of its Members is a valid and binding obligation of
Oglethorpe, enforceable in accordance with its terms;
(xi) Each of the Ownership Agreement and the Operating Agreement (as
defined in each Participation Agreement) has been duly authorized,
executed and delivered by Oglethorpe and is a valid and binding
obligation thereof, enforceable in accordance with its terms;
(xii) The Collateral Trust Indenture creates in favor of the Collateral
Trust Trustee a valid and enforceable security interest in such of
the Pledged Property (as defined in the Collateral Trust Indenture)
as exists on the date hereof and, so long as the Collateral Trust
Trustee has possession of that part of the Pledged Property in which
a security interest is not perfected by filing, such security
interest is a perfected security interest; and
(xiii) There having been made the filings and recordings described in
Schedule 9 to the Participation Agreements, no filing, recording,
payment of any taxes or recording fees or other action is necessary,
including any action under any fraudulent conveyance statute, to
establish, preserve, protect and perfect the lien and the security
interest of the Lease Indenture Trustees in the indenture estate
under each Lease Indenture and each Lease Indenture Trustee's rights
under the related Participation Agreement and the other Operative
Documents referred to and included under the granting clauses of the
related Lease Indenture, assuming the validity of such Lease
Indenture.
Such counsel shall also state that although it has not verified and is
not passing upon or assuming any responsibility for the accuracy,
completeness or fairness of any of the statements made in the Offering
Circular (except as expressly indicated in paragraph (ix)), nothing has come
to its attention in the course of providing the services described in the
following paragraph which has caused it to believe that the Offering Circular
(other than (i) the financial data included in the Offering Circular, and
(ii) information in the Offering Circular relating to the book-entry only
system, as to which such counsel may say that it makes no statement) contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
12
The statement in the immediately preceding paragraph may be limited to
information such counsel has gained during the course of its participation in
the preparation of the Offering Circular and its engagement as counsel by
Oglethorpe. Such counsel may further state that (i) its participation in the
preparation of the Offering Circular has been limited to drafting certain
provisions of and reviewing the Offering Circular and conferences with
representatives of Oglethorpe and Goldman, Sachs & Co., at which conferences
the contents of the Offering Circular and related matters were discussed,
(ii) except as otherwise expressly indicated in such opinion, it has not
independently verified the accuracy, completeness or fairness of the
information contained in the Offering Circular, (iii) its engagement as
counsel by Oglethorpe has been limited to specific matters as to which it has
been consulted by Oglethorpe from time to time, including preparation of the
Offering Circular and (iv) therefore, neither its engagement as counsel by
Oglethorpe nor its participation in the preparation of the Offering Circular
would necessarily have revealed any untrue statement of a material fact
contained therein or the omission to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
Further, the opinions of Sutherland, Asbill & Brennan LLP may state, (A)
that their opinion speaks as to facts and law in existence on its date and at
no time subsequent thereto; (B) that their opinion is limited to the laws of
the State of Georgia and of the United States of America; and (C) that they
need express no opinion to the extent that the foregoing opinions involve
conclusions as to the enforceability, validity and legality of the agreements
noted therein under the laws of the State of New York.
The foregoing opinions, to the extent that they relate to the
enforceability of any document, instrument, indenture or agreement may
contain the following qualifications: (i) that enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws now
or hereafter in effect relating to creditors' rights generally, (ii) that
such counsel expresses no opinion with respect to the effect or availability
of equitable remedies, (iii) that enforcement may be subject to certain other
laws and judicial decisions which may affect or relate to certain other
remedial provisions, none of which other laws and judicial decisions will, in
such counsel's opinion, substantially interfere with the practical
realization of the benefits or security intended to be afforded by such
document, instrument or agreement; and (iv) that no opinion is expressed as
to the validity or enforceability of the restraints on alienation set forth
in the Ownership Agreement and the Operating Agreement;
(c) Orrick, Herrington & Sutcliffe LLP, special lease counsel to
Oglethorpe, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Funding Corporation is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, is duly authorized to transact the business in which it
is engaged, and to execute, deliver and perform its obligations
under this Agreement, the Collateral Trust Indenture and the
Participation Agreements;
(ii) Rocky Mountain Leasing Corporation is a corporation duly organized
and validly existing in good standing under the laws of the State of
Delaware, and has full corporate power to transact the business in
which it is engaged; and all outstanding shares of capital stock of
Rocky Mountain Leasing Corporation have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned by
Oglethorpe free and clear of any perfected security interest, or, to
13
the best knowledge of such counsel after reasonable inquiry, any
other security interest, lien, adverse claim, equity or other
encumbrance;
(iii) The Funding Corporation has corporate power and authority to enter
into this Agreement, the Collateral Trust Indenture and the
Supplemental Participation Agreements and to issue, sell and
deliver the Facility Bonds to the Purchasers as provided herein;
(iv) This Agreement, the Collateral Trust Indenture and the Supplemental
Participation Agreements have been duly authorized, executed and
delivered by the Funding Corporation;
(v) The Facility Bonds have been duly and validly authorized and
executed by the Funding Corporation;
(vi) The Supplemental Participation Agreements are valid and binding
agreements of Oglethorpe and the Funding Corporation, enforceable
in accordance with their terms assuming due execution and delivery
by all parties thereto other than the Funding Corporation;
(vii) The Lease Supplements are valid and binding agreements of
Oglethorpe, enforceable in accordance with their terms assuming
due execution and delivery by all parties thereto; and
(viii) Neither the offer, sale or delivery of the Facility Bonds, the
execution, delivery or performance of this Agreement, the
Supplemental Participation Agreements, or the Collateral Trust
Indenture, compliance by the Funding Corporation with the
provisions hereof and thereof, nor consummation by the Funding
Corporation of the transactions contemplated hereby and thereby,
will result in any violation of any existing law, regulation,
ruling (assuming compliance with all applicable state securities
and Blue Sky laws), including the Investment Company Act of 1940,
as amended.
Further, the opinion of Orrick, Herrington & Sutcliffe LLP may state,
(A) that their opinion speaks as to facts and law in existence in its date
and at no time subsequent thereto; and (B) that their opinion is limited to
the laws of the State of New York and of the United States of America;
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Coopers & Lybrand L.L.P. shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto;
(e) Counsel to the Members shall have delivered opinions, dated the Time
of Delivery and addressed to the Purchasers, to the effect that they have
rendered opinions on March 11, 1997, with respect to the Wholesale Power
Contracts and that the Purchasers may rely on such as though they were dated the
Time of Delivery and addressed to the Purchasers;
(f) (i) Neither Oglethorpe nor any of the Subsidiaries shall have
sustained since the date of the latest audited financial statements included
in the Offering Circular any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not
14
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular, and (ii) since the respective dates as of which
information is given in the Offering Circular there shall not have been any
change in the net margins or long-term debt of Oglethorpe or any of the
Subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
Member's patronage capital or results of operations of Oglethorpe and the
Subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or
(ii), is in your judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Facility Bonds on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded Oglethorpe's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of
Oglethorpe's debt securities;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities declared by either Federal or New
York state authorities or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
Clause (iii) in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Facility Bonds on the
terms and in the manner contemplated in the Offering Circular;
(i) Oglethorpe shall have obtained such consents as may be required to
consummate the transactions in connection with the sale of the Facility Bonds;
(j) At the Time of Delivery, each Refunding Lessor Note will have been
duly authorized, executed and delivered by the Lessor which is the obligor
thereunder and will constitute the legal, valid and binding obligation of
such Lessor, enforceable against it in accordance with its respective terms,
except as enforcement thereof may be affected by bankruptcy, insolvency,
moratorium or other laws generally affecting creditors' rights, and
performance by each such Lessor thereunder will not conflict with, or result
in a breach of any of the provisions of, or constitute a default under, any
agreement or instrument to which such Lessor is bound by law, administrative
regulation or court decree; and
(k) Oglethorpe shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of Oglethorpe and the Funding
Corporation satisfactory to you as to the accuracy of the representations and
warranties of Oglethorpe and the Funding Corporation herein at and as of such
Time of Delivery, as to the performance by Oglethorpe and the Funding
Corporation of all of their obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in subsections (a) and
(f) of this Section and as to such other matters as you may reasonably
request.
10. (a) Oglethorpe will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to
which such Purchaser may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
15
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Circular or the Offering Circular, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact necessary to make the statements therein not
misleading, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by such Purchaser in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that Oglethorpe shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in the Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to Oglethorpe by any Purchaser through Goldman,
Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless Oglethorpe against
any losses, claims, damages or liabilities to which Oglethorpe may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in the Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Preliminary Offering Circular or
the Offering Circular or any such amendment or supplement in reliance upon
and in conformity with written information furnished to Oglethorpe by such
Purchaser through Goldman, Sachs & Co. expressly for use therein; and will
reimburse Oglethorpe for any legal or other expenses reasonably incurred by
Oglethorpe in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault,culpability or a failure to act,
by or on behalf of any indemnified party.
16
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by Oglethorpe on the one hand and the
Purchasers on the other from the offering of the Facility Bonds. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of Oglethorpe on the one hand and the Purchasers
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by Oglethorpe on the one hand and the Purchasers on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Funding
Corporation bear to the total underwriting discounts and commissions received
by the Purchasers, in each case as set forth in the Offering Circular. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by Oglethorpe on the one hand or the Purchasers on the other and the
parties' relative intent, knowledge, accss to information and opportunity to
correct or prevent such statement or omission. Oglethorpe and the Purchasers
agree that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Facility Bonds underwritten by it and distributed to investors were
offered to investors exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of Oglethorpe under this section shall be in
addition to any liability which Oglethorpe may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Purchaser within the meaning of the Act; and the obligations of
the Purchasers under this section shall be in addition to any liability which
the respective Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of Oglethorpe and to each
person, if any, who controls Oglethorpe within the meaning of the Act.
11. (a) If any Purchaser shall default in its obligation to purchase
the Facility Bonds which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Facility Bonds on the terms contained herein. If within thirty-six hours
17
after such default by any Purchaser you do not arrange for the purchase of
such Facility Bonds, then Oglethorpe shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Facility Bonds on such terms. In the
event that, within the respective prescribed periods, you notify Oglethorpe
that you have so arranged for the purchase of such Facility Bonds, or
Oglethorpe notifies you that it has so arranged for the purchase of such
Facility Bonds; you or Oglethorpe shall have the right to postpone the Time
of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Offering Circular, or
in any other documents or arrangements, and Oglethorpe agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement
shall include any person substituted under this section with like effect as
if such person had originally been a party to this Agreement with respect to
such Facility Bonds.
(b) If, after giving effect to any arrangements for the purchase of the
Facility Bonds of a defaulting Purchaser or Purchasers by you and Oglethorpe
as provided in subsection (a) above, the aggregate principal amount of such
Facility Bonds which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Facility Bonds, then Oglethorpe shall
have the right to require each non-defaulting Purchaser to purchase the
principal amount of Facility Bonds which such Purchaser agreed to purchase
hereunder and, in addition, to require each non-defaulting Purchaser to
purchase its pro rata share (based on the principal amount of Facility Bonds
which such Purchaser agreed to purchase hereunder) of the Facility Bonds of
such defaulting Purchaser or Purchasers for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Purchaser from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Facility Bonds of a defaulting Purchaser or Purchasers by you and Oglethorpe
as provided in subsection (a) above, the aggregate principal amount of
Facility Bonds which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Facility Bonds, or if Oglethorpe shall
not exercise the right described in subsection (b) above to require
non-defaulting Purchasers to purchase Facility Bonds of a defaulting
Purchaser or Purchasers, then this Agreement shall thereupon terminate,
without liability on the part of any non-defaulting Purchaser or Oglethorpe,
except for the expenses to be borne by the Lessors and the Purchasers as
provided in Section 8 hereof and the indemnity and contribution agreements in
Section 10 hereof; but nothing herein shall relieve a defaulting Purchaser
from liability for its default.
12. The respective indemnities, agreements, representations, warranties
and other statements of Oglethorpe, the Funding Corporation and the several
Purchasers, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Purchaser or any controlling person of
any Purchaser, or Oglethorpe, or any officer or director or controlling
person of Oglethorpe, and shall survive delivery of and payment for the
Facility Bonds
13. If this Agreement shall be terminated pursuant to Section 11
hereof, Oglethorpe and the Funding Corporation shall not then be under any
liability to any Purchaser except as provided in Sections 8 and 10 hereof;
but, if for any other reason, the Facility Bonds are not delivered by or on
behalf of Oglethorpe or the Funding Corporation as provided herein, then
Oglethorpe will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Facility Bonds, but
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Oglethorpe, the Funding Corporation and the Lessors shall then be under no
further liability to any Purchaser except as provided in Sections 8 and 10
hereof.
14. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex
or facsimile transmission to you at 85 Broad Street, New York, New York
10004, Attention: Registration Department; and if to Oglethorpe shall be
delivered or sent by mail, telex or facsimile transmission to the address of
Oglethorpe set forth in the Offering Circular, Attention: Senior Financial
Officer; provided, however, that any notice to a Purchaser pursuant to
Section 10(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Purchaser at its address set forth in its Purchasers'
Questionnaire, or telex constituting such Questionnaire, which address will
be supplied to Oglethorpe by you upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, Oglethorpe, the Funding Corporation and, to the
extent provided in Sections 10 and 12 hereof, the officers and directors of
Oglethorpe and each person who controls Oglethorpe and the Funding
Corporation or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Facility Bonds from any Purchaser shall be deemed a successor or assign
by reason merely of such purchase.
16. Time shall be of the essence of this Agreement.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one
and the same instrument.
(Remainder of Page Intentionally Left Blank)
19
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers,
Oglethorpe, the Lessors and the Funding Corporation. It is understood that
your acceptance of this letter on behalf of each of the Purchasers is
pursuant to the authority set forth in a form of Agreement among Purchasers,
the form of which shall be submitted to Oglethorpe for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
By: /s/ T.D. Kilgore
--------------------------------
Name: T.D. Kilgore
Title: President and Chief Executive Officer
OPC 1997 SCHERER FUNDING CORPORATION A
By: /s/ Anne B. Brennan
--------------------------------
Name: Anne B. Brennan
Title: Secretary
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
By: Goldman, Sachs & Co.
------------------------------
(Goldman, Sachs & Co.)
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Hiran Cantu
------------------------
Name: Hiran Cantu
Title: Vice President
Accepted as of the date hereof:
WILMINGTON TRUST COMPANY, as Owner
Trustee, under Trust Agreement No. 1,
dated December 30, 1985, with IBM
Credit Financing Corporation
By: /s/ Roseline K. Maney
------------------------
Name: Roseline K. Maney
Title: Senior Financial Services Officer
WILMINGTON TRUST COMPANY, as Owner
Trustee, under Trust Agreement No. 2,
dated December 30, 1985, with DFO
Partnership, as assignee of Ford Motor
Credit Corporation
By: /s/ Roseline K. Maney
------------------------
Name: Roseline K. Maney
Title: Senior Financial Services Officer
WILMINGTON TRUST COMPANY, as
Owner Trustee, under Trust Agreement
No. 3, dated December 30, 1985, with
Chrysler Financial Corporation
By: /s/ Roseline K. Maney
------------------------
Name: Roseline K. Maney
Title: Senior Financial Services Officer
WILMINGTON TRUST COMPANY, as
Owner Trustee, under Trust Agreement
No.4, dated December 30, 1985,
with HEI Investment Corp.
By: /s/ Roseline K. Maney
------------------------
Name: Roseline K. Maney
Title: Senior Financial Services Officer
SCHEDULE I
Principal
Amount of
Facility Bonds
to be
Purchaser Purchased
Goldman, Sachs & Co. .................................... $112,351,000
Morgan Stanley & Co. Incorporated........................ 112,351,000
------------
Total............................................... $224,702,000
------------
------------
S-1
ANNEX I
Pursuant to Section 9(d) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to Oglethorpe and its subsidiaries within the
meaning of the Securities Exchange Act of 1934 (the
"Exchange Act") and the applicable published rules and
regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in
the Offering Circular comply as to form in all material
respects with the applicable requirements of the Exchange
Act and the related published rules and regulations;
(iii) The unaudited selected financial information with respect to
the consolidated results of operations and financial
position of Oglethorpe for the five most recent fiscal years
included in the Offering Circular agrees with the
corresponding amounts (after restatements where applicable)
in the audited consolidated financial statements for such
five fiscal years;
(iv) On the basis of limited procedures not constituting an audit
in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial
statements and other information referred to below, a
reading of the latest available interim financial statements
of Oglethorpe and its subsidiaries, inspection of the minute
books of Oglethorpe and its subsidiaries since the date of
the latest audited financial statements included in the
Offering Circular, inquiries of officials of Oglethorpe and
its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention
that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated
statements of cash flows included in the Offering
Circular are not in conformity with generally
accepted accounting principles applied on the
basis substantially consistent with the basis for
the unaudited condensed consolidated statements of
income, consolidated balance sheets and
consolidated statements of cash flows included in
the Offering Circular;
(B) any other unaudited income statement data and
balance sheet items included in the Offering
Circular do not agree with the corresponding items
in the unaudited consolidated financial statements
from which such data and items were derived, and
any such unaudited data and items were not
determined on a basis substantially consistent
with the basis for the corresponding amounts in
the audited consolidated financial statements
included in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which
were derived any unaudited condensed financial
statements referred to in Clause (A) and any
unaudited income statement data
I-1
and balance sheet items included in the Offering
Circular and referred to in Clause (B) were not
determined on a basis substantially consistent
with the basis for the audited consolidated
financial statements included in the Offering
Circular;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering
Circular do not comply as to form in all material
respects with the applicable accounting
requirements or the pro forma adjustments have not
been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been
any changes in the patronage capital which were
outstanding on the date of the latest financial
statements included in the Offering Circular or
any increase in the consolidated long-term debt of
Oglethorpe and its subsidiaries, or any decreases
in consolidated net current assets or patronage
capital or other items specified by the
Representative, or any increases in any items
specified by the Representatives, in each case as
compared with amounts shown in the latest balance
sheet included in the Offering Circular except in
each case for changes, increases or decreases
which the Offering Circular discloses have
occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest
financial statements included in the Offering
Circular to the specified date referred to in
Clause (E) there were any decreases in
consolidated net revenues or operating profit or
the total amounts of consolidated net income or
other items specified by the Representative, or
any increases in any items specified by the
Representative, in each case as compared with the
comparable period of the preceding year and with
any other period of corresponding length specified
by the Representative, except in each case for
decreases or increases which the Offering Circular
discloses have occurred or may occur or which are
described in such letter; and
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited
procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above,
they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts,
percentages and financial information specified by the
Representative, which are derived from the general
accounting records of Oglethorpe and its subsidiaries, which
appear in the Offering Circular, and have compared certain
of such amounts, percentages and financial information with
the accounting records of Oglethorpe and its subsidiaries
and have found them to be in agreement.
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