EXHIBIT 10.32.2
This instrument, when recorded,
should be returned to: THE PURPOSE OF THIS INSTRUMENT IS TO MAKE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TECHNICAL CORRECTIONS TO THAT CERTAIN
Attorney at Law HEAD LEASE (P1), DATED DECEMBER 30, 1996,
The Carnegie Building RECORDED IN DEED BOOK ____, PAGE ____, OF
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ THE RECORDS OF THE CLERK OF SUPERIOR
Rome, Georgia 30161-3059 COURT OF ▇▇▇▇▇ COUNTY, GEORGIA. IT IS THE
INTENTION OF THE PARTIES THAT THIS
DOCUMENT SUPERCEDE SUCH OTHER DOCUMENT IN
ITS ENTIRETY.
================================================================================
ROCKY MOUNTAIN
HEAD LEASE AGREEMENT
(P1)
Dated as of December 30, 1996
between
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
and
SUNTRUST BANK, ATLANTA,
not in its individual capacity
but solely as Co-Trustee
ROCKY MOUNTAIN
PUMPED STORAGE HYDROELECTRIC PROJECT
================================================================================
CERTAIN OF THE RIGHT, TITLE AND INTEREST OF SUNTRUST BANK, ATLANTA IN AND
TO THIS ROCKY MOUNTAIN HEAD LEASE AGREEMENT (P1) HAVE BEEN ASSIGNED TO AND ARE
SUBJECT TO A SECURITY TITLE, LIEN AND SECURITY INTEREST IN FAVOR OF
UTRECHT-AMERICA FINANCE CO., AS LENDER UNDER THE LOAN AGREEMENT AND THE DEED TO
SECURE DEBT EACH DATED AS OF DECEMBER 30, 1996. THIS ROCKY MOUNTAIN HEAD LEASE
AGREEMENT (P1) HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. ONLY THE ORIGINAL
COUNTERPART CONTAINS THE RECEIPT THEREFOR EXECUTED BY THE LENDER ON THE
SIGNATURE PAGE THEREOF. SEE SECTION 13 FOR INFORMATION CONCERNING THE RIGHTS OF
THE HOLDERS OF THE VARIOUS COUNTERPARTS HEREOF.
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...............................................1
SECTION 2. LEASE OF THE UNDIVIDED INTEREST...........................2
SECTION 3. TERM AND RENT.............................................2
Section 3.1. Basic Term...............................2
Section 3.2. Renewal Term.............................2
Section 3.3. Head Lease Rent..........................2
Section 3.4. Nonterminability.........................2
Section 3.5. Termination Option.......................3
SECTION 4. RIGHT OF QUIET ENJOYMENT..................................3
SECTION 5. RETURN OF UNDIVIDED INTEREST BY HEAD LESSEE...............3
SECTION 6. LIENS.....................................................4
Section 6.1. Head Lessee Covenant.....................4
Section 6.2. Head Lessor Covenant.....................4
SECTION 7. OPERATION AND MAINTENANCE; REPLACEMENT
COMPONENTS................................................4
Section 7.1. Operation and Maintenance................4
Section 7.2. Replacement Components...................5
SECTION 8. MODIFICATIONS.............................................5
SECTION 9. TRANSFER OF UNDIVIDED INTEREST............................5
SECTION 10. INSPECTION................................................5
SECTION 11. HEAD LESSOR EVENT OF DEFAULT; REMEDIES....................6
Section 11.1. Head Lessor Event of Default................6
Section 11.2. Remedies for Head Lessor Event of Default...7
SECTION 12. WAIVER OF PARTITION.......................................9
SECTION 13. SECURITY FOR THE HEAD LESSEE'S OBLIGATION TO THE
LENDER....................................................9
1
TABLE OF CONTENTS, Continued
Page
SECTION 14. NONMERGER................................................10
SECTION 15. APPLICATION OF PAYMENTS FROM GOVERNMENTAL
ENTITY...................................................10
SECTION 16. INSURANCE................................................10
SECTION 17. MISCELLANEOUS............................................10
Section 17.1. Amendments and Waivers..................10
Section 17.2. Notices.................................10
Section 17.3. Survival................................12
Section 17.4. Successors and Assigns..................12
Section 17.5. Business Day............................13
Section 17.6. Governing Law...........................13
Section 17.7. Severability............................13
Section 17.8. Counterparts............................13
Section 17.9. Headings and Table of Contents..........13
Section 17.10. Further Assurances......................13
Section 17.11. Effectiveness of Head Lease.............13
Section 17.12. Limitation of Liability.................13
Section 17.13. Measuring Life..........................14
Appendix A Definintions.................................................A-1
EXHIBIT A Description of the Facility..................................A-1
Exhibit A-1 Descripton of Entire Rocky Mountain Property........A-1-1
Exhibit A-2 Project Boundary Drawing of the Rocky Mountain
Project ..........................................A-2-1
Exhibit A-3 Powertunnel and Powerhouse General Plan and Profile
of the Rocky Mountain Project Drawing NO.
RM-00-CL0013 R1...................................A-3-1
Exhibit A-4 Equipment...........................................A-3-2
Schedule 1 Termination Values for Head Lease Basic Term................S1-1
ii
ROCKY MOUNTAIN HEAD LEASE AGREEMENT (P1)
This ROCKY MOUNTAIN HEAD LEASE AGREEMENT (P1), dated as of December 30,
1996 (as amended, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, this "Head Lease"), between OGLETHORPE
POWER CORPORATION (AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION
CORPORATION), an electric membership corporation organized under the laws of the
State of Georgia (together with its successors and permitted assigns, the "Head
Lessor"), and SUNTRUST BANK, ATLANTA, a state banking corporation organized
under the laws of the State of Georgia, not in its individual capacity but
solely as Co-Trustee (together with its successors and permitted assigns, the
"Head Lessee") under the Trust Agreement (P1), dated as of December 30, 1996 (as
amended, supplemented or otherwise modified from time to time in accordance with
provisions hereof, the "Trust Agreement"), with the Owner Trustee and the Owner
Participant (as each is defined therein).
WHEREAS, the Head Lessor and Georgia Power Company, a corporation organized
under the laws of the State of Georgia ("Georgia Power"), own the Rocky Mountain
Site as tenants in common under laws of the State of Georgia;
WHEREAS, the Head Lessor and Georgia Power own the Facility (as hereinafter
defined) as tenants in common under laws of the State of Georgia;
WHEREAS, pursuant to the Ground Lease (as hereinafter defined) the
Co-Trustee has acquired from the Head Lessor a leasehold interest in an
undivided interest equal to the Facility Lessor's Percentage in the Rocky
Mountain Site for a term equal to approximately 120% of the estimated useful
life of the Facility, subject to extension as provided therein; and
WHEREAS, pursuant to this Head Lease, the Head Lessor is leasing the
Undivided Interest to the Head Lessee for a term equal to approximately 120% of
the estimated useful life of the Facility, subject to extension as provided
herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements herein contained, 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 Head Lease, including the recitals, and not
otherwise defined herein shall have the respective meanings set forth in
Appendix A attached hereto unless the
context hereof shall otherwise require. The general provisions of Appendix A
shall apply to terms used in this Head Lease and specifically defined herein.
SECTION 2. LEASE OF THE UNDIVIDED INTEREST.
The Head Lessor hereby leases the Undivided Interest, upon the terms and
conditions set forth herein, to the Head Lessee for the term and renewal terms,
if any, described below, and the Head Lessee hereby leases the Undivided
Interest from the Head Lessor. The Head Lessor and the Head Lessee understand
and agree that (a) this Head Lease of the Undivided Interest is subject to the
limitations identified in the definition of Undivided Interest, (b) legal title
to the Facility remains vested in the Head Lessor and Georgia Power as
tenants-in-common, (c) this Head Lease of the Undivided Interest is subject and
subordinate to the Lien of the Oglethorpe Mortgage and the encumbrances
described in the Title Report, and (d) this Head Lease is subject to those
encumbrances set forth in the Title Report.
SECTION 3. TERM AND RENT.
Section 3.1. Basic Term. The term of this Head Lease shall commence on the
Closing Date and shall terminate at 11:59 p.m. (New York City time) on November
1, 2067 (the "Head Lease Basic Term"), subject to earlier termination pursuant
to the express terms hereof and extension for any number of Renewal Terms (as
defined below); provided, however, that notwithstanding anything to the contrary
set forth herein, in no event shall the Head Lease Basic Term terminate so long
as the Head Lessee's interest under this Head Lease shall be subject to the Lien
of the Loan Agreement or the security title of the Deed to Secure Debt.
Section 3.2. Renewal Term. At the expiration of the Head Lease Basic Term
or any Head Lease Renewal Term (as hereinafter defined), the Head Lessee may
extend this Head Lease for any number of additional terms of not less than 1
year each (each a "Head Lease Renewal Term" and, together with the Head Lease
Basic Term, the "Head Lease Term") by giving the Head Lessor 180 days prior
written notice.
Section 3.3. Head Lease Rent. The Head Lessee hereby agrees to pay the Head
Lessor rent in the amount of the Undivided Interest Cost on the Closing Date for
the Head Lease Basic Term and all Head Lease Renewal Terms (the "Head Lease
Rent"). The Head Lessor acknowledges receipt of such amount in full satisfaction
of the Head Lessee's obligation to pay rent during the Head Lease Basic Term and
each Head Lease Renewal Term. If the Head Lessee elects to renew the term of the
Head Lease for any number of Head Lease Renewal Term or Terms pursuant to
Section 3.2 hereof, the Head Lessor agrees that no additional rent shall be
payable in respect of any such Head Lease Renewal Term. The parties agree that
this Head Lease constitutes a sale of the Undivided Interest from the Head
Lessor to the Head Lessee for U.S. federal income tax purposes and that the Head
Lessee shall be treated as the owner of the Undivided Interest for U.S. federal
income tax purposes.
2
Section 3.4. Nonterminability. Subject to Sections 3.1, 3.2 and 3.5 hereof,
notwithstanding anything herein or otherwise to the contrary, neither the rights
of the Head Lessee nor the obligations of the Head Lessor under this Head Lease
shall be extinguished, diminished, lost or otherwise impaired by any
circumstances of any character or for any reason whatsoever, whether or not the
same involves the loss of all or any part of the leasehold estate granted by
this Head Lease, including, without limitation, any of the following
circumstances or reasons: (a) any damage to or loss or destruction of all or any
part of the Facility for any reason whatsoever and of whatever duration, (b) the
condemnation, requisition (by eminent domain or otherwise), seizure or other
taking of title or use of all or any part of the Facility by any Governmental
Entity or otherwise, (c) any prohibition, limitation or restriction on the use
by any Person of all or any part of its property or the interference with such
use by any Person, or any foreclosure or deed in lieu of foreclosure of the
Oglethorpe Mortgage, or any termination of this Head Lease as a result thereof
by operation of law or contract, or any eviction by paramount title or
otherwise, (d) any inadequacy, incorrectness or failure of the description of
the Facility or the Undivided Interest or any part thereof or any rights or
property in which an interest is intended to be granted or conveyed by this Head
Lease, (e) the insolvency, bankruptcy, reorganization or similar
proceedings by or against the Head Lessor, the Head Lessee or any other Person,
(f) the failure by the Head Lessee to comply with Section 3, 5, 6 or 7 or any
other provision hereof or of any other Operative Documents or (g) any other
reason whatsoever, whether similar or dissimilar to any of the foregoing. The
provisions of this Section 3.4 shall survive the termination of this Head Lease
for any reason whatsoever. The obligations of the Head Lessor hereunder are
covenants that are independent of the existence of such leasehold and shall
survive the termination thereof for any reason whatsoever.
Section 3.5. Termination Option. After the expiration or earlier
termination of the Facility Lease Term, subject to the provision at the end of
Section 3.1, the Head Lessee may terminate this Head Lease upon thirty days
prior written notice to the Head Lessor; provided, however, that the Head Lessee
shall simultaneously terminate the Ground Lease pursuant to Section 2.6 thereof.
SECTION 4. RIGHT OF QUIET ENJOYMENT.
The Head Lessor warrants that it has full right and authority to lease the
Undivided Interest to the Head Lessee pursuant to the terms of this Head Lease
and covenants that, notwithstanding any provision of any other Operative
Documents, during the Head Lease Term, neither the Head Lessor, any Affiliate
nor any other Person claiming title superior to, or by, through or under it
(other than the obligees or any trustee under the Oglethorpe Mortgage) shall
interfere with or interrupt the quiet enjoyment of the use, operation and
possession by the Head Lessee of the Undivided Interest pursuant to the terms
hereof; provided that the Head Lessor's covenant does not relate to actions of
the Lender.
3
SECTION 5. RETURN OF UNDIVIDED INTEREST BY HEAD LESSEE.
Subject to Section 9, hereof, on the last day of the Head Lease Term, the
Head Lessee shall return the Undivided Interest by delivering its possession of
the same to the Head Lessor at the location of the Facility in ▇▇▇▇▇ County,
Georgia, and shall execute, acknowledge and deliver a release, surrender or
conveyance of all of its rights, title and interests in the Undivided Interest
to be prepared by and at the expense of the Head Lessor in a form reasonably
satisfactory to the Head Lessee, in each case without representation or warranty
other than that the Undivided Interest is free and clear of any Facility
Lessor's Liens attributable to it and a warranty from the Owner Participant with
respect to absence of Owner Participant's Liens and the Owner Trustee with
respect to the absence of Facility Lessor's Liens attributable to it, without
any other liability or cost to the Head Lessee. The obligations of the Head
Lessee under this Section 5 shall survive termination of this Head Lease.
SECTION 6. LIENS.
Section 6.1. Head Lessee Covenant. Prior to the expiration or termination
of the Facility Sublease, the Head Lessee agrees that it will not, directly or
indirectly, create, incur, assume or suffer to exist, any Facility Lessor's
Liens on or with respect to the Undivided Interest or the Facility Lessor's
Rocky Mountain Interest, and the Head Lessee shall promptly notify the Head
Lessor of the imposition of any such Lien of which the Head Lessee is aware and
shall promptly, at its own expense, take such action as may be necessary to
fully discharge or release any such Lien.
Section 6.2. Head Lessor Covenant. The Head Lessor agrees that it will not,
directly or indirectly, (i) create, incur, assume or suffer to exist any Lien on
or with respect to the Undivided Interest other than Permitted Liens or (ii)
assign, convey or otherwise transfer its interest in the Undivided Interest, and
the Head Lessor shall promptly notify the Head Lessee of the imposition of any
such Lien of which the Head Lessor is aware and shall promptly, at its own
expense, take such action as may be necessary to fully discharge or release any
such Lien.
SECTION 7. OPERATION AND MAINTENANCE; REPLACEMENT COMPONENTS.
Section 7.1. Operation and Maintenance. Prior to the end of the Facility
Lease Term, the Head Lessee shall comply with the provisions of Section 7 of the
Facility Lease (which provisions are incorporated herein, mutatis mutandis) as
if such provisions applied to the Head Lessee; provided, however, by entering
into the Facility Lease with the Facility Lessee, the Head Lessee shall be
deemed to be in full compliance with the first sentence of this Section 7.1
whether or not the Facility Lessee complies or continues to comply with the
terms of the Facility Lease. On and after the end of the Facility Lease Term,
the Head Lessee, at its own expense, will maintain, repair and service, or cause
to be maintained, repaired and serviced, the Undivided
4
Interest in accordance with Prudent Utility Practice for similar hydroelectric
power plants; provided, however, that so long as the Operating Agency Agreement
shall be in effect, the Head Lessee shall be deemed to have complied with the
second sentence of this Section 7.1. Notwithstanding any provision contained in
this Head Lease or in any other Operative Document, the Head Lessee has the
right to perform any and all acts required by an order of the FERC or its
successor affecting the Facility or the Rocky Mountain Site without the prior
approval of the Head Lessor.
Section 7.2. Replacement Components. An undivided interest equal to the
Facility Lessor's Percentage in all Replacement Components incorporated in the
Facility during the Head Lease Term in accordance with the Facility Lease, the
Facility Sublease or the Rocky Mountain Operating Agreement shall automatically
become subject to this Head Lease without any action by any Person whatsoever
and shall be deemed to be a part of the Facility and the Undivided Interest for
all purposes of this Head Lease.
SECTION 8. MODIFICATIONS.
An undivided interest equal to the Facility Lessor's Percentage in all
Modifications to the Facility during the Head Lease Term in accordance with the
Facility Lease, the Facility Sublease or the Rocky Mountain Operating Agreement
shall automatically become subject to this Head Lease without any action by any
Person whatsoever and shall be deemed to be a part of the Facility and the
Undivided Interest for all purposes of this Head Lease.
SECTION 9. TRANSFER OF UNDIVIDED INTEREST.
The Head Lessor acknowledges that (x) the Head Lessee shall have the right
to transfer and convey the Undivided Interest and any interest therein under and
in accordance with Sections 10.2, 13.2, 14.4, 15.3, 17.1(c), 17.1(e) and 18 of
the Facility Lease in connection with the Head Lessee's transfer thereunder of
the Facility Lessor's Rocky Mountain Interest, and the Head Lessee and the Head
Lessor agree to comply with the provisions of the applicable section of the
Facility Lease in connection with such transfer to the extent required by the
provisions of each such Section and (y) the Head Lessee's interest hereunder may
be transferred to the Lender or any Affiliate of the Lender or any other Person
who is the purchaser thereof in foreclosure, of the security title of the Deed
to Secure Debt or the Lien of the Loan Agreement or by deed in lieu of any such
foreclosure or after any such foreclosure or deed in lieu of foreclosure. The
Head Lessor acknowledges that the Undivided Interest will be leased by the
Facility Sublessor to the Facility Sublessee pursuant to the Facility Sublease
and that the Facility Sublessor shall have the right to transfer and convey the
Undivided Interest and any interest therein under and in accordance with
Sections 10.2, 13.2, 14.3, 17.1(c), 17.1(e) or 18 of the Facility Sublease in
connection with the Facility Sublessor's transfer thereunder of the Facility
Sublessor's Rocky Mountain Interest.
5
SECTION 10. INSPECTION.
During the Term of the Facility Lease, the rights of the Head Lessee, the
Owner Participant, the Lender and their representatives to inspect the Facility
and the Rocky Mountain Site shall be governed by Section 12 of the Facility
Lease and the Head Lessor agrees to give to each such party the same inspection
rights as are provided to the parties referred to in Section 12 of the Facility
Lease.
SECTION 11. HEAD LESSOR EVENT OF DEFAULT; REMEDIES.
Section 11.1. Head Lessor Event of Default. Each of the following events
(whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court, or rule or regulation of any administrative or
governmental body) shall constitute a Head Lessor Event of Default:
(a) the principal and interest on any of the Oglethorpe Mortgage Bonds
shall have been declared to be immediately due and payable;
(b) the obligees or any trustee under the Oglethorpe Mortgage shall
have (x) given the notice contemplated by Section 1(b) or Section 4 of the
Intercreditor Agreement of, or shall have commenced or taken action to,
foreclosure or otherwise to dispossess Oglethorpe or the Head Lessee from
the Facility or otherwise effect an action referred to in Section 4 of the
Intercreditor Agreement or (y) exercised any dispossessing remedy pursuant
to the remedy provisions of the Oglethorpe Mortgage or pursuant to
Applicable Law;
(c) the mortgagees or trustee under the Oglethorpe Mortgage shall
commence a foreclosure action under the relevant remedy provisions
following an "event of default" under the Oglethorpe Mortgage or accept or
agree to accept a deed in lieu of foreclosure of the Oglethorpe Mortgage;
(d) the Undivided Interest, the Rocky Mountain Site and the Rocky
Mountain Agreements shall not be returned to the Head Lessee free and clear
of all Liens other than Liens permitted by paragraph (d) of Section 5.2 of
the Facility Sublease as required by the Facility Lease;
(e) the Head Lessor shall (i) commence a voluntary case or other
proceeding seeking relief under Title 11 of the Bankruptcy Code or
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect, or apply for or consent to the appointment of a
6
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or (ii) consent to, or fail to
controvert in a timely manner, any such relief or the appointment of or
taking possession by any such official in any voluntary bankruptcy case or
other proceeding commenced against it, or (iii) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding or (iv) fail to pay its debts generally as they become due or
admit its inability to do so, or take any corporate steps with respect to
any of the foregoing;
(f) an involuntary case or other proceeding shall be commenced against
the Head Lessor seeking (i) liquidation, reorganization or other relief
with respect to it or its debts under Title 11 of the Bankruptcy Code or
any bankruptcy, insolvency or other similar law now or hereafter in effect,
or (ii) the appointment of a trustee, receiver, liquidator, custodian or
other similar official with respect to it or any substantial part of its
property, or (iii) the winding-up or liquidation of the Head Lessor; and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days;
(g) any other material breach by the Head Lessor of its obligations
under Section 4 hereof or Section 4 of the Ground Lease and, if capable of
remedy, no action to cure has commenced within 30 days after notice to the
Head Lessor by the Head Lessee or, if such action has been taken and the
Head Lessor is diligently pursuing such cure, such action has not succeeded
within a period of 120 days after such notice;
(h) the Head Lessor shall fail to comply with Section 8.5, 8.7 (as it
relates to a Qualifying Letter of Credit provided in substitution for a
Qualifying Head Lease Surety Bond), 8.8, 8.16 or 16.2 of the Participation
Agreement and the Owner Participant shall have given written notice to the
Head Lessor declaring a Head Lessor Event of Default under this paragraph
(h);
(i) the Head Lease, the Ground Lease or the Rocky Mountain Agreements
Assignment and Assumption Agreement shall cease to be valid and enforceable
obligations of the Head Lessor;
(j) the FERC License is not renewed for a term of at least 17 years
from the Expiration Date;
(k) the Qualifying Head Lease Surety Bond (or the Qualifying Letter of
Credit in replacement thereof) or any Qualifying Additional Security
securing the Head Lessor's obligations under this Head Lease shall cease to
be the valid and enforceable obligations of the issuer thereof (whether or
not such bond or letter of credit meets the requirements for a "Qualifying
Head Lease Surety Bond", "Qualifying Letter of Credit" or "Qualifying
Additional Security"); or
7
(l) the Head Lessor shall have failed to perform or observe its
covenants set forth in Section 8.15 of the Participation Agreement, and, if
capable of remedy, no action to cure is commenced within 30 days after
notice, or, if such action has been taken and the Head Lessor is diligently
pursuing such cure, such action has not succeeded within a period of 60
days after such notice.
Section 11.2. Remedies for Head Lessor Event of Default. Upon the
occurrence of any Head Lessor Event of Default, and so long as the same shall be
continuing, this Head Lease shall automatically be deemed to be in default
without the need for giving any notice (the giving of which is waived to the
fullest extent permitted by Applicable Law); and at any time thereafter Head
Lessee may, subject to the proviso set forth in paragraph (b) of this Section
11.2, exercise the following remedies:
(a) Head Lessee may demand by written notice to Head Lessor specifying
a Termination Date occurring not less than 10 days following such demand,
that the Head Lessor pay to Head Lessee, and the Head Lessor shall pay to
the Head Lessee, on the Termination Date specified in such notice, as
liquidated damages for loss of bargain and not as a penalty, an amount
equal to the Termination Value, computed as of the Termination Date
specified in such notice; provided, however, that such amount shall be
deemed paid and satisfied to the extent of (i) the amount, if any, of any
proceeds received by the Head Lessee pursuant to the exercise of any
remedies under the Facility Lease, including but not limited to proceeds
received from the exercise of rights against the Qualifying Equity Funding
Agreement, and (ii) the amount of any proceeds received by the Head Lessee
pursuant to a Qualifying Head Lease Surety Bond; and provided, further
that, if requested by the Head Lessor, the Head Lessee shall pursue its
remedies under Section 17 of the Facility Lease prior to making any demand
for liquidated damages pursuant to this Section 11.2 in excess of the
Equity Exposure Amount. Upon payment of all amounts payable to the Head
Lessee, the Lender and the Owner Participant under this Head Lease and the
other Operative Documents by any Person (the "Assignment Amount"), the Head
Lessee will assign all its rights in the Facility Lease and any unapplied
security therefor (including, without limitation, the Facility Sublease,
the Facility Sublease Assignment Agreement and the Qualifying Sublease
Surety Bond) to the Head Lessor. Should amounts in excess of the Assignment
Amount be received by the Lender, the Head Lessee or the Owner Participant,
such amounts shall be returned to the entity that paid such excess amounts.
The Head Lessor's obligation to pay all amounts payable under this Section
11.2 shall be absolute and unconditional under any and all circumstances
and shall not be affected by any circumstance of any character, including,
without limitation, (v) any setoff, counterclaim, recoupment, defense or
other right which the Head Lessor may have against the Head Lessee or any
other Person, (w) the invalidity or unenforceability or lack of due
authorization or other infirmity of this Head Lease, whether or not due to
any failure of the Head Lessee to comply with any Applicable Law, (x) any
legal requirement similar or dissimilar to the foregoing, any present or
future law to the contrary notwithstanding, (y) any insolvency, bankruptcy,
reorganization or similar
211229.1
8
proceeding by or against the Head Lessor or any other Person or any
foreclosure or action taken by the Mortgagees under or in connection
with the Oglethorpe Mortgage, or (z) the Head Lessor or any other Person
at any time having immunity from suit, prejudgment attachment,
attachment in aid of execution or execution on the grounds of
sovereignty or otherwise; or
(b) the Head Lessee may exercise any other right or remedy that may be
available to it under Applicable Law or proceed by appropriate court action
to enforce the terms of the Head Lease; provided, however, that the
liquidated damage amount specified in subparagraph (a) of this Section,
together with all other amounts due hereunder and under any of the other
Operative Documents, shall be the sole and exclusive money damages remedy
to Head Lessee for a Head Lessor Event of Default;
provided, however, that notwithstanding any of the above, this Head Lease shall
not be terminated unless and until the Loan has been paid in full and the
security title and interest of the Lender under the Deed to Secure Debt and the
Lien of the Loan Agreement shall have been finally discharged.
The Head Lessor will upon demand pay to the Head Lessee the amount of any
and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Head Lessee may
incur in connection with the exercise or enforcement of any of the rights of the
Head Lessee under this Section 11.
The Provisions of this Section 11.2 shall survive the termination of this
Head Lease for any reason whatsoever and the termination or cancellation of the
Head Lessee's leasehold estate in the Undivided Interest, for any reason
whatsoever.
SECTION 12. WAIVER OF PARTITION.
The Head Lessee, on its own behalf and on behalf of its successors and
assigns, hereby waives any right, whether pursuant to statute or common law, to
partition the Facility, or any interest or portion thereof, and such waiver will
continue in effect until the termination of the Rocky Mountain Ownership
Agreement and Rocky Mountain Operating Agreement in accordance with their terms.
Until the termination of such Agreements the Head Lessee agrees not to commence
any action of any kind seeking any form of partition with respect thereto.
SECTION 13. SECURITY FOR THE HEAD LESSEE'S OBLIGATION TO THE LENDER.
In order to secure the Secured Indebtedness, the Trustees will by the Loan
Agreement assign and ▇▇▇▇▇ ▇ ▇▇▇▇, and by the Deed to Secure Debt convey
security title, to the Lender in and to all of the Trustees' rights, title and
interest in, to and under this Head Lease, the Facility Lessor's Rocky Mountain
Interest including the Undivided Interest, other than Excepted Payments
9
and Excepted Rights. The Head Lessor hereby consents to such assignment and to
the creation of such Lien and security title and acknowledges receipt of copies
of the Loan Agreement and the Deed to Secure Debt, it being understood that such
consent shall not affect any requirement or the absence of any requirement for
any consent under any other circumstances. TO THE EXTENT, IF ANY, THAT THIS HEAD
LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS HEAD LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF
ANY COUNTERPART HEREOF OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE
IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE
LENDER ON THE SIGNATURE PAGE THEREOF. Unless and until the Head Lessor shall
have received written notice from the Lender that the Lien of the Loan Agreement
and the security title of the Deed to Secure Debt have been fully released, the
Lender shall have the right to exercise the rights of the Head Lessee under this
Head Lease to the extent set forth in and subject in each case to the exceptions
set forth in the Loan Agreement or the Deed to Secure Debt.
SECTION 14. NONMERGER.
The reversionary interest of the Head Lessor in the Undivided Interest
shall not merge into any interest in the Undivided Interest leased by, through
or under, this Head Lease even if such reversionary interest and such leased
interest are at any time vested in or held directly or indirectly by the same
Person, but this Head Lease shall nonetheless remain in full force and effect in
accordance with its respective terms notwithstanding such vesting or holding.
SECTION 15. APPLICATION OF PAYMENTS FROM GOVERNMENTAL ENTITY.
Subject to the provisions of the Oglethorpe Mortgage, any payments received
at any time by the Head Lessor or by the Head Lessee from any Governmental
Entity with respect to an Event of Loss shall be paid over to the Head Lessor or
the Head Lessee, or retained by the Head Lessor and the Head Lessee, as their
respective interests may appear. Any payments received at any time during or
with respect to the Head Lease Term by the Head Lessor or by the Head Lessee
from any Governmental Entity with respect to the seizure, expropriation,
condemnation or requisition of the use of, or title to, the Undivided Interest
not constituting an Event of Loss shall be paid over to, or retained by, the
Head Lessee.
10
SECTION 16. INSURANCE.
Each of the Head Lessor and the Head Lessee shall have the right to carry
insurance on the Undivided Interest for their own benefit. Upon the termination
of the Facility Lease or any Replacement Facility Lease, if any, at the request
of the Head Lessee, the Head Lessor shall, at the Head Lessee's sole cost and
expense, carry insurance for the benefit of the Head Lessee in the same amounts
and with the same coverage as the Facility Lessee is required to carry pursuant
to the terms of the Facility Lease.
SECTION 17. MISCELLANEOUS.
Section 17.1. Amendments and Waivers. No term, covenant, agreement or
condition of this Head Lease may be terminated, amended or compliance therewith
waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto.
Section 17.2. Notices. Unless otherwise expressly specified or permitted by
the terms of this Head Lease, all communications and notices provided for herein
to a party hereto shall be in writing or by a telecommunications device capable
of creating a written record, and any such notice shall become effective (a)
upon personal delivery thereof, including, without limitation, by overnight or
next business day mail or courier service, (b) in the case of notice by United
States mail, certified or registered, postage prepaid, return receipt requested,
upon receipt thereof, or (c) in the case of notice by such a telecommunications
device, upon transmission thereof, provided such transmission is promptly
confirmed by either of the methods set forth in clauses (a) or (b) above, in
each case addressed to such party and copy party at its address set forth below
or at such other address as such party or copy party may from time to time
designate by written notice to the other parties:
If to the Head Lessor:
Oglethorpe Power Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President - Finance
11
with copy to the Lender:
Utrecht-America Finance Co.,
c/o Rabobank Nederland, New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel's Office
If to the Head Lessee:
SunTrust Bank, Atlanta
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
with copies to the Owner Trustee:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
12
to the Owner Participant:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Vice President, Leasing with a copy to
Director, Portfolio Administration
and to the Lender:
Utrecht-America Finance Co.,
c/o Rabobank Nederland, New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel's Office
Section 17.3. Survival. Except as expressly set forth herein, the
warranties and covenants made by each party hereto shall survive the expiration
or termination of this Head Lease.
Section 17.4. Successors and Assigns.
(a) This Head Lease shall be binding upon and shall inure to the
benefit of, and shall be enforceable by, the parties hereto and their
respective successors and permitted assigns as permitted by and in
accordance with the terms hereof.
(b) The Head Lessor hereby consents to the entry by the Head Lessee
into, and the performance by the Head Lessee of, the Operative Documents,
including any assignment by the Head Lessee pursuant thereto. Except as
expressly provided herein or in any other Operative Document, the Head
Lessor may not assign or transfer any of its interests herein or in its
residual ownership interest in the Undivided Interest without the prior
written consent of the Head Lessee. Except as expressly provided herein or
in any of the other Operative Documents, the Head Lessee may not assign its
interests herein prior to the expiration or early termination of the
Facility Lease Term without the prior written consent of the Head Lessor.
(c) This Head Lease conveys a leasehold estate and not a usufruct.
13
Section 17.5. Business Day. Notwithstanding anything herein to the
contrary, if the date on which any payment or performance is to be made pursuant
to this Head Lease is not a Business Day, the payment otherwise payable on such
date shall be payable on the next succeeding Business Day with the same force
and effect as if made on such scheduled date and (provided such payment is made
on such succeeding Business Day) no interest shall accrue on the amount of such
payment from and after such scheduled date to the time of such payment on the
next succeeding Business Day.
Section 17.6. Governing Law. This Head Lease shall be in all respects
governed by and construed in accordance with the laws of the State of New York
including all matters of construction, validity and performance except to the
extent the law of the State of Georgia is mandatorily applicable.
Section 17.7. Severability. If any provision hereof shall be invalid,
illegal or unenforceable under Applicable Law, the validity, legality and
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby.
Section 17.8. Counterparts. This Head Lease may be executed in any number
of counterparts, each executed counterpart constituting an original but all
together only one agreement.
Section 17.9. Headings and Table of Contents. The headings of the sections
of this Head Lease and the Table of Contents are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
Section 17.10. Further Assurances. Each party hereto will promptly and duly
execute and deliver such further documents to make such further assurances for
and take such further action reasonably requested by the other party hereto, all
as may be reasonably necessary to carry out more effectively the intent and
purpose of this Head Lease.
Section 17.11. Effectiveness of Head Lease. This Head Lease has been dated
as of the date first above written for convenience only. This Head Lease shall
be effective on the date of execution and delivery by the Head Lessor and the
Head Lessee.
Section 17.12. Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Head Lease is executed and delivered
by SunTrust Bank, Atlanta, not individually or personally but solely as
Co-Trustee under the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Co-Trustee is made
and intended not as personal representations, undertakings and agreements by
SunTrust Bank, Atlanta but is made and intended for the purpose for binding only
the Co-Trustee, (c) nothing herein contained shall be construed as creating any
liability on SunTrust Bank Atlanta, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly
14
waived by the parties hereto or by any Person claiming by, through or under the
parties hereto and (d) under no circumstances shall SunTrust Bank, Atlanta be
personally liable for the payment of any indebtedness or expenses of the
Co-Trustee or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Co-Trustee under
this Head Lease. In addition, each of the parties hereto acknowledges and agrees
that the Co-Trustee has been appointed by the Owner Participant and Owner
Trustee for the purpose of exercising those trust powers in the State of Georgia
which may not be exercised by the Owner Trustee under applicable law, and that,
except as otherwise required by applicable law, the Co-Trustee shall not be
obligated to take any action hereunder unless expressly directed in writing by
the Owner Trustee or the Owner Participant in accordance with the terms of the
Trust Agreement.
Section 17.13. Measuring Life. If and to the extent that any of the rights
and privileges granted under this Head Lease, would, in the absence of the
limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule or law relating to
the vesting of interests in property or the suspension of the power of
alienation of property, then it is agreed that notwithstanding any other
provision of this Head Lease, such options, rights and privileges, subject to
the respective conditions hereof governing the exercise of such options, rights
and privileges, will be exercisable only during (a) the longer of (i) a period
which will end twenty-one (21) years after the death of the last survivor of the
descendants living on the date of the execution of this Head Lease of the
following Presidents of the United States: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇, and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or (ii) the period provided under the Uniform Statutory Rule
Against Perpetuities or (b) the specific applicable period of time expressed in
this Head Lease, whichever of (a) and (b) is shorter.
15
IN WITNESS WHEREOF, the Head Lessor and the Head Lessee have caused this
Head Lease to be duly executed and delivered by their respective officers
thereunto duly authorized.
OGLETHORPE POWER CORPORATION (AN
ELECTRIC MEMBERSHIP GENERATING &
TRANSMISSION CORPORATION),
Head Lessor
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
Date: December 30, 1996
(CORPORATE SEAL)
Attest: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary -
Treasurer
Date:
Signed and delivered
in the presence of:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Unofficial Witness
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
Notary Public
My Commission Expires:March 16, 1998
[Notary Seal]
SUNTRUST BANK, ATLANTA,
not in its individual capacity,
but solely as Co-Trustee under
the Trust Agreement,
as Head Lessee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Date: 12/30/96
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Date: 12/30/96
Signed and delivered
in the presence of:
/s/ E. M. Shadru
----------------
Unofficial Witness
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
Notary Public
My Commission Expires:March 16, 1998
[Notary Seal]
CERTAIN OF THE RIGHT, TITLE AND INTEREST OF THE HEAD LESSEE IN AND TO THIS
HEAD LEASE HAVE BEEN ASSIGNED TO AND ARE SUBJECT TO A FIRST PRIORITY SECURITY
INTEREST IN FAVOR OF THE UNDERSIGNED, AS LENDER, UNDER THE LOAN AGREEMENT AND
THE DEED TO SECURE DEBT EACH DATED AS OF DECEMBER 30, 1996. THIS AGREEMENT HAS
BEEN EXECUTED IN SEVERAL COUNTERPARTS. ONLY THE ORIGINAL COUNTERPART CONTAINS
THE RECEIPT THEREFOR EXECUTED BY THE UNDERSIGNED, ON THE SIGNATURE PAGES
THEREOF. SEE SECTION 13 HEREOF FOR INFORMATION CONCERNING THE RIGHTS OF THE
HOLDERS OF THE VARIOUS COUNTERPARTS THEREOF.
Receipt of this original counterpart of this Head Lease is hereby
acknowledged on this ___ day of December, 1996.
UTRECHT-AMERICA FINANCE CO.
By: ____________________________
Name:
Title:
Date:
By: ____________________________
Name:
Title:
Date:
SCHEDULE TO EXHIBIT 10.32.2
HEAD LEASE AGREEMENT (P1)
The following table indicates for each transaction the name of the
corresponding Owner Participant:
Agreement Date Owner Participant
--------- ----- -----------------
P1 December 30, 1996 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation
P2 January 3, 1997 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation
F3 December 30, 1996 First Chicago Leasing Corporation
F4 December 30, 1996 First Chicago Leasing Corporation
N5 December 30, 1996 NationsBanc Leasing & R.E. Corporation
N6 January 3, 1997 NationsBanc Leasing & R.E. Corporation
Other than Appendix A, the Exhibits and Schedules to the Head Lease
Agreement (P1) are not filed herewith; however, the registrant hereby agrees
that such Exhibits and Schedules will be provided to the Commission upon
request.
Appendix A
Definitions
Refer to Appendix A to Exhibit 10.32.1 to the Form 10-K.
A-1