EXHIBIT 10.3

 

This instrument, when recorded,

should be returned to:

 

Christopher J. Moore

Orrick, Herrington & Sutcliffe LLP

666 Fifth Avenue

New York, NY  10103-0001

 

Cross Reference:

Book 1409

Page 386

Floyd County, Georgia

 

AMENDMENT NO. 1 TO SUBORDINATED DEED
TO SECURE DEBT AND SECURITY AGREEMENT (P1)

 

THIS AMENDMENT NO. 1 TO SUBORDINATED DEED TO SECURE DEBT AND SECURITY AGREEMENT
(P1) (this “Amendment”) is made as of May 22, 2009, by and among (i) OGLETHORPE
POWER CORPORATION, (AN ELECTRIC MEMBERSHIP CORPORATION), an electric membership
corporation organized under the laws of the State of Georgia (herein, together
with its successors and permitted assigned, called “Oglethorpe”), (ii) AMBAC
ASSURANCE CORPORATION (formerly known as AMBAC Indemnity Corporation), a
Wisconsin-domiciled stock insurance corporation (together with its successors
and assigns, called “AMBAC”) and (iii) U.S. BANK NATIONAL ASSOCIATION, a
national banking association organized under the laws of the United States, as
successor in interest to Suntrust Bank, Atlanta, not in its individual capacity
but solely as Co-Trustee under the Trust Agreement (herein, together with its
successors and permitted assigns, called the “Co-Trustee” or the “Facility
Lessor”, and together with AMBAC, the “Beneficiaries”).  Capitalized terms used
but not defined herein shall have the meaning ascribed to them in the
Subordinated Deed (as defined below) or in Appendix A thereto, as heretofore
amended.

 

W I T N E S S E T H  T H A T

 

WHEREAS, in connection with the transactions contemplated by the Participation
Agreement, Oglethorpe secured the payment, performance and observance of certain
of its obligations under the Operative Documents and the AMBAC Guaranty to AMBAC
and the Facility Lessor under the Subordinated Deed to Secure Debt and Security
Agreement (P1), dated as of December 30, 1996 and filed for record on August 7,
1997 in Book 1409 Page 386 of the Floyd County, Georgia land records (the
“Subordinated Deed”);

 

WHEREAS, the Secured Obligations are obligations such as reimbursement and
indemnification obligations and not indebtedness evidenced by a note or for the
payment of borrowed money and are therefore exempt from the payment of
intangible recording tax under the laws of the State of Georgia;

 

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WHEREAS, pursuant to Section 8.5 and Section 8.6 of the Participation Agreement,
Oglethorpe has caused Berkshire to deliver (a) to the Head Lessee and the Owner
Participant, the Surety Bond (Head Lease-P1) No. 98SRD102494 issued by Berkshire
(as amended from time to time, the “Berkshire Head Lease Surety Bond”), and
(b) to the Facility Sublessor and the Facility Lessor, Surety Bond (Facility
Sublease-P1) No. 98SRD102495 issued by Berkshire (as amended from time to time,
the “Berkshire Sublease Surety Bond” and, together with the Berkshire Head Lease
Surety Bond, the “Berkshire Surety Bonds”);

 

WHEREAS, pursuant to the Berkshire Guaranty Agreement, dated as of May 22, 2009,
Oglethorpe has agreed to reimburse Berkshire for any payments made under the
Berkshire Surety Bonds; and

 

WHEREAS, in connection with the issuance by Berkshire of the Berkshire Surety
Bonds, Oglethorpe has agreed to grant Berkshire a security interest in the same
collateral as the Beneficiaries, and Oglethorpe and the Beneficiaries have
agreed to amend the Subordinated Deed to make Berkshire a secured party
thereunder.

 

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

Section 1.              Amendments to Appendix A (Definitions) to the
Subordinated Deed

 

Appendix A to the Subordinated Deed is hereby amended as follows:

 

(i)            by deleting the defined term “AMBAC Indemnity” and replacing the
definition of “AMBAC”, in its entirety, with the following language:

 

“AMBAC” shall mean Ambac Assurance Corporation (formerly named AMBAC Indemnity
Corporation), a Wisconsin-domiciled stock-insurance corporation.  Any reference
herein to “AMBAC Indemnity” shall be a reference to “AMBAC.”

 

(ii)           by adding the following definitions thereto:

 

 “Berkshire” shall mean Berkshire Hathaway Assurance Corporation.

 

“Berkshire Guaranty Agreement” shall mean the Berkshire Guaranty Agreement (P1),
dated as of May 22, 2009, by and between Oglethorpe and Berkshire.

 

“Berkshire Head Lease Surety Bond” shall mean the Surety Bond (Head Lease-P1)
No. 98SRD102494 issued by Berkshire in favor of the Head Lessee and the Owner
Participant.

 

“Berkshire Sublease Surety Bond” shall mean the Surety Bond (Facility
Sublease-P1) No. 98SRD102495 issued by Berkshire in favor of the Facility
Sublessor and the Facility Lessor.

 

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“Berkshire Surety Bonds” shall mean, collectively, the Berkshire Head Lease
Surety Bond and the Berkshire Sublease Surety Bond.

 

Section 2.              Other Amendments to the Subordinated Deed

 

(a)           The seventh “WHEREAS” clause of the Subordinated Deed is hereby
amended by replacing the words “Qualifying Surety Bonds” with “Surety Bonds (as
defined in the AMBAC Guaranty”.

 

(b)           The Subordinated Deed is hereby amended by adding the following
“WHEREAS” clause after the seventh “WHEREAS” clause thereof:

 

“WHEREAS, pursuant to the Berkshire Guaranty Agreement, Oglethorpe has agreed to
reimburse Berkshire for payments made under the Berkshire Surety Bonds and to
secure such reimbursement obligation by providing a lien, security title and
security interest identified in the fifth “WHEREAS” above.”

 

(c)           The opening paragraph of the Granting Clause of the Subordinated
Deed is hereby amended and replaced in its entirety with the following
paragraph:

 

“To secure all of the due and punctual payment, performance and observance by
Oglethorpe of all of (a) Oglethorpe’s obligations to the Facility Lessor and the
Owner Participant under the Operative Documents, (b) Oglethorpe’s obligations to
AMBAC under the AMBAC Guaranty, and (c) Oglethorpe’s obligations to Berkshire
under the Berkshire Guaranty Agreement (items (a), (b) and (c) collectively
referred to hereinafter as the “Secured Obligations”; it being acknowledged and
agreed that the Secured Obligations are obligations such as reimbursement and
indemnification obligations and are not indebtedness evidenced by a note or for
the payment of borrowed money and are therefore exempt from the payment of
intangible recording tax under the laws of the State of Georgia), Oglethorpe
hereby grants, bargains, sells and conveys unto AMBAC, Berkshire and the
Facility Lessor (for itself and for the benefit of the Owner Participant)
(collectively, the “Subordinated Secured Parties”) all rights, title and
interests of Oglethorpe in, to and under, and grants to the Subordinated Secured
Parties a security interest in, each and all of the following described
property, rights and privileges (such property, rights and privileges being
hereinafter referred collectively, the “Subordinated Collateral”):”

 

(d)           Section 2 of the Subordinated Deed is hereby amended and replaced
in its entirety with the following paragraph:

 

“Any amounts received in respect of a sale of any of the Subordinated Collateral
after a Subordinated Deed to Secure Debt Event of Default (as defined herein)
shall have occurred and be continuing shall be applied or distributed ratably
among (i) Berkshire (or if (x) the Berkshire Surety Bonds have been terminated
and all amounts owing to Berkshire under the Berkshire Guaranty Agreement have
been indefeasibly paid in full, or (y) no amounts are then owed

 

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to Berkshire under the Berkshire Guaranty Agreement, AMBAC), (ii) the Owner
Participant and (iii) the Facility Lessor, pari passu, according to the Secured
Obligations held by each.

 

Upon payment in full of the Secured Obligations, the balance, if any, of such
amounts remaining shall be distributed to Oglethorpe.”

 

(e)           Section 3.1 of the Subordinated Deed is hereby amended and
replaced in its entirety with the following paragraph:

 

“The term “Subordinated Deed to Secure Debt Event of Default,” wherever used
herein, shall mean the occurrence of a Head Lessor Event of Default or the
failure of Oglethorpe to promptly perform any of its obligations under this
Subordinated Deed to Secure Debt, the AMBAC Guaranty or the Berkshire Guaranty
Agreement.”

 

(f)            Section 6.3 of the Subordinated Deed is hereby amended by adding
the following contact information:

 

“If to Berkshire:

 

 

Berkshire Hathaway Assurance Corporation

 

c/o Berkshire Hathaway Group

 

100 First Stamford Place

 

Stamford, CT 06902

 

Attn: General Counsel

 

Facsimile No.: (203) 363 5221

 

 

 

with copies to:

 

 

 

Berkshire Hathaway Assurance Corporation

 

3024 Harney Street

 

Omaha, NE 68131

 

Attention: President

 

Facsimile No.: (402) 916-3237

 

 

 

and

 

 

 

Robert E. Bennett

 

99 Mill Lane

 

Norwell, MA 02061

 

Facsimile No.: (781) 659-2491”

 

Section 3.              Reference to Subordinated Deed

 

Except as herein amended, the Subordinated Deed shall remain in full force and
effect.  As amended hereby, the Subordinated Deed is hereby ratified, approved
and confirmed in all

 

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respects.  On and after the date hereof, each reference to the Subordinated Deed
made in the Subordinated Deed or any agreement, document or instrument executed
and delivered pursuant to the Subordinated Deed by the parties hereto, shall
mean and be a reference to the Subordinated Deed as amended hereby and by the
Amendment, Release and Consent Agreement, dated as of July 30, 1999.

 

Section 4.              Successors and Assigns

 

This Amendment shall be binding upon and shall inure to the benefit of, and
shall be enforceable by, the parties hereto and their respective successors and
assigns as permitted by and in accordance with the terms hereof.  Except as
expressly provided herein or in the other Operative Documents, no party hereto
may assign its interests herein without the consent of the other parties hereto.

 

Section 5.              Governing Law

 

This Amendment 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 6.              Severability

 

If any provision hereof shall be invalid, illegal or unenforceable under
Applicable Law, the validity, legality or enforceability of the remaining
provisions hereof shall not be affected or impaired thereby.

 

Section 7.              Counterparts

 

This Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one Agreement.

 

Section 8.              Limitation of Liability

 

It is expressly understood and agreed by the parties hereto that (a) this
Amendment is executed and delivered by U.S. Bank National Association, 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 the U.S. Bank National Association but is made
and intended for the purpose of binding only the Co-Trustee, (c) nothing herein
contained shall be construed as creating any liability on U.S. Bank National
Association, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto or by any Person claiming by, through or
under the parties hereto and (d) under no circumstances shall U.S. Bank National
Association be personally liable for the payment of any indebtedness or expenses
of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Co-Trustee under
this Amendment.  In addition, each of the parties hereto acknowledges and agrees
that the Co-Trustee has been appointed by the Owner Participant and the Owner
Trustee

 

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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.

 

 (Signature pages follow)

 

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IN WITNESS WHEREOF, the parties have each caused this Amendment to be duly
executed as of the day and year first written above.

 

 

 

OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION)

 

 

 

 

 

 

By:

/s/ Thomas A. Smith

 

 

Name:

Thomas A. Smith

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

(CORPORATE SEAL)

 

 

 

 

 

 

 

Attest:

/s/ Patricia N. Nash

 

 

Name:

Patricia N. Nash

 

 

Title:

Secretary

 

Signed, sealed and delivered in the presence of:

 

/s/ Thomas J. Brendiar

 

Unofficial Witness

 

 

 

/s/ Sharon H. Wright

 

Notary Public

 

 

 

 

 

My commission expires:

October 14, 2011

 

 

[Notary Seal]

 

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U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, except as
expressly provided herein, but solely as Co-Trustee under the Trust Agreement

 

 

 

 

 

 

By:

/s/ Jack Ellerin

 

 

 Name:

Jack Ellerin

 

 

 Title:

Vice President

 

 

Signed, sealed and delivered in the presence of:

 

/s/ Muriel Shaw

 

Unofficial Witness

 

 

 

 

 

/s/ Sonia S. Henry

 

Notary Public

 

 

 

 

 

My commission expires:

July 21, 2012

 

 

[Notary Seal]

 

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AMBAC ASSURANCE CORPORATION

 

 

 

 

 

 

By:

/s/ Michael C. Morcom

 

 

Name:

Michael C. Morcom

 

 

Title:

First Vice President

 

Signed, sealed and delivered in the presence of:

 

/s/ [signature illegible]

 

Unofficial Witness

 

 

 

/s/ Jean Kim

 

Notary Public

 

 

 

 

 

My commission expires:

December 27, 2012

 

 

[Notary Seal]

 

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Acknowledged and consented to by:

 

 

 

UTRECHT-AMERICA FINANCE CO.

 

 

 

 

 

 

By:

/s/ Brett Delfino

 

 

Name:

Brett Delfino

 

 

Title:

Assistant Secretary

 

 

 

 

 

 

 

By:

/s/ Margaret Schaubeck

 

 

Name:

Margaret Schaubeck

 

 

Title:

Assistant Treasurer

 

 

Signed, sealed and delivered in the presence of:

 

/s/ Geert C. Kortlandt

 

Unofficial Witness

 

 

 

 

 

/s/ Shannon Smith

 

Notary Public

 

 

 

 

 

My commission expires:

November 5, 2011

 

 

 

[Notary Seal]

 

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SCHEDULE TO EXHIBIT 10.3

 

AMENDMENT NO. 1 TO SUBORDINATED DEED TO SECURE DEBT AND SECURITY AGREEMENT (P1)

 

 

The following table indicates for each transaction the name of the corresponding
Owner Participant:

 

Amendment
to Agreement

 

Date

 

Owner Participant

 

 

 

 

 

P2

 

May 22, 2009

 

Philip Morris Capital Corporation

 

 

 

 

 

F3

 

May 22, 2009

 

First Chicago Leasing Corporation

 

 

 

 

 

F4

 

May 22, 2009

 

First Chicago Leasing Corporation

 

 

 

 

 

N6

 

May 22, 2009

 

Philip Morris Capital Corporation
(transferee from NationsBanc Leasing & R.E. Corporation)

 

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