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;


 

















 


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.


 


2

















 


“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 


 


3

















 


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 


 


4

















 


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 


 


5

















 


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)


 


6

















 


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]


 


7

















 


	
   

  	
  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]


 


8

















 


	
   

  	
  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]


 


9

















 


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]


 


10

















 


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)