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                                                             Exhibit 10.26

CONSULTANT:             - James L Warren
ACTIVBIOTICS CONTACT:   - Melissa Packard
EFFECTIVE DATE:         - June 16, 2006

                             [ACTIVBIOTICS(R) LOGO]

                              CONSULTING AGREEMENT

     This Consulting Agreement (together with its attachments, this "Agreement")
made as of the date written above (the "Effective Date") is between
ActivBiotics, Inc., a Delaware corporation having an address at 110 Hartwell
Avenue, Lexington, MA 02421 (together with its affiliates and subsidiaries,
"ActivBiotics"), and the consultant named on the signature page ("Consultant")
ActivBiotics desires to have the benefit of Consultant's knowledge and
experience, and Consultant desires to provide Consulting Services (defined
below) to ActivBiotics, all as provided in this Agreement.

1. CONSULTING SERVICES. ActivBiotics retains Consultant and Consultant agrees to
provide Consulting Services to ActivBiotics (the "Consulting Services") as it
may from time to time reasonably request and as specified in the business terms
exhibit attached to this Agreement ("Business Terms Exhibit") Any changes to the
Consulting Services (and any related compensation adjustments) must be agreed
upon in writing between Consultant and ActivBiotics prior to commencement of the
changes. Consultant understands and agrees that it is not the intent of
ActivBiotics that this Agreement or any actions of ActivBiotics be construed as
imposing any duty or obligation, express or implied, on Consultant to use,
purchase, prescribe, or recommend any product of ActivBiotics

     1.1  PERFORMANCE. Consultant agrees to render the Consulting Services to
          ActivBiotics, or to its designee, (a) at such reasonably convenient
          times and places as ActivBiotics may direct, (b) under the general
          supervision of ActivBiotics, and (c) on a best efforts basis.
          Consultant will comply with all rules, procedures and standards
          promulgated from time to time by ActivBiotics with regard to
          Consultant's access to and use of ActivBiotics' property, information,
          equipment and facilities Consultant agrees to furnish ActivBiotics
          with written reports with respect to the Consulting Services if and
          when requested by ActivBiotics.

     1.2  THIRD PARTY CONFIDENTIAL INFORMATION. Consultant agrees not to use any
          trade secrets or other confidential information of any other person,
          firm, corporation, institution or other entity in connection with any
          of the Consulting Services.

     1.3  NO CONFLICTS. Consultant is under no contractual or other obligation
          or restriction which is inconsistent with Consultant's execution of
          this Agreement or the performance of the Consulting Services, During
          the Term (defined below), Consultant will not enter into any
          agreement, either written or oral, in conflict with Consultant's
          obligations under this Agreement Consultant will arrange to provide
          the Consulting Services in such manner and at such times that the
          Consulting Services will not conflict with Consultant's

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          responsibilities under any other agreement, arrangement or
          understanding or pursuant to any employment relationship Consultant
          has at any time with any third party.

     1.4  COMPLIANCE WITH POLICIES. If Consultant is a faculty member at or
          employee of a university or hospital ("Institution") or of another
          company, Consultant represents and warrants that pursuant to
          Institution's or company's policies concerning professional consulting
          and additional workload, Consultant is permitted to enter into this
          Agreement. If Consultant is required by Consultant's Institution to
          disclose to it any proposed agreements with industry, Consultant has
          made such disclosure. If Institution's prior approval of this
          Agreement is required by Institution policies, Consultant has obtained
          or will obtain and deliver to ActivBiotics, Institution's consent on
          the form attached to this Agreement prior to beginning the Consulting
          Services.

     1.5  ABSENCE OF DEBARRMENT. Consultant represents that neither Consultant
          nor any Consultant Personnel (defined below) has been debarred, and to
          the best of Consultant's knowledge, is not under consideration to be
          debarred, by the U.S. Food and Drug Administration from working in or
          providing consulting services to any pharmaceutical or biotechnology
          company under the Generic Drug Enforcement Act of 1992.

     1.6  CONSULTANT PERSONNEL. In the event that others are, or may hereafter
          become, associated with Consultant or are used by Consultant in
          connection with the Consulting Services ("Consultant Personnel"),
          Consultant agrees to procure from them agreements containing analogous
          obligations to those in this Agreement, and Consultant agrees to
          cooperate with ActivBiotics in procuring execution by them of
          assignments and other papers as may be required by the terms of this
          Agreement.

2. COMPENSATION.

     2.1 PAYMENT. In consideration for the Consulting Services rendered by
Consultant to ActivBiotics, ActivBiotics agrees to pay Consultant the fees set
forth in the Business Terms Exhibit Unless otherwise specified in the Business
Terms Exhibit, payments are due net thirty (30) days from ActivBiotics' receipt
of Consultant's invoice. Invoices will contain such detail as ActivBiotics may
reasonably require and will be payable in U.S. Dollars.

     2.2 EXPENSES. ActivBiotics will reimburse Consultant for all reasonable
travel and other expenses incurred by Consultant in rendering the Consulting
Services, provided that such expenses are consistent with ActivBiotics' Travel
and Expense Policy, are agreed upon in advance, and are confirmed by appropriate
written expense statements and other supporting documentation.

3. INVENTIONS.

     3.1  DEFINITION. Consultant will promptly disclose in confidence to
          ActivBiotics all inventions, discoveries, improvements, ideas,
          designs, processes, products, computer programs, works of authorship,
          databases, mask works, trade secrets, know-how, research and creations
          (whether or not patentable or subject to copyright or trade secret
          protection) that Consultant makes, conceives or reduces to practice,
          either alone or jointly with others, and that (a) result from the
          performance of the Consulting Services, and/or (b) result from use of
          facilities, equipment, supplies, Research Materials (defined below),
          or Confidential Information (defined below) of ActivBiotics
          ("Inventions").

                                       2

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     3.2  OWNERSHIP. All Inventions will be the exclusive property of
          ActivBiotics For purposes of the copyright laws of the United States,
          all Inventions will constitute "works made for hire", except to the
          extent such Inventions cannot by law be "works made for hire". To the
          extent Inventions have not been previously assigned to ActivBiotics,
          Consultant hereby assigns and, to the extent any such assignment
          cannot be made at present, hereby agrees to assign to ActivBiotics,
          without further compensation, all right, title and interest in and to
          all Inventions and any and all related patents, patent applications,
          copyrights, copyright applications, trademarks, trade names, trade
          secrets and other proprietary rights in the United States and
          throughout the world.

     3.3  RESEARCH MATERIALS. If the Consulting Services entail laboratory work
          or experiments, "Research Materials" means all materials furnished by
          ActivBiotics, all materials developed by Consultant in connection with
          the Consulting Services and all materials, the cost of which are
          reimbursed to Consultant by ActivBiotics hereunder Research Materials
          include, in the case of biological materials, all progeny and
          unmodified derivatives of those materials, and in the case of chemical
          materials, all analogs, formulations, mixtures and compositions of
          those materials Research Materials are the sole property of
          ActivBiotics and at ActivBiotics' option, are either to be disposed of
          or delivered to ActivBiotics upon request, but in any event within
          thirty (30) days after the expiration or termination of this Agreement
          Consultant agrees that Consultant will not use or evaluate Research
          Materials for any purpose other than as directed by ActivBiotics, nor
          transfer the Research Materials to any third party without the prior
          consent of ActivBiotics. Consultant will use the Research Materials in
          compliance with all laws and regulations Consultant will be
          responsible for any claims or liabilities which arise as the result of
          Consultant's use, handling or storage of the Research Materials, and
          will hold ActivBiotics and its employees, officers and agents harmless
          from any loss, claim, damage or liability which may arise from or in
          connection with Consultant's use, handling or storage of Research
          Materials.

     3.4  RECORDS. Consultant will maintain adequate and current written records
          (in the form of notes, sketches, drawings and as may be specified by
          ActivBiotics), properly corroborated, to document the conception
          and/or first actual reduction to practice of any Invention Those
          written records will be available to and remain the sole property of
          ActivBiotics at all times. If the Consulting Services entail
          laboratory work or experiments, the details of such work or
          experiments performed will be recorded in laboratory notebooks used
          only for recording work done on behalf of ActivBiotics. This will be
          of sufficient detail that other skilled persons, without reference to
          other material, could directly repeat the experiments Results of all
          experiments will be documented, whether deemed to have been successful
          or not. All raw data will be included in the laboratory notebooks and
          will be available for inspection upon request. Data will be fully
          annotated such that cross-reference with records in laboratory
          notebooks is easily achieved. Laboratory notebooks (which will be the
          property of ActivBiotics) will be non-loose leaf and have numbered
          consecutive pages, the date to be filled in on each page Consultant
          will sign and date each page at the end of each day on which work is
          performed and such signature will be countersigned or witnessed by
          another researcher each day.

                                       3

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     3.5  AGREEMENT WITH INSTITUTION. This Agreement is made subject to the
          understanding that Consultant, if affiliated with an Institution, may
          be required to fulfill certain obligations, including teaching,
          directing laboratory operations, conducting research, and publishing
          work. It is further understood that Consultant may have signed an
          agreement concerning inventions with Institution, under which
          Consultant may be obligated to assign to Institution certain
          inventions which arise out of or otherwise relate to Consultant's work
          at or for Institution or from Consultant's use of certain of its
          facilities or intellectual property. In performing the Consulting
          Services, Consultant agrees not to utilize Institution facilities or
          intellectual property if the result of such use is that any Inventions
          will not be assignable solely to ActivBiotics. Use of Institution's
          telephone, fax machines or computers for communication purposes,
          however, will not constitute use of Institution's facilities under
          this Agreement

     3.6  WORK AT THIRD PARTY FACILITIES. Consultant agrees not to make any use
          of any funds, space, personnel, facilities, equipment or other
          resources of a third party in performing the Consulting Services nor
          take any other action that would result in a third party owning or
          having a right in any Inventions, unless agreed upon in writing in
          advance by ActivBiotics.

4.   CONFIDENTIAL INFORMATION.

     4.1  DEFINITION. "Confidential Information" means all trade secrets and
          confidential or proprietary information owned, possessed or used by
          ActivBiotics, learned of by Consultant or developed by Consultant in
          connection with the Consulting Services, whether or not labeled
          "Confidential", including but not limited to (a) all Inventions,
          marketing plans, business strategies, scientific data, financial
          information, forecasts, personnel information and customer lists of
          ActivBiotics, (b) all information of third parties that ActivBiotics
          has an obligation to keep confidential, and (c) the terms and
          conditions of this Agreement (including the compensation paid to
          Consultant pursuant to Section 2) Confidential Information does not
          include information which (i) is in the public domain or which becomes
          part of the public domain through no wrongful act on Consultant's part
          but only after it becomes so publicly known, (ii) is already in
          Consultant's possession at the time of disclosure by ActivBiotics,
          other than by previous disclosure by ActivBiotics, as evidenced by
          written or electronic records, or (iii) that becomes known to
          Consultant through disclosure by a third party having the right to
          disclose the information, as evidenced by written or electronic
          records

     4.2  OBLIGATIONS OF CONFIDENTIALITY. During the Term and thereafter,
          Consultant will not directly or indirectly publish, disseminate or
          otherwise disclose, use for Consultant's own benefit or for the
          benefit of a third party, deliver or make available to any third party
          any Confidential Information, other than in furtherance of the
          purposes of this Agreement, and only then with the prior written
          consent of ActivBiotics. If required, Consultant may disclose the
          Confidential Information to a governmental authority or by order of a
          court of competent jurisdiction, provided that such disclosure is
          subject to all applicable governmental or judicial protection
          available for like material and reasonable advance notice is given to
          ActivBiotics. Consultant will exercise all reasonable precautions to
          physically protect the integrity and confidentiality of the
          Confidential Information and will not remove any Confidential
          Information or copies thereof from ActivBiotics' premises except to
          the extent necessary to fulfill the Consulting Services,

                                        4

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          and then only with ActivBiotics' prior consent. Consultant may
          disseminate or permit access to Confidential Information only to
          Consultant Personnel who have a need to know such Confidential
          Information in the course of the performance of their duties and who
          are bound to protect the confidentiality of the Confidential
          Information consistent with the terms of this Agreement.

5. PUBLICATION. Consultant agrees to submit to ActivBiotics a copy of any
proposed manuscript or other materials to be published or otherwise publicly
disclosed which contains information or any discussion relating to ActivBiotics
or the Consulting Services, in sufficient time to enable ActivBiotics to
determine if patentable Inventions or any Confidential Information of
ActivBiotics would be disclosed Consultant will cooperate with ActivBiotics in
this respect and will delete from the manuscript or other disclosure any
Confidential Information if requested by ActivBiotics, and will assist
ActivBiotics in filing for patent protection for any patentable Inventions prior
to publication or other disclosure.

6.   TERM AND TERMINATION.

     6.1  TERM. This Agreement will commence on the Effective Date and continue
          for the term specified on the Business Terms Exhibit (the "Term"),
          unless sooner terminated pursuant to the express terms of this Section
          6 or extended by mutual agreement of the parties.

     6.2  TERMINATION FOR BREACH. If either party breaches in any material
          respect any of its material obligations under this Agreement, in
          addition to any other right or remedy, the non-breaching party may
          terminate this Agreement in the event that the breach is not cured
          within thirty (30) days after receipt by that party of written notice
          of the breach.

     6.3  TERMINATION. Either party may terminate this Agreement (a) immediately
          at any time upon written notice in the event of a breach of this
          Agreement which cannot be cured (i.e. breach of the confidentiality
          obligation) and/or (b) at any time without cause upon not less than
          thirty (30) days' prior written notice.

     6.4  EFFECT OF EXPIRATION/TERMINATION. Upon expiration or termination,
          neither ActivBiotics nor Consultant will have any further obligations
          under this Agreement, except (a) the liabilities accrued through the
          date of termination, and (b) the obligations under, sections 3, 4, 6
          and 7 will survive Upon expiration or termination, and in any case
          upon ActivBiotics' request, Consultant will return immediately to
          ActivBiotics all tangible Confidential Information, including all
          copies and reproductions thereof, except for one (1) copy which may be
          retained solely for archival purposes.

7. MISCELLANEOUS.

     7.1  INDEPENDENT CONTRACTOR. All Consulting Services will be rendered by
          Consultant as an independent contractor and this Agreement does not
          create an employer-employee relationship between ActivBiotics and
          Consultant. Consultant will have no rights to receive any employee
          benefits, such as health and accident insurance, sick leave or
          vacation which are accorded to regular ActivBiotics employees
          Consultant will not in any way represent himself to be an employee,
          partner, joint venturer, or agent of ActivBiotics.

                                        5

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     7.2  TAXES. Consultant will pay all required taxes on Consultant's income
          from ActivBiotics under this Agreement. Consultant will provide
          ActivBiotics with Consultant's taxpayer identification number or
          social security number, as applicable.

     7.3  ASSIGNABILITY AND BINDING EFFECT. The Consulting Services to be
          rendered by Consultant are personal in nature. Consultant may not
          assign or transfer this Agreement or any of Consultant's rights or
          obligations hereunder except to a corporation of which Consultant is
          the sole stockholder. In no event will Consultant assign or delegate
          responsibility for actual performance of the Consulting Services to
          any other natural person except to Consultant Personnel as provided
          for under this Agreement. This Agreement will be binding upon and
          inure to the benefit of the parties and their respective legal
          representatives, heirs, successors and permitted assigns.

     7.4  HEADINGS. The section headings are included solely for convenience of
          reference and will not control or affect the meaning or interpretation
          of any of the provisions of this Agreement.

     7.5  NOTICES. Any notices or other communications from one party to the
          other will be in writing and will be given by addressing the same to
          the other at the address or facsimile number set forth in this
          Agreement. Notices to ActivBiotics will be marked "ATTENTION: CHIEF
          EXECUTIVE OFFICER" Notice will be deemed to have been duly given when
          (a) deposited in the United States mail with proper postage for first
          class Registered or Certified Mail prepaid, return receipt requested,
          (b) sent by any reputable commercial courier, delivery confirmation
          requested, (c) delivered personally, or (d) if promptly confirmed by
          mail or commercial courier as provided above, when dispatched by
          facsimile.

     7.6  NO MODIFICATION. This Agreement may be changed only by a writing
          signed by authorized representatives of both parties.

     7.7  SEVERABILITY. In the event that any one or more of the provisions
          contained in this Agreement will, for any reason, be held to be
          invalid, illegal or unenforceable in any respect, such invalidity,
          illegality or unenforceability will not affect any other provisions of
          this Agreement, and all other provisions will remain in full force and
          effect. If any provision of this Agreement is held to be excessively
          broad, it will be reformed and construed by limiting and reducing it
          so as to be enforceable to the maximum extent permitted by law.

     7.8  ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
          the parties with regard to its subject matter, and supersedes all
          previous written or oral representations, agreements and
          understandings between the parties.

     7.9  GOVERNING LAW. This Agreement will be governed by, and construed and
          enforced in accordance with, the laws of the Commonwealth of
          Massachusetts applicable to contracts made and to be performed
          therein, without giving effect to the principles thereof relating to
          the conflict of laws.

     7.10 COUNTERPARTS. This Agreement may be executed in any number of
          counterparts, each of which will be deemed an original, but all of
          which together will constitute one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
under seal as of the Effective Date.

                                        ACTIVBIOTICS,INC.

                                        By: /s/ Cathy Carew
                                            -----------------------------
                                        Name: Cathy Carew
                                        Title: Vice President, Human Resources

                                        CONSULTANT:

                                        By: /s/ James L. Warren
                                            -----------------------------
                                            James L. Warren

                                        Tax ID No: (redacted)
                                                  -----------------------
                                                   (required for payment)

                                       7

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                             BUSINESS TERMS EXHIBIT

1.   CONSULTING SERVICES:

     FINANCE AND ACCOUNTING PRACTICES

2.   COMPENSATION:

     As full compensation for the Consulting Services, ActivBiotics will pay
     Consultant $200.00 per hour, not to exceed $20,000 per twelve month period
     during the Term, without ActivBiotics' specific written consent.

     On the last day of each calendar month, Consultant will invoice
     ActivBiotics for Consulting Services rendered [AND EXPENSES INCURRED]
     during the preceding month. Invoices should reference this Agreement and be
     forwarded to Melissa Packard.

     All invoices will be submitted to the following address:

     ActivBiotics, Inc
     Attn: Accounts Payable Dept.
     110 Hartwell Avenue
     Lexington, MA 02421

3.   TERM:

     This Agreement will be for a term of twelve months months beginning on the
     Effective Date, and may be extended for additional periods, at
     ActivBiotics' option and with Consultant's consent.

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EXHIBIT 4.6  

          SECOND AMENDED AND RESTATED

LOAN CONTRACT  

 Dated as of May 31, 2006  

 between  

 OGLETHORPE POWER CORPORATION

(AN ELECTRIC MEMBERSHIP CORPORATION)  

 and  

 UNITED STATES OF AMERICA

RUS
Project Designation:

Georgia 109 OPC 

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	 ARTICLE I — DEFINITIONS	 	1
	
 ARTICLE II — REPRESENTATIONS AND WARRANTIES	
 	

5
	
 ARTICLE III — THE LOANS	
 	

6
	 	Section 3.1	 	The Loans	 	6
	 	Section 3.2	 	No Further Advances	 	7
	 	Section 3.3	 	Advances under the Partially Unadvanced Notes and the P-8 FFB Note	 	7
	 	Section 3.4	 	Interest Rates and Payment	 	7
	 	Section 3.5	 	Prepayment	 	7
	
 ARTICLE IV — CONDITIONS OF LENDING	
 	

7
	 	Section 4.1	 	General Conditions	 	7
	 	Section 4.2	 	Conditions to Advances Under the Partially Unadvanced Notes and the P-8 FFB Note	 	8
	
 ARTICLE V — AFFIRMATIVE COVENANTS	
 	

9
	 	Section 5.1	 	Generally	 	9
	 	Section 5.2	 	Performance under Indenture	 	10
	 	Section 5.3	 	Annual Compliance Certificate	 	10
	 	Section 5.4	 	Simultaneous Prepayment of Contemporaneous Loans	 	10
	 	Section 5.5	 	Rates and Coverage Ratios	 	10
	 	Section 5.6	 	Financial Books	 	10
	 	Section 5.7	 	Rights of Inspection	 	11
	 	Section 5.8	 	Real Property Acquisition	 	11
	 	Section 5.9	 	Financial Reports	 	11
	 	Section 5.10	 	Miscellaneous Reports and Notices	 	11
	 	Section 5.11	 	Variable Rate Indebtedness	 	12
	 	Section 5.12	 	Special Construction Account	 	12
	 	Section 5.13	 	Compliance with Laws	 	12
	 	Section 5.14	 	Plant Agreements	 	12
	 	Section 5.15	 	Lockbox Agreement	 	12
	 	Section 5.16	 	Nuclear Fuel	 	13
	 	Section 5.17	 	Power Requirements Studies	 	13
	 	Section 5.18	 	Long Range Engineering Plans and Construction Work Plans	 	13
	 	Section 5.19	 	Design Standards, Construction Standards and List of Materials	 	13
	 	Section 5.20	 	Plans and Specifications	 	13
	 	Section 5.21	 	Standard Forms of Construction Contracts, and Engineering and Architectural Services Contracts	 	13
	 	Section 5.22	 	Contract Bidding Requirements	 	14
	 	Section 5.23	 	Nondiscrimination	 	14
	 	Section 5.24	 	"Buy American" Requirements	 	14
	 	Section 5.25	 	Maintenance of Credit Ratings	 	15
	 	Section 5.26	 	Application of Advances	 	15
	 	Section 5.27	 	Excepted Property	 	15
	 	Section 5.28	 	Additional Affirmative Covenants	 	15
	 	 	 	 	 

i

 

	
 ARTICLE VI — NEGATIVE COVENANTS	
 	

15
	 	Section 6.1	 	General	 	15
	 	Section 6.2	 	Limitations on System Extensions, Additions and Dispositions	 	15
	 	Section 6.3	 	Limitations on Employment and Retention of General Manager	 	16
	 	Section 6.4	 	Limitations on Certain Types of Contracts	 	16
	 	Section 6.5	 	Limitations on Loans, Investments and Other Obligations	 	17
	 	Section 6.6	 	Depreciation Rates	 	18
	 	Section 6.7	 	Rate Reductions	 	18
	 	Section 6.8	 	Indenture Restrictions	 	18
	 	Section 6.9	 	Negative Pledge	 	20
	 	Section 6.10	 	Emissions Allowances	 	21
	 	Section 6.11	 	Changes to Plant Agreements	 	21
	 	Section 6.12	 	Fiscal Year	 	21
	 	Section 6.13	 	Limits on Variable Rate Indebtedness	 	21
	 	Section 6.14	 	Limitations on Changing Principal Place of Business	 	21
	 	Section 6.15	 	Limitations on RUS Financed Extensions and Additions	 	21
	 	Section 6.16	 	Historic Preservation	 	22
	 	Section 6.17	 	Impairment of Wholesale Power Contracts	 	22
	 	Section 6.18	 	State Regulation	 	22
	 	Section 6.19	 	Additional Negative Covenants	 	22
	
 ARTICLE VII — EVENTS OF DEFAULT	
 	

22
	
 ARTICLE VIII — REMEDIES	
 	

23
	 	Section 8.1	 	Remedies	 	23
	 	Section 8.2	 	Suspension of Advances	 	23
	
 ARTICLE IX — MISCELLANEOUS	
 	

24
	 	Section 9.1	 	Notice to RUS; Objection of RUS	 	24
	 	Section 9.2	 	Notices	 	24
	 	Section 9.3	 	Expenses	 	25
	 	Section 9.4	 	Late Payments	 	25
	 	Section 9.5	 	Filing Fees	 	25
	 	Section 9.6	 	No Waiver	 	25
	 	Section 9.7	 	Governing Law	 	25
	 	Section 9.8	 	Holiday Payments	 	26
	 	Section 9.9	 	Successors and Assigns	 	26
	 	Section 9.10	 	Complete Agreement; Amendments	 	26
	 	Section 9.11	 	Headings	 	27
	 	Section 9.12	 	Severability	 	27
	 	Section 9.13	 	Right of Set Off	 	27
	 	Section 9.14	 	Schedules and Exhibits	 	27
	 	Section 9.15	 	Sole Benefit	 	27
	 	Section 9.16	 	Existing Loan Contract	 	27
	 	Section 9.17	 	Authority of RUS Representatives	 	27
	 	Section 9.18	 	Relation to RUS Regulations	 	28
	 	Section 9.19	 	Term	 	28
	 	Section 9.20	 	Relation to Indenture	 	28

ii

  

 
 

SCHEDULES AND EXHIBITS    
    

	Schedule 1	 	Contemporaneous Loans and Outstanding Notes
	Schedule 2	 	Plant Agreements
	Schedule 3	 	Subsidiaries
	Schedule 4	 	Additional Affirmative and Negative Covenants
	Schedule 5	 	Litigation
	Exhibit A	 	Description of Projects
	Exhibit B	 	Equal Opportunity Contract Provisions
	Exhibit C	 	Description of Rating Agency Services

iii

  

 
 

SECOND AMENDED AND RESTATED LOAN CONTRACT    
    

        THIS SECOND AMENDED AND RESTATED LOAN CONTRACT, dated as of May 31, 2006, is between  OGLETHORPE POWER
CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION), formerly known as Oglethorpe Power Corporation (An Electric Membership
Generation & Transmission Corporation) (together with any successors and assigns, the "Borrower"), a corporation organized and existing under the laws of the State of Georgia
(the "State"), and the UNITED STATES OF AMERICA (the "Government"), acting by and through the Administrator (together with any person
succeeding to the powers and rights of the Administrator with respect to this Agreement, the "Administrator") of the Rural Utilities Service (together with any agency succeeding to the powers and
rights of the Rural Utilities Service with respect to this Agreement, the "RUS"), and amends and restates that certain Amended and Restated Loan Contract, dated as of May 21, 2003, between the
Borrower and the Government, acting by and through the Administrator of the RUS (the "Existing Loan Contract"). 

 
 

RECITALS    
    

        WHEREAS, the Borrower has incurred, pursuant to the Act (as defined in Article I) and under the Existing Loan Contract, certain indebtedness
and other obligations to, or guaranteed by, the Government, acting by and through the Administrator of the RUS, which indebtedness and other obligations are evidenced by the Outstanding Notes
(as defined in Article I); and 

        WHEREAS,
the Borrower has entered into that certain Indenture (as defined in Article I), pursuant to which the Borrower has granted security title to and a security
interest in substantially all of its real and personal property to secure the indebtedness and other obligations evidenced by the Outstanding Notes and to secure certain other indebtedness; and 

        WHEREAS,
in order to provide for the Borrower incurring, pursuant to the Act, certain additional indebtedness and other obligations to, or guaranteed by, the Government, acting by and
through the Administrator of the RUS, which additional indebtedness and other obligations will be evidenced by the P-8 Notes (as defined in Article I), the Borrower
and RUS desire to amend and restate the Existing Loan Contract as hereinafter set forth. 

        NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto amend and restate the Existing Loan Contract to read in its
entirety, and agree and bind themselves, as follows: 

 
 

ARTICLE I — DEFINITIONS    
    

        Capitalized terms that are not defined herein shall have the meanings set forth in the Indenture. The terms defined herein include both the plural and the
singular. Unless otherwise specifically provided, all accounting terms not otherwise defined herein shall have the meanings assigned to them, and all determinations and computations herein provided
for shall be made, in accordance with Accounting Requirements. 

        "Accounting
Requirements" shall have the meaning given such term in the Indenture. 

        "Act"
shall mean the Rural Electrification Act of 1936, as amended. 

        "Advance"
or "Advances" shall mean an advance or advances made or approved by the RUS under any Partially Unadvanced Note payable to FFB or under the P-8 FFB Note. 

        "Agreement"
shall mean this Second Amended and Restated Loan Contract, as it may be amended or supplemented from time to time, together with all schedules and exhibits hereto. 

        "Business
Day" shall mean any day that the RUS and FFB are both open for business. 

1

 

        "Chattahoochee
Project" shall mean the project identified as such on Exhibit A hereto. 

        "Contemporaneous
Loans" shall mean those loans identified as such on Schedule 1 hereto. Any loan used to refinance or refund a
Contemporaneous Loan is also considered to be a Contemporaneous Loan. 

        "Credit
Rating" shall mean a rating assigned by a Rating Agency (i) to any long-term indebtedness (that is not subject to Credit Enhancement) (including, without
limitation, indebtedness issued by any governmental authority with respect to which the Borrower is an obligor) secured directly or indirectly under the Indenture or (ii) if a Rating Agency has
not assigned a rating to indebtedness of the type described in clause (i) hereof, a "shadow rating" of the Borrower's senior, secured long-term indebtedness (that is not
subject to Credit Enhancement). 

        "Current
Refunding" shall mean any refinancing or refunding of indebtedness that occurs not more than ninety (90) days following the Stated Maturity of such indebtedness. 

        "Designation
Notice" shall have the meaning as defined in Section 4.1(b). 

        "Equity"
shall mean the Borrower's total margins and equities computed in accordance with Accounting Requirements. 

        "Events
of Default" shall have the meaning as defined in Article VII. 

        "FERC"
shall mean the Federal Energy Regulatory Commission, or any agency or other governmental body succeeding to the functions thereof. 

        "FFB"
shall mean the Federal Financing Bank, an instrumentality and wholly-owned corporation of the Government, and any successor to the powers and rights thereof with respect to the
Notes. 

        "Fitch"
shall mean Fitch, Inc., and any successor thereto. 

        "General
Manager" shall mean the President and Chief Executive Officer of the Borrower or the person performing the duties of a chief executive officer if no person holds such title and,
in the event of any dispute between the Borrower and the Government as to who is the General Manager, the Administrator may designate a person or position that shall be the General Manager for
purposes of this Agreement. 

        "Highest
Oversight Period" shall mean (x) as to an event described in clause (i) or (iv), any period commencing on the date that such event has occurred and
ending on the date that such event has ended, and (y) as to an event described in clause (ii) or (iii), any period commencing on the date that the
Borrower receives written notice from the Administrator that such event has occurred (which notice shall set forth the basis for concluding that such event has occurred) and ending on the date that
the Borrower receives written notice from the Administrator that such period has ended: 

	(i)
	the
Borrower has been assigned a Credit Rating of less than "Ba3" (or its then current equivalent) in the case of Moody's, "BB-" (or its then current
equivalent) in the case of S&P, "BB-" (or its then current equivalent) in the case of Fitch, or the then current equivalent by any other Rating Agency then assigning a Credit
Rating;

	(ii)
	the
Administrator determines that the System is incapable of providing reliable service to the members of the Borrower pursuant to the terms of the Wholesale Power Contracts;

	(iii)
	the
Administrator determines that, as a consequence of any change in the condition, financial or otherwise, operations, properties or business of the Borrower, the Borrower will be
unable to perform its material obligations under (a) this Agreement, (b) the Wholesale Power Contracts, (c) the Notes, or (d) the Indenture; or 

2

 

	(iv)
	the
occurrence of an Event of Default under the Indenture, or any event which with the passage of time or giving of notice, or both, would constitute an Event of Default under the
Indenture. 

        "Increased
Oversight Period" shall mean any period (other than a Highest Oversight Period) during which the Borrower has been assigned a Credit Rating below investment grade by at least
two (2) Rating Agencies. For purposes of this definition, an investment grade rating shall mean, in the case of Moody's, a rating of "Baa3" (or its then current equivalent) or higher, in
the case of S&P, a rating of "BBB-" (or its then current equivalent) or higher, in the case of Fitch, a rating of "BBB-" (or its then current equivalent) or
higher, and in the case of any other Rating Agency, the then current equivalent thereof. 

        "Indenture"
shall mean the Indenture, dated as of March 1, 1997, entered into by the Borrower and SunTrust Bank, formerly known as SunTrust Bank, Atlanta, as trustee, and all
amendments and supplements thereto. 

        "Investment"
shall mean any loan or advance to, or any investment in, or purchase or commitment to purchase any stock, bonds, notes or other securities of, or guaranty, assumption or
other obligation or liability with respect to the obligations of, any other person, firm or corporation, except investments in securities or deposits issued, guaranteed or fully insured as to payment
by the Government or any agency thereof. 

        "Laws"
shall have the meaning as defined in Paragraph (e) of Article II. 

        "Loans"
shall mean the loans and other obligations described in Article III. 

        "Loan
Documents" shall mean, collectively, this Agreement, the Indenture and the related documents delivered thereunder, the Notes and the Lockbox Agreement. 

        "Lockbox
Agreement" shall mean that certain Lockbox Agreement, dated as of March 1, 1997, among the Borrower, SunTrust Bank, formerly known as SunTrust Bank, Atlanta, and the
Trustee. 

        "Material
Adverse Effect" shall mean a material adverse effect on the Borrower's overall condition, financial or otherwise, operations, properties, margins or business or on the ability
of the Borrower to perform its obligations under the Loan Documents. 

        "Moody's"
shall mean Moody's Investors Service, Inc., and any successor thereto. 

        "Notes"
shall mean, collectively, the Outstanding Notes and the P-8 Notes. 

        "Outstanding
Notes" shall mean those notes, other than the P-8 Notes, of the Borrower outstanding on the date hereof payable to the order of FFB, the payment of which
is guaranteed by the Government, acting by and through the Administrator of the RUS, pursuant to the Act, and those notes, other than the P-8 Notes, of the Borrower outstanding on
the date hereof payable to the order of the Government evidencing loans made by the Government, acting by and through the Administrator of the RUS, pursuant to the Act, or evidencing reimbursement
obligations of the Borrower to the Government with respect to the Government's guarantee of the payment of certain notes payable to the order of FFB, all as specifically identified on  Schedule 1
hereto, and all amendments, supplements, extensions and replacements to, of or for such notes.
 

        "P-8 Loan"
shall have the meaning as defined in Section 3.1(b). 

        "P-8 Loan
Documents" shall mean, collectively, this Agreement, the P-8 Notes and the supplement to the Indenture and the related documents delivered
thereunder pursuant to which the P-8 Notes are issued. 

        "P-8 FFB
Note" shall mean the note of the Borrower, dated as of May 31, 2006, payable to the order of FFB in the face principal amount of $92,000,000, the
payment of which is guaranteed by the 

3

 

Government,
acting by and through the Administrator of the RUS, pursuant to the Act, and all amendments, supplements, extensions and replacements to, of or for such note. 

        "P-8 Notes"
shall mean, collectively, the P-8 FFB Note and the P-8 Reimbursement Note. 

        "P-8 Reimbursement
Note" shall mean the note of the Borrower, dated as of May 31, 2006, evidencing the reimbursement obligations of the Borrower to the
Government, acting by and through the Administrator of the RUS, with respect to the Government's guarantee of the P-8 FFB Note, and all amendments, supplements, extensions and
replacements to, of or for such note. 

        "Partially
Unadvanced Notes" shall mean those Outstanding Notes identified as Partially Unadvanced Notes on Schedule 1 hereto, as
to which portions of the available principal amount thereunder remain unadvanced. 

        "Plant
Agreements" shall mean those agreements relating to the ownership and operation of generating facilities described on  Schedule 2 hereto. 

        "Projects"
shall mean, collectively, the Talbot Project and the Chattahoochee Project. 

        "Prudent
Utility Practice" shall mean any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry in the region during the
relevant time period, or any of the practices, methods and acts that, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to
accomplish the desired result at lowest reasonable cost consistent with good business practices, reliability, safety and expedition.
"Prudent Utility Practice" is not intended to be limited to the optimum practice, method or act, to the exclusion of all others, but rather to include a spectrum of possible practices, methods or acts
generally in acceptance in the region in light of the circumstances. 

        "Rates"
shall have the meaning given such term in the Indenture. 

        "Rating
Agency" shall mean S&P, Moody's, Fitch or, provided that it is acceptable to the RUS, any other nationally recognized statistical rating organization (within the meaning of the
rules of the United States Securities and Exchange Commission). 

        "RUS
Form 12" shall mean the version of RUS Form 12 (including subdivisions thereof including, but not limited to, RUS Form 12a) submitted by the Borrower and dated
as of December 31, 2005 or corresponding information in future versions of such form or any form required by RUS in substitution therefor containing corresponding information. 

        "RUS
Regulations" shall mean the rules, regulations and bulletins of general applicability published by the RUS from time to time as such rules, regulations and bulletins exist at the
date of applicability thereof, and, unless the context clearly demonstrates a contrary intent, shall also include any rules and regulations of other Federal entities which the RUS is required by law
to implement. 

        "S&P"
shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto. 

        "Special
Construction Account" shall have the meaning as defined in Section 5.12. 

        "Subsidiary"
shall mean a corporation or other entity that is a subsidiary of the Borrower and subject to the Borrower's control, as defined by Accounting Requirements. 

        "System"
shall mean all electric properties and interest in electric properties of the Borrower, it being the intent that "System" be broadly construed to encompass and include the
Borrower's interests in all electric production, transmission, distribution, conservation, load management, general plant and other related facilities, equipment or property and in any mine, well,
pipeline, plant, structure or other facility for the development, production, manufacture, storage, fabrication or processing of fossil, nuclear or other fuel of any kind or in any facility or rights
with respect to the supply of water, in each 

4

 

case
for use, in whole or in major part, in any of the Borrower's generating plants, now existing or hereafter acquired by lease, contract, purchase or otherwise or constructed by the Borrower,
including any interest or participation of the Borrower in any such facilities or any rights to the output or capacity thereof, together with all additions, betterments, extensions and improvements to
said System or any part thereof hereafter made and together with all lands, easements and rights-of-way of the Borrower and all other works, property or structures of the
Borrower and contract rights and other tangible and intangible assets of the Borrower used or useful in connection with or related to said System, including, without limitation, a contract right or
other contractual arrangement for the long-term or short-term interconnection, interchange, exchange, pooling, wheeling, transmission, purchase or sale of electric power and
energy and other similar arrangements with entities having generation or transmission capabilities; provided, however, that "System" shall not include
any property constituting Excepted Property or Excludable Property. 

        "Talbot
Project" shall mean the project identified as such on Exhibit A hereto. 

        "Total
Utility Plant" shall mean the amount constituting the total utility plant (gross) of the Borrower computed in accordance with Accounting Requirements. 

        "Wholesale
Power Contracts" shall mean the Amended and Restated Wholesale Power Contracts, each dated as of January 1, 2003, by and between the Borrower and its members, as
amended by the First Amendments to Amended and Restated Wholesale Power Contracts, each dated as of June 1, 2005, and all amendments, supplements or replacements thereto or thereof. 

 
 

ARTICLE II — REPRESENTATIONS AND WARRANTIES    
    

        Recognizing that the RUS is relying hereon, the Borrower represents and warrants, as of the date of this Agreement, as follows: 

        (a)    Organization; Power, Etc.    The Borrower: (i) is duly organized, validly existing, and in good standing
under the laws of the State; (ii) is duly qualified to do business and is in good standing in each jurisdiction in which the transaction of its business makes such qualification necessary;
(iii) has all requisite corporate and legal power to own and operate its assets and to carry on its business and to enter into and perform its obligations under the Loan Documents;
(iv) has duly and lawfully obtained and maintained all material licenses, certificates, permits, authorizations and approvals which are necessary to the conduct of its business or required by
applicable Laws; and (v) is eligible to obtain the financial assistance from the RUS contemplated by this Agreement. 

        (b)    Authority.    The execution, delivery and performance by the Borrower of this Agreement and the other Loan
Documents and the performance of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and do not violate any provision of law or of the Articles
of Incorporation or By-Laws of the Borrower or result in a breach of, or constitute a default under, any agreement, indenture or other instrument to which the Borrower is a party or by
which it or its properties may be bound. 

        (c)    Consents.    No consent, permission, authorization, order or license of any governmental authority is necessary
in connection with the execution, delivery or performance of the Loan Documents, except such as have been obtained and are in full force and effect. 

        (d)    Binding Agreement.    Each of the Loan Documents is, or when executed and delivered will be, the legal, valid,
and binding obligation of the Borrower, enforceable in accordance with its terms, subject only to limitations on enforceability imposed in equity or by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally. 

5

 

        (e)    Compliance With Laws.    The Borrower is in compliance in all material respects with all federal, state and
local laws, rules, regulations, ordinances, codes and orders (collectively, "Laws"), the failure to comply with which could reasonably be expected to have a Material Adverse Effect. 

        (f)    Litigation.    Attached as Schedule 5 hereto is a
list of all pending or, to our knowledge, threatened legal, arbitration or governmental actions or proceedings to which, as of May 31, 2006, the Borrower is a party or to which any of its
property is subject. There are no pending legal, arbitration or governmental actions or proceedings to which the Borrower is a party or to which any of its property is subject which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect, and to the best of the Borrower's knowledge, no such actions or proceedings are threatened or contemplated, except as the
Borrower has disclosed to the RUS in writing. 

        (g)    Financial Statements; No Material Adverse Change; Etc.    The financial statements of the Borrower dated as of
December 31, 2005, and for the period then ended, present fairly, in all material respects, the financial position of the Borrower and the results of its operations in conformity with
Accounting Requirements. Since the date thereof, there has been no material adverse change in the financial condition or operations of the Borrower. 

        (h)    Budgets; Projections; Etc.    All budgets, projections, appraisals, feasibility studies and other documentation
submitted by the Borrower to the RUS and any Rating Agency assigning a Credit Rating were based on assumptions that were reasonable at the time submitted; and, as of the date hereof, Oglethorpe has
updated such budgets, projections, appraisals, feasibility studies and other documentation as required by RUS and any Rating Agency and in connection with customary updates provided to Rating Agencies
assigning a Credit Rating. 

        (i)    Location of Properties.    All real property and interests therein of the Borrower is located in the states and
counties identified in the Indenture. 

        (j)    Principal Place of Business; Records.    The principal place of business and chief executive office of the
Borrower are at the address of the Borrower specified in Section 9.2. 

        (k)    Subsidiaries.    The Borrower's Subsidiaries are identified on  Schedule 3 hereto, and the Borrower has no other Subsidiaries. 

        (l)    Defaults Under Other Agreements.    No default by the Borrower has occurred under any agreement or instrument
to which the Borrower is a party or to which any of its property is subject that could reasonably be expected to have a Material Adverse Effect. 

        (m)    Title to Property.    As to the property which is included in the description of the Trust Estate, the Borrower
holds good and marketable title to all of its fee and leasehold interests in real property and owns all of its personal property, free and clear of any lien or encumbrance other than the lien of the
Indenture, Permitted Exceptions and liens permitted by Section 13.6 of the Indenture. 

        (n)    Survival.    All representations and warranties made by the Borrower herein or made in any certificate
delivered pursuant hereto shall survive the making of the Advances. 

 
 

ARTICLE III — THE LOANS    
    

Section 3.1    The Loans  

        (a)    Existing Loans Evidenced by the Outstanding Notes.    To finance, pursuant to the provisions of the Act, the
construction of the System for the purpose of furnishing electric energy to persons in rural areas not receiving central station electric service, (i) the Borrower has borrowed funds from the
Government, acting by and through the Administrator of the RUS, evidenced by the Outstanding Notes payable to the Government, (ii) the Borrower has borrowed funds from FFB, evidenced by the
Outstanding Notes payable to FFB, and the Government, acting by and through the Administrator of 

6

 

the
RUS, has guaranteed the repayment of such funds, and (iii) the Borrower has agreed to reimburse the Government, acting by and through the Administrator of the RUS, for amounts paid by the
Government on account of its guarantee of funds borrowed by the Borrower from FFB, which reimbursement obligations are evidenced by the Outstanding Notes payable to the Government in respect of such
reimbursement obligations. 

        (b)    P-8 Loan.    To finance, pursuant to the provisions of the Act, certain improvements to its
System, the RUS agrees to guarantee the payment of a loan in the amount of $92,000,000 to be made by FFB to the Borrower (the "P-8 Loan"). 

Section 3.2    No Further Advances  

        Except with respect to the Partially Unadvanced Notes, the Borrower acknowledges and agrees that all amounts to be advanced to the Borrower under the Outstanding
Notes have been advanced and neither
FFB nor the Government, acting by and through the Administrator of the RUS, is under any obligation to make any further advances to the Borrower under such Outstanding Notes (other than with respect
to payments by the Government on account of its guarantees of certain Outstanding Notes payable to FFB). 

Section 3.3    Advances under the Partially Unadvanced Notes and the P-8 FFB Note  

        With respect to Advances to be made under any Partially Unadvanced Note or the P-8 FFB Note, the RUS agrees to make or approve and the Borrower
agrees to request such Advances on the terms and conditions of this Agreement. The Borrower shall give the RUS written notice of the date on which each Advance is requested to be made in accordance
with RUS policies and procedures. 

Section 3.4    Interest Rates and Payment  

        (a)    Interest Rates.    The Notes shall be payable and bear interest as therein provided. 

        (b)    Electronic Funds Transfer.    Except as otherwise prescribed by the RUS, the Borrower shall make all payments
on the Notes utilizing electronic funds transfer procedures as specified by the RUS. 

Section 3.5    Prepayment  

        The Borrower has no right to prepay any Note in whole or in part except such rights, if any, as are expressly provided for in each Note or as may be provided by
Law. However, prepayment of any Outstanding Note (and any penalties) relating to a Contemporaneous Loan shall be mandatory under Section 5.4. 

 
 

ARTICLE IV — CONDITIONS OF LENDING    
    

Section 4.1    General Conditions  

        In connection with the execution and delivery of this Agreement, each of the following conditions shall be satisfied (all documents, certificates and other
evidence of such conditions are to be satisfactory to the RUS in its discretion; such satisfaction (or waiver thereof) to be evidenced by the approval of the initial Advance of the
P-8 Loan): 

        (a)    Legal Matters.    All legal matters incident to the consummation of the transactions hereby contemplated shall
be satisfactory to counsel for the RUS; 

        (b)    Loan Documents.    The RUS shall receive duly executed originals of the P-8 Loan Documents.
The P-8 FFB Note, the P-8 Reimbursement Note and this Agreement must be received within ninety (90) days of the date of the Designation Notice for the
P-8 FFB Note committing FFB to purchase such P-8 FFB Note (the "Designation Notice") in the manner prescribed in such Designation 

7

 

Notice
and all the conditions set forth in such Designation Notice and the contract of guarantee must be satisfied; 

        (c)    Authorization.    The RUS shall receive evidence satisfactory to it that all corporate documents and
proceedings of the Borrower necessary for duly authorizing the execution, delivery and performance of the P-8 Loan Documents have been obtained and are in full force and effect; 

        (d)    Approvals.    The RUS shall receive evidence satisfactory to it that all consents and approvals which are
necessary for, or required as a condition of, the validity and enforceability of each of the P-8 Loan Documents have been obtained and are in full force and effect; 

        (e)    Indenture Filing.    That supplements to the Indenture shall be duly executed and delivered and, to the extent
necessary to secure the P-8 Notes under the lien of the Indenture, duly recorded and filed in all jurisdictions where the Borrower owns real or personal property and fixtures, all
in accordance with applicable Laws, and the Borrower shall cause satisfactory evidence thereof to be furnished to the RUS; 

        (f)    P-8 Notes.    That each of the P-8 Notes shall be authenticated and
delivered by the Trustee and shall be entitled to the benefits of and secured by the lien of the Indenture equally and ratably with all other Outstanding Secured Obligations under the Indenture; and 

        (g)    Opinion of Counsel.    The RUS shall receive an opinion of counsel for the Borrower (who shall be
acceptable to the RUS) in form and content acceptable to the RUS. 

Section 4.2    Conditions to Advances Under the Partially Unadvanced Notes and the P-8 FFB Note  

        The obligation of the RUS to approve any Advance under any Partially Unadvanced Note or the P-8 FFB Note is subject to the satisfaction of each
of the following conditions precedent on or before the date of such Advance (all documents, certificates and other evidence of such conditions precedent are to be satisfactory to the RUS in its
reasonable discretion; such satisfaction (or waiver thereof) to be evidenced by the approval or making of the requested Advance): 

        (a)    Continuing Representations and Warranties.    That the representations and warranties of the Borrower contained
in this Agreement be true and correct on and as of the date of such Advance as though made on and as of such date (except for any representation or warranty limited by its terms to a specific date;  provided that the representations contained in Paragraph (g) of Article II shall be deemed made as of and since the date of the
last audited financials of the Borrower); 

        (b)    Wholesale Power Contract.    That the Borrower shall not be in default under the terms of, or contesting the
validity of, any Wholesale Power Contract; 

        (c)    Material Adverse Effect.    That no event shall have occurred since the date hereof that has had or is likely
to have a Material Adverse Effect; 

        (d)    Event of Default.    That no Event of Default, and no event which with the passage of time or giving of notice
or both would constitute an Event of Default, shall have occurred and be continuing, or shall have occurred after giving effect to such Advance on the books of the Borrower; 

        (e)    Requisitions.    That the Borrower shall have requisitioned such Advance by submitting a requisition to the RUS
in form and substance satisfactory to the RUS; 

        (f)    Flood Insurance.    That for any such Advance used in whole or in part to finance the construction or
acquisition of any building in any area identified by the Secretary of Housing and Urban Development pursuant to the Flood Disaster Protection Act of 1973 (the "Flood Insurance Act") or any
rules, regulations or orders issued to implement the Flood Insurance Act as any area having special flood hazards, or to finance any facilities or materials to be located in any such building, or in
any building owned or occupied by the Borrower and located in such a flood hazard area, the 

8

 

Borrower
shall have submitted evidence, in form and substance satisfactory to the RUS or the RUS has otherwise determined, that (i) the community in which such area is located is then
participating in the national flood insurance program, as required by the Flood Insurance Act and any related regulations, and (ii) the Borrower has obtained flood insurance coverage with
respect to such building and contents as may then be required pursuant to the Flood Insurance Act and any related regulation; 

        (g)    Compliance With this Agreement and Indenture.    That the Borrower is in material compliance with this
Agreement and the Indenture; 

        (h)    Oversight Period.    That an Increased Oversight Period or Highest Oversight Period shall not exist; 

        (i)    Application of Advances.    That the Borrower agrees to apply (I) the proceeds of the Advances under the
Partially Unadvanced Notes to reimburse the costs paid to date by or on behalf of the Borrower to develop, construct or equip the Talbot Project and for other Talbot Project purposes that have been
approved by RUS or the Chattahoochee Project and for other Chattahoochee Project purposes that have been approved by RUS, as applicable, and (II) the proceeds of the Advances under the
P-8 FFB Note to pay the costs, or reimburse the costs paid, by or on behalf of the Borrower to make the improvements to the System that have been approved by the RUS; 

        (j)    Additional Documents.    That the Borrower agrees to provide or cause to be provided to RUS such additional
documents as RUS may reasonably request from the Trustee; 

        (k)    Conditions Precedent to Advance.    That all conditions precedent under the Indenture and this Agreement to
such Advance have been satisfied or waived, that the RUS has received copies of all certificates and opinions delivered to the Trustee in connection therewith, and that the Trustee has
consented to each Advance pursuant to Section 4.8 of the Indenture and the RUS has received a copy of such consent; and 

        (l)    Invoices.    That with respect to Advances under the Partially Unadvanced Notes, receipt by the RUS of all
relevant invoices for work and materials related to the Projects, together with satisfactory evidence that such invoices have been paid in full. 

 
 

ARTICLE V — AFFIRMATIVE COVENANTS    
    

Section 5.1    Generally  

        Unless otherwise agreed to in writing by the RUS, while this Agreement is in effect, the Borrower shall duly observe each of the affirmative covenants contained
in this Article V. 

9

  

Section 5.2    Performance under Indenture  

        The Borrower shall duly observe and perform all of its obligations under the Indenture including, without limitation, the obligation to establish and collect
rates in accordance with Section 13.14 of the Indenture. 

Section 5.3    Annual Compliance Certificate  

        Within one hundred twenty (120) days after the close of each fiscal year, the Borrower shall deliver to the RUS a written statement signed by its General
Manager, stating that, to the knowledge of the General Manager, during such year the Borrower has fulfilled its obligations under the Loan Documents throughout such year in all material respects or,
if there has been a material default in the fulfillment of such obligations, specifying each such default known to the General Manager and the nature and status thereof. 

Section 5.4    Simultaneous Prepayment of Contemporaneous Loans  

        If the Borrower shall at any time prepay in whole or in part any Contemporaneous Loan, the Borrower shall prepay the related Outstanding Note to the Government in
the ratio that the unpaid principal balance of such Outstanding Note to the Government bears to the aggregate unpaid principal amount of both such Outstanding Note and the note evidencing the
Contemporaneous Loan. If either such Outstanding Note or such other note calls for a prepayment penalty or premium, such amount shall be paid but shall not be used in computing the amount needed to be
paid to the Government under this Section 5.4 to maintain such ratio. Prepayments associated with refinancing or refunding a Contemporaneous Loan are not considered to be prepayments for
purposes of this Agreement if (i) the principal amount of such refinancing or refunding loan is not less than the amount of loan principal being refinanced and (ii) the weighted average
life of the refinancing or refunding loan is not less than the weighted average remaining life of the loan being refinanced. 

Section 5.5    Rates and Coverage Ratios  

        (a)    Prospective Notice of Change in Rates.    The Borrower shall give the RUS sixty (60) days' prior written
notice of any proposed change in the Borrower's general rate structure. 

        (b)    Routine Reporting of Coverage Ratios.    In connection with the furnishing of its annual report to the RUS
pursuant to Section 5.9, the Borrower shall report to the RUS, in such written format as RUS may require, the Margins for Interest level which was achieved during such fiscal year. 

        (c)    Corrective Plans.    Within thirty (30) days of (i) sending a notice to the RUS under
Subsection (b) above that shows the Margins for Interest level specified by Section 13.14 of the Indenture was not achieved for any fiscal year, or (ii) being notified by
the RUS that the Margins for Interest level specified by Section 13.14 of the Indenture was not achieved for any fiscal year, whichever is earlier, the Borrower in consultation with the RUS
shall provide a written plan reasonably satisfactory to the RUS setting forth the actions that shall be taken to achieve the specified Margins for Interest level on a timely basis. 

Section 5.6    Financial Books  

        The Borrower shall at all times keep, and safely preserve, proper books, records and accounts in which full and true entries shall be made of all of the dealings,
business and affairs of the Borrower and its Subsidiaries, in accordance with any applicable Accounting Requirements. 

10

 

Section 5.7    Rights of Inspection  

        The Borrower shall afford the RUS, through its representatives, reasonable opportunity, at all times during business hours and upon prior notice, to have access
to and the right to inspect the System, any other property encumbered by the Indenture, and any or all books, records, accounts, invoices, contracts, leases, payrolls, canceled checks, statements and
other documents and papers of every kind
belonging to or in the possession of the Borrower or in any way pertaining to its property or business, including its Subsidiaries, if any, and to make copies or extracts therefrom. 

Section 5.8    Real Property Acquisition  

        In acquiring real property, the Borrower shall comply in all material respects with the provisions of the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended by the Uniform Relocation Act Amendments of 1987, and 49 C.F.R. part 24, referenced by 7 C.F.R. part 21, to the extent
applicable to such acquisition. 

Section 5.9    Financial Reports  

        The Borrower shall cause to be prepared and furnished to the RUS, within one hundred twenty (120) days after the end of each fiscal year of the Borrower, a
full and complete annual report of its financial condition and of its operations in form and substance satisfactory to the RUS, audited and certified by an independent certified public accountant
satisfactory to the RUS and accompanied by a report of such audit in form and substance reasonably satisfactory to the RUS. If requested by the RUS, the Borrower shall also furnish to the RUS from
time to time such other reports concerning the financial condition or operations of the Borrower, including its Subsidiaries, as the RUS may reasonably request or RUS Regulations require. 

Section 5.10     Miscellaneous Reports and Notices  

        The Borrower shall furnish to the RUS: 

        (a)    Notice of Default.    Promptly after becoming aware thereof, notice of: (i) the occurrence of any Event
of Default or event which with the giving of notice or the passage of time, or both, would become an Event of Default; and (ii) the receipt of any notice given pursuant to the Indenture with
respect to the occurrence of any event which with the giving of notice or the passage of time, or both, could become an "Event of Default" under the Indenture; 

        (b)    Notice of Litigation.    Promptly after the commencement thereof, notice of the commencement of all actions,
suits or proceedings before any court, arbitrator, or governmental department, commission, board, bureau, agency or instrumentality affecting the Borrower which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect; 

        (c)    Notice of Change of Place of Business.    Promptly in writing, notice of any change in location of its
principal place of business or the office where its records concerning accounts and contract rights are kept; 

        (d)    Regulatory and Other Notices.    Promptly after receipt thereof, copies of any notices or other communications
received from any governmental authority with respect to any matter or proceeding which could reasonably be expected to have a Material Adverse Effect; 

        (e)    Ratings.    Promptly after receipt thereof, copies of Credit Ratings and copies of any reports with respect to
the Borrower or its Credit Rating issued by any Rating Agency; 

        (f)    Material Adverse Effect.    Promptly after becoming aware thereof, notice of any matter that would reasonably
be expected to have a Material Adverse Effect; and 

11

 

        (g)    Other Information.    Such other information regarding the condition, financial or otherwise, operations,
properties or business of the Borrower as the RUS may, from time to time, reasonably request. 

Section 5.11    Variable Rate Indebtedness  

        In connection with the furnishing of its annual report to the RUS pursuant to Section 5.9, if requested by the RUS, the Borrower shall report to the RUS,
in such written format as may be acceptable to the RUS, the specific maturities of all of the Borrower's outstanding indebtedness and the interest rates applicable thereto, including, without
limitation, with respect to any indebtedness not bearing a fixed rate through the maturity of such indebtedness the method and timing for adjustment and readjustment of the applicable interest rate. 

Section 5.12    Special Construction Account  

        The Borrower shall continue to maintain the "Special Construction Account" maintained under the Existing Loan Contract and continue to hold therein all moneys
currently held therein, as provided in this Section 5.12. The Special Construction Account shall be insured to the extent insurable by the Federal Deposit Insurance Corporation or other federal
agency acceptable to the RUS and shall be designated by the corporate name of the Borrower followed by the words "Special Construction Account." The Borrower shall promptly deposit proceeds from all
Advances, including previously advanced funds whose original expenditure has been disallowed by a RUS loan fund audit, into the Special Construction Account. Moneys in the Special Construction Account
shall be used solely for the purposes for which the Advance was made or for such other purposes as may be approved by the RUS. 

Section 5.13    Compliance with Laws  

        The Borrower shall operate and maintain the System and its properties in compliance in all material respects with all applicable Laws the failure to comply with
which could reasonably be expected to have a Material Adverse Effect. 

Section 5.14    Plant Agreements  

        (a)    Enforcement.    If the RUS, in its absolute discretion, shall determine it appropriate or necessary to preserve
the security for the Loans, subject to the provisions of the Indenture, the RUS may require in writing the Borrower to authorize and empower the Government to enforce any Plant Agreement, with the
form of such written authorization to be prescribed by the RUS. 

        (b)    Appointment of Agent.    If the appointment of Georgia Power Company as agent under any Plant Agreement is
terminated in whole or in part, and if the Borrower is not qualified to serve as agent, then the RUS may require the Borrower to take all action that the Borrower is entitled to take to cause the
appointment of the Government or such agency of the Government as the RUS shall designate in writing, as agent under any such Plant Agreement, to the extent and with such duties, rights, power and
authority as the RUS shall prescribe in writing, not inconsistent with the provisions of such Plant Agreement. 

Section 5.15    Lockbox Agreement  

        The Borrower shall not, without first complying with the requirements of Section 9.1, amend, supplement, or otherwise modify the Lockbox Agreement.
During a Highest Oversight Period, the Borrower shall, if so directed in writing by the Administrator of the RUS, (a) deposit, pursuant to such Lockbox Agreement, all cash proceeds of the Trust
Estate, including, without limitation, checks, money and the like (other than cash proceeds deposited or required to be deposited with the Trustee pursuant to the Indenture), which cash proceeds shall
include, without limitation, all payments by members of 

12

 

the
Borrower on account of the Wholesale Power Contracts, in separate deposit or other accounts, segregated from all other monies, revenues and investments of the Borrower, and (b) take all
such other actions as the RUS shall request to continue perfection of the lien of the Indenture in such proceeds for the benefit of all Holders of the Outstanding Secured Obligations. 

Section 5.16    Nuclear Fuel  

        Upon the written request of the RUS, to the extent the Borrower owns nuclear fuel located outside the State of Georgia as to which a security interest can be
created under the Uniform Commercial Code and perfected solely by the filing of a financing statement under the Uniform Commercial Code, the Borrower shall cause such nuclear fuel to be subjected to
the lien of the Indenture. 

Section 5.17    Power Requirements Studies  

        The Borrower shall prepare and use power requirements studies of its electric loads and future energy and capacity requirements in conformance with Prudent
Utility Practice and an RUS approved plan for preparation of such power requirements studies, taking into account the limited obligation of the Borrower under the Wholesale Power Contracts;  provided, however, that during a Highest Oversight Period, or in connection with acquisition or construction financed in whole or in part by RUS, the
Borrower shall prepare and use such studies in conformance with RUS Regulations. The Borrower shall provide the RUS with copies of such studies. 

Section 5.18    Long Range Engineering Plans and Construction Work Plans  

        The Borrower shall develop, maintain and use up-to-date long-range engineering plans and construction work plans in
conformance with Prudent Utility Practice; provided, however, that during a Highest Oversight Period, or in connection with acquisition or construction
financed in whole or in part by RUS, the Borrower shall develop, maintain and use such plans in conformance with RUS Regulations. 

Section 5.19    Design Standards, Construction Standards and List of Materials  

        The Borrower shall use design standards, construction standards and lists of acceptable materials in conformance with Prudent Utility Practice;  provided,
however, that during a Highest Oversight Period, or in connection with construction financed in whole or in part by RUS, the Borrower shall
use such standards and lists in conformance with RUS Regulations. 

Section 5.20    Plans and Specifications  

        The Borrower shall submit plans and specifications for construction to the RUS for review and approval, as directed in writing by the RUS, for construction
financed in whole or in part by the RUS. 

Section 5.21    Standard Forms of Construction Contracts, and Engineering and Architectural Services Contracts  

        The Borrower shall use the standard forms of contracts promulgated by the RUS for construction, procurement, engineering services and architectural services, if
directed in writing by the RUS, for construction, procurement, or services financed in whole or in part by the RUS. 

13

 

Section 5.22    Contract Bidding Requirements  

        The Borrower shall follow the RUS contract bidding procedures in conformance with RUS Regulations when contracting for construction or procurement financed in
whole or in part by the RUS. 

Section 5.23    Nondiscrimination  

        (a)    Equal Opportunity Provisions in Construction Contracts.    The Borrower shall incorporate or cause to be
incorporated into any construction contract, as defined in Executive Order 11246 of September 24, 1965 and implementing regulations, which is paid for in whole or in part with funds
obtained from the RUS or borrowed on the credit of the United States pursuant to a grant, contract, loan, insurance or guarantee, or undertaken pursuant to any RUS program involving such grant,
contract, loan, insurance or guarantee, the equal opportunity provisions set forth in Exhibit B attached hereto entitled Equal Opportunity
Contract Provisions. 

        (b)    Equal Opportunity Contract Provisions Also Bind the Borrower.    The Borrower further agrees that it shall be
bound by such equal opportunity clause in any federally assisted construction work which it performs itself other than through the permanent work force directly employed by an agency of government. 

        (c)    Sanctions and Penalties.    The Borrower agrees that it shall cooperate actively with the RUS and the Secretary
of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations and relevant orders of the Secretary of Labor, that it shall furnish
the RUS and the Secretary of Labor such information as they may require for the supervision of such compliance, and that it shall otherwise assist the administering agency in the discharge of the
RUS's primary responsibility for securing compliance. The Borrower further agrees that it shall refrain from entering into any contract or contract modification subject to Executive Order
11246 with a contractor debarred from, or who has not demonstrated eligibility for, Government contracts and federally assisted construction contracts pursuant to Part II,
Subpart D of Executive Order 11246 and shall carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by
the RUS or the Secretary of Labor pursuant to Part II, Subpart D of Executive Order 11246. In addition, the Borrower agrees that if it fails or refuses to comply with these undertakings
the RUS may cancel, terminate or suspend in whole or in part this contract, may refrain from extending any further assistance under any of its programs subject to Executive Order 11246 until
satisfactory assurance of future compliance has been received from the Borrower, or may refer the case to the Department of Justice for appropriate legal proceedings. 

Section 5.24    "Buy American" Requirements  

        The Borrower shall use or cause to be used in connection with the expenditures of funds if such funds were obtained in whole or in part by a loan being made or
guaranteed by the RUS only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States or any eligible country, and only such manufactured
articles, materials, and supplies as have been manufactured in the United States or any eligible country substantially all from articles, materials, and supplies mined, produced or
manufactured, as the case may be, in the United States or any eligible country, except to the extent the RUS shall determine that such use shall be impracticable or that the cost thereof shall
be unreasonable. For purposes of this section, an "eligible country" is any country that has with respect to the United States an agreement ensuring reciprocal access for United States
products and services and United States suppliers to the markets of that country, as determined by the United States Trade Representative. 

14

 

Section 5.25    Maintenance of Credit Ratings  

        As long as any Note remains outstanding, the Borrower shall (a) maintain a Credit Rating from at least two (2) Rating Agencies and
(b) continuously subscribe with a Rating Agency for the services described in Exhibit C attached hereto. 

Section 5.26    Application of Advances  

        The Borrower shall apply the proceeds of Advances as provided in Section 4.2(i) above, with only such modifications as may be mutually agreed upon. 

Section 5.27    Excepted Property  

        During a Highest Oversight Period, the Borrower shall take all actions necessary to include in the Trust Estate, subject to the first lien of the Indenture, the
Excepted Property designated in writing by the Government; provided, however, the Borrower shall not be required to subject to the lien of the Indenture cash and/or securities held for working capital
purposes in an amount up to the greater of
(i) twenty five percent (25%) of the Borrower's aggregate cost of operation and maintenance for the preceding twelve (12) calendar month period or (ii) the Borrower's aggregate
cost of operation and maintenance for three (3) consecutive calendar months designated by the Borrower during such preceding twelve (12) calendar month period as shown on RUS
Form 12(a), lines 14 and 19. 

Section 5.28    Additional Affirmative Covenants  

        The Borrower also shall comply with the additional covenants identified in Schedule 4 hereto. 

 
 

ARTICLE VI — NEGATIVE COVENANTS    
    

Section 6.1    General  

        Unless otherwise agreed to in writing by the RUS, while this Agreement is in effect, the Borrower shall duly observe each of the negative covenants set forth in
this Article VI. 

Section 6.2    Limitations on System Extensions, Additions and Dispositions  

        (a)    Additions to Capacity.    The Borrower shall not, without first complying with the requirements of
Section 9.1, purchase, construct, lease or otherwise acquire Special Assets (as defined below) if the aggregate amount expended for purchase, construction, lease or other acquisition of
all Special Assets (i) in the current fiscal year of the Borrower is greater than 5% of the Borrower's Total Utility Plant or (ii) in the current and two immediately preceding fiscal
years of the Borrower is greater than 10% of the Borrower's Total Utility Plant. For the purposes of this Subsection (a), "Special Assets" means capital assets that constitute utility or
non-utility plant and that: (1) taking into account any substantially contemporaneous or otherwise related sale, transfer, lease or other disposition, increase the generating
capacity of the System or any generating plant of the Borrower by more than 5%; (2) are not subject to the lien of the Indenture and are not nuclear fuel; or (3) are not used or useful
as a part of the System. 

        (b)    Dispositions of System Assets.    The Borrower shall not, without first complying with the requirements of
Section 9.1, request the release of capital assets that constitute utility plant from the lien of the Indenture pursuant to Section 5.2 of the Indenture if (taking into account any
substantially contemporaneous or otherwise related purchase, construction, lease or other acquisition of similar property that is subject to the lien of the Indenture) there will result a decrease in
the generating capacity of the System or any generating plant by more than 5% if the aggregate net book value of all such assets released from the lien of the Indenture (i) in the current
fiscal year of the Borrower is 

15

 

greater
than 5% of the Borrower's Total Utility Plant or (ii) in the current and two immediately preceding fiscal years of the Borrower is greater than 10% of the Borrower's Total Utility
Plant. 

        (c)    Legal Requirements.    The requirements of this Section 6.2 shall not apply to any purchase,
construction, lease or other acquisition, or any sale, transfer, lease or other disposition, of capital assets to the extent that any of the foregoing is required to comply with "Legal Requirements"
(as defined in the Wholesale Power Contract). No such purchase, construction, lease or other acquisition and no such sale, transfer, lease or other disposition shall be considered in
calculating the aggregate limitations specified in Subsections (a) or (b) hereof. 

        (d)    Highest Oversight Period.    During a Highest Oversight Period, the Borrower shall not, without the prior
written approval of the RUS, purchase, construct, lease or otherwise acquire, or sell, transfer, lease or otherwise dispose of, any capital asset, or enter into any agreement therefor. 

Section 6.3    Limitations on Employment and Retention of General Manager  

        At any time an Event of Default, or an event which with the passage of time or the giving of notice, or both, would become an Event of Default, occurs and is
continuing, the Borrower shall not, without the prior written approval of the RUS, enter into an employment relationship with any person to serve as General Manager unless such employment shall first
have been approved by the RUS. If an Event of Default, or an event which with the passage of time or the giving of notice, or both, would become an Event of Default, occurs and is continuing and the
RUS requests the Borrower to terminate the employment of its General Manager, the Borrower shall do so within thirty (30) days after the date of such request. All contracts in respect of the
employment of the General Manager hereafter entered into shall contain provisions to permit compliance with this Section 6.3. 

Section 6.4    Limitations on Certain Types of Contracts  

        (a)    Approval of Certain Contracts.    The Borrower shall not, without first complying with the requirements of
Section 9.1, enter into any of the following: 

	(i)
	any
contract for the management or operation of all or substantially all of the System;

	(ii)
	any
contract for the purchase, exchange or sale of electric power and energy that has a term exceeding three (3) years and under which committed purchases, exchanges or sales
exceed ten percent (10%) of the peak demand of the System for the most recently completed fiscal year;

	(iii)
	any
pooling or similar power supply agreement that has a term exceeding three (3) years;

	(iv)
	any
amendment or modification to any of the Wholesale Power Contracts, including the Schedules thereto and the form of Withdrawal Agreement incorporated therein, except that the
Borrower may amend or modify any of (A) Exhibit 1 to "Rate Schedule A" thereto; (B) the Exhibits to Appendix 1
to "Rate Schedule A" thereto in the manner expressly provided in the Wholesale Power Contracts; (C) Sections I
and II of Appendix 2 (Control Area Services) to "Rate Schedule A" thereto; (D) Appendix 3 (General Terms and
Conditions) to "Rate Schedule A" thereto; (E) Schedule B — Form of Subscription Agreement in
the manner expressly provided in Section 13.3.1 of the Wholesale Power Contracts; and (F) the Wholesale Power Contracts in the manner expressly provided in any "Withdrawal Agreement"
(as defined in the Wholesale Power Contracts) entered into in connection with such Wholesale Power Contracts; or

	(v)
	any
contract for construction or procurement or for architectural and engineering services in connection with a new generating facility if the project will be financed in whole or in
part by the RUS. 

16

 

        (b)    Terminations.    The Borrower shall not, without first complying with the requirements of Section 9.1,
exercise any option to terminate any contract, including, without limitation, any Wholesale Power Contract, if such contract, based upon its nature, remaining term (not taking into account any
option of the Borrower to terminate) and size, would be required to be approved by the RUS pursuant to Subsection (a) above if the Borrower were to have entered into such contract on the
proposed termination date. The Borrower further agrees at the written direction of the RUS to exercise any option to terminate a contract if the exercise by the Borrower of that option would require
compliance with the requirements of Section 9.1 pursuant to the immediately preceding sentence; provided, however, the Borrower shall not be
required to exercise any such option to terminate if such exercise could reasonably be expected to have a Material Adverse Effect. For the purpose of illustration only, and not by way of limitation,
the Borrower shall be required to comply with the requirements of Section 9.1 before terminating, and the RUS can require the Borrower to terminate, in any year before year seven
(7) thereof, a ten (10) year contract for the sale of electric power and energy that exceeds ten percent (10%) of the Borrower's peak demand because the portion of the contract to be
terminated meets the standards of Subsection (a)(ii) above (i.e., a term greater than three (3) years for the committed sale of electric power and energy that exceeds ten
percent (10%) of the Borrower's peak demand). The Borrower can terminate without first complying with the requirements of Section 9.1, and the RUS cannot require the Borrower to
terminate, that same contract after year seven (7) thereof. 

        (c)    Highest Oversight Period.    During a Highest Oversight Period, the Borrower shall not, without the prior
written approval of the RUS, enter into or amend or modify any of the contracts of the type described in this Section 6.4, regardless of duration or size. 

        (d)    Determination of Term.    For purposes of this Section 6.4, the term of any contract shall be determined
in accordance with this Subsection. The term of any contract shall be the period during which performance (other than payment) is to occur and not the period commencing when such contract is executed.
The term of any contract shall be based upon the period prior to the first date upon which the Borrower could, at its option, terminate the contract (taking into account any notice period required for
termination), unless the exercise of such termination right could reasonably be expected to have a Material Adverse Effect. 

        (e)    Amendments; Extensions.    Any amendment or modification to an existing contract (including an extension
thereof) shall be governed by this Section 6.4 only to the extent such specific amendment or modification (and not the contract as a whole), judged as if it were a separate contract,
would be required to be approved by the RUS pursuant to Subsection (a) above. 

Section 6.5    Limitations on Loans, Investments and Other Obligations  

        The Borrower shall not, without first complying with the requirements of Section 9.1, make any Investment, except (i) Investments made for the
purpose of funds management that are made pursuant to an investment policy approved by the Borrower's Board of Directors, a copy of which has been provided to the RUS, (ii) Investments
specifically approved by the RUS in writing under this clause (ii), (iii) retained earnings or patronage of Subsidiaries, (iv) patronage allocated to the Borrower as a result of
transactions in the ordinary course of business with cooperatives, such as, National Rural Utilities Cooperative Finance Corporation and CoBank, ACB, (v) investments set forth in RUS
Regulations (7 C.F.R. § 1717.655, as such RUS Regulations exist on the date hereof) as excluded from computations of the amounts and type of Investments for which RUS
approval is required, and (vi) other Investments (valued at the initial cost thereof) that do not in the aggregate with all other Investments other than Investments described in
clauses (i) through (v) above exceed fifteen percent (15%) of the Borrower's Total Utility Plant; provided, however, that
during an Increased Oversight Period, or Highest Oversight Period, the Borrower shall not, without the prior written approval of the RUS, make any additional Investments of the type described in
clause (vi) above. 

17

 

Section 6.6    Depreciation Rates  

        The Borrower shall not, without first complying with the requirements of Section 9.1, adopt any depreciation rate not previously approved for the Borrower
by the RUS. 

Section 6.7    Rate Reductions  

        The Borrower shall not, without first complying with the requirements of Section 9.1, decrease its Rates if it has failed to comply with the provisions of
Section 13.14 of the Indenture for the fiscal year prior to such reduction. 

Section 6.8    Indenture Restrictions  

        Notwithstanding the provisions of the Indenture, the Borrower shall not, without first complying with the requirements of Section 9.1: 

        (a)    issue
Additional Obligations under the Indenture on the basis of the $200,000,000 carry forward amount described in Section 4.2B(1) of the Indenture,
unless the proceeds of such Additional Obligations are used (i) to pay premiums and other penalties and charges in respect of any Existing Obligation held by FFB or the RUS, (ii) to fund
the acquisition or construction of additions or extensions to the System that are subject to the lien of the Indenture, or (iii) to pay premiums and other penalties, charges and other costs of
issuance incurred in connection with a Current Refunding in an aggregate amount not to exceed five percent (5%) of the principal amount of the Obligations subject to the Current Refunding; 

18

  

        (b)    issue Additional Obligations under the Indenture while any amounts are outstanding under any RUS Reimbursement Obligation or during an Increased Oversight Period or a
Highest Oversight Period; 

        (c)    consolidate
or merge with any other corporation or convey or transfer the Trust Estate under the Indenture substantially as an entirety unless the aggregate amount of
the Borrower's Equity is not reduced as a result of such transaction and the Borrower provides the RUS with evidence reasonably satisfactory to the RUS that the consummation of such transaction will
not result in the commencement of an Increased Oversight Period; provided, however, that during an Increased Oversight Period or a Highest Oversight
Period, the Borrower shall not consolidate or merge with any corporation or convey or transfer the Trust Estate substantially as an entirety; 

        (d)    elect
pursuant to Section 1.1D of the Indenture to apply Accounting Requirements in effect as of the date of execution and delivery of the Indenture; 

        (e)    include
as Property Additions, under any provision of the Indenture, any property that would not qualify as Property Additions but for paragraph C of the
definition of Property Additions, or sell, lease or sublease any portion of the Trust Estate pursuant to paragraph H of Section 5.1 of the Indenture; 

        (f)    submit
an Available Margins Certificate under Article IV of the Indenture for the purpose of issuing Additional Obligations unless such Certificate is accompanied
by an Independent Accountant's Certificate stating in substance that nothing came to the attention of such Accountant in connection with its unaudited review of the applicable period that would lead
such Accountant to believe that there was any incorrect or inaccurate statement in such Certificate; 

        (g)    enter
into a Supplemental Indenture pursuant to Section 12.1H of the Indenture; 

        (h)    enter
into a Supplemental Indenture pursuant to Section 12.1B or 12.1C of the Indenture if (i) the Holders of the Obligations issued under such
Supplemental Indenture are granted greater security rights in and to the Trust Estate than those security rights enjoyed by the Government in its capacity as a Holder of Obligations under the
Indenture, provided, however, that neither (A) the existence of Credit Enhancement nor (B) the creation and maintenance of debt service or
similar funds for the payment of the principal and interest on Obligations issued under such Supplemental Indenture (to the extent such debt service or other similar funds are funded from the
proceeds of the issuance of such Obligations or funded in connection with the refinancing of other debt by such Obligations), shall constitute greater security rights in and to the Trust Estate
requiring the Borrower to comply with the requirements of Section 9.1; (ii) the Supplemental Indenture provides for covenants, restrictions, limitations, conditions, events of defaults
or remedies not applicable to all Obligations then Outstanding or not equally available to all Holders of Obligations then Outstanding, provided,
however, that provisions for covenants and events of default that relate solely to assuring that the interest on such Obligations (or other indebtedness secured by such
Obligations) is excludable from the gross income of the holder thereof pursuant to the Internal Revenue Code, as amended, shall not constitute the providing of covenants or events of default requiring
the Borrower to comply with the requirements of Section 9.1; or (iii) the Obligations issued under such Supplemental Indenture, or the indebtedness secured by such Obligations, can be
accelerated, or effectively accelerated through a mandatory purchase or similar mechanism, in either case, as a consequence of a breach or default by the Borrower under the related loan agreement or
similar agreement entered into in connection with such Obligation or indebtedness, provided, however, that acceleration and similar rights may be
granted to development authorities and trustees without first complying with the requirements of Section 9.1 in connection with the issuance of Obligations (or other indebtedness secured
by such Obligations) the interest on which is excludable from the gross income of the holder thereof pursuant to the Internal Revenue Code, as amended, if such acceleration and similar rights are
substantially similar to those currently granted to development authorities and trustees in connection with the Existing Obligations; 

19

 

        (i)    create
or incur or suffer or permit to be created or incurred or to exist any pledge of current assets secured under the Indenture to secure current liabilities; 

        (j)    provide
any Certificate of an Appraiser under the Indenture, unless such Appraiser is Independent, if the amount of the property or securities as to which the
Appraiser's Certificate applies is greater than two million dollars ($2,000,000); provide any Certificate of an Engineer under the Indenture, unless such Engineer is a licensed professional, if the
amount of the property as to which the Engineer's Certificate applies is greater than one hundred thousand dollars ($100,000); or provide any Certificate of an Engineer under the Indenture, unless
such Engineer is Independent, if the amount of the property as to which the Engineer's Certificate applies is greater than ten million dollars ($10,000,000); 

        (k)    issue
any Additional Obligations upon the basis of Designated Qualifying Securities unless the Borrower has a one hundred percent (100%) ownership or membership interest
in the Subsidiary entering into a Qualifying Securities Indenture in connection with such Designated Qualifying Securities; or 

        (l)    modify
or alter Section 8.7 of the Indenture or the obligation of the Trustee under the Indenture to hold the Trust Estate for the equal and proportionate benefit
and security of the Holders, without any priority of any Obligation over any other Obligation. 

Section 6.9    Negative Pledge  

        The Borrower shall not, without first complying with the requirements of Section 9.1, directly or indirectly create, incur, assume or permit to exist any
lien, mortgage, pledge, security interest, charge or encumbrance of any kind, whether voluntary or involuntary (including any conditional sale or other title retention agreement, any lease in the
nature thereof, and any other agreement to give any security interest) on or with respect to any of the Excepted Property (other than the Excepted Property described in paragraph P of the
definition of Excepted Property, which property shall not be subject to this Section 6.9) except for: 

        (a)    Permitted
Exceptions (other than the Permitted Exception described in paragraph Y of the definition of Permitted Exceptions); 

        (b)    as
to the Excepted Property described in paragraphs B through E, inclusive, and paragraph K of the definition of Excepted Property, liens,
mortgages, pledges, security interests, charges and encumbrances in connection with purchase money, construction or acquisition indebtedness (or renewals or extensions thereof) that encumber
only the asset or assets so purchased, constructed or acquired or property improved through such purchase, construction or acquisition, and the proceeds upon a sale, transfer or exchange thereof; 

        (c)    liens,
mortgages, pledges, security interests, charges and encumbrances (i) for the benefit of all Holders of the Obligations issued under the Indenture,
(ii) in connection with any bond or similar fund established by the Borrower with respect to any debt securities, the interest on which is excludable from gross income of the holder thereof
pursuant to the Internal Revenue Code, as amended, to the extent of amounts deposited in such funds in the ordinary course to make regularly scheduled payments on such debt securities, or
(iii) in connection with any debt service or similar fund established by the Borrower for the payment of principal or interest on debt securities, the interest on which is excludable from gross
income of the holder thereof pursuant to the Internal Revenue Code, as amended, if such fund is funded solely from the proceeds of the issuance of such debt securities (or funded in connection
with the refinancing of other debt by such debt securities); 

        (d)    liens,
pledges, security interests, charges and encumbrances with respect to any interest, debt or equity, of the Borrower in the National Rural Utilities Cooperative
Finance Corporation or CoBank, 

20

 

ACB
purchased or otherwise acquired by the Borrower in connection with membership in any such entity or any borrowing from any such entity; 

        (e)    liens,
pledges, security interests, charges and encumbrances arising in connection with any legal or economic defeasance of indebtedness, unless the funding of the
defeasance is during an Increased Oversight Period or a Highest Oversight Period and more than twenty percent (20%) of the defeasance is funded other than with the proceeds of the issuance of new
indebtedness (in which case the Borrower shall first comply with the requirements of Section 9.1 before permitting or creating any such lien, pledge, security interest, charge or
encumbrance); or 

        (f)    liens,
pledges, security interests, charges and encumbrances with respect to deposit, brokerage, commodity and other similar accounts to the extent such liens, pledges,
security interests, charges and encumbrances do not secure indebtedness for borrowed money other than indebtedness incurred in connection with acquiring securities or other investments deposited in
any such account. 

Section 6.10    Emissions Allowances  

        The Borrower shall not, without first complying with the requirements of Section 9.1, sell, assign or otherwise dispose of (or enter into any
agreement therefor) any allowances for emissions or similar rights granted by any governmental authority, except allowances or similar rights that exceed those necessary in any particular fiscal year
for the Borrower to operate its generating facilities during such year, as evidenced by a written certification by the Borrower and provided to the RUS at the time of such sale, assignment or other
disposition. 

Section 6.11    Changes to Plant Agreements  

        The Borrower shall not, without first complying with the requirements of Section 9.1, amend, supplement, waive, extend, terminate or assign the Plant
Agreements or agree to do so. 

Section 6.12    Fiscal Year  

        The Borrower shall not, without first complying with the requirements of Section 9.1, change its fiscal year. 

Section 6.13    Limits on Variable Rate Indebtedness  

        During an Increased Oversight Period or Highest Oversight Period, the Borrower shall not, if so directed in writing by the RUS, increase the outstanding principal
amount of indebtedness of the Borrower, the interest rate with respect to which is adjusted or readjusted at intervals of less than two (2) years, including, without limitation, Additional
Obligations issued as a Periodic Offering, the interest rate on which is subject to such adjustment or readjustment, to an amount exceeding the amount thereof outstanding on the date of such notice
from the RUS. 

Section 6.14    Limitations on Changing Principal Place of Business  

        Without prior written notification to the RUS, the Borrower shall not change its principal place of business. 

Section 6.15    Limitations on RUS Financed Extensions and Additions  

        The Borrower shall not extend or add to its System either by construction or acquisition without the prior written approval of the RUS if the construction or
acquisition is financed or will be financed in whole or in part by the RUS. 

21

 

Section 6.16    Historic Preservation  

        The Borrower shall not, without approval in writing by the RUS, use any Advance to construct any facility which shall involve any district, site, building,
structure or object which is included in, or eligible for inclusion in, the National Register of Historic Places maintained by the Secretary of the Interior pursuant to the Historic Sites Act of 1935
and the National Historic Preservation Act of 1966. 

Section 6.17    Impairment of Wholesale Power Contracts  

        The Borrower shall not materially breach any obligation to be paid or performed by the Borrower on any Wholesale Power Contract, or take any action which is
likely to materially impair the value of any Wholesale Power Contract. 

Section 6.18    State Regulation  

        The Borrower shall not voluntarily allow or permit itself to be regulated by any state governmental agency or authority. 

Section 6.19    Additional Negative Covenants  

        The Borrower also shall comply with the additional negative covenants identified in Schedule 4 attached
hereto. 

 
 

ARTICLE VII — EVENTS OF DEFAULT    
    

        The following shall be "Events of Default" under this Agreement: 

        (a)    Representations and Warranties.    Any representation or warranty made by the Borrower in Article II
hereof, in any certificate furnished to the RUS hereunder or in the Indenture shall be incorrect in any material respect at the time made; 

        (b)    Payment.    Default shall be made in the payment of or on account of interest on or principal of any Note when
and as the same shall be due and payable, whether by acceleration or otherwise, which shall remain unsatisfied for five (5) Business Days; 

        (c)    Borrowing Under the Indenture in Violation of the Loan Contract.    Default by the Borrower in the observance
or performance of any covenant or agreement contained in Subsection (a) or (b) of Section 6.8; 

        (d)    Other Covenants.    Default by the Borrower in the observance or performance of any other covenant or agreement
contained in any of the Loan Documents, which shall remain unremedied for thirty (30) calendar days after written notice thereof shall have been given to the Borrower by the RUS, unless such
default cannot be reasonably cured within such thirty (30) day period, then in such event and so long as a cure is being diligently pursued, the Borrower shall have a reasonable period of time
beyond such thirty (30) days to complete such cure; 

        (e)    Corporate Existence.    The Borrower shall forfeit or otherwise be deprived of its corporate charter or any
franchises, permits, easements, consents or licenses required to carry on any material portion of its business; 

        (f)    Other Obligations.    Default by the Borrower in the payment of any obligation, whether direct or contingent,
for borrowed money in excess of ten million dollars ($10,000,000) or in the performance or observance of the terms of any instrument pursuant to which such obligation was created or securing such
obligation which default shall have resulted in such obligation becoming or being declared due and payable prior to the date on which it would otherwise be due and payable; 

22

 

        (g)    Bankruptcy.    A court having jurisdiction in the premises shall enter a decree or order for relief in respect
of the Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official, or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of ninety (90) consecutive
days or the Borrower shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian or trustee, of a substantial part of its property, or make any general assignment for the benefit of creditors; 

        (h)    Dissolution or Liquidation.    Other than as provided in Subsection (g) above, the dissolution or
liquidation of the Borrower, or failure by the Borrower promptly to forestall or remove any execution, garnishment or attachment of such consequence as shall impair its ability to continue its
business or fulfill its obligations and such execution, garnishment or attachment shall not be vacated within thirty (30) days. The term "dissolution or liquidation of the Borrower," as used in
this Subsection (h), shall not be construed to include the cessation of the corporate existence of the Borrower resulting either from a merger or consolidation of the Borrower into or
with another corporation following a transfer of all or substantially all its assets as an entirety, under the conditions permitting such actions; and 

        (i)    Indenture.    Any Event of Default as set forth in Section 8.1 of the Indenture and any event
(as set forth in such Section 8.1) that with the giving of notice or the passage of time, or both, could become an Event of Default. 

 
 

ARTICLE VIII — REMEDIES    
    

Section 8.1    Remedies  

        Upon the occurrence of an Event of Default, then the RUS may pursue all rights and remedies available to the RUS that are contemplated by this Agreement in the
manner, upon the conditions and with the effect provided in this Agreement, including, but not limited to, a suit for specific performance, injunctive relief or compensatory damages. The RUS is hereby
authorized, to the maximum extent permitted by applicable law, to demand specific performance of this Agreement at any time when the Borrower shall have failed to comply with any provision of this
Agreement applicable to it. The Borrower hereby irrevocably waives, to the maximum extent permitted by applicable law, any defense based on the adequacy of a remedy at law that might be asserted as a
bar to such remedy of specific performance. Nothing herein shall limit the right of the RUS to pursue all rights and remedies available to a creditor at law or in equity following the occurrence of an
Event of Default, or any right or remedy available to the RUS as a Holder of an Obligation under the Indenture. Each right, power
and remedy of the RUS shall be cumulative and concurrent, and recourse to one or more rights or remedies shall not constitute a waiver of any other right, power or remedy. 

Section 8.2    Suspension of Advances  

        In addition to the rights, powers and remedies referred to in Section 8.1, the RUS may, in its absolute discretion, suspend or terminate the obligation to
make or approve Advances hereunder if (i) any Event of Default, or any occurrence which with the passage of time or giving of notice would be an Event of Default, occurs and is continuing; or
(ii) an event shall have occurred that has had or is likely to have a Material Adverse Effect. 

23

 

 
 

ARTICLE IX — MISCELLANEOUS    
    

Section 9.1    Notice to RUS; Objection of RUS  

        Before undertaking any transaction described in Article VI that requires compliance with the requirements of this Section 9.1, the Borrower shall
give to the RUS (i) notice in writing describing in reasonable detail the proposed transaction and expressly stating that the transaction is covered by this Section 9.1
and (ii) drafts of all material documents to effect such transaction. If the RUS delivers to the Borrower written notice that it objects to the proposed transaction within
(I) 60 days (or such shorter period as the parties shall agree to in writing) in the case of any transaction of the nature described in paragraph (a) below,
or (II) 30 days (or such shorter period as the parties shall agree to in writing) in the case of any transaction of the nature described in
paragraph (b) below, the Borrower shall not complete the transaction without RUS approval. 

        (a)    Transactions
requiring compliance with the requirements of this Section 9.1 pursuant to Sections 5.15, 6.2, 6.4, 6.6,
6.8(a), 6.8(b), 6.8(c), 6.8(e), 6.8(g), 6.8(h), 6.9, 6.11 and 6.12 shall be subject to a 60-day review and objection period
(or such shorter period as the parties shall agree to in writing); and 

        (b)    Transactions
requiring compliance with the requirements of this Section 9.1 pursuant to Sections 6.5, 6.7,
6.8(d), 6.8(f), 6.8(i), 6.8(j), 6.8(k), 6.8(l) and 6.10 shall be subject to a 30-day review and objection period (or such shorter
period as the parties shall agree to in writing). 

Section 9.2    Notices  

        All notices, requests and other communications provided for herein, including, without limitation, any modifications of, or waivers, requests or consents under,
this Agreement, shall be given or made in writing (including, without limitation, by telecopy) and delivered to the intended recipient at the "Address for Notices" specified below; or, as to any
party, at such other address as shall be designated by such party in a notice to the other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as provided for herein. The Address for Notices of
the respective parties are as follows: 

        The
Government: 

Rural
Utilities Service

United States Department of Agriculture

Room No. 5135 South

1400 Independence Avenue, S.W.

STOP: 1510

Washington, DC 20250-1510

Fax: (202) 720-1725

Attention: Administrator 

        With
a copy to: 

Rural
Utilities Service

United States Department of Agriculture

Room No. 0270 South

1400 Independence Avenue, S.W.

STOP: 1568

Washington, DC 20250-1568

Fax: (202) 720-1401

Attention: Power Supply Division 

24

 

        The
Borrower: 

Oglethorpe
Power Corporation

2100 East Exchange Place (30084-5336)

Post Office Box 1349

Tucker, Georgia (30085-1349)

Fax: (770) 270-7872

Attention: President and Chief Executive Officer

With a copy to: Vice President, Treasurer 

Section 9.3    Expenses  

        To the extent permitted by Law, the Borrower shall pay all costs and expenses of the RUS, including reasonable fees of counsel, incurred in connection with the
enforcement of the Loan Documents or with the preparation for such enforcement if the RUS has reasonable grounds to believe that such enforcement may be necessary. 

Section 9.4    Late Payments  

        If payment of any amount due hereunder is not received at the United States Treasury in Washington, DC, or such other location as the RUS may designate to
the Borrower, within five (5) Business Days after the due date thereof or such other longer time period as the RUS may prescribe from time to time in its policies of general application in
connection with any late payment charge (such unpaid amount being herein called the "delinquent amount," and the period beginning after such due date until payment of the delinquent amount being
herein called the "late-payment period"), the Borrower shall pay to the RUS, in addition to all other amounts due under the terms of the Notes and this Agreement, any
late-payment charge as may be fixed by RUS Regulations from time to time on the delinquent amount for the late-payment period. 

Section 9.5    Filing Fees  

        To the extent permitted by Law, the Borrower agrees to pay all expenses of the RUS (including the fees and expenses of its counsel) in connection with the filing
or recordation of all financing statements and instruments as may be required by the RUS in connection with this Agreement, including, without limitation, all documentary stamps, recordation and
transfer taxes and other costs and taxes incident to recordation of any document or instrument in connection herewith. The Borrower agrees to save harmless and indemnify the RUS from and against any
liability resulting from the failure to pay any required documentary stamps, recordation and transfer taxes, recording costs, or any other expenses incurred by the RUS in connection with this
Agreement. The provisions of this Section 9.5 shall survive the execution and delivery of this Agreement and the payment of all other amounts due hereunder or due on the Notes. 

Section 9.6    No Waiver  

        No failure on the part of the RUS to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the RUS of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. 

Section 9.7    Governing Law  

        EXCEPT TO THE EXTENT GOVERNED BY APPLICABLE FEDERAL LAW, THE LOAN DOCUMENTS SHALL BE DEEMED TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF GEORGIA. 

25

 

Section 9.8    Holiday Payments  

        If any payment to be made by the Borrower hereunder shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in computing any interest in respect of such payment. 

Section 9.9    Successors and Assigns  

        This Agreement shall be binding upon and inure to the benefit of the Borrower and the RUS and their respective successors and assigns, except that the Borrower
may not assign or transfer its rights or obligations hereunder without the prior written consent of the RUS. 

Section 9.10    Complete Agreement; Amendments  

        This Agreement and the other Loan Documents are intended by the parties to be a complete and final expression of their agreement. However, the RUS reserves the
right to waive its rights to compliance with any provision of this Agreement, the RUS Regulations and the other Loan Documents. No amendment, modification, or waiver of any provision hereof or
thereof, and no consent to any departure of the Borrower herefrom or therefrom, shall be effective unless approved in writing by the RUS in the form of either RUS Regulations or other writing signed
by or on behalf of the RUS, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Any Schedule to this Agreement may be amended
and replaced by attaching a revised Schedule hereto, which revised Schedule shall have been signed by both parties hereto. 

26

   Section 9.11    Headings  

        The headings and sub-headings contained in the titling of this Agreement are intended to be used for convenience only and do not constitute part of
this Agreement. 

Section 9.12    Severability  

        If any term, provision or condition, or any part thereof, of this Agreement shall for any reason be found or held invalid or unenforceable by any governmental
agency or court of competent jurisdiction, such invalidity or unenforceability shall not affect the remainder of such term, provision or condition nor any other term, provision or condition, and this
Agreement, the Notes, and the Indenture shall survive and be construed as if such invalid or unenforceable term, provision or condition had not been contained herein. 

Section 9.13    Right of Set Off  

        Upon the occurrence and during the continuance of any Event of Default, the RUS is hereby authorized at any time and from time to time, without prior notice to
the Borrower, to exercise rights of set off or recoupment and apply any and all amounts held or hereafter held, by the RUS or owed to the Borrower or for the credit or account of the Borrower against
any and all of the obligations of the Borrower now or hereafter existing hereunder or under the Notes. The RUS agrees to notify the Borrower promptly after any such set off or recoupment and the
application thereof, provided that the failure to give such notice shall not affect the validity of such set off, recoupment or application. The rights of the RUS under this Section 9.13 are in
addition to any other rights and remedies (including other rights of set off or recoupment) which the RUS may have. The Borrower waives all rights of set off, deduction, recoupment or counterclaim. 

Section 9.14    Schedules and Exhibits  

        Each Schedule and Exhibit attached hereto and referred to herein is an integral part of this Agreement. 

Section 9.15    Sole Benefit  

        The rights and benefits set forth in this Agreement are for the sole benefit of the parties hereto and may be relied upon only by them. 

Section 9.16    Existing Loan Contract  

        This Agreement amends the Existing Loan Contract so that, as of the date of this Agreement, it reads in its entirety as herein provided. As of the date hereof,
this Agreement replaces and supersedes the Existing Loan Contract. 

Section 9.17    Authority of RUS Representatives  

        In the case of any consent, approval or waiver from the RUS that is required under this Agreement or any other Loan Document, such consent, approval or waiver
must be in writing and signed by an authorized RUS representative to be effective. As used in this Section 9.17, "authorized RUS representative" means the Administrator, and also means a person
to whom the Administrator has officially delegated specific or general authority to take the action in question. If not publicly available, the RUS will provide evidence of the authority of such
authorized RUS representative upon the request of the Borrower. 

27

 

Section 9.18    Relation to RUS Regulations  

        (a)    In
case of any conflict between the terms of this Agreement or the Indenture and the provisions of the RUS Regulations, the terms of this Agreement and the Indenture
shall control. 

        (b)    The
RUS Regulations shall apply to the Borrower to the extent and under the conditions expressly set forth in this Agreement (other than in Section 5.13). 

        (c)    The
Borrower recognizes that some RUS Regulations implement Federal statutes or regulatory policies that are not limited to rural electrification but apply to many types
of Federal assistance. Nothing herein is intended to, or shall be deemed to, waive the requirements of any Federal statute or regulation that is applicable to the Borrower independently of any
requirement made applicable solely by the RUS Regulations. 

        (d)    Subject
to Subsections (b) and (c) above, if on the date of this Agreement, any RUS Regulation conflicts with the terms of this Agreement or
the Indenture or imposes additional or different requirements, pursuant to 7 C.F.R. § 1710.113(c)(2), the provisions of this Agreement or the Indenture shall control
and the RUS hereby waives compliance by the Borrower with such RUS Regulations. 

Section 9.19    Term  

        This Agreement shall remain in effect until one of the following two events has occurred: 

        (a)    The
Borrower and the RUS replace this Agreement with another written agreement; or 

        (b)    All
of the Borrower's obligations under this Agreement and the Notes have been discharged and paid. 

Section 9.20    Relation to Indenture  

        The RUS is a party to this Agreement and a Holder of Outstanding Secured Obligations under the Indenture. Both this Agreement and the Indenture govern the
relationship between the Borrower and the RUS, and the parties intend that the Indenture and this Agreement independently govern such relationship. Each provision of this Agreement is intended to and
shall be fully operative and enforceable as written whether or not the subject matter of any such provision is or is not addressed by the Indenture, or, if so addressed, is addressed in a different
way from that set forth in this Agreement. 

(Signatures
begin on next page.) 

28

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, and the Borrower's execution to be attested under seal, as of the day and year first above written. 

	 	 	OGLETHORPE POWER CORPORATION

(AN ELECTRIC MEMBERSHIP CORPORATION)
	
 	
 	

 	

 
	
 	
 	

 	

 
	 	 	By:	        /s/ Thomas A. Smith
 President and Chief Executive Officer
	
 	
 	

 	

 

	
 	
 	

Attest:	

        /s/ Patricia N. Nash
 Secretary
	
 	
 	

 	

 
	
 	
 	

 	

 
	
 	
 	

 	

[CORPORATE SEAL]
	
 	
 	

 	

 
	
 	
 	

 	

 

(Signatures
continued on next page.) 

29

 
(Signatures
continued from previous page.) 

	
 	
 	

UNITED STATES OF AMERICA,

acting by and through the Administrator

of the Rural Utilities Service
	
 	
 	

 	

 
	
 	
 	

 	

 
	 	 	By:	        /s/ James M. Andrew
 Administrator

30

 
 

SCHEDULE 1    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and the United States of America  

 CONTEMPORANEOUS LOANS AND OUTSTANDING NOTES  

	1.
	"Contemporaneous
Loans" shall mean the loans evidenced by the following:

	(a)
	Promissory
Note, dated March 1, 1997, made by the Borrower to the order of CoBank, ACB, in the original face principal amount of $1,856,475.12; and

	(b)
	Promissory
Note, dated March 1, 1997, made by the Borrower to the order of CoBank, ACB, in the original face principal amount of $7,102,740.26.

	2.
	"Outstanding
Notes" shall mean the following notes:

	(a)
	Retained
Indebtedness Note, dated as of March 1, 1997, from the Borrower to FFB, in the original face principal amount of $2,637,782,327.56;

	(b)
	Reimbursement
Note, dated as of March 1, 1997, from the Borrower to the Government, acting through the Administrator of the RUS;

	(c)
	Mortgage
Note, dated as of March 1, 1997, from the Borrower to the Government, acting through the Administrator of the RUS, in the original face principal amount of
$3,820,352.89;

	(d)
	Mortgage
Note, dated as of March 1, 1997, from the Borrower to the Government, acting through the Administrator of the RUS, in the original face principal amount of
$14,786,985.70;

	(e)
	Note
(M-8), dated as of March 31, 2003, from the Borrower, to FFB, in the original face principal amount of $275,000,000;

	(f)
	Reimbursement
Note (M-8), dated as of March 31, 2003, from the Borrower to the Government, acting through the Administrator of the RUS;

	(g)
	Note
(N-8), dated as of March 31, 2003, from the Borrower to FFB, in the original face principal amount of $313,665,000; and

	(h)
	Reimbursement
Note (N-8), dated as of March 31, 2003, from the Borrower to the Government, acting through the Administrator of the RUS.

	3.
	"Partially
Unadvanced Notes" shall mean the following notes:

	(a)
	Note
(M-8), dated as of March 31, 2003, from the Borrower, to FFB, in the original face principal amount of $275,000,000;

	(b)
	Reimbursement
Note (M-8), dated as of March 31, 2003, from the Borrower to the Government, acting through the Administrator of the RUS;

	(c)
	Note
(N-8), dated as of March 31, 2003, from the Borrower to FFB, in the original face principal amount of $313,665,000; and

	(d)
	Reimbursement
Note (N-8), dated as of March 31, 2003, from the Borrower to the Government, acting through the Administrator of the RUS. 

 
 

SCHEDULE 2    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and the United States of America

PLANT AGREEMENTS  

        "Plant Agreements" shall mean, collectively, the following agreements relating to the ownership and operation of generating facilities: 

	1.
	Plant
Robert W. Scherer Units Numbers One and Two Purchase and Ownership Participation Agreement among Georgia Power Company, the Borrower, Municipal Electric Authority of Georgia and
City of Dalton, Georgia (the "Co-Owners"), dated as of May 15, 1980, as amended by that certain Amendment, among the Co-Owners, dated as of December 30,
1985; and as amended by that certain Amendment Number Two, among the Co-Owners, dated as of July 1, 1986; and as amended by that certain Amendment Number Three, among the
Co-Owners, dated as of August 1, 1988; and as amended by that certain Amendment Number Four, among the Co-Owners, dated as of December 31, 1990;

	2.
	Plant
Robert W. Scherer Units Numbers One and Two Operating Agreement among the Co-Owners, dated as of May 15, 1980, as amended by that certain Amendment, among the
Co-Owners, dated as of December 30, 1985; and as amended by that certain Amendment Number Two, among the Co-Owners, dated as of December 31, 1990;

	3.
	Plant
Scherer Managing Board Agreement, among the Co-Owners, Gulf Power Company, Florida Power & Light Company and Jacksonville Electric Authority, dated as of
December 31, 1990;

	4.
	Alvin
W. Vogtle Nuclear Units Numbers One and Two Purchase and Ownership Participation Agreement, among the Co-Owners, dated as of August 27, 1976, as amended by
that certain Amendment Number One, among the Co-Owners dated as of January 18, 1977; and as amended by that certain Amendment Number Two, among the Co-Owners, dated as
of February 24, 1977;

	5.
	Plant
Alvin W. Vogtle Additional Units Ownership Participation Agreement, among the Co-Owners, dated as of April 21, 2006 (the "Vogtle Additional Units
Ownership Agreement");

	6.
	Plant
Alvin W. Vogtle Nuclear Units Amended and Restated Operating Agreement, among the Co-Owners, dated as of April 21, 2006;

	7.
	Plant
Hal Wansley Purchase and Ownership Participation Agreement, between Georgia Power Company and the Borrower, dated as of March 26, 1976, as amended by that certain
Amendment, dated as of January 15, 1995;

	8.
	Plant
Hal Wansley Operating Agreement, between Georgia Power Company and Borrower, dated as of March 26, 1976;

	9.
	Plant
Hal Wansley Combustion Turbine Agreement, between Georgia Power Company and the Borrower, dated as of August 2, 1982, and Amendment No. 1, dated as of
October 20, 1982;

	10.
	Edwin
I. Hatch Nuclear Plant Purchase and Ownership Participation Agreement, between Georgia Power Company and the Borrower, dated as of January 6, 1975;

	11.
	Edwin
I. Hatch Nuclear Plant Operating Agreement, between Georgia Power Company and the Borrower, dated as of January 6, 1975;

	12.
	The
Rocky Mountain Pumped Storage Hydroelectric Project Operating Agreement, dated as of November 18, 1988, between the Borrower and Georgia Power Company;

	13.
	The
Rocky Mountain Pumped Storage Hydroelectric Project Operating Agreement, dated as of November 18, 1988, between the Borrower and Georgia Power Company; 

	14.
	Plant
Wansley CC Projects Operating Agreement, dated as of June 1, 2002, among Georgia Power Company (GPC), Chattahoochee, Municipal Electric Authority of Georgia (MEAG) and
Southern Power Company (SPC);

	15.
	Wansley
CC Projects Agreement Regarding Allocation of Costs, Administration of the Allocation of Natural Resources and Other Matters, dated as of June 1, 2002 among
Chattahoochee, GPC, the Borrower, MEAG, the City of Dalton and SPC;

	16.
	Plant
Wansley CC Projects Ownership Participation Agreement, dated as of November 15, 2001, among GPC, Borrower and MEAG; and

	17.
	Agreement
For Operation and Maintenance of the Hal B. Wansley Combined Cycle Plant, dated as of July 11, 2001, between the Borrower and Siemens Westinghouse Operating Services
Company. 

 
 

SCHEDULE 3    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and the United States of America  

 SUBSIDIARIES  

	1.
	Black
Diamond Energy, Inc.

	2.
	Rocky
Mountain Leasing Corporation 

 
 

SCHEDULE 4    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and the United States of America  

 ADDITIONAL AFFIRMATIVE AND NEGATIVE COVENANTS  

Section 1    Definitions  

        Capitalized terms that are not defined in this Schedule 4 shall have the meanings set forth in the Agreement. The terms defined herein include both the
plural and the singular. 

        "Affiliates"
shall have the meaning given such term in the Purchase Agreement. 

        "Alternative
Floating Amount" shall have the meaning given such term in the Interest Rate Swap Agreements. 

        "Base
Capacity Price" shall have the meaning given such term in the Purchase Agreement. 

        "Contract"
shall mean any one of the NMBA and the Umbrella Agreement, including any schedules or exhibits thereto other than Appendix A to the NMBA, and including any
executed Nuclear Operating Agreement or other contract described at Section 2.3.2 of the NMBA. 

        "Equity
Transfer Interest" shall have the meaning given such term in the Purchase Agreement. 

        "Facility"
shall have the meaning given such term in the Purchase Agreement. 

        "General
Partner" shall have the meaning given such term in the Purchase Agreement. 

        "General
Partner Holding Company" shall have the meaning given such term in the Purchase Agreement. 

        "Intercreditor
Agreement" shall have the meaning given such term in the Rocky Mountain Participation Agreements. 

        "Interest
Rate Swap Agreements" shall mean the Interest Rate Swap Agreements, each dated as of December 1, 1992, between the Borrower and AIG Financial Products Corp. 

        "Monthly
Energy Payment" shall have the meaning given such term in the Purchase Agreement. 

        "NMBA"
shall mean the Second Amended and Restated Nuclear Managing Board Agreement, among the Co-Owners, dated as of April 21, 2006. 

        "Operating
Agent" shall have the meaning given such term in the Purchase Agreement. 

        "PCB
Documents" shall mean the indentures, loan agreements, notes, letters of representation, insurance policies, tender agent agreements, remarketing agreements and liquidity and
standby bond purchase agreements entered into in connection with the Pollution Control Bonds and the Interest Rate Swap Agreements. 

        "Pollution
Control Bonds" shall mean those pollution control revenue bonds issued for the benefit of the Borrower between January 1, 1992 and March 11, 1997, for which
security was provided, on the date of their respective issuances, under the RUS Mortgage. 

        "Purchase
Agreement" shall mean the Power Purchase Agreement, dated as of June 12, 1992, between the Borrower and Seller, as amended from time to time. 

        "Rocky
Mountain Lease Transaction" shall mean the lease and leaseback arrangements of the Borrower's undivided interest in the Rocky Mountain Pumped Storage Hydroelectric Project, as
contemplated by the Rocky Mountain Participation Agreements. 

 

        "Rocky
Mountain Participation Agreements" shall mean those certain four (4) Participation Agreements, dated as of December 30, 1996 and those certain two
(2) Participation Agreements, dated as of January 3, 1997, between the Borrower, Rocky Mountain Leasing Corporation and certain other parties identified therein, including Philip Morris
Capital Corporation, NationsBanc Leasing and R. E. Corporation and First Chicago Leasing Corporation, as Owner Participants, as such agreements may hereafter be amended or supplemented from time to
time. 

        "Rocky
Mountain Transaction Documents" shall be as defined in the Rocky Mountain Participation Agreements. 

        "Scherer
Participation Agreements" shall mean the Participation Agreements, dated as of December 30, 1985, between the Borrower and each of IBM Credit Finance Corporation, HEI
Investment Corp., Ford Motor Credit Corporation and Chrysler Capital Corporation, as such agreements have been or may hereafter be amended or supplemented from time to time. 

        "Scherer
Transaction" shall mean the sale and leaseback arrangements of the Borrower's 60% undivided interest in Unit No. 2 of Plant Robert W. Scherer, as contemplated by the
Scherer Participation Agreements. 

        "Scherer
Transaction Documents" shall be as defined in the Scherer Participation Agreements. 

        "Seller"
shall mean the Hartwell Energy Limited Partnership. 

        "Senior
Creditors" shall have the meaning given such term in the Intercreditor Agreement. 

        "Senior
Financing Agreements" shall have the meaning given such term in the Intercreditor Agreement. 

        "Senior
Secured Parties" shall have the meaning given such term in the Intercreditor Agreement. 

        "Settlement
Price" shall have the meaning given such term in the Purchase Agreement. 

        "Termination
Event" shall have the meaning given such term in the Interest Rate Swap Agreements. 

        "Transco
Energy" shall have the meaning given such term in the Purchase Agreement. 

        "Umbrella
Agreement" shall mean the ITSA, Power Sale and Coordination Umbrella Agreement, dated as of November 12, 1990. 

Section 2    Notices  

        The Borrower shall promptly furnish to the RUS, or notify the RUS of, any of the following as soon as practical after receipt thereof or after it has obtained
actual knowledge thereof: 

	(i)
	Copies
of:

	(a)
	All
notices, certificates and opinions which the Borrower receives in connection with the transaction under the terms of the Scherer Transaction Documents;

	(b)
	Any
executed "Nuclear Operating Agreement" (as defined by the NMBA);

	(c)
	Any
and all "Strategic Plans" (as defined in the NMBA) approved under the NMBA;

	(d)
	Any
amendment to Appendix A of the NMBA;

	(e)
	Any
agreement entered into between the Seller and the Operating Agent; or

	(f)
	All
notices or other communications given to or received by the Borrower with respect to any "Event of Default," "Loan Event of Default" or "Subordinated Deed to Secure Debt 

2

 

and
Security Agreement Event of Default" under any "Operative Document" (all as defined in the Rocky Mountain Participation Agreements). 

	(ii)
	Any
attempt to remove the Borrower as agent under Article IV of the Rocky Mountain Pumped Storage Hydroelectric Project Operating Agreement, dated as of
November 18, 1988, between the Borrower and Georgia Power Company (the "Ownership Agreement"), or Article VIII of the Ownership Agreement; or the occurrence of any default under
the Ownership Agreement or the Rocky Mountain Pumped Storage Hydroelectric Project Ownership Agreement, dated as of November 18, 1988, between the Borrower and Georgia Power Company, which is
material and is continuing; or

	(iii)
	Any
of the following and, if the RUS so requests in writing, the Borrower shall provide information concerning any of the following in form and substance satisfactory
to the RUS:

	(a)
	That
a default or event of default has occurred under any of the PCB Documents;

	(b)
	That
a default or event of default under any of the PCB Documents has been cured;

	(c)
	That
the Borrower has been called upon to protect, indemnify or otherwise hold harmless any person or entity pursuant to any of the PCB Documents;

	(d)
	That
an event has occurred which causes the Alternative Floating Amount to become effective under any of the Interest Rate Swap Agreements;

	(e)
	That
any trustee under any PCB Document has resigned, been removed or has become incapable of acting;

	(f)
	That
a Termination Event has occurred under any of the Interest Rate Swap Agreements;

	(g)
	That
any of the PCB Documents have been terminated or partially terminated;

	(h)
	That
any of the Contracts have expired or have been terminated, extended or assigned either by any of the parties thereto or by a "Governmental Authority" (as defined in the
applicable Contract) or that the parties to such Contract have executed an amendment to such Contract or any Governmental Authority has amended such Contract;

	(i)
	That
a party to the NMBA, including the Borrower, has referred a dispute to arbitration pursuant to Section 9.14 of the NMBA, and thereafter, the results of such arbitration;

	(j)
	That
a party to any Contract, including the Borrower, has commenced a legal proceeding either before a court or governmental agency with respect to such Contract (including, but not
limited to, applications to FERC);

	(k)
	The
President and Chief Executive Officer of the Borrower has concluded, or any other party to a Contract has given the Borrower written notice alleging, that a party to such Contract
has failed to act in accordance with Prudent Utility Practices (as defined in the applicable Contract) or has engaged in willful misconduct; provided,
however, that Borrower shall not be obligated to notify the RUS of any action which could not reasonably be expected to have a Material Adverse Effect;

	(l)
	That
a person or entity has made a claim against any party to a Contract (including the Borrower); provided, however, that the Borrower
need not provide notice of any claim the payment of which could not reasonably be expected to have a Material Adverse Effect;

	(m)
	That
any member of the Borrower has sought service from Georgia Power Company pursuant to the "Antitrust Conditions" (as defined in the Umbrella Agreement); 

3

 

	(n)
	That
any representation or warranty of Georgia Power Company under Section 7.2 of the Umbrella Agreement or any matter in the legal opinion furnished to Borrower under
Section 7.4 of the Umbrella Agreement is incorrect or in dispute;

	(o)
	That
as the result of any audit conducted pursuant to a party's rights under any Contract, such party has made a claim or reserved the right to make a claim for an adjustment in an
amount in excess of $10,000,000 for any charge made by Georgia Power Company under such contract; provided however, that the dollar amount stated in this condition is in January 1, 1991 dollars
and shall be escalated annually for inflation using the Handy-Whitman Index of Public Utility Construction Costs (South Atlantic Region);

	(p)
	That
a Governmental Authority (as defined in the NMBA) has assessed against the Operating Agent (as defined in the NMBA) a criminal penalty of any kind or a civil
penalty of more than $110,000 or, when added to any other civil penalty assessed within the previous 12 months, is in the aggregate in excess of $440,000;

	(q)
	That
a management audit is being conducted pursuant to Section 5.4 of the NMBA and, when applicable, that such audit has been concluded;

	(r)
	That
the Borrower has received notice pursuant to Section 5.1.2 of the Nuclear Operating Agreement (as defined by the NMBA) that a proceeding has been initiated in which
the "Operating Agent" (as defined in the NMBA) is a party;

	(s)
	That
the Purchase Agreement has expired or has been terminated or amended, or that the Seller has assigned or otherwise transferred the Facility or its rights and obligations under
the Purchase Agreement to any other entity;

	(t)
	That
a notice of termination of the Purchase Agreement has been either delivered or received by the Borrower;

	(u)
	That,
pursuant to Section 5.5 of the Purchase Agreement, the Seller has obtained an increase in the Base Capacity Price or the Monthly Energy Payment and the amount of such
increase;

	(v)
	That
a filing has been made with the FERC for approval, or that FERC on its own motion has proposed a change to any charge, rate or tariff under the Purchase Agreement, and,
thereafter, the action taken by FERC;

	(w)
	That
(i) the Borrower has provided written notice to the Seller that the Seller has defaulted under the Purchase Agreement and whether the Borrower is considering terminating
the Purchase Agreement and exercising its option to purchase the Facility if the default is not cured, or (ii) the Seller has defaulted under the Purchase Agreement, even though the Borrower
has not yet provided written notice to the Seller to that effect, except that the Borrower shall not be obligated to provide notice of defaults if the Borrower reasonably believes that the default
will be satisfactorily cured within two (2) days following the default; provided, however, that the Borrower shall provide notice to the RUS after such two day period if the default has not
been cured;

	(x)
	That
the Borrower has received notice that it is in default under the Purchase Agreement;

	(y)
	That
a default under the Purchase Agreement has not been cured within the period provided in the Purchase Agreement;

	(z)
	That
Transco Energy or any of its Affiliates has transferred an Equity Transfer Interest; 

4

 

	(aa)
	That
Transco Energy or any of its Affiliates has sold more than fifty percent of the outstanding stock of a General Partner Holding Company;

	(ab)
	That
as a result of an audit conducted by the Borrower pursuant to Section 14.3 of the Purchase Agreement, the Borrower has requested an adjustment to the payments made by the
Borrower in an amount in excess of $5 million, or has requested to reserve the right to request such an adjustment; provided, however, that the dollar amount stated in this subsection is in
January 1, 1992 dollars and shall be escalated annually for inflation using the Handy-Whitman Index of Public Utility Construction Costs (South Atlantic Region); or

	(ac)
	That
any insurance coverage required under the Purchase Agreement has lapsed, been canceled or, for any other reason, is not in effect. 

Section 3    Amendments  

        The Borrower shall not, without first complying with the requirements of Section 9.1 of the Agreement, amend, supplement, waive, terminate, extend or
assign any of the agreements set forth below or agree to do so (except to the extent specifically governed by Sections 5 or 6 of this Schedule 4): 

	(a)
	Section 168
Agreement and Election dated as of April 7, 1982, between Continental Telephone Corporation and the Borrower;

	(b)
	Section 168
Agreement and Election dated as of April 9, 1982, between National Service Industries, Inc. and the Borrower;

	(c)
	Section 168
Agreement and Election dated as of April 9, 1982, between Rollins, Inc. and the Borrower;

	(d)
	The
PCB Documents;

	(e)
	The
Scherer Transaction Documents;

	(f)
	The
Contracts;

	(g)
	The
Purchase Agreement; or

	(h)
	The
Rocky Mountain Transaction Documents. 

        Each
of the foregoing actions shall be considered described in paragraph (a) of Section 9.1 of the Agreement and shall be subject to the review and objection period
set forth in such paragraph. 

Section 4    1985 — Plant Scherer Leveraged Lease  

        4.1    Direction of the RUS. Whenever requested in writing to do so by the RUS, such requests to be made
for good cause as determined solely in the absolute discretion of the RUS, the Borrower shall exercise such rights and powers as may be vested in the Borrower and make such elections and requests as
may
be available to the Borrower, under the terms of the Scherer Transaction Documents in such manner and at such times as the RUS may so specify. 

        4.2    Options to Purchase; Assignment; Etc. The Borrower shall not, without the prior written approval
of the RUS, exercise any of its options to purchase or renew its lease of an "Undivided Interest" as defined in the Scherer Participation Agreements; or assign, sublease, transfer or encumber its
leasehold interest in the Undivided Interest. 

5

 

Section 5    GPC Agreements  

        5.1    Actions Requiring Consent of the RUS. The Borrower shall not, without the prior written consent
of the RUS, execute any conforming amendment to the "Joint Committee Agreement" (as defined in the NMBA). 

        5.2    Notice of Approval or Rejection of Certain Contracts. The Borrower shall not, without the prior
written approval of the RUS, vote as a member of the "Nuclear Managing Board" (as defined in the NMBA) to approve or reject any Contract as described in Section 2.3.2 of the NMBA that
would have been subject to the prior approval of the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935 and the regulations thereunder, in each case as in
effect on August 1, 2005, including, without limitation, 17 C.F.R. §§ 250.80 - 250.95, unless and until the Borrower shall have
first given the RUS written notice of the proposed vote not less than 60 days prior to such vote. If, upon receipt of such notice, the RUS shall notify the Borrower within the
60-day period preceding the vote of an objection to the proposed vote, then the Borrower shall not vote until it has obtained RUS approval of such vote. 

        5.3    Audits. Upon the request of the RUS, the Borrower shall conduct, to the satisfaction of the RUS,
either a management audit or a cost audit, as provided in Sections 5.4 and 5.5, respectively, of the NMBA. If the RUS requests in writing, the Borrower shall appoint the
United States Department of Agriculture and the employees and representatives thereof as its duly authorized representative for the purpose of conducting any such management audit or cost
audit, whether or not such audit is initiated at the direction of the RUS. 

Section 6    Hartwell Power Purchase Agreement  

        6.1    Actions Requiring Consent of RUS. The Borrower shall not, without the prior written consent of
RUS, take any of the following actions: 

	(a)
	Pursuant
to Section 3.3 of the Purchase Agreement, exercise its option to take title to the Facility by paying Seller the Settlement Price; or

	(b)
	Pursuant
to Article XIII of the Purchase Agreement, exercise its option to purchase all or any part of the Facility. 

        6.2    Termination Provisions. The following provisions shall apply to a termination of the Purchase
Agreement by the Borrower: 

	(a)
	The
Borrower shall not give notice of termination to the Seller unless the RUS has received written notice from the Borrower of its intent to terminate (a "Default Termination
Notice") not less than 30 days prior to the date that the termination notice is delivered to the Seller. The Borrower may deliver the termination notice to the Seller so long as the RUS has not
notified the Borrower within the later of 29 days of receipt of the Default Termination Notice or one business day prior to the Borrower's delivery of a notice of termination to Seller that the
RUS objects to the Borrower terminating the Purchase Agreement. The Borrower shall provide to its Board of Directors any written comments which the RUS provides to the Borrower with respect to the
termination; and

	(b)
	If
the termination is pursuant to any other provision of the Purchase Agreement, including Section 3.4 thereof, the Borrower shall not, without the prior written consent of the
RUS, exercise its right to terminate the Purchase Agreement. 

        6.3    Option to Purchase Equity of Transco or Affiliates. The Borrower shall not exercise its option,
pursuant to Section 13.2.2 of the Purchase Agreement, to purchase equity held by Transco Energy or any Affiliate in any General Partner (i) unless the Borrower has promptly provided the
RUS with a copy of the written notice received from Seller and (ii) until the RUS has received from the Borrower 

6

 

written
notice of its intent to exercise such option not less than 30 days prior to the date the Borrower is to exercise its option or be deemed to have waived said option. The Borrower shall
provide the RUS with such information available to the Borrower with respect to its option as the RUS may request. The Borrower shall also provide the RUS with a report analyzing the economic and
business feasibility of the proposed acquisition no less than 60 days prior to the date the Borrower is to exercise its option. The Borrower shall promptly provide the RUS with any information
which affects the information or report it has previously provided to the RUS pursuant to this Section 6.3. The Borrower shall provide to its Board of Directors any written comments which the
RUS provides to the Borrower with respect to the exercise of its option under Section 13.2.2 of the Purchase Agreement. The Borrower may exercise its option under said Section 13.2.2 so
long as the RUS has not notified the Borrower within 29 days of receipt by the RUS of notice from the Borrower that the RUS objects to the Borrower's exercising such option. 

        6.4    Option to Purchase Equity Transfer Interest. The Borrower shall not exercise its option, pursuant
to Section 13.3 of the Purchase Agreement, to purchase any Equity Transfer Interest (i) unless the Borrower has promptly provided the RUS with a copy of the written notice received from
Seller and (ii) until the RUS has received from the Borrower written notice of its intent to exercise such option not less than 60 days prior to the date the Borrower is to exercise its
option or be deemed to have waived said option. The Borrower shall provide the RUS with such information available to the Borrower with respect to its option as the RUS may request. The Borrower shall
provide the RUS with a report analyzing the economic and business feasibility of the proposed acquisition no less than 90 days prior to the date the Borrower is to exercise its option. The
Borrower shall promptly provide the RUS with any information which affects any information or report it has previously provided to the RUS pursuant to this Section. The Borrower shall provide to its
Board of Directors any written comments which the RUS provides to the Borrower with respect to the exercise of its option under Section 13.3 of the Purchase Agreement. The Borrower may exercise
its option under said Section 13.3 so long as the RUS has not notified the Borrower within 59 days of receipt by the RUS of notice from the Borrower that the RUS objects to the
Borrower's exercising such option. 

        6.5    Consent Provision. The Borrower shall not give its written consent to any agreement between the
Seller and the Operating Agent until 14 days after the Borrower has provided the RUS with a copy of the proposed agreement substantially in the form it is to be executed. 

        6.6    Audit. Upon the written request of the RUS, the Borrower shall take any of the following actions: 

	(a)
	Conduct,
to the satisfaction of the RUS, an audit pursuant to Section 14.3 of the Purchase Agreement;

	(b)
	Appoint
the United States Department of Agriculture and the employees and representatives thereof as its duly authorized agent for the purpose of conducting an audit pursuant
to Section 14.3 of the Purchase Agreement; or

	(c)
	Promptly
take such actions as may be required to terminate the Purchase Agreement pursuant to its terms if the RUS determines that the failure of the Borrower to do so would have a
Material Adverse Effect. 

Section 7    Rocky Mountain Lease Transaction  

        The Borrower will not enter into or consent to any amendments or modifications of, or accept any waivers with respect to, any of the "Operative Documents"
(as defined in the Rocky Mountain Participation Agreements) which would adversely affect the rights or remedies of the Senior Secured Parties and Senior Creditors with respect to the "Undivided
Interest," the "Ground Interest" or the "Rocky Mountain Agreements" (as such terms are defined in the Rocky Mountain Participation 

7

 

Agreements)
under the Intercreditor Agreement or under the Senior Financing Agreements without the consent of the Government (which consent may be given or withheld in the sole and absolute discretion
of the Government). 

Section 8    Talbot Project and Chattahoochee Project  

 8.1    Insurance on Projects  

        The Borrower will maintain insurance against acts of terrorism on the Projects, naming the Trustee as an additional insured and loss payee; provided, however, at
least thirty (30) days prior to the initial date of such policy of insurance or any renewal date thereof, the Borrower will provide RUS a quote for such insurance against acts of terrorism, and
RUS may waive the requirement for such insurance if RUS determines the cost of such insurance is unreasonable. 

 8.2    Fuel Supply Plan  

        Upon reasonable written request of RUS, the Borrower will provide to RUS its then current fuel supply plan for the Projects. 

 8.3    Maintenance of Warranties  

        The Borrower shall undertake all maintenance and other activities with respect to the Projects as necessary to keep in full force and effect all manufacturer's
warranties applicable to the Projects. 

 8.4    Engineer's Certification  

        The Borrower agrees that upon reasonable written request of RUS, which request shall be made no more frequently than once every two years, the Borrower will
supply promptly to RUS a certification (the "Engineer's Certification"), in form satisfactory to RUS, prepared by a professional engineer, who shall be satisfactory to RUS, as to the condition
of the Projects. In the event such Engineer's Certification identifies any defects with respect to the Projects, the Borrower will undertake such remedial action to correct such defects as RUS may
reasonably request. 

 8.5    Tax Abatement Arrangements  

        In the event the Borrower enters into a lease pursuant to Section 5.1 H of the Indenture with respect to either of the Projects for purposes of ad valorem
tax abatement, the Borrower agrees: 

	(a)
	That
it will duly observe and perform in all material respects its obligations under any such lease;

	(b)
	That
it will not transfer or convey to any third party any bond or other evidence of indebtedness it may purchase in connection with any such lease; and

	(c)
	That
it will terminate, upon written request of RUS, any such lease if the ad valorem tax abatement benefits achieved as a consequence of such lease are no longer being realized in
any material part. 

Section 9    Waiver  

        Any of the requirements contained in this Schedule 4 may be waived by the RUS upon written notice provided to the Borrower;  provided, however, that such waiver may be rescinded by the RUS, in the sole discretion of the RUS, upon written notice of such rescission provided to
the Borrower. In the event written notice is provided to the Borrower that a waiver has been rescinded, then the requirements to which the notice relates shall be fully binding upon and enforceable
against the Borrower 30 days after such notice is received by the Borrower, and such rescission shall not affect any action taken pursuant to any such waiver during the period of its
effectiveness. 

8

 
 

SCHEDULE 5    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and the United States of America  

AD VALOREM TAX MATTERS IN MONROE COUNTY, GEORGIA

        2003 Appeal.    On October 28, 2003, the Monroe County Board of Assessors issued its assessment of Oglethorpe's interest
in Plant Scherer for the 2003 tax year. While the state valued this interest at $330,538,885, Monroe County's assessment used a valuation of $898,722,327. On December 11, 2003, Oglethorpe
appealed Monroe County's valuation by filing a notice of arbitration with the Monroe County Board of Tax Assessors. 

        2004 Appeal.    On July 8, 2004, the Monroe County Board of Assessors issued its assessment of Oglethorpe's interest in
Plant Scherer for the 2004 tax year. While the state valued this interest for the 2004 tax year at $362,685,639, Monroe County's assessment used a valuation of $817,826,084. On August 20, 2004,
Oglethorpe appealed Monroe County's valuation by filing a notice of arbitration with the Monroe County Board of Tax Assessors. 

        2005 Appeal.    On January 4, 2006, the Monroe County Board of Assessors issued its assessment of Oglethorpe's interest
in Plant Scherer for the 2005 tax year. While the state valued this interest at $344,902,128, Monroe County's assessment used a valuation of $981,199,888. On February 10, 2006, Oglethorpe
appealed Monroe County's valuation by fling a notice of arbitration with the Monroe County Board of Tax Assessors. 

        The
arbitration for the three appeals will be heard by a panel of arbitrators, with the right of appeal first to Monroe County Superior Court and then to the Georgia appellate courts.
None of the appeals has been sent to the arbitrators. 

        Oglethorpe
accrues for ad valorem taxes on a monthly basis, which are generally paid in the fourth quarter of the year. For 2005, 2004 and 2003, Oglethorpe increased its accrual by
$6,849,000, $4,096,000 and $4,884,000, respectively, for ad valorem taxes relating to Plant Scherer; however, Oglethorpe plans to vigorously oppose these increased assessments through the appeals
process described above. 

ENVIRONMENTAL MATTERS

 Sierra Club v. Georgia Power Company, Civil Action No. 3:02-CV-151 (December 30, 2002)  

        In December 2002, the Sierra Club, Physicians for Social Responsibility, Georgia Forest Watch and one individual filed suit in Federal Court in Georgia
against Georgia Power Company (GPC) alleging violations of the Clean Air Act at Plant Wansley. The complaint alleges violations of opacity limits at both the coal-fired units, in which
Oglethorpe is a co-owner, and other violations at several of the combined cycle units in which Oglethorpe has no ownership interest. This civil action requests injunctive and declaratory
relief, civil penalties, a supplemental environmental project and attorneys' fees. In December 2004, the U.S. District Court for the Northern District of Georgia issued an Order
holding GPC liable for certain violations of opacity limits at the coal-fired units. In March 2005, the U.S. Court of Appeals for the Eleventh Circuit allowed an
immediate appeal of the Court's Order. In March 2006, the Eleventh Circuit reversed the Order, remanding it back to the District Court for trial on the issues. While Oglethorpe believes that
Plant Wansley has complied with applicable laws and regulations, resolution of this matter is uncertain at this time, as is Oglethorpe's responsibility, if any, for a share of any penalties or other
costs that might be assessed against GPC. 

 Sierra Club v. Johnson, Docket No. 06-10714-E (January 25, 2006)  

        In January 2003, the Sierra Club appealed an unsuccessful challenge to an air operating permit for the Chattahoochee combined cycle facility to the U. S.
Court of Appeals for the Eleventh Circuit. 

Oglethorpe
acquired this facility when it merged with Chattahoochee EMC in May 2003. Oglethorpe intervened in the appeal on behalf of the U.S. Environmental Protection Agency (EPA). In
May 2004, the Court ruled in favor of the Sierra Club, invalidating EPA's denial of the petition and remanding the matter to EPA for further consideration. In November 2005, EPA issued
an order denying Sierra Club's petition to object to the Chattahoochee facility's air operating permit. In January 2006, the Sierra Club filed an appeal of that order to the U.S. Court
of Appeals for the Eleventh Circuit. Oglethorpe has again intervened in the appeal on behalf of EPA. Although Oglethorpe believes that the appeal will not affect facility operations pending further
consideration and that favorable outcome in this matter is likely, an unfavorable ruling could temporarily affect the ability of the facility to continue operations. 

PERSONAL INJURY LAWSUIT

        Goodman et al v. Georgia Power Company, MEAG, Oglethorpe and City of Dalton, State Court of Whitfield County, Georgia

        The
Goodman case is a premises liability personal injury case arising out of a fall and resulting injury that occurred at Plant Wansley, owned jointly by MEAG, Oglethorpe, the City of
Dalton, and Georgia Power Company. Mr. Goodman and his wife sued all four co-owners, alleging negligence on the part of the defendants and seeking money damages for medical
expenses, lost wages, and pain and suffering. 

        The
State Court granted the co-owners' Motion for Summary Judgment, which would dismiss the case. However, the Goodmans have filed an appeal with the Superior Court of
Whitfield County. This matter is being handled by insurance defense. Oglethorpe's maximum potential liability is $600,000 (the amount of its deductible). 

 
 

EXHIBIT A    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation) and the

United States of America  

 DESCRIPTION OF PROJECTS  

"Chattahoochee
Project" shall mean the following generation facility located in Heard and Carroll Counties, Georgia: 

        An
intermediate facility with a nominal capacity of approximately 520 MW, consisting of two Siemens Westinghouse V84.3A Combustion Turbines and auxiliaries, heat
recovery steam generators (HRSG), and steam turbines operating in combined cycle service in a "2 on 1" configuration. 

"Talbot
Project" shall mean the following generation facilities located in Talbot County, Georgia: 

        Peaking
facilities with a nominal aggregate capacity of approximately 432 MWs, consisting of four Siemens Westinghouse V84.2 combustion turbines and
auxiliaries operating in simple cycle service; and 

        Peaking
facilities with a nominal aggregate capacity of approximately 216 MWs, consisting of two Siemens Westinghouse V84.2 combustion turbines and
auxiliaries operating in simple cycle service. 

 
 

EXHIBIT B    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and the United States of America  

 EQUAL OPPORTUNITY CONTRACT PROVISIONS  

During
the performance of this contract, the contractor agrees as follows: 

	(a)
	The
contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. The contractor shall take affirmative
action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex or national origin. Such action shall include, but
not be limited to the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection
for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions
of this nondiscrimination clause.

	(b)
	The
contractor shall, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants shall receive consideration
for employment without regard to race, color, religion, sex or national origin.

	(c)
	The
contractor shall send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be
provided advising the said labor union or workers' representative of the contractor's commitments under this section, and shall post copies of the notice in conspicuous places available to employees
and applicants for employment.

	(d)
	The
contractor shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations and relevant orders of the Secretary of
Labor.

	(e)
	The
contractor shall furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations and orders of the
Secretary of Labor, or pursuant thereto, and shall permit access to his books, records and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations and orders.

	(f)
	In
the event of the contractor's noncompliance with the non-discrimination clauses of this contract or with any of the said rules, regulations or orders, this contract may
be canceled, terminated or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with
procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in said Executive Order or by rule,
regulation or order of the Secretary of Labor, or as otherwise provided by law.

	(g)
	The
contractor shall include the provisions of paragraphs (a) through (g) in every subcontract or purchase order unless exempted by rules, regulations or
orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246, dated September 24, 1965, so that such provisions shall be binding upon each subcontractor or
vendor. The contractor shall take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for
noncompliance. Provided, however, that in the event a contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the agency, the
contractor may request the United States to enter into such litigation to protect the interests of the United States. 

 
 

EXHIBIT C    
    

to the Second Amended and Restated Loan Contract,

dated as of May 31, 2006, between Oglethorpe Power Corporation

(An Electric Membership Corporation)

and United States of America  

 DESCRIPTION OF RATING AGENCY SERVICES  

	(a)
	Credit
evaluation and assignment of long term credit rating;

	(b)
	Ongoing
evaluation of Borrower's rating, including a credit report published annually;

	(c)
	Annual
presentation by senior Rating Agency analysts on Borrower's credit rating to the RUS, if requested by the RUS; and

	(d)
	Furnish
to the RUS copies of any written reports to Borrower. 

QuickLinks

TABLE OF CONTENTS

SCHEDULES AND EXHIBITS

SECOND AMENDED AND RESTATED LOAN CONTRACT

RECITALS

ARTICLE I — DEFINITIONS

ARTICLE II — REPRESENTATIONS AND WARRANTIES

ARTICLE III — THE LOANS

ARTICLE IV — CONDITIONS OF LENDING

ARTICLE V — AFFIRMATIVE COVENANTS

ARTICLE VI — NEGATIVE COVENANTS

ARTICLE VII — EVENTS OF DEFAULT

ARTICLE VIII — REMEDIES

ARTICLE IX — MISCELLANEOUS

SCHEDULE 1

SCHEDULE 2

SCHEDULE 3

SCHEDULE 4

SCHEDULE 5

EXHIBIT A

EXHIBIT B

EXHIBIT C

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