Document:

ex10-10tojune302007form10q.htm

    
      EXHIBIT
        10.10

    

    
      

      AMENDED
        AND RESTATED

    

    
      SUPPLEMENTAL
        EXECUTIVE RETIREMENT AGREEMENT

       

      

    

    THIS
      AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT is
      made as of the 29th day of June, 2007,between Merchants and Manufacturers
      Bancorporation, Inc., a Wisconsin corporation and its successor and assigns
      (collectively, “Employer”) and John Krawczyk, an adult resident of the State of
      Wisconsin (the “Executive”).

     

    RECITALS

     

    WHEREAS,
      Executive is a key employee of Employer, and

     

    WHEREAS,
      Executive possesses unique knowledge and skills that are integral to Employer’s
      continued success,

     

    WHEREAS,
      Employer established this Agreement on January 1, 2004 for purposes of
      promoting in Executive the strongest interest in the successful operation of
      Employer and increased efficiency in Executive’s work and to provide Executive
      with additional benefits upon retirement, death, disability or other termination
      of employment; and

     

    WHEREAS,
      Employer and Executive now wish to amend and restate this Agreement to comply
      with the requirements of Internal Revenue Code Section 409A.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of services to be performed after the date of this
      Agreement but prior to Executive’s retirement or other Separation From Service
      and in consideration of the foregoing Recitals and the agreements set forth
      below, the parties hereto agree as follows:

     

    1.            
      Definitions.

     

    (a)           Age–
      “Age” shall mean the age of the person as of his/her last birthday.

     

    (b)           Beneficiary–
      “Beneficiary” shall mean the individual, individuals, entity or entities that
      Executive designates, in accordance with Section 2.6 below, as the recipient
      of
      any benefits that may be payable under this Agreement following Executive’s
      death.  

     

    (c)           Board
      of Directors– “Board of Directors” shall refer to the complete Board of
      Directors of the organization designated in each reference.

     

    (d)           Change
      in Control– For purposes of this Agreement, a “Change in Control” shall be
      deemed to have occurred if any “individual, entity or group” (as such term is
      used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
      or indirectly, of securities representing 25% or more of the voting power of
      the
      securities of MMBC or any of MMBC’s affiliates or becomes the owner of all or
      substantially all of the assets of MMBC or any of Employer’saffiliates or if the
      shareholders of MMBC or an affiliate of MMBC approve a reorganization, merger
      or
      consolidation of MMBC or any affiliates of MMBC.  “Change in Control”
shall not refer to or include any transaction involving only entities affiliated
      directly or indirectly with MMBC.  The Executive
      Personnel/Compensation Committee of MMBC shall, in its sole discretion,
      determine whether a particular event or a series of events are related to a
      corporate reorganization, restructuring, refinancing or other similar occurrence
      referenced in the last sentence.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)           Disability–
      “Disability” shall mean, if Executive is insured under a long-term disability
      insurance policy the premiums for which are paid by Employer, the individual
      is
      determined to have suffered a total disability (or equivalent designation)
      under
      such policy.  If Executive is not insured under such a disability
      insurance policy, “Disability” shall mean Executive’s inability, as the result
      of physical or mental incapacity, to substantially perform his duties for a
      period of 180 consecutive days.  If Executive and Employer cannot
      agree as to the existence of a disability, the determination shall be made
      by a
      qualified independent physician acceptable to both parties, or alternatively,
      by
      a physician designated by the president of the medical society for the county
      in
      which Executive resides.  The costs of any such medical examination
      shall be borne by Employer.

     

    (f)           Discharge
      for Cause– “Discharge for Cause” shall mean Executive’s Separation From
      Service by Employer because of:

     

    (1)           A
      failure by Executive to substantially perform his duties (other than failure
      resulting from incapacity) after a written demand by the Board of Directors
      of
      the Employer, which demand identifies, with reasonable specificity, the manner
      in which the Board of Directors of the Employer believes Executive has not
      substantially performed, and Executive’s failure to cure within a reasonable
      period of time after his receipt of this notice;

     

    (2)           A
      criminal conviction of or plea of nolo contendere by Executive for any
      act involving dishonesty, breach of trust or a violation of the banking laws
      of
      the State of Wisconsin or the United States;

     

    (3)           A
      criminal conviction of or plea of nolo contendere by Executive for the
      commission of any felony;

     

    (4)           A
      breach of fiduciary duty by Executive involving personal profit;

     

    (5)           A
      willful violation of any law, rule or order by Executive (other than traffic
      violations or similar offenses); or

     

    (6)           Incompetence,
      personal dishonesty or material breach of any provision of this Agreement or
      any
      willful misconduct by Executive.

     

    For
      purposes of this definition, no act, or failure to act, on Executive’s part
      shall be deemed “willful” unless done, or omitted to be done, by Executive not
      in good faith and without reasonable belief that the action or omission was
      in
      the best interest of Employer.  A “Discharge for Cause” shall also be
      deemed to occur immediately and without a right to cure if:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (1)           Executive
      is suspended and/or temporarily prohibited from participating in the conduct
      of
      Employer’s or any of Employer’s affiliates’ affairs by a regulatory agency;
      or

     

    (2)           Executive
      is removed and/or permanently prohibited from participating in the conduct
      of
      Employer’s or any of Employer’s affiliates’ affairs by an order issued by a
      regulatory agency.

     

    (g)           Early
      Retirement Date– “Early Retirement Date” shall mean the first day of the
      month following the month in which Executive reaches age 55.

     

    (h)           Executive
      Personnel/Compensation Committee– “Executive Personnel/Compensation
      Committee” shall mean the Executive Personnel/Compensation Committee of MMBC’s
      Board of Directors.  If no such committee exists, then the outside
      directors of MMBC shall comprise the Executive Personnel/Compensation
      Committee.

     

    (i)           Employer–
      “Employer” shall mean Merchants and Manufacturers Bancorporation, Inc., a
      Wisconsin corporation, and any successor in interest to Merchants and
      Manufacturers Bancorporation, Inc..  

     

    (j)           MMBC–
      “MMBC” shall mean Merchants and Manufacturers Bancorporation, Inc., a Wisconsin
      corporation, and any successor in interest to Merchants and Manufacturers
      Bancorporation, Inc.]

     

    (k)           Normal
      Retirement Date– “Normal Retirement Date” shall mean the first day of the
      month following the month in which Executive reaches age 65.

     

    (l)           Reduced
      Benefit Factor– The “Reduced Benefit Factor” shall be the percentage of the
      benefit that the Executive could receive at a particular age, determined
      according to the attached Schedule A.  For example, at age 55, the
      Reduced Benefit Factor would be 25%, such that Executive would receive 25%
      of
      the benefits calculated under Section 2.1 below.

     

    (m)           Separation
      From Service– “Separation From Service” means the termination of the
      Executive’s employment with the Employer for reasons other than
      death.  Whether a Separation From Service takes place is determined in
      accordance with the requirements of Internal Revenue Code Section 409A based
      on
      the facts and circumstances surrounding the termination of the Executive’s
      employment and whether the Employer and the Executive intended for the Executive
      to provide significant services for the Employer following such
      termination.

     

    (n)           Specified
      Employee– “Specified Employee” shall have the same meaning as under Internal
      Revenue Code Section 409A and the regulations thereunder.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

    2.            
      Payment of Benefits.

     

       
    2.1           Benefits
      Upon Normal Retirement.

     

                   Upon
      Executive’s Separation From Service on or after the Normal Retirement Date,
      Employer shall pay to Executive (or to Executive’s Beneficiary or
      Beneficiaries), as compensation for services rendered prior to such date, an
      annual amount (payable in monthly installments) equal to fifty percent (50%)
      of
      the “base compensation” that Executive received from Employer during the
      calendar year immediately preceding Executive’s Separation From Service.
 Subject to the restriction in Section 2.8 below, payments
      under this Section shall commence on the first day of the month coincident
      with
      or next following Executive’s date of Separation From Service and continue for a
      period of 180 months thereafter.

     

                                   
      2.2           Benefits
      Upon Early Retirement.

     

                  
      Upon Executive’s Separation From Service on or after reaching the Early
      Retirement Date but prior to the Normal Retirement Date, Employer shall pay
      to
      Executive (or to Executive’s Beneficiary or Beneficiaries), as compensation for
      services rendered prior to such date an annual amount (payable in monthly
      installments) calculated under Section 2.1 above, multiplied by the Reduced
      Benefit Factor in Schedule A.  Subject to the restriction in Section
      2.8 below, such payments shall commence on the first day of the month coincident
      with or next following the date of Separation From Service and shall continue
      for a period of 180 months thereafter.

     

                   
      2.3           Benefits
      Upon Disability.

     

                  
      Upon Executive’s Separation From Service prior to the Normal Retirement Date due
      to Disability, no separate provision is made for a disability benefit under
      this
      Agreement.  However, any such Executive shall be considered,
      notwithstanding such Separation From Service, to continue to be an Executive
      in
      this Agreement, and in the event of such Executive’s death while disabled and
      for so long as the disability continues prior to reaching the Early Retirement
      Date, such Executive’s beneficiary shall receive the survivor’s benefits
      described in Section 2.5(a).  In the event Executive lives to the
      Early Retirement Date, Executive (or Executive’s Beneficiary or Beneficiaries)
      shall be entitled to receive the early retirement benefit described in Section
      2.2, such payments commencing on the first day of the month coincident with
      or
      next following the Early Retirement Date.

     

                                   
      2.4           Other
      Separations From Service.

     

    (a)           Voluntary
      Separation From Service Prior to the Early Retirement Date or Discharge for
      Cause at any Time.  Upon Executive’s voluntary Separation From
      Service prior to reaching the Early Retirement Date, for reasons other than
      death or Disability, or upon Executive’s Discharge for Cause at any time,
      Employer shall not be obligated to pay any benefit to Executive (or to
      Executive’s Beneficiary or Beneficiaries) pursuant to this Agreement, and
      Executive (and Executive’s Beneficiary or Beneficiaries) shall have no further
      right to receive any benefit hereunder.

     

    (b)           Involuntary
      Separation From Service Prior to the Early Retirement Date Other Than Because
      of
      Death, Disability or Discharge for Cause.  Upon Executive’s
      involuntary Separation From Service prior to reaching the Early Retirement
      Date,
      for reasons other than Death, Disability, or Discharge for Cause, Employer
      shall
      not be obligated to pay any benefit to Executive (or to Executive’s Beneficiary
      or Beneficiaries) pursuant to this Agreement, and Executive (and Executive’s
      Beneficiary or Beneficiaries) shall have no further right to receive any benefit
      hereunder.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (c)           Separation
      From Service At or After A Change in Control.  If Executive has a
      Separation From Service as a result of a Change in Control, Executive (or
      Executive’s Beneficiary or Beneficiaries) shall have a fully vested right to
      receive a lump sum payment equal to the greater of:  (i) the
      present value of the normal retirement benefit described in Section 2.1 above,
      calculated as if the payments would begin on Executive’s Normal Retirement Date
      and using a discount rate equal to 120% of the long-term applicable rate
      published by the IRS for the month in which the Change in Control occurs or
      (ii) three (3) times his or her highest annual compensation from Employer
      (determined on a calendar-year basis from the year prior to the Change in
      Control through the date of the Separation From Service).  Subject to
      the restriction in Section 2.8 below, the lump sum payment shall be made to
      Executive within thirty (30) days after the Executive’s date of Separation From
      Service.  For purposes of this Section 2.4(c), Executive’s Separation
      From Service shall be deemed to have resulted from a Change in Control
      if:  Employer terminates Executive’s employment for any reason other
      than death, Disability or Discharge for Cause, at any time:  (a)
      within ninety (90) days before a Change in Control; or (b) at any time within
      twelve (12) months after a Change in Control.  Executive’s Separation
      From Service shall also be deemed to have resulted from a Change in Control
      if,
      within ninety (90) days before or within twelve (12) months after a Change
      in
      Control, Executive has a voluntary Separation From Service after Employer has
      significantly lessened Executive’s title, duties, responsibilities or
      compensation or otherwise changed Executive’s employment status without
      Executive’s prior written consent.

     

    (d)           Transition
      Services.  If the Executive’s employment does not terminate as a
      result of a Change in Control, as provided in Subsection 2.4 (c) above, but
      Executive continues to work for Employer and/or for a successor employer for
      at
      least twelve (12) months following a Change in Control (the “Transition
      Period”), then upon Executive’s Separation From Service for any reason other
      than a Discharge for Cause, no benefits shall be payable under Section 2.1
      above, but Executive shall have a nonforfeitable right to receive benefits
      under
      this Agreement equal to the greater of: (i) the present value of the normal
      retirement benefit described in Section 2.1 above, calculated as if the payments
      would begin beginning on Executive’s Normal Retirement Date and using a discount
      rate equal to 120% of the rate provided for in Section 1274(d)(1)(B) of the
      Code
      for the month in which the Executive’s Separation From Service occurs or
      (ii) three (3) times his or her highest annual compensation from Employer
      (determined on a calendar-year basis from the year prior to the Change in
      Control through the date of the Change in Control) (such greater amount
      hereinafter referred to as the “Transition Benefit”).  Subject to the
      restriction set forth in Section 2.8 below, where the Separation From Service
      occurs within the two-year period following the date of the Change of Control,
      the payment of Transition Benefit shall be made to Executive within thirty
      (30)
      days after the Executive’s date of Separation From Service.  Where the
      Separation From Service occurs more than two years following the date of the
      Change of Control, the amount of the Transition Benefit shall be credited to
      a
      bookkeeping account (the “Account”) and shall be paid to the Executive in 180
      monthly installments payable on the declining balance method, commencing on
      the
      first date of the month coincident with or next following the date of Separation
      From Service (subject to the restriction set forth in Section 2.8 below) and
      continuing on the first day of each month thereafter until the balance of the
      Account has been paid to the Executive.  On December 31 of each year
      in which the Executive maintains a balance in the Account, the Account shall
      be
      credited with interest on the average weighted balance of the Account for the
      year at 100% of the annual short-term rate provided for in Section 1274(d)(1)(B)
      of the Code for the month of June of such year.  Each monthly
      installment that is paid to the Executive will reduce the balance in the
      Executive’s Account.  By way of illustration, if the average weighted
      balance in the Executive’s Account for 2015 is $200,000 and the ending balance
      on December 31, 2015 was $188,00, if the annual short-term rate provided for
      in
      Section 1274(d)(1)(B) for June 2015 is 5% and the Executivewere entitled to
      120
      remaining monthly installments, each monthly installment payment for 2016 would
      be $1,650 (($188,000 +$10,000)/120).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    2.5           Survivorship
      Benefits.

     

    (a)           Prior
      to Commencement of Normal or Early Retirement Benefits.  If
      Executive dies while in the service of Employer or after a Separation From
      Service due to Disability and while disabled or after a Separation From Service
      on or after the Early Retirement Date, but prior to commencement of any benefit
      payment under this Agreement, Employer shall pay to Executive’s Beneficiary or
      Beneficiaries a survivor’s benefit of 180 equal monthly installments equal to
      Executive’s fixed normal retirement benefit as described in Section 2.1 (and
      expressed as a monthly benefit), commencing on the first day of the month after
      Executive’s death and continuing on the first day of each month thereafter until
      all such payments are completed.  (In the event that there are
      multiple Beneficiaries, their combined benefit shall be equal to this
      amount.)  In the event a Beneficiary dies before receiving all the
      survivor’s benefit payments, the remaining payments shall be paid to the legal
      representatives of the Beneficiary’s estate.  Payment of the
      survivor’s benefit shall relieve Employer of the obligation to pay any other
      benefit, which Executive would have otherwise received under the terms of this
      Agreement.

     

    (b)           After
      Commencement of Benefits.  If Executive dies after any benefit
      payments have commenced, but prior to receiving all of the scheduled minimum
      number of monthly payments, Employer shall pay the remaining monthly payments
      to
      Executive’s Beneficiary or Beneficiaries.  (In the event that there
      are multiple Beneficiaries, their combined benefit shall be equal to this
      amount.)  In the event a Beneficiary dies before receiving all the
      remaining payments, the then-remaining payments shall be paid to the legal
      representatives of the Beneficiary’s estate.

     

                   
      2.6           Recipients
      of Payments:  Designation of Beneficiary.  All payments
      to be made by Employer shall be made to Executive, if living.  In the
      event of Executive’s death prior to the receipt of all benefit payments, all
      subsequent payments to be made under this Agreement shall be to Executive’s
      Beneficiary or Beneficiaries.  Executive shall designate a Beneficiary
      by filing a written notice of such designation with Employer in such form as
      Employer may prescribe.  Executive may revoke or modify said
      designation at any time by a further written designation.  Executive’s
      beneficiary designation shall be deemed automatically revoked in the event
      of
      the death of the Beneficiary or, if the Beneficiary is Executive’s spouse, in
      the event of dissolution of marriage.  If no designation shall be in
      effect at the time any benefits payable under this Agreement shall become due,
      the Beneficiary shall be the spouse, or if no spouse is then living, the legal
      representative of Executive’s estate.  All designations under this
      section must be made on the Beneficiary Designation form attached on Schedule
      B.

     

                   
      2.7           Potential
      Tax Consequences.  If the payment of any of the compensation or
      benefits contemplated under this Agreement (when added to any other payments
      or
      benefits provided to the Executive) will result in the payment of an “excess
      parachute payment,” as that term is defined in Section 280(G) of the Internal
      Revenue Code of 1986, as amended (the “Code”), then in such event, the Employer
      shall pay the Employee an additional amount for each calendar year in which
      an
      excess parachute payment is received by the Executive (the “Gross-up
      Payment”).  The Gross-up Payment is intended to cover the Executive’s
      liability for any parachute tax under Code Section 4999 on such excess parachute
      payment, as well as federal and state income taxes and parachute tax on the
      additional amount, and shall be computed using such reasonable calculation
      methods as adopted by the Board of Directors of the Employer at such
      time.  The Gross-up Payment shall be made to the Executive no later
      than the calendar year following the year in which the Executive remits the
      required parachute or other taxes to the federal or state tax
      authorities.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    2.8           Restriction
      on Timing of Distribution.  Notwithstanding any provision of this
      Agreement to the contrary, if the Executive is considered a Specified Employee
      at the time of his or her Separation From Service, under such procedures as
      established by the Employer, in accordance with Section 409A of the Code,
      benefit distributions that are made upon such Separation From Service may not
      commence earlier than six (6) months after the date of such Separation From
      Service.  Therefore, in the event this Section 2.8 is applicable to
      the Executive, any distributions which would otherwise be paid to the Executive
      within the first six months following the date of the Executive’s Separation
      From Service shall be accumulated and paid to the Executive in a lump sum on
      the
      first day of the seventh month following the Separation From
      Service.  All subsequent distributions shall be paid in the manner
      specified.

     

    3.            
      Successors; Binding
      Agreement.

     

    (a)           Employer
      will require any successor (whether direct or indirect, by purchase, merger,
      consolidation or otherwise) to substantially all of the business and/or assets
      of Employer (“Successor Organization”) to expressly assume and agree to perform
      this Agreement in the same manner and to the same extent that Employer would
      have been required to perform if no such succession had taken
      place.  If such succession is the result of a Change in Control, such
      assumption shall specifically preserve to Executive (and Executive’s Beneficiary
      or Beneficiaries), for the then remaining term of this Agreement, the same
      rights and remedies (recognizing them as being available and applicable as
      the
      result of the Change in Control effectuating said succession) provided under
      this Agreement upon a Change in Control. 

     

    (b)           No
      right or interest to or in any payments or benefits under this Agreement shall
      be assignable or transferable in any respect by Executive, nor shall any such
      payment, right or interest be subject to seizure, attachment or creditor’s
      process for payment of any debts, judgments, or obligations of
      Executive.

     

    (c)           Any
      rights and obligations of Employer under this Agreement may be assigned or
      transferred by Employer to any of its affiliates prior to a change in control
      as
      defined in this Agreement.

     

    4.            
      Administration and Interpretation of this
      Agreement.

     

                   
      Interpretation by the Employer and/or the Executive Personnel/Compensation
      Committee shall be final and binding upon Executive (and Executive’s Beneficiary
      or Beneficiaries).  The Employer and/or the Executive
      Personnel/Compensation Committee may adopt rules and regulations relating to
      this Agreement as it may deem necessary or advisable for the administration
      thereof.

     

    5.            
      Claims Procedure.

     

                   
      If Executive (or Executive’s Beneficiary or Beneficiaries) (each hereinafter
      referred to individually as a “Claimant”) is denied all or a portion of an
      expected benefit under this Agreement for any reason, he
      or she may file a claim with the Executive Personnel/Compensation
      Committee.  The Executive Personnel/Compensation Committee shall
      notify the Claimant within 60 days of allowance or denial of the claim, unless
      the Claimant receives written notice from the Executive
      Personnel/Compensation Committee prior to the end of the sixty (60) day period
      stating that special circumstances require an extension of the time for
      decision.  The notice of the Executive
      Personnel/Compensation Committee’s decision shall be in writing, sent by mail to
      Claimant’s last known address, and, if a denial of the claim, must contain the
      following information:

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (a)           the
      specific reasons for the denial;

     

    (b)           specific
      reference to pertinent provisions of the Agreement on
      which the denial is based; and

     

    (c)           if
      applicable, a description of any additional information or material necessary
      to
      perfect the claim, an explanation of why such information or material is
      necessary, and an explanation of the claims review procedure.

     

    6.             Review
      Procedure.

     

    (a)           A
      Claimant is entitled to request a review of any denial of Claimant’s claim by
      the Executive Personnel/Compensation Committee.  The request for
      review must be submitted in writing within 60 days of mailing of notice of
      the
      denial.  Absent a request for review within the 60-day period, the
      claim will be deemed to be conclusively denied.  The Claimant or
      Claimant’s representative shall be entitled to review all pertinent documents,
      and to submit issues and comments orally and in writing.

     

    (b)           If
      the request for review by a Claimant concerns the interpretation and application
      of the provisions of the Agreement and Employer’s obligations, then the review
      shall be conducted by a separate committee consisting of three persons
      designated or appointed by the Executive Personnel/Compensation
      Committee.  The separate committee shall afford the Claimant a hearing
      and the opportunity to review all pertinent documents and submit issues and
      comments orally and in writing and shall render a review decision in writing,
      all within sixty (60) days after receipt of a request for a review, provided
      that, in special circumstances (such as the necessity of holding a hearing)
      the
      committee may extend the time for decision by not more than sixty (60) days
      upon
      written notice to the Claimant.  The Claimant shall receive written
      notice of the separate committee’s review decision, together with specific
      reasons for the decision and reference to the pertinent provisions of this
      Agreement.

     

    (c)           Executive
      (and Executive’s Beneficiary or Beneficiaries) shall not be entitled to pursue
      any court or other relief under this Agreement unless Executive (or Executive’s
      Beneficiary or Beneficiaries) has first exhausted all of the remedies provided
      in Sections 6(a) and 6(b) above.

     

    7.             Life
      Insurance and Funding.

     

                   
      Employer in its discretion may apply for and procure as owner and for its own
      benefit, insurance on the life of Executive, in such amounts and in such forms
      as Employer may choose.  The Executive shall have no interest
      whatsoever in any such policy or policies, but at the request of Employer,
      Executive shall submit to medical examinations and supply such information
      and
      execute such documents as may be required by the insurance company or companies
      to whom Employer has applied for insurance.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

                  
      The rights of Executive (or Executive’s Beneficiary or Beneficiaries), or
      estate, to benefits under this Agreement shall be solely those of an unsecured
      creditor of Employer.  Any insurance policy or other assets acquired
      by or held by Employer in connection with the liabilities assumed by it pursuant
      to this Agreement shall not be deemed to be held under any trust for the benefit
      of Executive, Executive’s Beneficiary or Beneficiaries, or Executive’s estate,
      or to be security for this performance of the obligations of Employer but shall
      be, and remain, a general, unpledged, and unrestricted asset of
      Employer.

     

                   
      If Employer elects to protect against its liabilities under this Agreement
      by
      purchasing any insurance or other similar product on the life of Executive
      or on
      any pool or group of similarly situated individuals, then Executive acknowledges
      that Employer shall have no obligation to provide any benefits under this
      Agreement if Executive makes any material misstatement, fails to disclose any
      material information or otherwise acts in any way (e.g., commits suicide) which
      allows the underlying insurer to reduce or eliminate its payments under that
      policy or reduce or avoid making payments to Employer under that insurance
      policy.  Under such circumstances, Employer may reduce or eliminate
      any or all benefits under this Agreement to reflect the actual benefit that
      Employer receives under such policy.

     

    8.            
      Employment Not Guaranteed by Agreement.

     

                   
      Neither this Agreement nor any action taken hereunder shall be construed as
      giving Executive the right to be retained as an executive employee or as an
      employee of Employer for any period.  To the extent that Employer and
      Executive enter into (or previously have entered into an employment agreement),
      the terms of that agreement shall run concurrently with this Agreement, but
      each
      separate agreement shall be considered applied on its own and separate from
      the
      other agreement.

     

    9.            
      Taxes.

     

                   
      Employer shall deduct from all payments made hereunder all applicable federal
      or
      state taxes required by law to be withheld from such payments, and all benefit
      amounts payable hereunder are stated before any such deductions.

     

    10.           Amendment
      and Termination.

     

                   
      The Board of Directors of Employer may, at any time, amend or terminate this
      Agreement, provided that the Employer’s Board may not reduce or modify any
      benefit in pay status to Executive or to any Beneficiary hereunder or any
      benefit that would become payable hereunder if Executive were to have died
      or
      were to have been involuntarily terminated under Section 2.4(b) hereof on the
      day prior to such action by the Board, without the prior written consent of
      Executive (or Executive’s Beneficiary or Beneficiaries).

     

    Notwithstanding
      the preceding
      provisions, Employer may not reduce, eliminate or change benefits that Executive
      has accrued under this Agreement at any time within ninety (90) days before
      a
      Change in Control or at anytime following a Change in
      Control.  Employer is entering into this Agreement upon the assumption
      that certain existing tax laws will continue in effect in substantially their
      current form.  In the event of any changes in Federal law relating to
      and allowing the tax-free accumulation of earning within a life insurance policy
      or any other law which would result in a material adverse impact upon Employer’s
      ability to perform its obligations under this Agreement, Employer shall have
      an
      option to terminate or modify this Agreement subject to the protection afforded
      Executive in this Section 10.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    11.           Applicable
      Law.

     

                   
      This Agreement shall be construed according to the laws of the State of
      Wisconsin.  Any proceeding arising out of or relating to this
      Agreement may only be brought in the State of Wisconsin, County of Waukesha
      or,
      if it has or can acquire jurisdiction, in the United States District Court
      for
      the Eastern District of Wisconsin.  Each of the parties to this
      Agreement irrevocably submits to the exclusive jurisdiction of each of the
      preceding courts in any such proceeding, waives any objection it may now or
      hereafter have to venue or to convenience of forum, agrees that all claims
      in
      respect to the proceeding shall be heard and determined only in such court
      and
      agrees to not bring any proceeding arising out of or related to this Agreement
      in any other court.

     

    12.           Form
      of Communication.

     

                   
      Any application, claim, notice or other communication required or permitted
      to
      be made by Executive to Employer shall be made in writing and in such form,
      as
      Employer shall prescribe.  Such communication shall be effective upon
      mailing, if sent by first class mail, postage pre-paid, and addressed to
      Employer’s main office.

     

    13.           Captions.

     

                   
      The captions at the head of a section or a paragraph of this Agreement are
      designed for convenience of reference only and are not to be resorted to for
      the
      purpose of interpreting any provision of this Agreement.

     

    14.           Severability.

     

                   
      The invalidity of any portion of this Agreement shall not invalidate the
      remainder thereof, and said remainder shall continue in full force and
      effect.

     

    15.           Waiver.

     

                   
      No provision of this Agreement shall be deemed to have been waived unless such
      waiver is in writing signed by the waiving party.  No failure by any
      party to insist upon the strict performance of any provision of this Agreement,
      or to exercise any right or remedy consequent upon a breach thereof, shall
      constitute a waiver of any such breach, of such provision or of any other
      provision.  No waiver of any provision of this Agreement shall be
      deemed a waiver of any other provision of this Agreement or a waiver of such
      provision with respect to any subsequent breach, unless expressly provided
      in
      writing.

     

    16.           Neutral
      Construction.

     

                   
      The language used in this Agreement shall be deemed to be the language chosen
      by
      both of the parties hereto to express their mutual intent, and no rule of strict
      construction shall be applied against either party.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    17.           Final
      Agreement.

     

                   
      This Agreement constitutes the entire agreement of the parties relating to
      the
      subject matter hereof.  There are no promises, terms, conditions,
      obligations, or warranties other than those contained in this
      Agreement.  This Agreement shall supercede all prior communications,
      representations, or agreements, verbal or written, among the parties relating
      to
      the subject matter hereof.

     

    18.           Binding
      Effect.

     

                   
      This Agreement shall be binding upon and shall inure to the benefit of Employer
      and Executive, and each of their successors, heirs, personal representatives
      and
      permitted assigns.  No sale of substantially all of Employer’s assets
      shall be made without the buyer expressly assuming the obligation of this
      Agreement.  Any subsequent benefits that Employee or any Beneficiary
      receives under this Agreement shall be reduced by the liquidated damages paid
      under the preceding clause.

     

    19.           Compliance
      with Section 409A.

     

    This
      Agreement shall at all times be
      administered and the provisions of this Agreement shall be interpreted
      consistent with the requirements of Section 409A of the Code and any and all
      regulations thereunder, including such regulations as may be promulgated after
      the effective date of this Agreement.

     

                   
      IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
      date first set forth above.

     

    

    By:
      /s/ Michael J.
      Murry                          
                                                                        

    Chairman
      of the Board

    

    

    /s/
      John
      Krawczyk                                     

    Executive

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

    

    Early
      Retirement Benefit, as a Percentage of Executive’s Normal Retirement
      Benefit

    

    

    
      	
              Age

            	
              Reduced
                Benefit Factor

            
	 	 
	
              55

            	
              25%

            
	
              56

            	
              30%

            
	
              57

            	
              35%

            
	
              58

            	
              40%

            
	
              59

            	
              45%

            
	
              60

            	
              50%

            
	
              61

            	
              60%

            
	
              62

            	
              70%

            
	
              63

            	
              80%

            
	
              64

            	
              90%

            

    

    
      	 

    

     

    12QuickLinks
 -- Click here to rapidly navigate through this document

EXHIBIT 4.6  

 
 

THIRD AMENDED AND RESTATED LOAN CONTRACT    
    

Dated as of July 25, 2007  

       

between  

      

OGLETHORPE POWER CORPORATION  

(AN ELECTRIC MEMBERSHIP CORPORATION)  

       

and  

       

UNITED STATES OF AMERICA  

      

      

RUS
Project Designation:

Georgia 109 "R8" 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 any Partially Unadvanced Note and the R-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 any Partially Unadvanced Note and the R-8 FFB Note	 	8
	

ARTICLE V—AFFIRMATIVE COVENANTS	
 	

9
	 	Section 5.1	Generally	 	9
	 	Section 5.2	Performance under Indenture	 	9
	 	Section 5.3	Annual Compliance Certificate	 	9
	 	Section 5.4	Simultaneous Prepayment of Contemporaneous Loans	 	9
	 	Section 5.5	Rates and Coverage Ratios	 	10
	 	Section 5.6	Financial Books	 	10
	 	Section 5.7	Rights of Inspection	 	10
	 	Section 5.8	Real Property Acquisition	 	10
	 	Section 5.9	Financial Reports	 	10
	 	Section 5.10	Miscellaneous Reports and Notices	 	11
	 	Section 5.11	Variable Rate Indebtedness	 	11
	 	Section 5.12	Special Construction Account	 	11
	 	Section 5.13	Compliance with Laws	 	12
	 	Section 5.14	Plant Agreements	 	12
	 	Section 5.15	Lockbox Agreement	 	12
	 	Section 5.16	Nuclear Fuel	 	12
	 	Section 5.17	Power Requirements Studies	 	12
	 	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	 	13
	 	Section 5.23	Nondiscrimination	 	13
	 	Section 5.24	"Buy American" Requirements	 	14
	 	Section 5.25	Maintenance of Credit Ratings	 	14
	 	Section 5.26	Application of Advances	 	14
	 	Section 5.27	Excepted Property	 	14
	 	Section 5.28	Additional Affirmative Covenants	 	14
	

ARTICLE VI—NEGATIVE COVENANTS	
 	

15
	 	Section 6.1	General	 	15
	 	Section 6.2	Limitations on System Extensions, Additions and Dispositions	 	15
	 	 	 	 

i

 

	 	Section 6.3	Limitations on Employment and Retention of General Manager	 	15
	 	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	 	17
	 	Section 6.7	Rate Reductions	 	17
	 	Section 6.8	Indenture Restrictions	 	17
	 	Section 6.9	Negative Pledge	 	19
	 	Section 6.10	Emissions Allowances	 	20
	 	Section 6.11	Changes to Plant Agreements	 	20
	 	Section 6.12	Fiscal Year	 	20
	 	Section 6.13	Limits on Variable Rate Indebtedness	 	20
	 	Section 6.14	Limitations on Changing Principal Place of Business	 	20
	 	Section 6.15	Limitations on RUS Financed Extensions and Additions	 	20
	 	Section 6.16	Historic Preservation	 	21
	 	Section 6.17	Impairment of Wholesale Power Contracts	 	21
	 	Section 6.18	State Regulation	 	21
	 	Section 6.19	Additional Negative Covenants	 	21
	

ARTICLE VII—EVENTS OF DEFAULT	
 	

21
	

ARTICLE VIII—REMEDIES	
 	

22
	 	Section 8.1	Remedies	 	22
	 	Section 8.2	Suspension of Advances	 	22
	

ARTICLE IX—MISCELLANEOUS	
 	

23
	 	Section 9.1	Notice to RUS; Objection of RUS	 	23
	 	Section 9.2	Notices	 	23
	 	Section 9.3	Expenses	 	24
	 	Section 9.4	Late Payments	 	24
	 	Section 9.5	Filing Fees	 	24
	 	Section 9.6	No Waiver	 	24
	 	Section 9.7	Governing Law	 	24
	 	Section 9.8	Holiday Payments	 	25
	 	Section 9.9	Successors and Assigns	 	25
	 	Section 9.10	Complete Agreement; Amendments	 	25
	 	Section 9.11	Headings	 	25
	 	Section 9.12	Severability	 	25
	 	Section 9.13	Right of Set Off	 	25
	 	Section 9.14	Schedules and Exhibits	 	26
	 	Section 9.15	Sole Benefit	 	26
	 	Section 9.16	Existing Loan Contract	 	26
	 	Section 9.17	Authority of RUS Representatives	 	26
	 	Section 9.18	Relation to RUS Regulations	 	26
	 	Section 9.19	Term	 	26
	 	Section 9.20	Relation to Indenture	 	27

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	
 	

Equal Opportunity Contract Provisions
	

Exhibit B	
 	

Description of Rating Agency Services

iii

   THIRD AMENDED AND RESTATED LOAN CONTRACT  

        THIS THIRD AMENDED AND RESTATED LOAN CONTRACT, dated as of July 25, 2007, 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 Second Amended and Restated Loan Contract, dated as of May 31, 2006, 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 R-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 R-8 FFB Note. 

        "Agreement"
shall mean this Third 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

 

        "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

	(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. 

2

 

        "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 U.S. Bank National Association, as successor to 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, U.S. Bank National Association, as successor to 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 R-8 Notes. 

        "Outstanding
Notes" shall mean those notes, other than the R-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 R-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. 

        "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. 

        "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 

3

 

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. 

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

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

        "R-8
FFB Note" shall mean the note of the Borrower, dated as of July 25, 2007, payable to the order of FFB in the face principal amount of $78,418,600, the payment of
which is guaranteed by the 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. 

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

        "R-8
Reimbursement Note" shall mean the note of the Borrower, dated as of July 25, 2007, 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 R-8 FFB Note, and all amendments, supplements, extensions and replacements to, of or
for such note. 

        "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, 2006 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 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 

4

 

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. 

        "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. 

        (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. 

5

   
        (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 the date of this Agreement, 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, 2006, 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 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 

6

 

reimbursement
obligations are evidenced by the Outstanding Notes payable to the Government in respect of such reimbursement obligations. 

        (b)   R-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 $78,418,600 to be made by FFB to the Borrower (the "R-8 Loan"). 

Section 3.2  No Further Advances  

        Except with respect to any Partially Unadvanced Note, 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 any Partially Unadvanced Note and the R-8 FFB Note  

        With respect to Advances to be made under any Partially Unadvanced Note or the R-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 R-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 R-8 Loan Documents. The R-8
FFB Note, the R-8 Reimbursement Note and this Agreement must be received within ninety (90) days of the date of the Designation Notice for the R-8 FFB Note committing
FFB to purchase such R-8 FFB Note (the "Designation Notice") in the manner prescribed in such Designation Notice and all the conditions set forth in such Designation Notice and the
contract of guarantee must be satisfied; 

7

   
        (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 R-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 R-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 R-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)    R-8 Notes. That each of the R-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 any Partially Unadvanced Note and the R-8 FFB Note  

        The obligation of the RUS to approve any Advance under any Partially Unadvanced Note or the R-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 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 

8

 

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 the proceeds of the Advances under any Partially Unadvanced
Note or R-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; and 

        (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. 

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. 

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 

9

 

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. 

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. 

10

 

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 

        (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. 

11

 

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 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. 

12

   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. 

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 A 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 

13

 

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. 

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 B 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. 

14

 

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 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. 

15

 

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. 

        (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. 

16

   
        (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. 

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; 

17

 

        (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; 

18

   
        (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, 

19

 

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. 

20

 

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; 

21

 

        (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. 

22

 

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 

23

 

        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. 

24

 

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. 

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. 

25

 

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. 

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. 

26

 

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.) 

27

 

        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.) 

28

 
(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

29

SCHEDULE 1  

to the Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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, as amended by each of the six
Agreements Amending Note, made as of May 22, 2007, among the Borrower, FFB and the Government, acting through the Administrator of the RUS;

	(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;

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

	(i)
	Note
(P-8), dated as of May 31, 2006, from the Borrower to FFB, in the original face principal amount of $92,000,000; and

	(j)
	Reimbursement
Note (P-8), dated as of May 31, 2006, from the Borrower to the Government, acting through the Administrator of the RUS.

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

	(a)
	Note
(P-8), dated as of May 31, 2006, from the Borrower to FFB, in the original face principal amount of $92,000,000; and

	(b)
	Reimbursement
Note (P-8), dated as of May 31, 2006, from the Borrower to the Government, acting through the Administrator of the RUS. 

SCHEDULE 2  

to the Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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 Option 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 Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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 Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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. 

        "Chattahoochee
Project" shall mean an intermediate generation facility located in Heard and Carroll Counties, Georgia, 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. 

        "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. 

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

        "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. 

        "Talbot
Project" shall mean a peaking generation facility located in Talbot County, Georgia, with a nominal aggregate capacity of approximately 648 MWs, consisting of six Siemens
Westinghouse V84.2 combustion turbines and auxiliaries operating in simple cycle service; 

        "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 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); 

	(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;

	(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 $5.0 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. 

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 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 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. 

SCHEDULE 5  

to the Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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. 

        2006 Appeal.    On January 3, 2007, the Monroe County Board of Assessors issued its assessment of Oglethorpe's interest
in Plant Scherer for the 2006 tax year. While the state valued this interest at $343,262,927, Monroe County's assessment used a valuation of $728,850,596. On January 31, 2007,
Oglethorpe appealed Monroe County's valuation by filing a notice of arbitration with the Monroe County Board of Tax Assessors. 

        The
arbitration for all four appeals is on hold pending the outcome of a related case filed by Georgia Power Company (GPC), which challenges the authority of Monroe County to change
values determined by the Georgia Department of Revenue. GPC obtained a ruling on March 30, 2007 from the Georgia Court of Appeals that Monroe County did not have the authority to change the
values determined by the Georgia Department of Revenue. However, the Georgia Supreme Court granted the County's request to review that ruling and has placed the case on its October 2007 oral
argument calendar. Depending on the final outcome of the GPC appeal, the arbitration for Oglethorpe's four 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 have 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. The total ad valorem taxes assessed by Monroe County for tax years
2003 through 2006, is $31,923,000, relating to Plant Scherer. At December 31, 2006, Oglethorpe has accrued $22,654,000 for ad valorem taxes including $3,426,000 to be paid in 2007 related to
tax year 2006. The remaining $19,228,000 represents the difference between ad valorem taxes assessed by Monroe County and the amount paid by Oglethorpe. Oglethorpe plans to vigorously oppose the
increased Monroe County assessments. 

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. In November 2006, additional briefs were filed and oral argument was presented on the
pending motions for summary judgment. In January 2007, the District Court ruled in favor of GPC on all counts still pending that involved the units co-owned by Oglethorpe. The
parties entered into a consent decree on the other issue which was entered by the Court on May 25, 2007, and the case was dismissed with prejudice on June 18, 2007. 

 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 again intervened in the appeal on behalf of EPA, briefing and oral argument were completed and, on
June 26, 2007, the Court ruled in favor of EPA, upholding its decision not to object to Oglethorpe's Title V Permit. Whether Sierra Club will appeal remains to be seen. 

 Sierra Club and Coosa River Basin Initiative v. Johnson, (April 6, 2007)  

        In April, 2007, the Sierra Club and the Coosa River Basin Initiative appealed two unsuccessful permit challenges involving operating permit renewals for Plants
Scherer (co-owned by Oglethorpe Power), Bowen, Hammond and Branch to the U. S. Court of Appeals for the Eleventh Circuit. The permits were all challenged on the bases of not including
compliance schedules to bring
the sources into compliance with opacity standards, not including an adequate statement of basis, and, in the cases of Scherer and Bowen, not including compliance schedules to bring the sources into
compliance with Prevention of Significant Deterioration requirements. Oglethorpe filed a motion to intervene on behalf of EPA in the case and that motion was granted. Briefing on the case is scheduled
to be completed in November 2007. Oral argument may be scheduled for the Spring of 2008, with a decision reached by the Court later next year. 

 PROPERTY LAWSUIT  

 Sewell Creek Noise Lawsuits (February 5, 2007)  

        On February 5, 2007, twelve lawsuits were filed against Oglethorpe and Smarr EMC in the Superior Court of Polk County, Georgia (Cedartown) by plaintiffs
owning property near the Sewell Creek Energy Facility, which is owned by Smarr EMC and operated by Oglethorpe. The plaintiffs allege that noise and vibration from the plant have interfered with the
plaintiffs' right of quiet enjoyment of their property and diminished their property values. Plaintiffs seek unspecified damages based on various claims, including trespass, nuisance, inverse
condemnation and negligence. 

        Both
Oglethorpe and Smarr have insurance that is expected to cover any liability resulting from these claims. However, pursuant to the indemnification provision contained in the
management agreement between Oglethorpe and Smarr, Smarr EMC would be responsible for indemnifying Oglethorpe for any liability it may incur in this litigation. 

 EPA REQUEST FOR INFORMATION  

        On January 10, 2006, Oglethorpe received a Request for Information pursuant to CERCLA Section 104 and RCRA Section 3007. The Request
concerned a location known as the Carolina Transformer Site in Fayetteville, NC (the "Site"), and requested that Oglethorpe provide information about any business
Oglethorpe had done between 1950 and 1984 with companies or individuals operating on the Site and any materials that Oglethorpe may have given, sold, transferred, delivered, or disposed of at or to
the Site. Sutherland Asbill and Brennan filed Oglethorpe's response to the EPA on February 10, 2006, in which Oglethorpe indicated that it had no information concerning the Site and denied any
liability as a potentially responsible party with respect to the Site. Oglethorpe has not received any other correspondence from the EPA with respect to this matter. 

EXHIBIT A  

to the Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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 B  

to the Third Amended and Restated Loan Contract,

dated as of July 25, 2007, 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

THIRD AMENDED AND RESTATED LOAN CONTRACT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]