EXHIBIT 2.1
FIRST AMENDED AND RESTATED RESTRUCTURING AGREEMENT
BY AND AMONG
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION
CORPORATION),
GEORGIA TRANSMISSION CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
AND
GEORGIA SYSTEM OPERATIONS CORPORATION
AUGUST 1, 1996
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) "Business Day" . . . . . . . . . . . . . . . . . . . . . 2
(b) "Closing". . . . . . . . . . . . . . . . . . . . . . . . 2
(c) "Closing Conditions" . . . . . . . . . . . . . . . . . . 2
(d) "Closing Date" . . . . . . . . . . . . . . . . . . . . . 2
(e) "Effective Date" . . . . . . . . . . . . . . . . . . . . 2
(f) "Existing Wholesale Power Contracts" . . . . . . . . . . 2
(g) "FERC" . . . . . . . . . . . . . . . . . . . . . . . . . 2
(h) "FFB". . . . . . . . . . . . . . . . . . . . . . . . . . 2
(i) "GSOC Asset Transfer Date" . . . . . . . . . . . . . . . 2
(j) "GTC Assumed OPC Debt" . . . . . . . . . . . . . . . . . 3
(k) "GTC CoBank Note". . . . . . . . . . . . . . . . . . . . 3
(l) "GTC Credit Suisse Note" . . . . . . . . . . . . . . . . 3
(m) "GTC FFB Note(s)". . . . . . . . . . . . . . . . . . . . 3
(n) "GTC Indenture". . . . . . . . . . . . . . . . . . . . . 3
(o) "GTC PCB Assumption Agreements". . . . . . . . . . . . . 3
(p) "GTC RUS Note(s)". . . . . . . . . . . . . . . . . . . . 3
(q) "ITSA" . . . . . . . . . . . . . . . . . . . . . . . . . 4
(r) "ITSA O&M Agreement" . . . . . . . . . . . . . . . . . . 4
(s) "Joint Committee Agreement". . . . . . . . . . . . . . . 4
(t) "Member Agreement" . . . . . . . . . . . . . . . . . . . 4
(u) "New Wholesale Power Contracts". . . . . . . . . . . . . 4
(v) "Net Book Value" . . . . . . . . . . . . . . . . . . . . 4
(w) "OPC Bylaw Amendments" . . . . . . . . . . . . . . . . . 4
(x) "OPC Closing Date Distribution". . . . . . . . . . . . . 4
(y) "OPC Indenture". . . . . . . . . . . . . . . . . . . . . 4
(z) "OPC Mortgage" . . . . . . . . . . . . . . . . . . . . . 4
(aa) "PCB Trustees" . . . . . . . . . . . . . . . . . . . . . 5
(ab) "Purchase Price Adjustment". . . . . . . . . . . . . . . 5
(ac) "Purchase Price Adjustment Event". . . . . . . . . . . . 5
(ad) "RUS". . . . . . . . . . . . . . . . . . . . . . . . . . 5
(ae) "SEC". . . . . . . . . . . . . . . . . . . . . . . . . . 5
(af) "System Operations Assets" . . . . . . . . . . . . . . . 5
(ag) "System Operations Business" . . . . . . . . . . . . . . 6
(ah) "System Operations Contracts". . . . . . . . . . . . . . 6
(ai) "System Operations Employees". . . . . . . . . . . . . . 6
i
(aj) "System Operations Liabilities". . . . . . . . . . . . . 6
(ak) "Transmission Assets". . . . . . . . . . . . . . . . . . 6
(al) "Transmission Business". . . . . . . . . . . . . . . . . 7
(am) "Transmission Contracts" . . . . . . . . . . . . . . . . 7
(an) "Transmission Employees" . . . . . . . . . . . . . . . . 7
(ao) "Transmission Liabilities" . . . . . . . . . . . . . . . 7
1.2 Other Definitions . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
THE RESTRUCTURING . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 The Restructuring and Division of Functions . . . . . . . . . 8
(a) Systems Operations Business. . . . . . . . . . . . . . . 8
(b) OPC Closing Date Distribution. . . . . . . . . . . . . . 8
(c) Transmission Business. . . . . . . . . . . . . . . . . . 8
2.2 New Wholesale Power Contracts . . . . . . . . . . . . . . . . 8
2.3 OPC Closing Date Distribution . . . . . . . . . . . . . . . . 8
(a) Allocation Among Members . . . . . . . . . . . . . . . . 9
(b) Methodology for Charging Each Member's Patronage
Account. . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Acquisition of Transmission Business. . . . . . . . . . . . . 9
(a) Purchase and Sale of Transmission Assets . . . . . . . . 9
(b) Assumption of Transmission Liabilities . . . . . . . . . 10
(c) Purchase Price . . . . . . . . . . . . . . . . . . . . . 10
(d) Payment of Purchase Price. . . . . . . . . . . . . . . . 10
(e) Transfer of Employees. . . . . . . . . . . . . . . . . . 11
(f) Adjustment to Purchase Price Resulting from
Certain Events Subsequent to the Closing Date. . . . . . 11
(g) Assets Owned in Common . . . . . . . . . . . . . . . . . 11
2.5 Transmission Contracts. . . . . . . . . . . . . . . . . . . . 11
2.6 Transfer of System Operations Business. . . . . . . . . . . . 12
(a) Purchase and Sale of System Operations Assets. . . . . . 12
(b) Assumption of System Operations Liabilities. . . . . . . 12
(c) Purchase Price . . . . . . . . . . . . . . . . . . . . . 12
(d) Transfer of Employees. . . . . . . . . . . . . . . . . . 13
2.7 System Operations Contracts . . . . . . . . . . . . . . . . . 13
2.8 Change of OPC Name. . . . . . . . . . . . . . . . . . . . . . 13
2.9 Provision of Administrative Services. . . . . . . . . . . . . 13
2.10 Office Space Leases . . . . . . . . . . . . . . . . . . . . . 13
ii
2.11 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 14
(a) Amendments To Be Adopted . . . . . . . . . . . . . . . . 14
(b) Allocation of Costs. . . . . . . . . . . . . . . . . . . 14
(c) Plans Covered. . . . . . . . . . . . . . . . . . . . . . 14
(d) Right to Terminate Sponsorship . . . . . . . . . . . . . 14
2.12 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3
OPC GOVERNANCE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 New OPC Governance. . . . . . . . . . . . . . . . . . . . . . 15
(a) Conditions to Full Implementation of Governance
Changes. . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Possible Modifications . . . . . . . . . . . . . . . . . 15
3.2 Interim Governance. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OPC . . . . . . . . . . . . . . . . . 16
4.1 Organization and Qualification, Etc.. . . . . . . . . . . . . 16
4.2 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . 16
4.3 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Governmental Consents, Etc. . . . . . . . . . . . . . . . . . 17
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GTC AND GSOC. . . . . . . . . . . . . 17
5.1 Organization and Qualification, Etc.. . . . . . . . . . . . . 17
5.2 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . 17
5.3 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Governmental Consents, Etc. . . . . . . . . . . . . . . . . . 18
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . 19
6.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 19
6.2 Interim Cost Allocations. . . . . . . . . . . . . . . . . . . 19
6.3 HSR Act Filings . . . . . . . . . . . . . . . . . . . . . . . 19
iii
6.4 Consents, Authorizations, Etc.. . . . . . . . . . . . . . . . 19
(a) OPC Closing Date Distribution. . . . . . . . . . . . . . 19
(b) New Wholesale Power Contracts. . . . . . . . . . . . . . 20
(c) Release from OPC Mortgage. . . . . . . . . . . . . . . . 20
(d) GTC Assumption Documents . . . . . . . . . . . . . . . . 20
(e) OPC Indenture. . . . . . . . . . . . . . . . . . . . . . 20
(f) Transmission Contracts . . . . . . . . . . . . . . . . . 20
(g) GSOC Matters . . . . . . . . . . . . . . . . . . . . . . 20
(h) System Operations Contracts. . . . . . . . . . . . . . . 20
(i) Other Matters Contemplated Hereby. . . . . . . . . . . . 20
6.5 IRS Ruling. . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Access; Confidentiality . . . . . . . . . . . . . . . . . . . 20
(a) Access . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Confidentiality. . . . . . . . . . . . . . . . . . . . . 20
6.7 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Actions to Avoid and Notices of, Breaches of
Representations and Warranties. . . . . . . . . . . . . . . . 21
6.10 Additional Agreements . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7
CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Closing Conditions. . . . . . . . . . . . . . . . . . . . . . 22
(a) Governance Changes . . . . . . . . . . . . . . . . . . . 22
(b) Member Agreement . . . . . . . . . . . . . . . . . . . . 22
(c) RUS Approvals. . . . . . . . . . . . . . . . . . . . . . 22
(d) Hart-Scott-Rodino. . . . . . . . . . . . . . . . . . . . 23
(e) PUHCA Matters. . . . . . . . . . . . . . . . . . . . . . 23
(f) Federal Power Act Matters. . . . . . . . . . . . . . . . 23
(g) No Injunction, Etc.. . . . . . . . . . . . . . . . . . . 23
(h) Other Consents, Authorizations, Etc. . . . . . . . . . . 23
(i) Representations and Warranties; Compliance With
Covenants and Obligations. . . . . . . . . . . . . . . . 23
(j) Confirmation of Ratings. . . . . . . . . . . . . . . . . 24
(k) New Wholesale Power Contracts. . . . . . . . . . . . . . 24
(l) Membership In GTC. . . . . . . . . . . . . . . . . . . . 24
(m) Transmission Contracts . . . . . . . . . . . . . . . . . 24
(n) Membership In GSOC . . . . . . . . . . . . . . . . . . . 24
iv
(o) System Operations Contracts. . . . . . . . . . . . . . . 24
(p) State Tax Matters. . . . . . . . . . . . . . . . . . . . 24
(q) Opinions of Counsel and Certified Resolutions. . . . . . 24
7.2 Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Pre-Closing . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Deliveries at or prior to GSOC Asset Transfer Date. . . . . . 25
ARTICLE 9
TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination and Abandonment . . . . . . . . . . . . . . . . . 26
(a) By Mutual Action . . . . . . . . . . . . . . . . . . . . 26
(b) By OPC . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Procedure for Termination . . . . . . . . . . . . . . . . . . 26
9.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 10
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 Dispute Resolution and Arbitration. . . . . . . . . . . . . . 26
(a) Arbitration Procedures . . . . . . . . . . . . . . . . . 27
(b) Arbitration Decision . . . . . . . . . . . . . . . . . . 27
10.3 Specific Performance, Etc.. . . . . . . . . . . . . . . . . . 27
10.4 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.6 Counterparts; Facsimile Delivery. . . . . . . . . . . . . . . 28
10.7 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.8 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 29
10.10 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 29
v
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.1(af) System Operations Assets
Schedule 1.1(aj) Certain System Operations Liabilities
Schedule 1.1(ao) Certain Transmission Liabilities
Schedule 2.3 Methodology for Determining OPC Closing Date
Distribution and Members' Capital Contribution to GTC
Schedule 2.4(d)(i) Debt Allocation Methodology
EXHIBITS
Exhibit A Draft of Indemnity Agreement between OPC and GTC
Exhibit B Draft of Assumption Agreement between GTC and the PCB
Trustees
vi
LIST OF CERTAIN DEFINED TERMS
DEFINED IN SECTIONS OTHER THAN SECTION 1.1
Term Section
- ---- -------
Additional OPC Contract 4.2
Additional GSOC Contract 5.2
Additional GTC Contract 5.2
Agreement Preamble
Applicable Additional Contract 6.4
Closing 8.1
Confidential Material 6.6(b)
Employee Benefit Plan 2.11(c)
Final Appraisal 2.4(c)
GSOC Preamble
GSOC Assumed OPC Debt 2.6(c)
GSOC Assumption Agreement 2.6(c)
GSOC Purchase Money Note 2.6(c)
GTC Preamble
GTC Assumed OPC Deferred Charges 2.4(c)
HSR Act 4.4
IRS Ruling 3.1(a)
Members Preamble
OPC Preamble
OPC Closing Date Distribution 2.3
Pre-Closing 8.2
Purchase Price Premium 2.4(c)
Representatives 6.6(b)
vii
FIRST AMENDED AND RESTATED RESTRUCTURING AGREEMENT
This First Amended and Restated Restructuring Agreement (this "Agreement")
is dated as of August 1, 1996, by and among Oglethorpe Power Corporation (An
Electric Membership Generation & Transmission Corporation) ("OPC"), Georgia
Transmission Corporation (An Electric Membership Corporation) ("GTC") and
Georgia System Operations Corporation ("GSOC").
BACKGROUND STATEMENT
Since its formation, OPC has provided generation, transmission and
ancillary and other related services for the 39 electric membership cooperatives
that are members of OPC (the "Members") in order to satisfy the Members'
requirements for power. Because of the increasing competition occurring in the
electric industry and related changes in law and regulation, OPC and the Members
have determined that it is in their mutual best interests to restructure OPC to
provide greater flexibility for the future and to settle certain issues and
controversies confronting OPC and the Members, as contemplated by a Statement of
Agreement, dated November 21, 1995, among representatives of OPC and certain
Members named therein, as approved by the OPC Board of Directors on December 4,
1995.
On March 29, 1996, the Boards of Directors of OPC, GTC and GSOC approved
the Restructuring Agreement, dated as of March 29, 1996 (the "Original
Agreement"), by and among OPC, GTC and GSOC and the restructuring and other
transactions and matters contemplated thereby. Also on March 29, 1996, the
Boards of Directors of OPC, GTC and GSOC approved the "Member Agreement" (as
defined in Section 1.1) for the purpose of submitting the Member Agreement to
the Members for their consideration. The Board of Directors of OPC also has
recommended to the Members that they join OPC, GTC and GSOC in executing the
Member Agreement and thereby agree among themselves and with OPC, GSOC and GTC
as to those matters contemplated hereby and thereby that directly involve the
Members in their capacities as separate corporations.
This Agreement amends and restates the Original Agreement and, as of the
date of this Agreement, replaces and supersedes the Original Agreement in its
entirety to set forth the terms on which the restructuring and related changes
will occur. Among other things, the restructuring will separate OPC's
"Transmission Business" substantially as an entirety and its "System Operations
Business" substantially as an entirety (as such terms are defined in Section
1.1) from OPC's generation business and any other retained business. OPC will
transfer the Transmission Business to GTC and the System Operations Business to
GSOC.
AGREEMENT
In consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. For the purposes of this Agreement, the following
terms, whether singular or plural, shall have the meanings set forth below:
(a) "BUSINESS DAY" shall mean any day on which both: (i) OPC is open
for business, and (ii) commercial banks in the City of Atlanta or in the City of
New York are not authorized or required to close.
(b) "CLOSING" shall have the meaning specified in Section 8.1.
(c) "CLOSING CONDITIONS" shall mean all of the conditions set forth
in Article 7 of this Agreement.
(d) "CLOSING DATE" shall mean the date on which the Closing occurs
pursuant to Article 8 of this Agreement.
(e) "EFFECTIVE DATE" shall mean (i) January 1, 1997 or (ii) such
other date as the parties to this Agreement may mutually agree.
(f) "EXISTING WHOLESALE POWER CONTRACTS" shall mean the Amended and
Consolidated Wholesale Power Contracts, dated as of December 1, 1988, between
OPC and each of OPC's 39 Members pursuant to which the Members currently
purchase electric power and transmission services from OPC.
(g) "FERC" shall mean the Federal Energy Regulatory Commission.
(h) "FFB" shall mean the Federal Financing Bank, which is an
instrumentality and wholly owned corporation of the United States of America.
(i) "GSOC ASSET TRANSFER DATE" shall mean the date on which the
System Operations Assets are sold and transferred to GSOC and GSOC assumes
certain System Operations Liabilities, as provided in Section 2.6.
2
(j) "GTC ASSUMED OPC DEBT" shall mean that portion of OPC's
indebtedness that GTC assumes pursuant to the GTC CoBank Note, the GTC Credit
Suisse Note, the GTC FFB Note(s), the GTC RUS Note(s) and the GTC PCB Assumption
Agreements.
(k) "GTC COBANK NOTE" shall mean a note or other agreement or
instrument in the form required by CoBank pursuant to which GTC will assume, and
replace OPC as an obligor with respect to, that portion of OPC's indebtedness to
CoBank outstanding as of the Effective Date that OPC and GTC have agreed will be
assumed as part of the payment of the purchase price pursuant to Section
2.4(d)(i).
(l) "GTC CREDIT SUISSE NOTE" shall mean a note or other agreement or
instrument in the form required by Credit Suisse pursuant to which GTC will
assume, and replace OPC as an obligor with respect to, that portion of OPC's
indebtedness to Credit Suisse as of the Effective Date that OPC and GTC have
agreed will be assumed as part of the payment of the purchase price pursuant to
Section 2.4(d)(i).
(m) "GTC FFB NOTE(S)" shall mean the note(s) in the form required by
FFB pursuant to which GTC will assume, and replace OPC as an obligor with
respect to, that portion of OPC's indebtedness to the FFB outstanding as of the
Effective Date that OPC and GTC have agreed will be assumed as part of the
payment of the purchase price pursuant to Section 2.4(d)(i).
(n) "GTC INDENTURE" shall mean an indenture to be agreed to by GTC
and RUS prior to the Closing, or any other form of real and personal property
security document(s) that GTC and RUS shall mutually agree upon, pursuant to
which GTC will pledge, and grant security title to and a security interest in,
substantially all of the Transmission Assets to secure the GTC FFB Note(s), the
GTC RUS Note(s), the GTC CoBank Note, the GTC Credit Suisse Note and the GTC PCB
Assumption Agreements.
(o) "GTC PCB ASSUMPTION AGREEMENTS" shall mean collectively the
Indemnity Agreement between GTC and OPC and the Assumption Agreements between
GTC and the PCB Trustees based on the drafts attached hereto as EXHIBITS A and
B, respectively, as such drafts may be revised from time to time and, when they
become available, the final forms of such agreements as they may be agreed upon
by OPC and GTC prior to Closing, pursuant to which GTC will agree to assume the
obligation to pay that portion of OPC's pollution control debt secured under the
OPC Mortgage (and related obligations under swap agreements) that OPC and GTC
have agreed will be assumed as part of the payment of the purchase price
pursuant to Section 2.4(d)(i).
(p) "GTC RUS NOTE(S)" shall mean the note(s) in the form required by
RUS pursuant to which GTC will assume, and replace OPC as an obligor with
respect to, that portion of OPC's indebtedness to RUS outstanding as of the
Effective Date that OPC and GTC have agreed will be assumed as part of the
payment of the purchase price pursuant to Section 2.4(d)(i).
3
(q) "ITSA" shall mean the Revised and Restated Integrated
Transmission System Agreement, dated as of November 12, 1990, between OPC and
Georgia Power Company.
(r) "ITSA O&M AGREEMENT" shall mean the Transmission Facilities
Operation and Maintenance Contract between Georgia Power Company and OPC, dated
as of June 9, 1986.
(s) "JOINT COMMITTEE AGREEMENT" shall mean the Joint Committee
Agreement, dated as of August 27, 1976, among Georgia Power Company, OPC,
Municipal Electric Authority of Georgia and the City of Dalton, Georgia, as
amended by the First Amendment thereto, dated as of June 19, 1978.
(t) "MEMBER AGREEMENT" shall mean the Member Agreement based on the
draft presented to and approved by the OPC Board of Directors at their July 8,
1996 meeting, as such draft may be revised from time to time and, when it
becomes available, such Member Agreement in final form as executed and delivered
by and among the Members that become parties thereto, OPC, GTC and GSOC (as it
may be amended and supplemented thereafter).
(u) "NEW WHOLESALE POWER CONTRACTS" shall have the meaning specified
in the Member Agreement.
(v) "NET BOOK VALUE" of any asset shall mean at any given time the
amount, net of depreciation, at which such asset is recorded on the books of the
owner of such asset.
(w) "OPC BYLAW AMENDMENTS" shall mean the amendments to OPC's Bylaws
relating to the election of directors in the form adopted by the OPC member
representatives at their March 29, 1996 annual meeting, subject to the
conditions set forth in Section 3.1(a), as such Bylaw amendments may be amended
pursuant to Section 3.1(b).
(x) "OPC CLOSING DATE DISTRIBUTION" shall mean the distribution to be
made by OPC on the Closing Date, as contemplated by Section 2.3.
(y) "OPC INDENTURE" shall mean an indenture to be agreed to by OPC
and RUS prior to the Closing, or any other form of real and personal property
security document(s) that OPC and RUS shall mutually agree upon, pursuant to
which OPC will pledge, and grant security title to and a security interest in,
substantially all of the real and tangible personal property of OPC to secure
the obligations currently secured under OPC Mortgage as to which OPC is not
released from liability in connection with the assumption by GTC of the GTC
Assumed OPC Debt.
(z) "OPC MORTGAGE" shall mean the Consolidated Mortgage and Security
Agreement, dated as September 1, 1994, by and among OPC, the United States of
America, acting through the Administrator of the RUS, CoBank, ACB, as successor
in interest to National Bank for Cooperatives, Credit Suisse, acting by and
through its New York Branch, and SunTrust Bank, Atlanta, as successor to Trust
Company Bank (as trustee under certain pollution control
4
bond indentures), as mortgagees, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended
or consolidated, or any alternate mortgage, deed to secure debt, deed of
trust, trust indenture or other security instrument entered into by OPC as a
substitute or replacement for such mortgage, which secures equally and
ratably the payment of principal of and interest on the obligations
thereunder and creates a lien on substantially all of the real and tangible
personal property of OPC in favor of such mortgagees and/or additional and/or
substitute mortgagees or secured parties.
(aa) "PCB TRUSTEES" shall mean SunTrust Bank, Atlanta, acting as
trustee under the several pollution control bond indentures identified in the
OPC Mortgage.
(ab) "PURCHASE PRICE ADJUSTMENT" shall mean: (A) 75% of that amount,
if any, by which (i) the consideration received by GTC for any sale, lease or
exchange of any part or all of the Transmission Assets constituting a Purchase
Price Adjustment Event exceeds the amount paid to OPC for such Transmission
Assets, or (ii) the value of the Transmission Assets reflected in the
consideration received by GTC or its members in any merger or consolidation of
GTC or any other disposition or reduction of the GTC members' capital interests
constituting a Purchase Price Adjustment Event exceeds the amount paid to OPC
for such Transmission Assets, in each of the cases (i) and (ii) net of taxes and
other expenses attributable to the transaction, MINUS (B) any Purchase Price
Adjustment previously paid with respect to such Transmission Assets.
(ac) "PURCHASE PRICE ADJUSTMENT EVENT" shall mean the consummation by
GTC or one or more members of GTC of any one or more transactions after the
Closing Date and prior to the fifth anniversary of the Effective Date (or
thereafter if consummated pursuant to a binding contract entered into after the
Closing Date and prior to the fifth anniversary of the Effective Date) pursuant
to which: (i) GTC sells, leases or exchanges 20% or more, in the aggregate
(measured based on Net Book Value at the time of the transaction or during the
time of any series of related transactions), of the Transmission Assets, or
merges or consolidates with another entity, or (ii) any member or members of
GTC, in a transaction or series of transactions involving any party which is not
one of the 39 Members of OPC as of the Effective Date, dispose of or in any
other manner reduce the capital interests in GTC of those entities constituting
the members of GTC as of the Effective Date (tested separately based on both the
dollar value of such members' capital interests and the percentage such members'
capital interests represent of the total GTC capital interests, in each case at
the time of the transaction or during any series of related transactions).
(ad) "RUS" shall mean the Rural Utilities Service, as successor to the
Rural Electrification Administration, which is an agency of the United States
Department of Agriculture, or any governmental agency succeeding to its powers
and functions.
(ae) "SEC" shall mean the Securities and Exchange Commission.
(af) "SYSTEM OPERATIONS ASSETS" shall mean the computers, other
equipment, equipment leases, and other property of OPC identified on SCHEDULE
1.1(af) as constituting the
5
System Operations Assets, as such Schedule may be amended by OPC and GSOC
from time to time, all of which assets are used to perform system operations
services.
(ag) "SYSTEM OPERATIONS BUSINESS" shall mean the performance of system
operations services and the use and ownership of and rights to the System
Operations Assets and shall include the System Operations Liabilities.
(ah) "SYSTEM OPERATIONS CONTRACTS" shall mean the contracts (i)
relating to system operations services to be agreed to between GSOC and OPC and
between GSOC and GTC, respectively, as such contracts are executed and delivered
by the parties thereto, (ii) the "Member System Operations Contracts" between
GSOC and each Member, as defined in the Member Agreement, and (iii) the
generation services contract to be agreed to between GSOC and OPC, as such
contract is executed and delivered by the parties thereto.
(ai) "SYSTEM OPERATIONS EMPLOYEES" shall mean those individuals so
designated by the President and Chief Executive Officer of OPC.
(aj) "SYSTEM OPERATIONS LIABILITIES" shall mean (i) the obligations
assumed by GSOC from OPC under the leases and other contractual undertakings
identified on SCHEDULE 1.1(aj) as such obligations exist as of the GSOC Asset
Transfer Date; (ii) OPC's obligations relating to the System Operations
Employees as such obligations exist as of the Effective Date; and (iii) such
other obligations relating to the performance of system operations services as
OPC and GSOC shall agree upon from time to time.
(ak) "TRANSMISSION ASSETS" shall mean all assets of OPC of every kind
and description and wherever located, which, as of the Effective Date, (A) are
properly classified as transmission assets under accounts 350 to 397 of the
System of Accounts as prescribed by RUS in effect on the Effective Date, or (B)
qualify for treatment as "Transmission Facilities" under the ITSA or (C) are
shown on OPC's books as of the Effective Date as transmission assets, plus the
warehouse facility located in Conyers, Georgia, and all inventories relating to
the transmission assets contained therein, all claims and rights under work in
progress, contracts (including the right to provide transmission services to the
Members in the manner contemplated by the Transmission Contracts), leases,
licenses or other agreements (whether governmental or private) and rights in
condemnation proceedings and other litigation matters (including by way of
counterclaim), in each case, used in or otherwise relating to its Transmission
Business; provided, however, that the Transmission Assets shall not include: (i)
any accounts receivable of OPC; (ii) any of the real property, buildings and
fixtures constituting OPC's headquarters facility or, except as OPC and GTC may
mutually agree, any equipment (except the types expressly specified above),
furniture and other personal property located at OPC's headquarters facility
(subject to OPC's obligations under Section 2.10 to enter into certain office
space leases); (iii) any books or records (subject to OPC's obligations to
provide access and copies pursuant to Section 6.6); (iv) any assets which OPC
owns as a tenant in common with others (except to the extent otherwise provided
by the third sentence of Section 2.4(g)); or (v) any step-up substation
transformers
6
located at generation facilities. For all purposes of this Agreement,
including all provisions relating to the Purchase Price Adjustment,
"Transmission Assets" shall be limited to the assets acquired or to be
acquired by GTC from OPC effective as of the Effective Date.
(al) "TRANSMISSION BUSINESS" shall mean the performance of the
Transmission Functions and the use and ownership of and rights to the
Transmission Assets and shall include the Transmission Liabilities.
(am) "TRANSMISSION CONTRACTS" shall mean the "Member Transmission
Contracts" as defined in the Member Agreement and the contract(s) to be executed
and delivered between GTC and OPC relating to Transmission Functions in
substantially the form of the Member Transmission Contracts (the "OPC
Transmission Contract").
(an) "TRANSMISSION EMPLOYEES" shall mean those individuals so
designated by the President and Chief Executive Officer of OPC.
(ao) "TRANSMISSION LIABILITIES" shall mean (i) all obligations, taxes
and liabilities of every kind and nature, known or unknown, contingent or
otherwise, that exist as of the Effective Date and are primarily related to the
Transmission Business or the Transmission Employees; and (ii) that portion of
OPC's costs, expenses and other liabilities (except for the OPC Closing Date
Distribution) incurred in effecting the transactions and actions contemplated
hereby that corresponds to the portion of OPC's debt assumed pursuant to Section
2.4(d)(i); provided, however, that any obligations or liabilities otherwise
covered by clause (i) above shall not be included as Transmission Liabilities to
the extent OPC's President and Chief Executive Officer determines that it would
not be in the best interests of OPC and GTC to so include them and so notifies
GTC at least 10 Business Days prior to Closing. Without in any way limiting the
foregoing, but subject to the foregoing proviso, the Transmission Liabilities
shall include any and all costs, expenses, obligations and liabilities incurred
in connection with or otherwise relating to any litigation described on SCHEDULE
1.1(ao) and not paid prior to the Effective Date. Notwithstanding the
foregoing, Transmission Liabilities shall not include: (A) the GTC Assumed OPC
Debt; (B) any taxes or accounts payable to the extent they arise from the
conduct of the Transmission Business prior to the Effective Date; (C) any taxes
of any kind imposed on OPC by reason of the consummation of the transactions
contemplated by this Agreement; (D) or any taxes imposed on any Members of OPC.
1.2 OTHER DEFINITIONS. Certain other terms are defined elsewhere in this
Agreement and have the meanings so indicated. A List of Certain Defined Terms
immediately following the Table of Contents has been included for the
convenience of the parties to assist in locating such definitions, but such list
shall not affect the interpretation of this Agreement.
7
ARTICLE 2
THE RESTRUCTURING
2.1 THE RESTRUCTURING AND DIVISION OF FUNCTIONS. On the terms and
conditions set forth herein, the Transmission Business and the System Operations
Business shall be separated from OPC's other business functions, assets and
liabilities (including those relating to the generation of power). OPC shall
retain all of its business functions, assets and liabilities that are not being
sold to and assumed by GTC or GSOC.
(a) SYSTEMS OPERATIONS BUSINESS.
(i) As soon as all required approvals have been obtained and the
conditions contained in Section 7.1(e) and (f), to the extent they relate to the
sale and transfer of the System Operations Assets, have been satisfied or
waived, and without waiting for the Closing of the other transactions
contemplated hereby, the System Operations Assets and the System Operations
Liabilities shall be transferred and sold to and assumed by GSOC, as
contemplated by and subject to the provisions contained in Section 2.6.
(ii) At the Closing, OPC shall transfer to GSOC the System
Operations Employees to the extent contemplated by Section 2.6(d), and GSOC
shall begin providing system operations and related services pursuant to the
System Operations Contracts, as contemplated by Section 2.7.
(b) OPC CLOSING DATE DISTRIBUTION. At the Closing, OPC shall effect
the OPC Closing Date Distribution contemplated by Section 2.3.
(c) TRANSMISSION BUSINESS. At the Closing, the Transmission Business
shall be transferred and sold to and assumed by GTC, as contemplated by Section
2.4. Also at the Closing, OPC shall transfer to GTC the Transmission Employees
to the extent contemplated by Section 2.4(e), and GTC shall begin providing
transmission and related services pursuant to the Transmission Contracts, as
contemplated by Section 2.5.
2.2 NEW WHOLESALE POWER CONTRACTS. To facilitate the restructuring,
including the transfer of the Transmission Business to GTC, OPC shall seek to
execute and deliver at or before Closing a New Wholesale Power Contract with
each Member pursuant to the terms of the Member Agreement. Commencing as of the
Effective Date, provided RUS approval has been obtained, each New Wholesale
Power Contract shall govern the purchase and sale of power between OPC and each
respective Member that is a party to such a New Wholesale Power Contract.
2.3 OPC CLOSING DATE DISTRIBUTION. On the Closing Date, OPC shall make a
special patronage capital distribution to (or at the direction of) its Members
in an aggregate amount
8
determined using the methodology set forth on SCHEDULE 2.3 (the "OPC Closing
Date Distribution").
(a) ALLOCATION AMONG MEMBERS. The OPC Closing Date Distribution
shall be made to (or at the direction of) the Members based on allocation
percentages determined by dividing each Member's patronage capital in OPC as of
December 31, 1995, by the total of all Members' patronage capital in OPC as of
December 31, 1995.
(b) METHODOLOGY FOR CHARGING EACH MEMBER'S PATRONAGE ACCOUNT. For
purposes of charging each Member's patronage account, such distribution shall be
allocated on a proportional basis to each annual period through December 31,
1995, for which any portion of such Member's total patronage capital has been
allocated.
2.4 ACQUISITION OF TRANSMISSION BUSINESS. At the Closing, the
Transmission Business shall be transferred by OPC to GTC in a complete and bona
fide liquidation of OPC's Transmission Business. The parties shall cooperate
with one another in taking such actions and making such adjustments as shall be
appropriate to cause the economic consequences of such actions and changes to be
effective, to the maximum extent feasible and reasonable, as of the Effective
Date. The parties acknowledge and agree that the precise identity of certain of
the Transmission Assets and the Transmission Liabilities, as well as the amount
of the purchase price, initially and preliminarily will be based on OPC's
projected financial statements and records as of December 31, 1996, and shall be
subject to adjustment when OPC's actual financial statements and records as of
December 31, 1996 become available in final form. The parties shall cooperate
with each other in taking such actions as shall be appropriate to effect and
reflect such adjustments.
(a) PURCHASE AND SALE OF TRANSMISSION ASSETS. At the Closing,
effective as of the Effective Date, OPC shall sell, convey, transfer, assign and
deliver to GTC, and GTC will receive, accept and pay for all of the Transmission
Assets. At the Closing, OPC shall deliver to GTC limited warranty deeds
conveying to GTC all of OPC's right, title and interest in and to the real
property included in the Transmission Assets, subject to the reservation by OPC
of nonexclusive easements to use such property in any way that does not
interfere with GTC's use of such property to conduct the Transmission Business,
and bills of sale, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as shall be effective to vest in GTC all
of OPC's right, title and interest in and to all other Transmission Assets. At
the Closing, OPC will take such other steps as may be reasonably required to put
GTC in actual possession and operating control of the Transmission Assets and
Transmission Business. From time to time after the Closing, at GTC's request
and expense but without further consideration, OPC will execute and deliver such
other instruments of conveyance and transfer and take such other actions as GTC
reasonably may require to vest more effectively in GTC, and to put GTC in
possession of, the Transmission Assets, subject to the above mentioned easement
reserved by OPC.
9
(b) ASSUMPTION OF TRANSMISSION LIABILITIES. At the Closing,
effective as of the Effective Date, GTC shall execute and deliver to OPC and to
such other persons and entities as may be appropriate all such assumptions of
liability, endorsements, acknowledgments of assignment, and such other
instruments as shall be effective to evidence and effect GTC's assumption and
agreement to pay, perform and discharge all Transmission Liabilities.
(c) PURCHASE PRICE. The purchase price for the Transmission Business
shall be the sum of:
(i) OPC's Net Book Value of the Transmission Assets as of the
Effective Date; plus
(ii) That portion of OPC's deferred charges relating to OPC's
debt secured under the OPC Mortgage as of the Effective Date which is determined
in accordance with the allocation formula set forth on Schedule 2.4(d)(i) (the
"GTC Assumed OPC Deferred Charges"); plus
(iii) An amount, if any, by which the Purchase Price Premium
exceeds the GTC Assumed OPC Deferred Charges.
As of the date of this Agreement, a preliminary appraisal has
been completed. The appraisal shall be updated by the appraiser at a date
selected by OPC nearer the closing (the "Final Appraisal"). For purposes of the
provisions of this Section 2.4, the term "Purchase Price Premium" shall be the
amount identified as such in the Final Appraisal. If the Purchase Price Premium
is greater than an amount equal to 6% of OPC's Net Book Value for the
Transmission Assets used in preparing the Final Appraisal, then GTC's payment of
the amount called for by this Section 2.4(c) must be approved by GTC's Board of
Directors. If the appraisal names a range of values and a most likely value
within the range, the Purchase Price Premium shall be deemed to be the Purchase
Price Premium named by the appraisal as the one most likely to be paid.
For purposes of determining the amount of the purchase price to
be paid at Closing, the amount set forth in subsection (i) and the GTC Assumed
OPC Deferred Charges shall be determined on a preliminary basis based on OPC's
projected financial statements and records as of December 31, 1996. Not later
than March 15, 1997, for purposes of determining the final purchase price, the
amount set forth in subsection (i) and the GTC Assumed OPC Deferred Charges
shall be determined based on OPC's actual financial statements and records as of
December 31, 1996.
(d) PAYMENT OF PURCHASE PRICE. GTC shall pay the purchase price as
follows:
(i) GTC shall assume, effective as of the Effective Date (as
evidenced and effected by delivery of the GTC Indenture, the GTC FFB Note(s),
the GTC RUS Note(s), the GTC CoBank Note, the GTC Credit Suisse Note and the GTC
PCB Assumption Agreements),
10
that portion of OPC's debt secured under the OPC Mortgage which is determined
by the allocation formula set forth on SCHEDULE 2.4(d)(i), along with certain
related obligations under swap agreements; and
(ii) The balance due (based on OPC's projected financial
statements as of December 31, 1996) shall be paid in cash by wire transfer on
the Closing Date, net of the booked value of the Transmission Liabilities
assumed (based upon such projected financial statements). Any additional
payment due from GTC (or any refund by OPC of a portion of the initial payment
made by GTC) based on OPC's actual financial statements as of December 31, 1996,
shall be paid by the party owing such amount in cash by wire transfer within 10
Business Days after such actual financial statements become available in final
form.
(e) TRANSFER OF EMPLOYEES. As of the Effective Date, OPC will
terminate the employment of all Transmission Employees of OPC. GTC immediately
thereupon shall have the right to employ such employees upon such terms and
conditions as GTC shall determine. For any such employees so hired, the
provision of any benefits under the "Employee Benefit Plans" (as hereinafter
defined) shall be pursuant to Section 2.11. This paragraph (e) does not and
shall not be construed to create any rights (of continued employment or
otherwise) in any employee or any other third party.
(f) ADJUSTMENT TO PURCHASE PRICE RESULTING FROM CERTAIN EVENTS
SUBSEQUENT TO THE CLOSING DATE. Upon the occurrence of any Purchase Price
Adjustment Event, the purchase price for the Transmission Assets purchased from
OPC pursuant to this Agreement, as determined pursuant to Section 2.4(c), shall
be increased by an amount equal to the Purchase Price Adjustment, if any. The
Purchase Price Adjustment, if any, shall be paid to OPC by GTC (or any successor
entity) in cash within 90 days after the occurrence of the applicable Purchase
Price Adjustment Event.
(g) ASSETS OWNED IN COMMON. Any asset that would be a Transmission
Asset but for the exclusion of assets owned in common under clause (iv) of the
definition of Transmission Assets in Section 1.1 shall be the subject of a lease
or other agreement between OPC and GTC pursuant to which, from and after the
Effective Date and for mutually agreed consideration from GTC to OPC, GTC shall
have the right to use, possess and operate such assets as fully as may be
permitted by the terms of any agreements relating to the common ownership of
such assets. Any such lease or other agreement shall be upon such terms as OPC
and GTC shall agree. If OPC is permitted by the terms of any agreements
relating to the common ownership of such assets and by any necessary consents,
waivers or other actions of the other co-owner(s) of such assets to transfer
OPC's interest in the title to such assets, then such assets, to the extent of
OPC's interest therein, shall be treated as part of the Transmission Assets.
Nothing in this Section 2.4(g) shall affect the exclusion from Transmission
Assets of step-up substation transformers located at generation facilities.
2.5 TRANSMISSION CONTRACTS. At or before the Closing, GTC shall seek
to execute and deliver Member Transmission Contract(s) with each Member
pursuant to the Member Agreement,
11
and GTC and OPC shall execute and deliver OPC Transmission Contract(s),
pursuant to which GTC shall provide transmission and related services to the
Members and to OPC.
2.6 TRANSFER OF SYSTEM OPERATIONS BUSINESS. As soon as all required
approvals have been obtained and the conditions contained in Sections 7.1(e) and
(f), to the extent they relate to the sale and transfer of the System Operations
Business, have been satisfied or waived (which may be earlier, but no later,
than the Closing), OPC and GSOC shall mutually determine the GSOC Asset Transfer
Date which shall be the date on which the System Operations Assets shall be
transferred and sold to GSOC and GSOC shall assume the System Operations
Liabilities.
(a) PURCHASE AND SALE OF SYSTEM OPERATIONS ASSETS. On the GSOC Asset
Transfer Date, OPC shall sell, convey, transfer, assign and deliver to GSOC, and
GSOC will receive, accept and pay for, all of the System Operations Assets,
subject to the continuing lien of the OPC Mortgage. On the GSOC Asset Transfer
Date, OPC shall deliver to GSOC such bills of sale, endorsements, assignments
and other good and sufficient instruments of conveyance and transfer as shall be
effective to vest in GSOC all of OPC's title to and interest in the System
Operations Assets, subject to the continuing lien of the OPC Mortgage. On the
GSOC Asset Transfer Date, OPC will take such other steps as may be reasonably
required to put GSOC in actual possession and operating control of the System
Operations Assets and System Operations Business. From time to time thereafter,
at GSOC's request and expense but without further consideration, OPC will
execute and deliver such other instruments of conveyance and transfer and take
such other actions as GSOC reasonably may require to vest more effectively in
GSOC, and to put GSOC in possession of, the System Operations Assets, subject to
the continuing lien of the OPC Mortgage. OPC and GSOC will enter into
appropriate agreements to permit OPC such use of the System Operations Assets as
it may require prior to the Closing Date.
(b) ASSUMPTION OF SYSTEM OPERATIONS LIABILITIES. On the GSOC Asset
Transfer Date, GSOC shall execute and deliver to OPC all such assumptions of
liability, endorsements, acknowledgments of assignment, and such other
instruments as shall be effective to evidence and effect GSOC's assumption and
agreement to pay, perform and discharge all System Operations Liabilities.
(c) PURCHASE PRICE. The purchase price for the System Operations
Assets shall be the Net Book Value of such assets on the GSOC Asset Transfer
Date. Such purchase price shall be paid on the GSOC Asset Transfer Date:
(i) By GSOC's assumption of OPC's obligations under that certain
Note from OPC, dated June 1, 1984, in the original principal amount of
$5,543,000, payable to the United States of America with a final maturity of May
31, 2019, as such obligations of OPC exist from time to time (the "GSOC Assumed
OPC Debt"), which assumption shall be evidenced by GSOC's execution and delivery
of an assumption document in the form required by RUS (the "GSOC Assumption
Agreement"); and
12
(ii) By GSOC's execution and delivery to OPC of a purchase money
note (the "GSOC Purchase Money Note") for the portion of the purchase price in
excess of: (A) the balance assumed by GSOC under the RUS Note identified in
clause (i) above and (B) the booked value of any (I) capital lease or (II)
obligation relating to the System Operations Employees assumed as part of the
System Operations Liabilities.
The GSOC Assumption Agreement and the GSOC Purchase Money Note shall contain
such terms and conditions as RUS shall approve (with the concurrence of OPC in
the case of the GSOC Purchase Money Note).
(d) TRANSFER OF EMPLOYEES. On or before the Closing, OPC will
terminate the employment of all System Operations Employees of OPC. GSOC shall
immediately thereupon have the right to employ such employees upon such terms
and conditions as GSOC shall determine. For any such employees so hired, the
provision of any benefits under the Employee Benefit Plans shall be pursuant to
Section 2.11. This paragraph (d) does not and shall not be construed to create
any rights (of continued employment or otherwise) in any employee or any other
third party.
2.7 SYSTEM OPERATIONS CONTRACTS. On or before the Closing Date, GSOC and
the other parties identified in this Section shall execute and deliver the
following contracts; (a) a System Operations Contract to be agreed to with OPC,
(b) a System Operations Contract to be agreed to with GTC, (c) a Member System
Operations Contract as required by the Member Agreement with each Member, and
(d) a generation services contract to be agreed to with OPC.
2.8 CHANGE OF OPC NAME. Before or promptly after the Closing Date, OPC's
name shall be changed to "Oglethorpe Power Corporation (An Electric Membership
Corporation)." OPC shall execute and file the appropriate documents with the
Georgia Secretary of State to effect such name change.
2.9 PROVISION OF ADMINISTRATIVE SERVICES. At or before the Closing,
OPC and GTC shall execute and deliver an administrative services contract,
and OPC and GSOC shall execute and deliver an administrative services
contract, both substantially in the form recommended by OPC's President and
Chief Executive Officer, subject to such changes as the parties thereto may
mutually agree upon. Effective as of the Effective Date, OPC shall begin
providing to GTC and GSOC pursuant to the administrative services contracts
the administrative services specified therein.
2.10 OFFICE SPACE LEASES. At or before the Closing, OPC and GTC shall
execute and deliver an office space lease, and OPC and GSOC shall execute and
deliver an office space lease, both substantially in the form recommended by
OPC's President and Chief Executive Officer, subject to such changes as the
parties thereto may mutually agree upon. Effective as of the Effective Date,
OPC shall begin leasing office space to GTC and GSOC pursuant to the office
space leases.
13
2.11 EMPLOYEE BENEFIT PLANS. As soon as practical after the Closing Date,
OPC shall amend its "Employee Benefit Plans," as hereinafter defined, to permit
the Employee Benefit Plans to be jointly sponsored by OPC, GTC, GSOC and any
other employer acceptable to OPC. Each such Employee Benefit Plan shall be a
single plan, with all plan assets available to pay benefits to participating
employees of any sponsoring employer.
(a) AMENDMENTS TO BE ADOPTED. Each such Employee Benefit Plan shall
be amended: (i) to credit employees of OPC, GTC, GSOC and any other sponsoring
employer with service with, and compensation paid by, OPC, GTC, GSOC or any
other sponsoring employer; (ii) to authorize the Board of Directors of OPC to
appoint the plan administrator of such plan; and (iii) to authorize the Board of
Directors of OPC to amend such plans, provided that any amendment that
materially increases the benefit cost to GTC, GSOC or any other sponsoring
employer shall be subject to the approval of the Board of Directors of GTC, the
Board of Directors of GSOC or the governing body of such other sponsoring
employers, which approval may not be unreasonably withheld by such Board of
Directors or other governing body.
(b) ALLOCATION OF COSTS. The benefit and administrative cost of each
such Employee Benefit Plan shall be allocated among OPC, GTC, GSOC and every
other sponsoring employer, in a manner determined by the actuary or contract
administrator then engaged by OPC on behalf of the plan, so as to most equitably
allocate such costs, including extraordinary one time costs, to the employer
whose employees are covered by the Plan; provided, however, in the case of
employee health care costs, such costs shall be allocated among OPC, GTC, GSOC
and every other sponsoring employer so as to most equitably spread the risk of
adverse claim experience among all such sponsoring employers in proportion to
the number of participating employees employed by such sponsoring employers.
(c) PLANS COVERED. For purposes of this Section 2.11, "Employee
Benefit Plan" shall include the following plans currently sponsored by OPC: (i)
the Retirement Income Plan; (ii) the Retirement Savings Plan; (iii) the Health
Insurance Plan; (iv) the Flexible Spending Account Plan; (v) the Long Term
Disability Plan; (vi) the Group Life Insurance Plan; (vii) the Deferred
Compensation Plan for Key Employees; and (viii) the Business Travel Accident
Insurance Plan.
(d) RIGHT TO TERMINATE SPONSORSHIP. OPC, GTC or GSOC may terminate
its sponsorship of any Employee Benefit Plan upon 90 days advance written notice
to the other parties.
2.12 FURTHER ASSURANCES. If at any time after the Closing Date for GTC
or after the GSOC Asset Transfer Date for GSOC, any further assignments or
assurances are necessary or desirable to vest or to perfect or confirm of
record in GTC or GSOC the title to any property or right included in the
Transmission Assets or the System Operations Assets, respectively (subject to
the easement reserved by OPC pursuant to Section 2.4(a)), or to evidence and
effect the assumption by GTC or GSOC of the Transmission Liabilities or the
System Operations Liabilities, respectively, or otherwise to carry out the
provisions of this Agreement, the officers of OPC,
14
GTC and GSOC are hereby authorized and empowered on behalf of such respective
corporations, in the name of and on behalf of the appropriate corporation, to
execute and deliver any and all things necessary or proper to vest or to
perfect or confirm title to such property or rights in GTC or GSOC (subject
to the aforementioned easement) or to evidence and effect such assumption by
GTC or GSOC, and otherwise to carry out the purposes and provisions of this
Agreement.
ARTICLE 3
OPC GOVERNANCE MATTERS
3.1 NEW OPC GOVERNANCE. Subject to satisfaction of the conditions
specified below prior to the full implementation of the governance changes
contemplated by the OPC Bylaw Amendments, OPC shall take appropriate steps on a
timely basis to elect a new Board of Directors in accordance with the OPC Bylaw
Amendments and to implement the new governance structure contemplated by the OPC
Bylaw Amendments.
(a) CONDITIONS TO FULL IMPLEMENTATION OF GOVERNANCE CHANGES. The
terms of the individuals elected as the new Board of Directors of OPC pursuant
to the OPC Bylaw Amendments shall commence, and the other governance changes
contemplated by the OPC Bylaw Amendments shall be fully and unconditionally
implemented, only on the Effective Date (or if earlier, on the fifth Business
Day following satisfaction or waiver of the following conditions) and shall be
conditioned upon satisfaction of all of the following conditions (or waiver by
the existing OPC Board of Directors of either or both of the conditions
contained in paragraphs (i) and (ii), provided that any waiver of the condition
in paragraph (ii) is also approved by RUS):
(i) A ruling from the Internal Revenue Service (the "IRS
Ruling") shall have been received to the effect that the adoption and
implementation of the OPC Bylaw Amendments and the New Wholesale Power Contracts
will not affect OPC's status for federal income tax purposes as a corporation
operating on a cooperative basis; and
(ii) Either a New Wholesale Power Contract, including RATE
SCHEDULE A, shall have become effective for each Member or an OPC rate schedule
which allocates to each Member responsibility for the fixed percentage of all
costs of OPC's existing resources as provided in Exhibit 1 to Appendix 1 of RATE
SCHEDULE A to the New Wholesale Power Contracts shall have otherwise become
legally binding and effective as to each Member.
(b) POSSIBLE MODIFICATIONS. If any changes in the governance
provisions contemplated by the OPC Bylaw Amendments are required in order to
obtain the IRS Ruling, OPC and the Members may develop changes that are mutually
acceptable to OPC, the Members and the IRS. Any such modification to the OPC
Bylaw Amendments may be adopted only by the requisite vote of the Members
prescribed by applicable law and by OPC's Bylaws.
15
3.2 INTERIM GOVERNANCE. Until the terms of the individuals elected as the
new OPC Board of Directors commence and the other governance changes
contemplated by the OPC Bylaw Amendments are fully implemented in accordance
with Section 3.1(a), the existing Board of Directors of OPC shall continue to
serve as the directors of OPC.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OPC
OPC represents and warrants to GTC and GSOC as follows:
4.1 ORGANIZATION AND QUALIFICATION, ETC. OPC is an electric membership
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia and has the corporate power and authority to own its
properties and assets and to carry on its business as it is now being conducted.
4.2 AUTHORIZATION, ETC. OPC has the corporate power and authority to
execute and deliver this Agreement and each additional contract which this
Agreement contemplates will be executed and delivered by OPC (each such contract
being referred to as an "Additional OPC Contract") and to consummate the
transactions and actions contemplated hereby and thereby on the part of OPC.
The execution and delivery by OPC of this Agreement and each Additional OPC
Contract and the consummation by OPC of the transactions and actions
contemplated on its part hereby and thereby have been duly authorized by the
Board of Directors of OPC, and the Members of OPC have adopted the OPC Bylaw
Amendments. This Agreement has been duly executed and delivered by OPC and is a
valid agreement of OPC, enforceable against OPC in accordance with its terms,
subject to (a) bankruptcy, insolvency and other laws of similar import, (b)
principles of equity and (c) applicable public policy.
4.3 NON-CONTRAVENTION. Except as may be contemplated by this Agreement,
the execution and delivery by OPC of this Agreement and each Additional OPC
Contract and the consummation of the transactions and actions contemplated
hereby and thereby, do not and will not: (a) violate any provision of the
Articles of Incorporation or Bylaws of OPC; (b) violate, or result (with the
giving of notice or the lapse of time or both) in a violation of any provision
of, or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any of the property of OPC pursuant to any
provision of, any mortgage, lien, lease, agreement, license, instrument, law,
ordinance, regulation, order, arbitration award, judgment or decree to which OPC
is a party or by which OPC is bound; (c) violate or conflict with any other
restriction of any kind or character to which OPC is subject or by which any
assets of OPC may be bound; or (d) constitute an event permitting termination of
any mortgage, lien, lease, agreement, license or instrument to which OPC is a
party, in each case, if such violation, acceleration, entitlement to accelerate,
creation or imposition of a lien, charge, pledge, security interest or other
encumbrance, conflict, or event would, when
16
taken together with all such other violations, accelerations, entitlements to
accelerate, creations and impositions of liens, charges, pledges, security
interests and other encumbrances, conflicts, and events, affect materially
and adversely the business of OPC or OPC's ability to consummate the
transactions and actions contemplated by this Agreement.
4.4 GOVERNMENTAL CONSENTS, ETC. Except for the RUS approvals contemplated
by Section 7.1(c), the IRS Ruling contemplated by Section 3.1(a), any filings
and other coordination with the SEC and FERC contemplated by Sections 7.1(e) and
(f), and any filings that may be required with the Federal Trade Commission and
the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), no consent, authorization, order or
approval, or filing or registration with, any governmental commission, board or
other regulatory body is required to be made or obtained by OPC for or in
connection with the execution and delivery by OPC of this Agreement and each
Additional OPC Contract and the consummation by OPC of the transactions and
actions contemplated hereby and thereby, other than such as have been or, prior
to the Closing Date, will be made or obtained.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GTC AND GSOC
Each of GTC and GSOC represents and warrants to OPC and each other as
follows, each such corporation making each representation and warranty severally
as to itself only:
5.1 ORGANIZATION AND QUALIFICATION, ETC. GTC is an electric membership
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia. GSOC is a non-profit corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia.
Each such corporation has the corporate power and authority to own the
properties and assets it will own following the Closing Date (or following the
GSOC Asset Transfer Date in the case of GSOC) and to carry on its business as it
will be conducted following the Closing Date.
5.2 AUTHORIZATION, ETC. Such corporation has the corporate power and
authority to execute and deliver this Agreement and each additional contract
which this Agreement contemplates will be executed and delivered by GTC or GSOC,
as the case may be (each such contract being referred to as an "Additional GTC
Contract" or an "Additional GSOC Contract," respectively) and to consummate the
transactions and actions contemplated hereby and thereby on the part of such
corporation. The execution and delivery by such corporation of this Agreement
and each Additional GTC Contract or each Additional GSOC Contract, as the case
may be, and the consummation by such corporation of the transactions and actions
contemplated on its part hereby and thereby have been duly authorized by the
Board of Directors of such corporation. This Agreement has been duly executed
and delivered by such corporation and is a valid agreement of such corporation,
enforceable against such corporation in accordance with its terms, subject to
17
(a) bankruptcy, insolvency and other laws of similar import, (b) principles of
equity and (c) applicable public policy.
5.3 NON-CONTRAVENTION. Except as may be contemplated by this Agreement,
the execution and delivery by such corporation of this Agreement and each
Additional GTC Contract or Additional GSOC Contract, as the case may be, and the
consummation of the transactions and actions contemplated hereby and thereby, do
not and will not: (a) violate any provision of the Articles of Incorporation or
Bylaws of such corporation; (b) violate, or result (with the giving of notice or
the lapse of time or both) in a violation of any provision of, or result in the
acceleration of or entitle any party to accelerate (whether after the giving of
notice or lapse of time or both) any obligation under, or result in the creation
or imposition of any lien, charge, pledge, security interest or other
encumbrance upon any of the property of such corporation pursuant to any
provision of, any mortgage, lien, lease, agreement, license, instrument, law,
ordinance, regulation, order, arbitration award, judgment or decree to which
such corporation is a party or by which such corporation is bound; (c) violate
or conflict with any other restriction of any kind or character to which such
corporation is subject or by which any assets of such corporation may be bound;
or (d) constitute an event permitting termination of any mortgage, lien, lease,
agreement, license or instrument to which such corporation is a party, in each
case, if such violation, acceleration, entitlement to accelerate, creation or
imposition of a lien, charge, pledge, security interest or other encumbrance,
conflict, or event would, when taken together with all such other violations,
accelerations, entitlements to accelerate, creations and impositions of liens,
charges, pledges, security interests and other encumbrances, conflicts, and
events, affect materially and adversely the business of such corporation or such
corporation's ability to consummate the transactions and actions contemplated by
this Agreement.
5.4 GOVERNMENTAL CONSENTS, ETC. Except for the RUS approvals contemplated
by Section 7.1(c), the IRS Ruling contemplated by Section 3.1(a), any filings
and other coordination with the SEC and FERC contemplated by Sections 7.1(e) and
(f), and any filings that may be required with the Federal Trade Commission and
the Department of Justice under the HSR Act, no consent, authorization, order or
approval, or filing or registration with, any governmental commission, board or
other regulatory body is required to be made or obtained by such corporation for
or in connection with the execution and delivery by such corporation of this
Agreement and each Additional GTC Contract or Additional GSOC Contract, as the
case may be, and the consummation by such corporation of the transactions and
actions contemplated hereby, other than such as have been or, prior to the
Closing Date, will be made or obtained.
18
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 CONDUCT OF BUSINESS. OPC covenants that during the period from the
date hereof to the Closing Date, it shall conduct its operations in the ordinary
and usual course of business, except as otherwise provided in or contemplated by
this Agreement.
6.2 INTERIM COST ALLOCATIONS. Subject to any subsequent amendments or
other changes by OPC's Board of Directors (and all necessary approvals thereof),
the interim rate, OPC-15ir, approved and adopted by OPC's Board of Directors at
its meeting on December 4, 1995 and currently applicable under the Existing
Wholesale Power Contracts, shall continue in effect in accordance with its terms
until the earlier of the Effective Date or December 31, 1996.
6.3 HSR ACT FILINGS. Following the execution of this Agreement, each
party shall make appropriate filings as may be required, if any, with the
Federal Trade Commission and the Department of Justice under the HSR Act, with
respect to the transactions contemplated by this Agreement. In connection with
any such filings, each party shall, in cooperation with each other, and from
time to time thereafter, make all such further filings and submissions, and take
such further actions, as may be required in connection therewith. Each party
shall furnish the other all information in its possession necessary for
compliance by the other with the provisions of this Section. No party shall
withdraw any such filing or submission prior to the termination of this
Agreement without the written consent of each other party required to file under
the HSR Act.
6.4 CONSENTS, AUTHORIZATIONS, ETC. Each party hereto will use its
reasonable efforts to obtain all consents, authorizations, waivers, orders and
approvals from any governmental commission, board or other regulatory body, and
to make all related filings and registrations, which may be necessary or
desirable in connection with the consummation of any of the transactions and
actions contemplated by this Agreement and by each additional contract which
this Agreement contemplates will be executed by such party (each such contract
applicable to a respective party being referred to as an "Applicable Additional
Contract"). Each party also will use its reasonable efforts to obtain all
consents, authorizations, waivers and approvals from any non-governmental third
party which may be necessary or desirable in connection with the consummation of
the transactions and actions contemplated by this Agreement and by each
Applicable Additional Contract. Each party will cooperate fully with the other
parties in assisting them to obtain such consents, authorizations, waivers,
orders and approvals that the other parties are required to obtain or make.
Without in any way limiting the foregoing, the parties shall use reasonable
efforts to obtain the approval of RUS of all of the following (as well as the
approvals and related actions by FFB, CoBank, Credit Suisse and the PCB Trustees
necessary to implement the matters referenced in subsections (c) and (d)):
(a) OPC CLOSING DATE DISTRIBUTION. The OPC Closing Date Distribution
contemplated by Section 2.3;
19
(b) NEW WHOLESALE POWER CONTRACTS. The New Wholesale Power Contracts;
(c) RELEASE FROM OPC MORTGAGE. Appropriate instruments to release
from the OPC Mortgage and to permit the transfer by OPC to GTC of the
Transmission Business;
(d) GTC ASSUMPTION DOCUMENTS. The GTC PCB Assumption Agreements, the
GTC Indenture, the GTC FFB Note(s), the GTC RUS Note(s), the GTC CoBank Note and
the GTC Credit Suisse Note;
(e) OPC INDENTURE. The OPC Indenture;
(f) TRANSMISSION CONTRACTS. The Transmission Contracts between GTC
and the Members and GTC and OPC;
(g) GSOC MATTERS. The transfer to GSOC of the System Operations
Business and the assumption by GSOC of the GSOC Assumed OPC Debt;
(h) SYSTEM OPERATIONS CONTRACTS. The System Operations Contracts
between GSOC and GTC, GSOC and OPC, and GSOC and the Members; and
(i) OTHER MATTERS CONTEMPLATED HEREBY. Such other transactions,
actions and contracts contemplated by this Agreement to the extent OPC
determines that approval by the RUS of such matters is necessary.
6.5 IRS RULING. OPC shall use its reasonable efforts to obtain a
favorable tax ruling of the Internal Revenue Service meeting the requirements of
Section 3.1(a).
6.6 ACCESS; CONFIDENTIALITY.
(a) ACCESS. Prior to and following the Closing Date, GTC and GSOC
shall continue to have access to the premises, books and records, officers and
employees of OPC at reasonable hours and the right to copy all books and records
relating to the Transmission Business and the System Operations Business,
respectively, as may be necessary or desirable for the conduct of the
Transmission Business and the System Operations Business, respectively. The
officers of OPC will furnish GTC and GSOC with such financial and operating data
and other information with respect to the Transmission Business and the System
Operations Business as GTC and GSOC may request from time to time.
(b) CONFIDENTIALITY. Except as otherwise required in filings which
any party makes with regulatory entities, any information which any party
provides to the other or to the other's Representatives, whether written or
oral, which is confidential or identified as confidential shall be treated as
confidential material (the "Confidential Material"), except that this shall not
apply to information that is generally available to the public or becomes
generally available to the public other than as a result of a disclosure by the
receiving party or its Representatives. For
20
purposes of this Agreement, the term "Representatives" shall mean a party's
directors, officers, employees, attorneys, accountants, investment bankers,
brokers, bankers and others engaged by such party or intended to be engaged
by such party to advise it regarding the Confidential Material or the
transactions contemplated hereby or to assist in financing the transactions
contemplated hereby and who receive Confidential Material. It is hereby
agreed that the Confidential Material will be used by the receiving party
and/or its Representatives only for purposes of evaluating and facilitating
the transactions contemplated hereby, and that the Confidential Material will
be kept confidential by the receiving party and its Representatives;
provided, however, that (i) any of such information may be disclosed to the
receiving party's Representatives who need to know such information for
purposes relating to the transactions contemplated hereby (it being
understood that such Representatives shall be informed by the receiving party
of the confidential nature of such information and shall be directed by the
receiving party to treat such information confidentially), and (ii) any other
disclosure of such information may be made to which the party providing the
information consents in writing. The provisions of this Section 6.6(b) shall
remain in effect for a period of three years after the date hereof; provided,
however, that following the Effective Date, GTC and GSOC and their respective
Representatives shall not be restricted hereunder with respect to any
information regarding the Transmission Business and the System Operations
Business, respectively.
6.7 EXPENSES. Whether or not the transactions and actions contemplated by
this Agreement are consummated, all costs and expenses (including reasonable
attorneys' and accountants' fees) incurred in connection with this Agreement and
the transactions and actions contemplated hereby shall be allocated by agreement
among the parties hereto, subject to the obligation of GTC to assume that
portion of OPC's expenses included in the definition of Transmission
Liabilities.
6.8 PUBLICITY. Except as otherwise required by law, OPC shall coordinate
any press releases or other public announcements through the Closing Date with
respect to this Agreement and the transactions contemplated hereby, and neither
GTC nor GSOC shall act unilaterally in this regard without prior consultation
with OPC.
6.9 ACTIONS TO AVOID AND NOTICES OF, BREACHES OF REPRESENTATIONS AND
WARRANTIES. Each party: (a) shall take such actions so that such party's
representations and warranties in this Agreement remain true and correct and
shall not take any action that would cause such representations and warranties
to cease to be true and correct; and (b) shall inform the other parties hereto
promptly of any facts or circumstances that could be reasonably expected to
constitute or result in a breach of any such party's representations and
warranties in this Agreement.
6.10 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective, as soon
as reasonably practicable, the transactions and actions contemplated by this
Agreement.
21
ARTICLE 7
CLOSING CONDITIONS
7.1 CLOSING CONDITIONS. Subject in each case to the rights of OPC (with
the approval of RUS when applicable) to waive (in whole or in part) any
condition pursuant to Section 7.2, each party's obligation to consummate the
transactions and actions contemplated by this Agreement is subject to the
fulfillment, to the reasonable satisfaction of such party, of each of the
following conditions, prior to or contemporaneously with the Closing; provided,
however, that the full implementation of the OPC Bylaw Amendments and related
governance changes are subject only to the fulfillment (or waiver) of the
conditions contained in Section 3.1(a), and provided further that the transfer
of the System Operations Assets and Liabilities to GSOC is subject only to the
fulfillment (or waiver) prior to or contemporaneously with the GSOC Asset
Transfer Date of the condition that the parties receive such approvals and
consents described below that are specifically applicable to such transfer of
the System Operation Assets and Liabilities and of the conditions contained in
Sections 7.1(e) and (f) to the extent they relate to the sale and transfer of
the System Operations Assets.
(a) GOVERNANCE CHANGES. The conditions set forth in Section 3.1(a)
shall have been satisfied or waived in accordance with the provisions of Section
3.1(a), the OPC Bylaw Amendments shall have been implemented on a full and
unconditional basis, and the terms of the individuals elected as the new Board
of Directors of OPC pursuant to the OPC Bylaw Amendments shall have commenced.
(b) MEMBER AGREEMENT. The Member Agreement shall have been executed
and delivered by and among all Members, OPC, GTC and GSOC.
(c) RUS APPROVALS. RUS shall have approved:
(i) The OPC Closing Date Distribution;
(ii) The New Wholesale Power Contracts;
(iii) The transfer of the Transmission Business to GTC, the
related release from the OPC Mortgage contemplated by Section 6.4(c) (which
release shall be joined in by the other secured parties under the OPC Mortgage),
the GTC PCB Assumption Agreements, the GTC Indenture, the GTC FFB Note(s), the
GTC RUS Note(s), the GTC CoBank Note, the GTC Credit Suisse Note, the
Transmission Contracts, the transfer of the System Operations Business to GSOC,
the assumption by GSOC of the GSOC Assumed OPC Debt, and the System Operations
Contracts;
(iv) The OPC Indenture; and
22
(v) The other transactions, actions and contracts contemplated
by this Agreement to the extent OPC determines that approval by the RUS of such
matters is necessary.
(d) HART-SCOTT-RODINO. Any applicable waiting period under the HSR
Act shall have expired or been terminated, and no proceeding by the Department
of Justice or the Federal Trade Commission shall be pending or threatened with
respect to the transactions contemplated by this Agreement, which, if determined
adversely, would have a material adverse effect on the financial condition or
results of operations of OPC, GTC or GSOC.
(e) PUHCA MATTERS. A no-action letter shall have been obtained from
the SEC to the effect that none of the members of GTC or GSOC shall be deemed a
public utility holding company within the meaning of the Public Utility Holding
Company Act of 1935, or there shall have otherwise been obtained assurance
satisfactory to OPC that the parties will be exempt from compliance or in
compliance with such Act and related regulations of the SEC.
(f) FEDERAL POWER ACT MATTERS. There shall have been obtained
assurance satisfactory to OPC that the parties will be exempt from compliance or
in compliance with the Federal Power Act and related regulations of FERC.
(g) NO INJUNCTION, ETC. There shall be no judgment, decree,
injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality outstanding against OPC, GTC or GSOC which prohibits,
restricts or delays consummation of the transactions and other actions
contemplated hereby or limits the right of GTC to control in any material
respect the Transmission Business after the Closing or the right of GSOC to
control in any material respect the System Operations Business after the
transfer of such business to GSOC.
(h) OTHER CONSENTS, AUTHORIZATIONS, ETC. In addition to the
approvals described under any of the foregoing provisions of this Section 7.1,
all other consents, authorizations, waivers, orders and approvals of, and
filings and registrations with, any governmental commission, board or other
regulatory body or any non-governmental third party which are required for or in
connection with the execution and delivery by OPC, GTC and GSOC of this
Agreement and each Applicable Additional Contract and the consummation by OPC,
GTC and GSOC of the transactions and actions contemplated hereby shall have been
obtained or made.
(i) REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH COVENANTS AND
OBLIGATIONS. In the case of each party: (A) the representations and warranties
of each of the other parties contained in this Agreement shall have been true
and correct at the date hereof and also shall be true and correct in all
material respects at and as of the Closing (and, to the extent applicable, at
and as of the GSOC Asset Transfer Date), except for changes contemplated by this
Agreement, with the same force and effect as if made at and as of the Closing
(and, to the extent applicable, at and as of the GSOC Asset Transfer Date); (B)
each of the other parties shall have performed and complied with in all material
respects all agreements and covenants required by this Agreement to be performed
or complied with by it at or prior to the Closing (and, to the extent
applicable, at or prior to the GSOC Asset Transfer Date); and (C) each party
shall have
23
received one or more certificates of the President or other senior executive
officer of each of the other parties certifying, to the best of his or her
knowledge, all of the foregoing effects.
(j) CONFIRMATION OF RATINGS. OPC shall have received confirmation
from two rating agencies then rating OPC's outstanding fixed rate uninsured
pollution control bonds that the ratings assigned by such rating agencies to
such bonds shall not be lowered as a result of the consummation of the
transactions and actions contemplated hereby. Such rating agencies also shall
have provided satisfactory assurance that they would assign to any comparable
bonds issued directly by GTC the same or higher ratings as those assigned to
OPC's fixed rate uninsured pollution control bonds on the Effective Date.
(k) NEW WHOLESALE POWER CONTRACTS. A New Wholesale Power Contract
shall have been executed, delivered and approved by RUS for each Member.
(l) MEMBERSHIP IN GTC. The Members shall have completed the actions
necessary to become Members of GTC.
(m) TRANSMISSION CONTRACTS. A Transmission Contract between GTC and
each Member and between GTC and OPC shall have been executed, delivered and
approved by RUS.
(n) MEMBERSHIP IN GSOC. The Members shall have completed the actions
necessary to become Members of GSOC.
(o) SYSTEM OPERATIONS CONTRACTS. The System Operations Contracts
between GSOC and OPC, GSOC and GTC, and GSOC and each Member shall have been
executed, delivered and approved by RUS.
(p) STATE TAX MATTERS. Satisfactory assurance shall have been
obtained from the Georgia Department of Revenue (or otherwise) with respect to
Georgia sales tax associated with the transfer of the Transmission Assets from
OPC to GTC.
(q) OPINIONS OF COUNSEL AND CERTIFIED RESOLUTIONS. All opinions of
counsel to each Member and all certificates from each Member as to such legal
matters as RUS shall require to be covered by any opinions or certificates and
all certified resolutions evidencing approval of the Member Agreement and each
Additional Member Contract (as defined in the Member Agreement), in the form
required by RUS, shall have been delivered.
7.2 WAIVER OF CONDITIONS. At its option, the Board of Directors of OPC
may waive any or all of the conditions (in whole or in part) contained herein,
except for those contained in Sections 7.1(c) and 7.1(d).
24
ARTICLE 8
CLOSING
8.1 CLOSING. Provided that all of the conditions set forth in Article 7
shall have been satisfied or waived, evidence of the fulfillment or waiver of
such conditions shall be provided, and all documents and payments required to be
delivered or made or otherwise necessary or desirable to consummate the
transactions contemplated hereby (other than those consummated on the GSOC Asset
Transfer Date) shall be executed and delivered and paid, by the parties hereto
to each other at a closing (the "Closing") to be held at the offices of
Sutherland, Asbill & Brennan, 999 Peachtree Street, N.E., Atlanta, Georgia 30309
at 10:00 a.m. Eastern time, on January 3, 1997 (or at such other date, time and
place as OPC, GTC and GSOC may mutually agree). If the parties mutually agree
to reschedule the Closing from January 3, 1997 to another date, the parties also
shall cooperate with each other to make and appropriately document all
adjustments as may be necessary or desirable in other dates contained in this
Agreement which relate to the timing of the Closing.
8.2 PRE-CLOSING. The parties hereto shall cooperate with one another and
shall seek the cooperation of the Members so that: (a) a pre-Closing (the "Pre-
Closing") can occur at the Atlanta offices of Sutherland, Asbill & Brennan on a
date and at a time to be set by the OPC Board (on or before December 2, 1996, if
possible); and (b) all documents that are a condition to Closing can be executed
and delivered at or before such Pre-Closing, with such delivery being either to
each other or to Sutherland, Asbill & Brennan to be held in escrow until the
Closing Date and then delivered. The parties hereto agree, and the parties
shall seek to obtain each Member's agreement in the Member Agreement, that any
document delivered in escrow to Sutherland, Asbill & Brennan may be delivered on
the Closing Date to the appropriate recipient(s) without further authorization,
unless Barrett K. Hawks or Cada T. Kilgore, III of Sutherland, Asbill & Brennan
actually receives a written notice from the party or Member that executed such
document: indicating that a representation, warranty, certification, opinion or
similar matter in such document is no longer true; setting forth the specific
reason why such document cannot be delivered; and providing a substitute
document which conforms as nearly as possible to the requirements applicable to
the original document.
8.3 DELIVERIES AT OR PRIOR TO GSOC ASSET TRANSFER DATE. Provided that all
applicable conditions to the sale and transfer of the System Operations Assets
and Liabilities have been satisfied or waived, at or prior to the GSOC Asset
Transfer Date (or any mutually agreed date for pre-closing such transaction),
OPC and GSOC shall execute and deliver all documents necessary or desirable to
consummate such transaction and evidence the satisfaction or waiver of
applicable conditions.
25
ARTICLE 9
TERMINATION AND ABANDONMENT
9.1 TERMINATION AND ABANDONMENT. This Agreement and all transactions and
actions contemplated hereby may be terminated and abandoned in either manner set
forth below at any time prior to the Closing Date, subject to any earlier
implementation of the effectiveness of the OPC governance changes contemplated
by, and effected pursuant to, Article 3 and subject to any earlier completion of
the transfer of the System Operations Assets and Liabilities to GSOC on the GSOC
Asset Transfer Date:
(a) BY MUTUAL ACTION. By mutual action of the Boards of Directors of
OPC, GTC and GSOC.
(b) BY OPC. By OPC if any condition set forth in Section 7.1 shall
not have been complied with or performed in any material respect and such non-
compliance or non-performance shall not have been cured or eliminated (or by its
nature cannot be cured or eliminated other than by waiver) on or before March
15, 1997.
9.2 PROCEDURE FOR TERMINATION. The termination and abandonment of this
Agreement and/or any of the transactions and actions contemplated hereby other
than pursuant to mutual action under Section 9.1(a) shall be effective only when
OPC gives written notice, signed by OPC, stating the grounds for such
termination and abandonment, to the other parties.
9.3 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement and/or any of the transactions and actions
contemplated hereby, no party shall have any liability (regardless of fault or
control) if such termination and abandonment is by mutual action pursuant to
Section 9.1(a), and no party hereto shall have any liability if this Agreement
and/or any of the transactions and actions contemplated hereby are otherwise
terminated or abandoned in accordance with Section 9.1, unless the failure to
consummate or fulfill a condition is within the reasonable control of such
party, in which case the party or parties having such reasonable control shall
continue to be liable hereunder.
ARTICLE 10
MISCELLANEOUS
10.1 SURVIVAL. The representations and warranties of the parties contained
in Articles 4 and 5 hereof shall not survive the Closing. The covenants and
other agreements contained in Sections 2.4(c), 2.4(d), 2.4(f), 2.8, 2.11, 2.12,
6.6, 6.7 and 10.2 shall survive the Closing.
10.2 DISPUTE RESOLUTION AND ARBITRATION. In the event of any disputes
under this Agreement, the parties agree to try in good faith to settle the
dispute by mediation under the
26
Commercial Mediation Rules of the American Arbitration Association, before
resorting to arbitration or some other dispute resolution procedure; provided
that a party may not invoke mediation unless it has provided the other with
written notice of the dispute and has attempted in good faith to resolve such
dispute through negotiation. If the parties involved in such dispute shall
not have reached agreement by negotiation or mediation within 120 days as to
the matter in question, then the matter in dispute shall be submitted to and
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (subject to the provisions stated
below). Notwithstanding the foregoing, any party may seek immediate
equitable relief, without attempting to settle a dispute through mediation,
in any case where such party is entitled to equitable relief by the terms of
this Agreement or otherwise.
(a) ARBITRATION PROCEDURES. The arbitrators shall have the right to
employ experts to assist them in any arbitration proceeding under this Section
and shall have the right to render equitable, as well as other, awards and
relief. Before submitting a list of potential arbitrators to the parties for
their consideration, the American Arbitration Association shall consult with
each party to discuss the applicable qualifications for the proposed
arbitrators. Upon request by the parties involved in the dispute, the American
Arbitration Association shall select a panel of at least three arbitrators, but
if no such request is made by the time the parties comment on any proposed list
of arbitrators, the American Arbitration Association may select a single
arbitrator unless the American Arbitration Association determines that a greater
number of arbitrators is appropriate.
(b) ARBITRATION DECISION. Any decision of the arbitrator(s) shall be
satisfied as provided in the order of the arbitrator(s). If necessary, any such
decision and satisfaction procedure may be enforced by the prevailing party in
any court of record having jurisdiction over the subject matter or over any of
the parties.
10.3 SPECIFIC PERFORMANCE, ETC. The parties hereto acknowledge that the
rights of the other parties to consummate the transactions contemplated hereby
are special, unique, and of extraordinary character, and that, in the event that
any party violates or threatens to violate or fails and refuses to perform any
covenant made by it herein, then the other parties hereto will be without
adequate remedy at law. Therefore, each party agrees, that, in the event it
violates, breaches, threatens to violate or breach, or fails and refuses to
perform any covenant made by it herein, then the other applicable party or
parties hereto, so long as it or they are not in breach hereof, may, in addition
to any remedies at law, institute and prosecute an action in a court of
competent jurisdiction to enforce specific performance of such covenant or seek
any other equitable relief against the defaulting party.
10.4 WAIVER. The failure of any party hereto at any time or times to
require performance of any provisions hereof shall in no manner affect the right
to enforce the same. No waiver by any party of any condition, or the breach of
any term, provision, warranty, representation, agreement or covenant contained
in this Agreement or the other contracts contemplated hereby, whether by conduct
or otherwise, in any one or more instances shall be deemed or construed as a
further or continuing waiver of any such condition or breach or a waiver
27
of any other condition or of the breach of any other term, provision,
warranty, representation, agreement or covenant herein or therein contained.
10.5 NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if either (a) delivered personally, by
courier or nationally recognized next business day delivery service or Express
Mail, (b) transmitted by telecopy mechanism, provided that any notice so given
is also sent for delivery as provided in clause (a) or mailed as provided in
clause (c), or (c) sent by registered or certified mail, postage prepaid,
addressed to each applicable party at the address shown below (or to such other
address or person as any party shall have designated by notice to the other
party):
If to OPC: Oglethorpe Power Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Attention: President and
Chief Executive Officer
Fax: (770) 270-7977
If to GTC: Georgia Transmission Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Attention: President
Fax: (770) 270-7977
If to GSOC: Georgia System Operations Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Attention: President
Fax: (770) 270-7977
Each such notice or other communication shall be effective (i) if given by
telecopy, when transmitted to the applicable number so specified in (or pursuant
to) this Section and an appropriate answer back is received, or (ii) if given by
any other means, when actually received at such address.
10.6 COUNTERPARTS; FACSIMILE DELIVERY. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Any party may
deliver an executed copy of this Agreement and an executed copy of any documents
contemplated hereby by facsimile transmission to another party except when the
law expressly requires physical delivery with respect to stock certificates or
other special types of documents, and such delivery shall have the same force
and effect as any other delivery of a manually signed copy of this Agreement or
such other document.
28
10.7 HEADINGS. The headings herein are for convenience of reference only,
do not constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions hereof.
10.8 AMENDMENT. This Agreement may be amended at any time by OPC, GTC and
GSOC by written instrument executed by the parties affected by such amendment.
10.9 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions and other actions contemplated hereby is not affected in any
manner adverse to any party hereto. Upon any such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions and other actions
contemplated by this Agreement are consummated to the extent possible.
10.10 MISCELLANEOUS. This Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties, with respect to the subject matter hereof; (b) is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder; (c) shall not be assigned, by operation of law or
otherwise; and (d) shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Georgia except that the
Federal Arbitration Act shall govern any arbitration proceedings.
[Signatures are on the following page.]
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their seals affixed, on the date first above written.
OPC:
[CORPORATE SEAL] OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
By: /s/ J. Calvin Earwood
----------------------------------------------
J. Calvin Earwood, Chairman of the Board
Attest:
/s/ Gary M. Bullock
- -----------------------------------------
Gary M. Bullock, Secretary-Treasurer
GTC:
[CORPORATE SEAL] GEORGIA TRANSMISSION CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
By: /s/ Charles R. Fendley
----------------------------------------------
Charles R. Fendley, Chairman of the Board
Attest:
/s/ Roy Tollerson, Jr.
- -----------------------------------------
Roy Tollerson, Jr., Secretary
GSOC:
[CORPORATE SEAL] GEORGIA SYSTEM OPERATIONS
CORPORATION
By: /s/ James E. Estes
----------------------------------------------
James E. Estes, Chairman of the Board
Attest:
/s/ Jarnett W. Wigington
- -----------------------------------------
Jarnett W. Wigington, Secretary-Treasurer
30