TABLE OF CONTENTS

 

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ARTICLE I - DEFINITIONS		1
ARTICLE II - REPRESENTATIONS AND WARRANTIES		6
ARTICLE III - THE LOANS		8
Section 3.1	The Loans	8
Section 3.2	No Further Advances	8
Section 3.3	Advances under any Partially Unadvanced Note and the S-8 FFB Note	8
Section 3.4	Interest Rates and Payment	9
Section 3.5	Prepayment	9
ARTICLE IV - CONDITIONS OF LENDING		9
Section 4.1	General Conditions	9
Section 4.2	Conditions to Advances Under any Partially Unadvanced Note and the S-8 FFB Note	10
ARTICLE V - AFFIRMATIVE COVENANTS		11
Section 5.1	Generally	11
Section 5.2	Performance under Indenture	11
Section 5.3	Annual Compliance Certificate	11
Section 5.4	Simultaneous Prepayment of Contemporaneous Loans	11
Section 5.5	Rates and Coverage Ratios	12
Section 5.6	Financial Books	12
Section 5.7	Rights of Inspection	12
Section 5.8	Real Property Acquisition	12
Section 5.9	Financial Reports	13
Section 5.10	Miscellaneous Reports and Notices	13
Section 5.11	Variable Rate Indebtedness	13
Section 5.12	Special Construction Account	14
Section 5.13	Compliance with Laws	14
Section 5.14	Plant Agreements	14
Section 5.15	Lockbox Agreement	14
Section 5.16	Nuclear Fuel	15
Section 5.17	Power Requirements Studies	15
Section 5.18	Long Range Engineering Plans and Construction Work Plans	15
Section 5.19	Design Standards, Construction Standards and List of Materials	15
Section 5.20	Plans and Specifications	15

 

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Section 5.21	Standard Forms of Construction Contracts, and Engineering and Architectural Services Contracts	16
Section 5.22	Contract Bidding Requirements	16
Section 5.23	Nondiscrimination	16
Section 5.24	“Buy American” Requirements	17
Section 5.25	Maintenance of Credit Ratings	17
Section 5.26	Application of Advances	17
Section 5.27	Excepted Property	17
Section 5.28	Additional Affirmative Covenants	17
ARTICLE VI - NEGATIVE COVENANTS		18
Section 6.1	General	18
Section 6.2	Limitations on System Extensions, Additions and Dispositions	18
Section 6.3	Limitations on Employment and Retention of General Manager	18
Section 6.4	Limitations on Certain Types of Contracts	19
Section 6.5	Limitations on Loans, Investments and Other Obligations	20
Section 6.6	Depreciation Rates	21
Section 6.7	Rate Reductions	21
Section 6.8	Indenture Restrictions	21
Section 6.9	Negative Pledge	23
Section 6.10	Emissions Allowances	24
Section 6.11	Changes to Plant Agreements	24
Section 6.12	Fiscal Year	24
Section 6.13	Limits on Variable Rate Indebtedness	24
Section 6.14	Limitations on Changing Principal Place of Business	25
Section 6.15	Limitations on RUS Financed Extensions and Additions	25
Section 6.16	Historic Preservation	25
Section 6.17	Impairment of Wholesale Power Contracts	25
Section 6.18	State Regulation	25
Section 6.19	Limits on Short-Term Indebtedness	25
Section 6.20	Additional Negative Covenants	26
ARTICLE VII - EVENTS OF DEFAULT		26
ARTICLE VIII - REMEDIES		27
Section 8.1	Remedies	27
Section 8.2	Suspension of Advances	27
ARTICLE IX - MISCELLANEOUS		28
Section 9.1	Notice to RUS; Objection of RUS	28
Section 9.2	Notices	28
Section 9.3	Expenses	29

 

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Section 9.4	Late Payments	29
Section 9.5	Filing Fees	30
Section 9.6	No Waiver	30
Section 9.7	Governing Law	30
Section 9.8	Holiday Payments	30
Section 9.9	Successors and Assigns	30
Section 9.10	Complete Agreement; Amendments	30
Section 9.11	Headings	31
Section 9.12	Severability	31
Section 9.13	Right of Set Off	31
Section 9.14	Schedules and Exhibits	31
Section 9.15	Sole Benefit	31
Section 9.16	Existing Loan Contract	31
Section 9.17	Authority of RUS Representatives	32
Section 9.18	Relation to RUS Regulations	32
Section 9.19	Term	33
Section 9.20	Relation to Indenture	33

 

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SCHEDULES AND EXHIBITS

 

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

 

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FIFTH AMENDED AND RESTATED LOAN CONTRACT

 

THIS FIFTH AMENDED AND RESTATED LOAN CONTRACT , dated as of December 22, 2008, is between OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION) , formerly known as Oglethorpe Power Corporation (An Electric Membership Generation & Transmission Corporation) (together with any successors and assigns, the “Borrower”), a corporation organized and existing under the laws of the State of Georgia (the “State”), and the UNITED STATES OF AMERICA (the “Government”), acting by and through the Administrator (together with any person succeeding to the powers and rights of the Administrator with respect to this Agreement, the “Administrator”) of the Rural Utilities Service (together with any agency succeeding to the powers and rights of the Rural Utilities Service with respect to this Agreement, the “RUS”), and amends and restates that certain Fourth Amended and Restated Loan Contract, dated as of September 5, 2008, between the Borrower and the Government, acting by and through the Administrator of the RUS (the “Existing Loan Contract”).

 

RECITALS

 

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

 

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

 

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

 

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

 

ARTICLE I  - DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

“Amendatory Supplemental Indenture” shall mean a Supplemental Indenture in the form set forth as Exhibit C attached hereto.

 

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

 

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

 

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

 

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

 

“Equity” shall mean the Borrower’s total margins and equities computed in accordance with Accounting Requirements.

 

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

 

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

 

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

 

“Fitch” shall mean Fitch, Inc., and any successor thereto.

 

“General Manager” shall mean the President and Chief Executive Officer of the Borrower or the person performing the duties of a chief executive officer if no person holds such title and, in the event of any dispute between the Borrower and the Government as to who is the

 

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General Manager, the Administrator may designate a person or position that shall be the General Manager for purposes of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Indenture” shall mean the Indenture, dated as of March 1, 1997, entered into by the Borrower and U.S. Bank National Association, as successor to SunTrust Bank, formerly known as SunTrust Bank, Atlanta, as trustee, and all amendments and supplements thereto.

 

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

 

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

 

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

 

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

 

“Lockbox Agreement” shall mean that certain Lockbox Agreement, dated as of March 1, 1997, among the Borrower, U.S. Bank National Association, as successor to SunTrust Bank, formerly known as SunTrust Bank, Atlanta, and the Trustee.

 

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

 

“Moody’s” shall mean Moody’s Investors Service, Inc., and any successor thereto.

 

“Notes” shall mean, collectively, the Outstanding Notes and the S-8 Notes.

 

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

 

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

 

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

 

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

 

“Rates” shall have the meaning given such term in the Indenture.

 

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

 

“RUS Form 12” shall mean the version of RUS Form 12 (including subdivisions thereof including, but not limited to, RUS Form 12a) submitted by the Borrower and dated as of December 31, 2007 or corresponding information in future versions of such form or any form required by RUS in substitution therefor containing corresponding information.

 

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

 

“S-8 Loan” shall have the meaning as defined in Section 3.1(b).

 

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

 

“S-8 FFB Note” shall mean the note of the Borrower, dated as of September 5, 2008, payable to the order of FFB in the face principal amount of $441,522,000, the payment of which is guaranteed by the Government, acting by and through the Administrator of the RUS, pursuant to the Act, and all amendments, supplements, extensions and replacements to, of or for such note.

 

“S-8 Notes” shall mean, collectively, the S-8 FFB Note and the S-8 Reimbursement Note.

 

“S-8 Reimbursement Note” shall mean the note of the Borrower, dated as of September 5, 2008, evidencing the reimbursement obligations of the Borrower to the Government, acting by and through the Administrator of the RUS, with respect to the Government’s guarantee of the S-8 FFB Note, and all amendments, supplements, extensions and replacements to, of or for such note.

 

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

 

“Short-Term Indebtedness” shall have the meaning as defined in Section 6.19.

 

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

 

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

 

“System” shall mean all electric properties and interest in electric properties of the Borrower, it being the intent that “System” be broadly construed to encompass and include the Borrower’s interests in all electric production, transmission, distribution, conservation, load

 

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management, general plant and other related facilities, equipment or property and in any mine, well, pipeline, plant, structure or other facility for the development, production, manufacture, storage, fabrication or processing of fossil, nuclear or other fuel of any kind or in any facility or rights with respect to the supply of water, in each case for use, in whole or in major part, in any of the Borrower’s generating plants, now existing or hereafter acquired by lease, contract, purchase or otherwise or constructed by the Borrower, including any interest or participation of the Borrower in any such facilities or any rights to the output or capacity thereof, together with all additions, betterments, extensions and improvements to said System or any part thereof hereafter made and together with all lands, easements and rights-of-way of the Borrower and all other works, property or structures of the Borrower and contract rights and other tangible and intangible assets of the Borrower used or useful in connection with or related to said System, including, without limitation, a contract right or other contractual arrangement for the long-term or short-term interconnection, interchange, exchange, pooling, wheeling, transmission, purchase or sale of electric power and energy and other similar arrangements with entities having generation or transmission capabilities; provided , however , that “System” shall not include any property constituting Excepted Property or Excludable Property.

 

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

 

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

 

ARTICLE II  - REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE III  - THE LOANS

 

Section 3.1             The Loans

 

(a)            Existing Loans Evidenced by the Outstanding Notes.  To finance, pursuant to the provisions of the Act, the construction of the System for the purpose of furnishing electric energy to persons in rural areas not receiving central station electric service, (i) the Borrower has borrowed funds from the Government, acting by and through the Administrator of the RUS, evidenced by the Outstanding Notes payable to the Government, (ii) the Borrower has borrowed funds from FFB, evidenced by the Outstanding Notes payable to FFB, and the Government, acting by and through the Administrator of the RUS, has guaranteed the repayment of such funds, and (iii) the Borrower has agreed to reimburse the Government, acting by and through the Administrator of the RUS, for amounts paid by the Government on account of its guarantee of funds borrowed by the Borrower from FFB, which reimbursement obligations are evidenced by the Outstanding Notes payable to the Government in respect of such reimbursement obligations.

 

(b)            S-8 Loan .  To finance, pursuant to the provisions of the Act, certain improvements to the System (including, without limitation, the installation of certain environmental improvements at Plant Robert W. Scherer), the RUS agrees to guarantee the payment of a loan in the amount of $441,522,000 to be made by FFB to the Borrower (the “S-8 Loan”).

 

Section 3.2             No Further Advances

 

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

 

Section 3.3             Advances under any Partially Unadvanced Note and the S-8 FFB Note

 

With respect to Advances to be made under any Partially Unadvanced Note or the S-8 FFB Note, the RUS agrees to make or approve and the Borrower agrees to request such

 

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Advances on the terms and conditions of this Agreement.  The Borrower shall give the RUS written notice of the date on which each Advance is requested to be made in accordance with RUS policies and procedures.

 

Section 3.4             Interest Rates and Payment

 

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

 

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

 

Section 3.5             Prepayment

 

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

 

ARTICLE IV  - CONDITIONS OF LENDING

 

Section 4.1             General Conditions

 

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

 

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

 

(b)            Loan Documents .  The RUS shall receive duly executed originals of this Agreement;

 

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

 

(d)            Opinion of Counsel .  The RUS shall receive an opinion of counsel for the Borrower (who shall be acceptable to the RUS) with respect to this Agreement, in form and content acceptable to the RUS.

 

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Section 4.2             Conditions to Advances Under any Partially Unadvanced Note and the S-8 FFB Note

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)             Flood Insurance .  That for any such Advance used in whole or in part to finance the construction or acquisition of any building in any area identified by the Secretary of Housing and Urban Development pursuant to the Flood Disaster Protection Act of 1973 (the “Flood Insurance Act”) or any rules, regulations or orders issued to implement the Flood Insurance Act as any area having special flood hazards, or to finance any facilities or materials to be located in any such building, or in any building owned or occupied by the Borrower and located in such a flood hazard area, the Borrower shall have submitted evidence, in form and substance satisfactory to the RUS or the RUS has otherwise determined, that (i) the community in which such area is located is then participating in the national flood insurance program, as required by the Flood Insurance Act and any related regulations, and (ii) the Borrower has obtained flood insurance coverage with respect to such building and contents as may then be required pursuant to the Flood Insurance Act and any related regulation;

 

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

 

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

 

(i)             Application of Advances.   That the Borrower agrees to apply the proceeds of the Advances under any Partially Unadvanced Note or S-8 FFB Note to pay the costs, or reimburse the costs paid, by or on behalf of the Borrower to make the improvements to the System that have been approved by the RUS;

 

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

 

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

 

ARTICLE V  - AFFIRMATIVE COVENANTS

 

Section 5.1             Generally

 

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

 

Section 5.2             Performance under Indenture

 

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

 

Section 5.3             Annual Compliance Certificate

 

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

 

Section 5.4             Simultaneous Prepayment of Contemporaneous Loans

 

If the Borrower shall at any time prepay in whole or in part any Contemporaneous Loan, the Borrower shall prepay the related Outstanding Note to the Government in the ratio that the unpaid principal balance of such Outstanding Note to the Government bears to the aggregate unpaid principal amount of both such Outstanding Note and the note evidencing the Contemporaneous Loan.  If either such Outstanding Note or such other note calls for a

 

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Section 5.9             Financial Reports

 

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

 

Section 5.10          Miscellaneous Reports and Notices

 

The Borrower shall furnish to the RUS:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.11          Variable Rate Indebtedness

 

In connection with the furnishing of its annual report to the RUS pursuant to Section 5.9, if requested by the RUS, the Borrower shall report to the RUS, in such written format as may be

 

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acceptable to the RUS, the specific maturities of all of the Borrower’s outstanding indebtedness and the interest rates applicable thereto, including, without limitation, with respect to any indebtedness not bearing a fixed rate through the maturity of such indebtedness the method and timing for adjustment and readjustment of the applicable interest rate.

 

Section 5.12          Special Construction Account

 

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

 

Section 5.13          Compliance with Laws

 

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

 

Section 5.14          Plant Agreements

 

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

 

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

 

Section 5.15          Lockbox Agreement

 

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

 

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

 

Section 5.16          Nuclear Fuel

 

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

 

Section 5.17          Power Requirements Studies

 

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

 

Section 5.18          Long Range Engineering Plans and Construction Work Plans

 

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

 

Section 5.19          Design Standards, Construction Standards and List of Materials

 

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

 

Section 5.20          Plans and Specifications

 

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

 

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

 

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

 

Section 5.22          Contract Bidding Requirements

 

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

 

Section 5.23          Nondiscrimination

 

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

 

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

 

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

 

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Section 5.24          “Buy American” Requirements

 

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

 

Section 5.25          Maintenance of Credit Ratings

 

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

 

Section 5.26          Application of Advances

 

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

 

Section 5.27          Excepted Property

 

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

 

Section 5.28          Additional Affirmative Covenants

 

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

 

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ARTICLE VI  - NEGATIVE COVENANTS

 

Section 6.1             General

 

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

 

Section 6.2             Limitations on System Extensions, Additions and Dispositions

 

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

 

(b)            Dispositions of System Assets .  The Borrower shall not, without first complying with the requirements of Section 9.1, request the release of capital assets that constitute utility plant from the lien of the Indenture pursuant to Section 5.2 of the Indenture if (taking into account any substantially contemporaneous or otherwise related purchase, construction, lease or other acquisition of similar property that is subject to the lien of the Indenture) there will result a decrease in the generating capacity of the System or any generating plant by more than 5% if the aggregate net book value of all such assets released from the lien of the Indenture (i) in the current fiscal year of the Borrower is greater than 5% of the Borrower’s Total Utility Plant or (ii) in the current and two immediately preceding fiscal years of the Borrower is greater than 10% of the Borrower’s Total Utility Plant.

 

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

 

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

 

Section 6.3             Limitations on Employment and Retention of General Manager

 

At any time an Event of Default, or an event which with the passage of time or the giving of notice, or both, would become an Event of Default, occurs and is continuing, the Borrower

 

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

 

Section 6.4             Limitations on Certain Types of Contracts

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)            Terminations .  The Borrower shall not, without first complying with the requirements of Section 9.1, exercise any option to terminate any contract, including, without limitation, any Wholesale Power Contract, if such contract, based upon its nature, remaining term (not taking into account any option of the Borrower to terminate) and size, would be

 

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

 

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

 

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

 

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

 

Section 6.5             Limitations on Loans, Investments and Other Obligations

 

The Borrower shall not, without first complying with the requirements of Section 9.1, make any Investment, except (i) Investments made for the purpose of funds management that are made pursuant to an investment policy approved by the Borrower’s Board of Directors, a copy of which has been provided to the RUS, (ii) Investments specifically approved by the RUS in writing under this clause (ii), (iii) retained earnings or patronage of Subsidiaries, (iv) patronage allocated to the Borrower as a result of transactions in the ordinary course of business with cooperatives, such as, National Rural Utilities Cooperative Finance Corporation and CoBank, ACB, (v) investments set forth in RUS Regulations (7 C.F.R. § 1717.655, as such RUS Regulations exist on the date hereof) as excluded from computations of the amounts and type of Investments for which RUS approval is required, and (vi) other Investments (valued at the initial

 

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cost thereof) that do not in the aggregate with all other Investments other than Investments described in clauses (i) through (v) above exceed fifteen percent (15%) of the Borrower’s Total Utility Plant; provided , however , that during an Increased Oversight Period, or Highest Oversight Period, the Borrower shall not, without the prior written approval of the RUS, make any additional Investments of the type described in clause (vi) above.

 

Section 6.6             Depreciation Rates

 

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

 

Section 6.7             Rate Reductions

 

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

 

Section 6.8             Indenture Restrictions

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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