Exhibit A-1
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
between
DEVELOPMENT AUTHORITY OF HEARD COUNTY
and
SOUTHERN POWER COMPANY
Dated as of December 1, 2002
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This Second Amendatory and Supplemental Lease Agreement and all right, title and
interest of the Development Authority of Heard County in any rents, revenues and
receipts derived under this Second Amendatory and Supplemental Lease Agreement
have been assigned to The Bank of New York, as Trustee under the Indenture of
Trust, dated as of December 1, 2000, as amended and supplemented by the First
Supplemental Indenture of Trust, dated as of December 1, 2001, and as further
amended and supplemented by the Second Supplemental Indenture of Trust, dated
December 1, 2002, from the Development Authority of Heard County which secures
Development Authority of Heard County Taxable Industrial Development Revenue
Bonds (Xxxxxxx Project) issued or to be issued thereunder.
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This instrument was prepared by and after recording return to:
Xxxxxxx X. Xxxx
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Second Amendatory and Supplemental Lease
Agreement is for convenience of reference only and is not intended to define,
limit or describe the scope or intent of any provisions of this Second
Amendatory and Supplemental Lease Agreement.)
Page
ARTICLE I. DEFINITIONS.....................................................1
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Section 1.1. Definitions.....................................1
ARTICLE II. REPRESENTATIONS AND WARRANTIES.................................1
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Section 2.1. Representations and Warranties by the
Issuer..........................................1
Section 2.2. Representations and Warranties by the
Lessee..........................................2
ARTICLE III. COMMENCEMENT AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 2002 BONDS; ADDITIONAL BONDS...............4
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Section 3.1. Agreement to Construct and Install
the Project.....................................4
Section 3.2. Agreement to Issue Series 2002 Bonds;
Application of Series 2002 Bond
Proceeds........................................4
ARTICLE IV. EFFECTIVE DATE OF THIS SECOND SUPPLEMENTAL LEASE;
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DURATION OF LEASE TERM; RENTAL PROVISIONS.........................5
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Section 4.1. Effective Date of this Second
Supplemental Lease; Duration of Lease
Term............................................5
Section 4.2. Delivery and Acceptance of Possession...........5
Section 4.3. Rents and Other Amounts Payable.................5
Section 4.4. Place of Rental Payments........................6
Section 4.5. Obligations of Lessee Hereunder
Absolute and Unconditional......................6
Section 4.6. Lessee's Performance under Indenture............7
ARTICLE V. MISCELLANEOUS...................................................7
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Section 5.1. Original Lease, First Supplemental
Lease and Second Supplemental Lease
as One Document.................................7
Section 5.2. Binding Effect..................................7
Section 5.3. Severability....................................7
Section 5.4. Execution Counterparts..........................7
Section 5.5. Captions........................................7
Section 5.6. Recording of Lease..............................7
Section 5.7. Law Governing Construction of Lease.............7
EXHIBIT "A"..................................DESCRIPTION OF LEASED EQUIPMENT
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
THIS SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT, dated
as of December 1, 2002, by and between the DEVELOPMENT AUTHORITY OF HEARD COUNTY
(the "Issuer"), a public body corporate and politic of the State of Georgia, as
lessor, and SOUTHERN POWER COMPANY (the "Lessee"), a Delaware corporation, as
lessee;
W I T N E S E T H:
That in consideration of the respective representations and
agreements hereinafter contained and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the Issuer and the
Lessee agree as follows (provided, that in the performance of the agreements of
the Issuer herein contained, any obligation it may thereby incur for the payment
of money shall not be a general debt on its part but shall be payable solely out
of the rents, revenues and receipts derived from the Lease Agreement, dated as
of December 1, 2000 (the "Original Lease"), as amended and supplemented by the
First Amendatory and Supplemental Lease Agreement, dated as of December 1, 2001
(the "First Supplemental Lease") and this Second Amendatory and Supplemental
Lease Agreement (the "Second Supplemental Lease"), the sale of the Bonds, any
insurance and condemnation awards as herein described and any other rents,
revenues and receipts arising out of or in connection with its ownership of the
Project as hereinafter defined):
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. All capitalized terms and words used in this Second
Supplemental Lease and not otherwise defined herein shall have the meanings set
forth, respectively, in Section 1.1 of the Original Lease or Section 1.02 of the
Second Supplemental Indenture unless the context or use clearly indicates
another or different meaning or intent.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties by the Issuer. The Issuer makes the
following representations and warranties:
(a) Organization and Authority. The Issuer is a public body corporate and
politic, created and validly existing pursuant to the Constitution and
laws of the State of Georgia, including particularly the provisions of
the Act. Under the provisions of the Act, the Issuer has the power to
execute and deliver the Second Supplemental Indenture and this Second
Supplemental Lease, to enter into the transactions contemplated hereby
and thereby and to perform and observe its obligations contained herein
and therein in accordance with the terms thereof. By proper corporate
action, the Issuer has duly authorized the execution and delivery of
the Second Supplemental Indenture and this Second Supplemental Lease.
(b) Ability to Finance Project Under Act. The Project constitutes an
undertaking within the scope of the Issuer's power for which bonds may
be issued to finance under the Act.
(c) Public Purpose. The Issuer has found and hereby declares that the
issuance of the Series 2002 Bonds and the use of the proceeds of the
Series 2002 Bonds to finance a portion of the cost of the Project and
the leasing of the Project to the Lessee and the sale of the Project to
the Lessee at the expiration or sooner termination of the Lease Term is
in furtherance of the public purposes for which the Issuer is created.
(d) Agreements are Legal and Authorized. The Issuer is not subject to any
charter, by-law or contractual limitation or provision of any nature
whatsoever which in any way limits, restricts or prevents the Issuer
from entering into the Second Supplemental Indenture and this Second
Supplemental Lease or performing any of its obligations under the Lease
or the Indenture.
(e) No Prior Pledge. The Trust Estate has not been pledged or hypothecated
in any manner or for any purpose other than as provided in the
Indenture.
(f) Governmental Consents. Neither the nature of the Issuer nor any of its
activities or properties, nor any relationship between the Issuer and
any other person, nor any circumstance in connection with the offer,
issue, sale or delivery of any of the Bonds is such as to require the
consent, approval or authorization of, or the filing, registration or
qualification with, any governmental authority on the part of the
Issuer in connection with the execution, delivery and performance of,
the Second Supplemental Indenture and this Second Supplemental Lease or
the offer, issue, sale or delivery of the Series 2002 Bonds, other than
those already obtained or filed; provided, however, no representation
is made herein as to compliance with the securities or "blue sky" laws
of any jurisdiction nor is any representation made as to any
governmental consents, approvals or permits required in connection with
the construction or operation of the Project.
(g) No Defaults. No event has occurred and no condition exists with respect
to the Issuer which would constitute an event of default, as defined
herein or therein, under any of the Second Supplemental Indenture and
this Second Supplemental Lease or which, with the lapse of time or with
the giving of notice or both, would become an event of default under
any of the Second Supplemental Indenture or this Second Supplemental
Lease.
(h) Enforceability. The Original Lease, as amended and supplemented by the
First Supplemental Lease and this Second Supplemental Lease, is a
legal, valid and binding obligation of the Issuer.
Section 2.2. Representations and Warranties by the Lessee. The Lessee makes the
following representations and warranties:
(a) Organization and Power. The Lessee is a corporation duly incorporated
and existing under the laws of the State of Delaware and has due
corporate authority to enter into this Second Supplemental Lease and to
perform its obligations contained herein and under the Lessee
Documents, and this Second Supplemental Lease, when executed and
delivered by the Lessee and assuming due authorization, execution and
delivery hereof by the Issuer, will be duly authorized, executed and
delivered by the Lessee.
(b) Pending Litigation. There is no action, suit, proceeding, inquiry or
investigation known to the Lessee to be pending or threatened against
or directly affecting the Lessee wherein an unfavorable decision,
ruling or finding (i) are reasonably anticipated to materially and
adversely affect the transactions contemplated on its part by the Lease
or (ii) are reasonably anticipated to adversely affect the validity or
enforceability of the Series 2002 Bonds or the Lessee Documents.
(c) No Violation or Breach. The execution and delivery by the Lessee of
this Second Supplemental Lease and the compliance by the Lessee with
its obligations hereunder do not result in any violation of the charter
or by-laws of the Lessee and do not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under,
(i) any indenture, mortgage, deed of trust, lease, note agreement or
other agreement or instrument to which the Lessee is a party or by
which the Lessee is presently bound (except for conflicts, breaches or
defaults which would not, individually or in the aggregate, be
materially adverse to the Lessee) or (ii) any existing applicable law
or any order, rule or regulation of any court or governmental or
regulatory authorities having jurisdiction over the Lessee, applicable
to the Lessee.
(d) Governmental Consents. Neither the Lessee nor any of its business or
properties, nor any relationship between the Lessee and any other
Person, nor any circumstance in connection with the execution, delivery
and performance by the Lessee of this Second Supplemental Lease, or the
offer, issue, sale or delivery by the Issuer of the Series 2002 Bonds,
is such as to require the consent, approval or authorization of, or the
filing, registration or qualification with, any governmental authority
on the part of the Lessee, other than those already obtained or filed;
provided, however, no representation is made herein as to compliance
with the securities or "blue sky" laws of any jurisdiction, nor is any
representation made as to any permits or other similar approvals not
required as of the date hereof with respect to the Project.
(e) No Defaults. No event has occurred and no condition exists with respect
to the Lessee that would constitute an event of default, as defined
herein or therein, under this Lease or which, with the lapse of time or
with the giving of notice or both, would become such an event of
default.
(f) Enforceability. The Original Lease, as supplemented by the First
Supplemental Lease and this Second Supplemental Lease (when executed
and delivered by the Lessee and assuming due authorization, execution
and delivery thereof by the Issuer), will be a legal, valid and binding
obligation of the Lessee, except to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
receivership, liquidation, fraudulent conveyance, moratorium or other
similar laws affecting creditors' rights generally or (ii) general
principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity) and except as limited by any
principles of public policy limiting the right to enforce the
indemnification provisions of the Lease.
ARTICLE III.
COMMENCEMENT AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 2002 BONDS; ADDITIONAL BONDS
Section 3.1. Agreement to Construct and Install the Project. The Issuer has
acquired the title in and to the Leased Land. As provided in Article IV of the
Original Lease, the Issuer has agreed that it will cause the acquisition,
construction and installation of the Buildings to be made in accordance with the
Project Summary, as may be amended from time to time by the Lessee, and will
cause to be acquired and installed in the Building or on the Leased Land, the
Leased Equipment, to consist of machinery, equipment and related property
described in the list attached to the Original Lease as Exhibit "B" and such
other items of machinery, equipment and related property as in the Lessee's
judgment may be necessary or desirable for the operation of the Project. The
Issuer acknowledges and agrees that not later than the execution and delivery of
this Second Supplemental Lease, it will have acquired title to the machinery,
equipment and other improvements listed on Exhibit "A" attached hereto. The
parties hereto hereby acknowledge and agree that such items constitute part of
the Project, legal title to which is held by the Issuer, and that such items are
part of the Project subject to the Lease.
The Issuer hereby ratifies and confirms all actions of, and
assumes and adopts all contracts entered into by, the Lessee, as agent of the
Issuer under Section 4.1 of the Original Lease, with respect to the Project
prior to the date hereof.
The Issuer makes no warranty or representation, either express
or implied, as to the suitability or fitness for a particular purpose of the
Project or any portion thereof, including but not limited to, the property
described on Exhibit "A" attached hereto.
Section 3.2. Agreement to Issue Series 2002 Bonds; Application of Series 2002
Bond Proceeds. In order to acquire the Project provided for in Section 3.1
hereof, the Issuer agrees that as soon as possible it will authorize, sell and
cause to be delivered to the initial purchaser or purchasers thereof, the Series
2002 Bonds, bearing interest and maturing as set forth in Article III of the
Original Indenture and Article II of the Second Supplemental Indenture, at a
price to be approved by the Lessee. Upon receipt of the proceeds derived from
the sale of the Series 2002 Bonds, the Issuer will deposit said proceeds
received upon said sale in the Project Fund.
ARTICLE IV.
EFFECTIVE DATE OF THIS SECOND SUPPLEMENTAL LEASE;
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 4.1. Effective Date of this Second Supplemental Lease; Duration of Lease
Term. This Second Supplemental Lease shall become effective upon its delivery
and the leasehold interest created by this Second Supplemental Lease shall then
begin, and, subject to the other provisions of the Original Lease, as amended
(including particularly Articles X, XI and XII of the Original Lease), shall
expire at midnight, January 1, 2023, or if at such time and on such date Payment
in Full of the Bonds shall not have been made, then on such date as such payment
shall have been made.
Section 4.2. Delivery and Acceptance of Possession. The Issuer agrees to deliver
to the Lessee sole and exclusive possession of the Project, or so much thereof
as may exist on the effective date hereof (subject to the right of the Trustee
to enter thereon for inspection and other purposes as set forth in Section 8.2
of the Original Lease) on the effective date of this Second Supplemental Lease
and the Lessee agrees to accept possession of the Project upon such delivery;
provided, however, that the Lessee shall be permitted full use and occupancy of
the Project prior to any Completion Date.
Section 4.3. Rents and Other Amounts Payable. Subject to Section 2.08 of the
Original Indenture, on or before January 1 and July 1 in each year, commencing
January 1, 2003, until Payment in Full of the Bonds, the Lessee shall pay or
cause to be paid to the Trustee for the account of the Issuer as rentals for the
Project a sum equal to the amount payable on such date as principal of and
interest on the Bonds, including the Series 2000 Bonds, Series 2001 Bonds and
the Series 2002 Bonds, as provided in the Indenture. Each rental payment under
this Section shall be sufficient to pay the total amount of principal and
interest payable on such semiannual interest payment date, and if at any
semiannual interest payment date the balance in the Bond Fund is insufficient to
make required payments of principal and interest on such date, the Lessee shall
forthwith pay any such deficiency.
Anything herein to the contrary notwithstanding, any amount at
any time held by the Trustee in the Bond Fund shall be credited against the next
succeeding rental payment and such credit shall reduce the payment to be then
made by the Lessee; and further, if the amount held by the Trustee in the Bond
Fund should be sufficient to pay at the times required the principal of and
interest on all Bonds then remaining unpaid, the Lessee shall not be obligated
to make any further rental payments under the provisions of this Section.
The Lessee agrees to pay to the Trustee until Payment in Full
of the Bonds (i) at least once a year an amount equal to the annual fee of the
Trustee for the Ordinary Services of the Trustee rendered and its Ordinary
Expenses incurred under the Indenture, (ii) the reasonable fees of Trustee's
Counsel as provided in the Indenture, as and when the same become due, and (iii)
the reasonable fees and charges of the Trustee for Extraordinary Services
rendered by it and Extraordinary Expenses incurred under the Indenture, as and
when the same become due; provided, that the Lessee may, without creating a
default hereunder, withhold such payment to contest in good faith the necessity
for any such Extraordinary Services and Extraordinary Expenses and the
reasonableness of any such fees, charges or expenses.
If the Lessee should fail to make any of the payments required
in this Section, the item or installment so in default shall continue as an
obligation of the Lessee until the same shall have been fully paid, and the
Lessee agrees to pay the same with interest thereon, to the extent legally
enforceable, at the Default Rate per annum until paid. The provisions of this
Section shall be subject to the provisions of Section 9.6 of the Original Lease.
Section 4.4. Place of Rental Payments. The rents provided for in the first
paragraph of Section 4.3 hereof and the interest on delinquent rents shall be
paid directly to the Trustee for the account of the Issuer and will be deposited
in the Bond Fund, unless a home office payment agreement is in effect pursuant
to the provisions of Section 2.08 of the Original Indenture. The other payments
provided for in Section 4.3 hereof shall be paid directly to the Trustee for its
own use or for disbursement to any other paying agent on the Bonds, as the case
may be.
Section 4.5. Obligations of Lessee Hereunder Absolute and Unconditional. Subject
to the provisions of Section 9.6 of the Original Lease, the obligations of the
Lessee to make the payments required in Section 4.3 hereof and to perform and
observe the other agreements on its part contained herein shall be absolute and
unconditional. Until such time as Payment in Full of the Bonds shall have been
made, the Lessee (i) will not suspend or discontinue any payments provided for
in Section 4.3 hereof except to the extent the same have been prepaid, (ii) will
perform and observe all of its other agreements contained in this Lease
Agreement and (iii) except as provided in Sections 11.1 and 11.2 of the Original
Lease, will not terminate the Lease Term for any cause, including, without
limiting the generality of the foregoing, failure of the Issuer to complete the
Project, failure of the Issuer's title in and to the Project or any part
thereof, any acts or circumstances that may constitute failure of consideration,
eviction or constructive eviction, destruction of or damage to the Project,
commercial frustration of purpose, any change in the tax or other laws of the
United States of America or of the State of Georgia or any political subdivision
of either thereof or any failure of the Issuer to perform and observe any
agreement, whether express or implied, or any duty, liability or obligation
arising out of or connected with the Lease or the Indenture. Nothing contained
in this Section shall be construed to release the Issuer from the performance of
any of the agreements on its part herein contained; and if the Issuer should
fail to perform any such agreement, the Lessee may institute such action against
the Issuer as the Lessee may deem necessary to compel performance or recover its
damages for nonperformance so long as such action shall not conflict with the
agreements on the part of the Lessee contained in the preceding sentence. The
Lessee may, however, at its own cost and expense and in its own name or in the
name of the Issuer, prosecute or defend any action or proceeding or take any
other action involving third persons which the Lessee deems reasonably necessary
or in order to insure the acquisition, construction, installation and completion
of the Project or to secure or protect its right of possession, occupancy and
use of the Project hereunder, and in such event the Issuer hereby agrees to
cooperate fully with the Lessee and to take all lawful action which is required
to effect the substitution of the Lessee for the Issuer in any such action or
proceeding if the Lessee shall so request.
Section 4.6. Lessee's Performance under Indenture. The Lessee agrees, for the
benefit of the owners from time to time of the Bonds, to do and perform all acts
and things contemplated in the Indenture to be done or performed by it.
ARTICLE V.
MISCELLANEOUS
Section 5.1. Original Lease, First Supplemental Lease and Second Supplemental
Lease as One Document. As amended and supplemented by the First Supplemental
Lease and as further amended and supplemented by the Second Supplemental Lease,
the Original Lease is in all respects ratified and confirmed, and the Original
Lease, the First Supplemental Lease and this Second Supplemental Lease shall be
read, taken and construed as one and the same instrument.
Section 5.2. Binding Effect. This Second Supplemental Lease shall inure to the
benefit of and shall be binding upon the Issuer, the Lessee and their respective
successors and assigns.
Section 5.3. Severability. If any provision of this Second Supplemental Lease
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 5.4. Execution Counterparts. This Second Supplemental Lease may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 5.5. Captions. The captions and headings in this Second Supplemental
Lease are for convenience only and in no way define, limit or describe the scope
or intent of any provisions of this Second Supplemental Lease.
Section 5.6. Recording of Lease. This Second Supplemental Lease and every
assignment and modification hereof and thereof shall be recorded in the office
of the Clerk of the Superior Court of Heard County, Georgia, or in such other
office as may be at the time provided by law as the proper place for such
recordation.
Section 5.7. Law Governing Construction of Lease. This Second Supplemental Lease
shall be governed by, and construed in accordance with, the laws of the State of
Georgia.
IN WITNESS WHEREOF, the Issuer and the Lessee have caused this
Second Supplemental Lease to be executed in their respective names by their duly
authorized officers, all as of the date first above written.
DEVELOPMENT AUTHORITY
OF HEARD COUNTY
By:_____________________________________
Chairman
As to the Issuer, signed sealed and delivered in the presence of:
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Witness
--------------------------------
Notary Public
My commission expires:.....
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(Notarial Seal)
SOUTHERN POWER COMPANY
By:_______________________________________
Name: Xxxxx Boston
Title: Assistant Secretary
--------------------------------
Notary Public
My commission expires:_______
(NOTARIAL SEAL)
EXHIBIT "A"
to
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
Between
Development Authority
of Heard County
and
Southern Power Company
dated as of December 1, 2002
LEASED EQUIPMENT DESCRIPTION
The leased equipment consists of all machinery, equipment and related personal
property from time to time located in the Building or on the Leased Land and
tagged or otherwise identified to reflect such ownership.
