Exhibit A-1
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
among
EFFINGHAM COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,
GEORGIA POWER COMPANY
and
SAVANNAH ELECTRIC AND POWER COMPANY
Dated as of , 2005
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This Second Amendatory and Supplemental Lease Agreement and all right, title and
interest of the Effingham County Industrial Development Authority in any rents,
revenues and receipts derived under this Second Amendatory and Supplemental
Lease Agreement have been assigned to The Bank of New York Trust Company, N.A.
(formerly known as The Bank of New York Trust Company of Florida, N.A.), as
Trustee under the Indenture of Trust, dated as of December 1, 2003, as amended
and supplemented by the First Supplemental Indenture of Trust, dated as of
December 1, 2004, and as further amended and supplemented by the Second
Supplemental Indenture of Trust, dated as of , 2005, from the Effingham County
Industrial Development Authority which secures Effingham County Industrial
Development Authority Taxable Industrial Development Revenue Bonds (Southern
Power Company Plant XxXxxxxx 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
Section 1.1. Definitions...............................1
ARTICLE II. REPRESENTATIONS AND WARRANTIES...........................2
Section 2.1. Representations and
Warranties by the Issuer..................2
Section 2.2. Representations and
Warranties by each Lessee.................3
ARTICLE III. COMMENCEMENT AND COMPLETION OF THE
PROJECT; ISSUANCE OF THE SERIES 2005 BONDS;
ADDITIONAL BONDS............................................4
Section 3.1. Agreement to Construct and
Install the Project.......................4
Section 3.2. Agreement to Issue Series
2005 Bonds; Application of
Series 2005 Bond Proceeds.................5
ARTICLE IV. EFFECTIVE DATE OF THIS SECOND
SUPPLEMENTAL LEASE; DURATION OF LEASE TERM;
RENTAL PROVISIONS...........................................5
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 Lessees
Hereunder Absolute and
Unconditional.............................6
Section 4.6. Lessees' Performance under
Indenture.................................7
ARTICLE V. MISCELLANEOUS.............................................7
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..................................8
EXHIBIT "A" DESCRIPTION OF LEASED EQUIPMENT
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
THIS SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT, dated
as of , 2005, by and among the EFFINGHAM COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
(the "Issuer"), a public body corporate and politic created and existing under
the laws of the State of Georgia, as lessor, and GEORGIA POWER COMPANY, a
Georgia corporation ("Georgia Power"), and SAVANNAH ELECTRIC AND POWER COMPANY,
a Georgia corporation ("Savannah Electric"), as lessees (together, the
"Lessees");
W I T N E S E T H:
WHEREAS, pursuant to the Original Lease (as hereinafter
defined), Georgia Power leases an approximate 84% undivided interest in the
Project (as hereinafter defined) from the Issuer, and Savannah Electric leases
an approximate 16% undivided interest in the Project from the Issuer (each, a
"Leased Interest");
NOW, THEREFORE, 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 Lessees 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, 2003 (the "Original Lease"), as assigned by
Southern Power Company to the Lessees and as amended and supplemented by that
certain First Amendatory and Supplemental Lease Agreement, dated as of December
1, 2004 (the "First Supplemental Lease") and this Second Amendatory and
Supplemental Lease Agreement (the "Second Supplemental Lease" and, together with
the Original Lease and the First Supplemental Lease, the "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
that certain Second Supplemental Indenture of Trust between the Issuer and the
Trustee dated as of , 2005 (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 hereof and 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 2005 Bonds and the use of the proceeds of the Series 2005
Bonds to finance a portion of the cost of the Project and the leasing of
the Project to the Lessees and the sale of the Project to the Lessees 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 2005 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 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 each Lessee. Each Lessee makes
the following representations and warranties:
(a) Organization and Power. Such Lessee is a corporation duly incorporated and
existing under the laws of the State of Georgia 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 such Lessee and
assuming due authorization, execution and delivery hereof by the Issuer,
will be duly authorized, executed and delivered by such Lessee.
(b) Pending Litigation. There is no action, suit, proceeding, inquiry or
investigation known to such Lessee to be pending or threatened against or
directly affecting such Lessee wherein an unfavorable decision, ruling or
finding (i) is reasonably anticipated to materially and adversely affect
the transactions contemplated on its part by the Lease or (ii) is
reasonably anticipated to adversely affect the validity or enforceability
of the Series 2005 Bonds or the Lessee Documents.
(c) No Violation or Breach. The execution and delivery by such Lessee of this
Second Supplemental Lease and the compliance by such Lessee with its
obligations hereunder do not result in any violation of the charter or
by-laws of such 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 such Lessee is a party or by which such
Lessee is presently bound (except for conflicts, breaches or defaults which
would not, individually or in the aggregate, be materially adverse to such
Lessee) or (ii) any existing applicable law or any order, rule or
regulation of any court or governmental or regulatory authorities having
jurisdiction over such Lessee, applicable to such Lessee.
(d) Governmental Consents. Neither such Lessee nor any of its business or
properties, nor any relationship between such Lessee and any other Person
(as defined in the Indenture), nor any circumstance in connection with the
execution, delivery and performance by such Lessee of this Second
Supplemental Lease, or the offer, issue, sale or delivery by the Issuer of
the Series 2005 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 such 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
such Lessee that would constitute an event of default, as defined herein or
therein, under the Second Supplemental Indenture or this Second
Supplemental 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 such Lessee and assuming due authorization, execution and
delivery thereof by the other parties hereto), will be a legal, valid and
binding obligation of such 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 2005 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 requested the Lessees to 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 Lessees, and has
requested the Lessees to 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 such
Lessees' 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 request the Lessees to
acquire 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, Southern Power Company and the
Lessees, as agents 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 2005 Bonds; Application of Series 2005
Bond Proceeds. In order to provide funds for the acquisition of the property
described 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 2005 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 Lessees. Upon receipt
of the proceeds derived from the sale of the Series 2005 Bonds, the Issuer will
cause the 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, 2025, 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 Lessees 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 Lessees agree to accept possession of the Project upon such delivery;
provided, however, that the Lessees 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, 2005, until Payment in Full of the Bonds, each Lessee shall pay or
cause to be paid pro rata in accordance with its respective Leased Interest 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 2003 Bonds, the Series 2004 Bonds and the Series 2005
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, each Lessee shall forthwith pay any such
deficiency pro rata in accordance with its respective Leased Interest.
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 each Lessee pro rata in accordance with its respective Leased Interest;
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, neither Lessee shall be obligated to make any
further rental payments under the provisions of this Section.
Each Lessee agrees to pay, pro rata in accordance with its
respective Leased Interest, 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 (as defined in the Indenture) of the Trustee rendered and
its Ordinary Expenses (as defined in the Indenture) 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 (as defined in the Indenture)
rendered by it and Extraordinary Expenses (as defined in the Indenture) incurred
under the Indenture, as and when the same become due; provided, that either
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 either 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 such Lessee until the same shall have been fully paid, and
such 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 Lessees Hereunder Absolute and Unconditional.
Subject to the provisions of Section 9.6 of the Original Lease, the several
obligations of the Lessees 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 Lessees (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 the Lease 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 Lessees may institute such
action against the Issuer as the Lessees 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 Lessees contained in
the preceding sentence. The Lessees may, however, at their own cost and expense
and in their own names or in the name of the Issuer, prosecute or defend any
action or proceeding or take any other action involving third persons which the
Lessees deem 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 Lessees and to take
all lawful action which is required to effect the substitution of the Lessees
for the Issuer in any such action or proceeding if the Lessees shall so request.
Section 4.6. Lessees' Performance under Indenture. The Lessees agree, 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 them.
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 Lessees 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 shall be recorded in the office of the Clerk
of the Superior Court of Effingham 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.
(Signature Page to Second Amendatory and Supplemental Lease Agreement)
IN WITNESS WHEREOF, the Issuer and the Lessees 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.
EFFINGHAM COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By:
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As to the Issuer, signed sealed and delivered in the presence of:
--------------------------------
Witness
--------------------------------
Notary Public
My commission expires:.....
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(Notarial Seal)
GEORGIA POWER COMPANY
By:
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Name:
-------------------
Title:
-------------------
--------------------------------
Notary Public
My commission expires:_______
(NOTARIAL SEAL)
SAVANNAH ELECTRIC AND POWER COMPANY
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
--------------------------------
Notary Public
My commission expires:_______
(NOTARIAL SEAL)
EXHIBIT "A"
to
SECOND AMENDATORY AND SUPPLEMENTAL LEASE AGREEMENT
among
Effingham County Industrial Development Authority,
Georgia Power Company
and
Savannah Electric and Power Company
dated as of ........., 2005
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.
