Execution Copy
Restated 1999 Amendatory Agreement
(Cash-Out)
This Restated Amendatory Agreement, dated as of November 17, 1999 between
VERMONT YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont
corporation, and [NAME OF PURCHASER], a ______________ corporation (the
"Purchaser"), amending both the Power Contract, dated February 1, 1968, as
heretofore amended by eight amendments dated June 1, 1972, April 15, 1983,
April 24, 1985, June 1, 1985, May 6, 1988, June 15, 1989 and December 1, 1989
between Vermont Yankee and the Purchaser (the "Power Contract") and the
Additional Power Contract, dated as of February 1, 1984, between Vermont
Yankee and the Purchaser (the "Additional Power Contract"), supersedes and
replaces the original Amendatory Agreement, dated as of November 17, 1999, and
reflects certain technical corrections in that original.
For good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed as follows:
1. Basic Understandings.
--------------------
Vermont Yankee was organized in 1966 to provide for the supply of power
to its sponsoring utility companies, including the Purchaser (collectively,
the "Purchasers"). It constructed a nuclear electric generating unit, having
a net capability of approximately 510 megawatts electric (the "Unit") at a
site in Vernon, Vermont. Vermont Yankee was issued a full-term, Facility
Operating License for the Unit by the Atomic Energy Commission (now the
Nuclear Regulatory Commission, which, together with any successor agencies, is
hereafter called the "NRC"), which license is now stated to expire on March
21, 2012 (the "End of License Term"). The Unit has been in commercial
operation since December 1, 1972 and continues to operate.
The names of the Purchasers of Vermont Yankee and their respective
interests ("entitlement percentages") in Vermont Yankee and the net capacity
and output of the Unit are as follows:
Purchaser Entitlement Percentage
--------- -----------------------
Central Vermont Public Service Corporation 35.0%
Green Mountain Power Corporation 20.0%
New England Power Company 20.0%
The Connecticut Light and Power Company 9.5%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
Western Massachusetts Electric Company 2.5%
Montaup Electric Company 2.5%
Cambridge Electric Light Company 2.5%
The Unit was conceived to supply economic power on a cost of service
formula basis to the Purchasers. Pursuant to the Power Contract, Vermont
Yankee has agreed to supply to the Purchaser and, pursuant to separate power
contracts substantially identical to the Power Contract except for the names
of the parties (collectively, the "Initial Power Contracts"), to the other
Purchasers all of the capacity and the electric energy available from the Unit
for a thirty year term extending through November 30, 2002.
Pursuant to the Additional Power Contract, Vermont Yankee has agreed to
supply to the Purchaser, and pursuant to separate additional power contracts
substantially identical to the Additional Power Contract except for the names
of the parties (collectively, the "Additional Power Contracts"), to the other
Purchasers all the capacity and electric energy available from the Unit during
an operative term stated to commence on December 1, 2002 (when the Initial
Power Contracts terminate) and extending until a date which is 30 days after
the later of the date on which the last of the financial obligations of
Vermont Yankee has been extinguished or the date on which Vermont Yankee is
finally relieved of any obligations under the last of the licenses (operating
or possessory) which it holds, or hereafter receives, from the NRC with
respect to the Unit. The Additional Power Contracts also provide, in the
event of their earlier cancellation, that the decommissioning cost obligation
and the other applicable provisions of the Additional Power Contracts shall
remain in effect to permit final xxxxxxxx of costs incurred prior to such
cancellation.
Pursuant to the Initial Power Contracts and the Additional Power
Contracts, the Purchasers are entitled and obligated to take their respective
entitlement percentages of the capacity and net electrical output of the Unit
during the service life of the Unit and are obligated to pay therefor monthly
their respective entitlement percentages of Vermont Yankee's cost of service,
including decommissioning costs, whether or not the Unit is operated.
On October 15, 1999, the Board of Directors of Vermont Yankee, which
includes representatives of the Purchasers (including the Purchaser), after
conducting a thorough review of the economics of continued operation of the
Unit until End of License Term in comparison to other alternatives (including
the early shut-down of the Unit) available to Vermont Yankee, voted to approve
an Asset Purchase Agreement (the "APA") between Vermont Yankee and AmerGen
Energy Company L.L.C., a Delaware limited liability company ("AmerGen"),
pursuant to which the Unit and related assets of Vermont Yankee, including a
pre-funded decommissioning trust, would be sold to AmerGen. The APA provides,
among other things, that Vermont Yankee will enter into a Power Purchase
Agreement (the "PPA") with AmerGen to purchase from AmerGen one hundred
percent (100%) of the actual net output of the Unit up to its present
operating level of approximately 510 megawatts electric (the "Future Power")
for a period ending at the End of License Term or the earlier permanent shut-
down of the Unit, such percentage being subject to reduction to the extent
that certain Purchasers, including the Purchaser, having entitlement
percentages aggregating 45% or less, elect the option of "cashing-out" of the
obligation to purchase Future Power and later "cash-outs" by remaining long-
term Purchasers. It is intended that the Future Power will be resold by
Vermont Yankee to the other Purchasers, excluding Purchaser, pursuant to the
Power Contracts and Additional Power Contracts as amended by amendatory
agreements similar to this agreement. Concurrently, the Directors of Vermont
Yankee also approved a Transmission Asset Purchase Agreement (the "TAPA")
providing for the sale of certain transmission assets to Vermont Electric
Power Company, Inc. ("Velco) and the payment by Vermont Yankee of certain
support charges to Velco (the "TAPA Obligations").
As a consequence of the APA, the PPA and the TAPA, Vermont Yankee and the
Purchaser propose to further amend the Power Contract and the Additional Power
Contract in various respects in order (I) to release Vermont Yankee from any
further obligations under said contracts with respect to the operation of the
Unit, (ii) to clarify and confirm provisions for the recovery under said
contracts of the remaining unamortized costs previously incurred by Vermont
Yankee in providing capacity and energy from the Unit prior to the Effective
Date (as hereinafter defined) and of the costs of decommissioning the Unit at
the end of its useful life (including, without limitation, the costs of
maintaining the Unit in a safe condition following its shutdown and prior to
its decontamination and dismantlement and the costs of storing the Unit's
spent nuclear fuel until it is removed by the Department of Energy), and
(iii) to provide for the recovery of any costs or liabilities assumed by
Vermont Yankee under the APA and the TAPA and of Vermont Yankee's on-going
administrative expenses.
Vermont Yankee and the Purchaser have agreed to enter into this
Amendatory Agreement. Concurrently herewith each of the other Purchasers is
entering into an amendatory agreement which is identical hereto except for the
necessary changes in the names of the parties and, where appropriate, the
inclusion or exclusion of the obligation to purchase an aliquot share of the
Future Power.
2. Parties' Contractual Commitments.
---------------------------------
Vermont Yankee and the Purchaser each acknowledge that the other has
faithfully performed its obligations under the Power Contract. The Purchaser
hereby reconfirms its obligations under the Power Contract and the Additional
Power Contract to pay its entitlement percentage of Vermont Yankee's
unamortized costs and the decommissioning costs of the Unit as deferred
payment in connection with the capacity and net electrical output of the Unit
previously delivered by Vermont Yankee and agrees that the decision to sell
the Unit as described in Section 1 hereof did not give rise to any
cancellation right under Section 9 of the Power Contract or Section 10 of the
Additional Power Contract. Vermont Yankee and the Purchaser further
acknowledge that certain of the Purchasers, not including the Purchaser, shall
continue to be entitled and obligated to purchase their aliquot shares of the
Future Power produced by the Unit during the terms of the Initial Power
Contracts and Additional Power Contracts as modified by amendatory agreements
similar to that agreement and to pay a like percentage of Vermont Yankee's
costs therefor, and that Vermont Yankee shall continue to be obligated to sell
such Future Power to those Purchasers during such terms. Recognizing that the
APA, by transferring ownership and operating responsibility for the Unit,
changes the nature of the costs that Vermont Yankee will incur to obtain
Future Power from the Unit for resale to those Purchasers, Vermont Yankee and
the Purchaser further agree that this Amendatory Agreement sets forth the
necessary and appropriate provisions for the continuation of the foregoing
entitlements and obligations.
Except as expressly modified by this Amendatory Agreement, the provisions
of the Power Contract and the Additional Power Contract remain in full force
and effect.
3. Effective Date.
---------------
Subject to receipt of FERC approval, this Amendatory Agreement shall
become effective on the Closing Date under the APA (the "Effective Date").
4. Power Contract Amendments.
--------------------------
The Power Contract is hereby amended as follows:
(a)In recognition of the sale of the Unit being effected pursuant to the
APA and the intention of the parties to release Vermont Yankee from any
further obligations with respect to operation of the Unit, the text of each
of Sections 3, 4, 6, 8, 9 and 10 of the Power Contract is hereby deleted and,
in lieu thereof in each instance the words "Intentionally Deleted and This
Section Left Blank" shall be inserted; provided, however, that the
pre-existing text shall remain in effect for purposes of settling any accounts
between the parties for periods prior to the Effective Date.
(b)Section 5 is hereby deleted and a new Section 5A is hereby inserted to
read as follows:
"5A. Termination of Obligation.
All payments made pursuant to this Amendatory Agreement and pursuant to
the Power Purchase Agreement Cash-Out Election dated as of November 17, 1999
between AmerGen and Purchaser are made in termination of Purchaser's
obligations and entitlements under former Section 5 of this contract.
Purchaser's obligations and entitlements under former Section 5 of this
contract are hereby terminated.
(c)A new section 10A is hereby inserted immediately following Section 10
to read as follows:
"10A. Definitions.
------------
Unless the context otherwise specifies or requires, each term defined
below, when used in this contract, shall have the meaning indicated below:
"Adjusted Entitlement Percentage" means the percentage derived by dividing the
Purchaser's entitlement percentage by the aggregate entitlement percentages of
all Purchasers that have not exercised their Prepayment Options under Section
7A of their respective Power Contracts.
"AmerGen" means AmerGen Energy Company L.L.C., a Delaware limited liability
company.
"APA" means the Asset Purchase Agreement, dated as of November 17, 1999,
between Vermont Yankee and AmerGen.
"APA Obligations" means the obligations of Vermont Yankee to AmerGen under the
APA, a schedule of which is attached as Exhibit A hereto.
"Cash Out Option" means the Power Purchase Agreement Cash-Out Election as
defined in the APA.
"Closing" means the Closing as defined in the APA.
"Credit Agreement" means the loan agreement entered into between Vermont
Yankee and the lending institutions named therein, to be dated on or before
the Effective Date and relating to the borrowing by Vermont Yankee of the
funds needed to prefund the Decommissioning Trust, prepay its outstanding
Bonds on the Effective Date and defray other costs in connection with the
Closing.
"Effective Date" means the Closing Date under the APA.
"Entitlement percentage" has the meaning provided in Section 1 hereof.
"End of License Term" means March 21, 2012.
"End of Term Date" means the earlier of the End of License Term
or the date on which the Unit is permanently removed from service.
"Net capacity" means for any period the actual level at which the Unit is
operated, less station service use and transformer losses.
"PPA" means the Power Purchase Agreement, dated November 17, 1999, between
Vermont Yankee, as buyer, and AmerGen, as seller, a complete copy of which is
attached hereto as Exhibit C.
"Prepayment Option" has the meaning set forth in Section 7A.
"Purchasers" means the sponsoring utilities named in Section 1 hereof or their
respective successors or assigns.
"TAPA" means the Transmission Asset Purchase Agreement, dated as of
November 17, 1999, between Vermont Yankee and Velco.
"TAPA Obligations: shall mean the maintenance and other support obligations
assumed by Vermont Yankee with respect to the transmission assets conveyed to
Velco pursuant to the TAPA, a schedule of which is attached as Exhibit B
hereto.
"Velco" means Vermont Electric Power Company, Inc.
(d) In recognition of the Purchaser's continuing obligation to reimburse
Vermont Yankee for its entitlement percentage of certain of Vermont Yankee's
costs as deferred payment for the capacity and net electrical output of the
Unit previously delivered by Vermont Yankee and to reflect the change in the
manner in which Vermont Yankee will incur costs to supply other Purchasers
with their entitlement percentages of the Future Power to be purchased
pursuant to the PPA by Vermont Yankee from AmerGen, the provisions of Sections
7 and 7A of the Power Contract are hereby deleted and new Sections 7 and 7A
are inserted in lieu thereof as follows:
"7. Reimbursed Costs
-----------------
With respect to each month during the balance of the term of this
contract, the Purchaser will pay Vermont Yankee (I) an amount equal to the
Purchaser's entitlement percentage (or the Purchaser's Adjusted Entitlement
Percentage, whichever is applicable, as provided in Section 7A hereof), of
each of (a) the portion of Vermont Yankee's Closing Net Unit Investment
allocable
to such month, together with one-twelfth of the composite percentage for such
month of the net Unit investment as most recently determined in accordance
with this Section 7, and (b) Vermont Yankee's Total Decommissioning Obligation
for such month, and (ii) an amount equal to the Purchaser's entitlement
percentage of the sum of (c) Vermont Yankee's total operating expenses for
such month, plus (d) Vermont Yankee's APA Obligations, if any, for such month,
plus (e) Vermont Yankee's TAPA Obligations, if any, for such month, plus (f)
to the extent not duplicative of a payment made under clause (a) above or
clause (I) of Section 7A, the portion of Vermont Yankee's net Unit investment
represented by the Purchaser's entitlement percentage of the Equity investment
allocable to such month, together with an amount equal to one- twelfth of the
equity percentage for such month of the Purchaser's entitlement percentage of
the Equity investment, as most recently determined in accordance with this
Section 7; provided, however, for any month during the term of this contract
commencing on or after the date on which the Purchaser has exercised its
option under clause (I) of Section 7A, the Purchaser will no longer be
obligated to make further payments under clause (I) above.
"Composite percentage" shall be computed as of the Effective Date and as of
the last day of each month thereafter (the "computation date") and for any
month the composite percentage shall be that computed as of the most recent
computation date. "Composite percentage" as of a computation date shall be
the sum of (I) the equity percentage as of such date multiplied by the
percentage which equity investment as of such date is of the total capital as
of such date, plus (ii) the stated interest rate per annum of each principal
amount of indebtedness (other than the Decommissioning Borrowing) bearing a
particular rate of interest outstanding on such date for money borrowed from
persons other than Purchasers multiplied by the percentage which such
principal amount is of total capital as of such date.
"Equity percentage" as of any date shall be whatever percentage may be
authorized from time to time by FERC.
"Common stock equity investment" as of any date shall consist of equity
investment as of such date less the aggregate par value of all issues of
preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of the sum of (I) all
amounts theretofore paid to Vermont Yankee for all capital stock theretofore
issued (taken at the total par value thereof plus the total of all amounts in
an excess of such par value paid thereon); plus all capital contributions,
loans and advances theretofore made to Vermont Yankee by its Purchasers, less
the sum of any amounts distributed by Vermont Yankee to its Purchasers or
stockholders in the form of stock repurchases or redemptions, return of
capital or repayments of loans and advances; plus (ii) any credit balance in
the capital surplus account (not included under (I)) and in earned surplus
account on the books of Vermont Yankee as of such date.
"Total capital" as of any date shall be the equity investment plus the total
of all indebtedness then outstanding for money borrowed from other than
Vermont Yankee's Purchasers, excluding Decommissioning Borrowing.
"Uniform System" shall mean the Uniform System of Accounts prescribed by the
Federal Power Commission for Class A and Class B Public Utilities and
Licensees as in effect on the date of this contract and as said System may be
hereafter amended to take account of private ownership of special nuclear
material.
Vermont Yankee's "operating expenses" shall include all expenses incurred by
Vermont Yankee after the Effective Date (I) for administrative and general
expenses which would be properly chargeable by an operating electric utility,
less any applicable credits thereto, in accordance with the Uniform System and
(ii) for expenses resulting from the settlement of claims of dissenting
shareholders.
The "net Unit investment" shall consist, in each case with respect to the
Unit, of (I) the aggregate amount properly chargeable at the time in
accordance with the Uniform System of Vermont Yankee's electric plant accounts
(including construction work in progress but excluding the Decommissioning
Borrowing), less the sum of (x) the aggregate amount included in operating
expenses from the plant completion date to the date in question on account of
depreciation accruals (and amortization, if any, of property losses) reduced
by the aggregate of all amounts charged during such period against the
accumulated provision for depreciation plus (y) the amount of net available
cash; plus (ii) the aggregate amount properly chargeable at the time in
accordance with the Uniform System to accounts representing fuel assemblies
and components (including nuclear materials) and other materials and supplies,
less the balance, if any, at the time of the accumulated amortization thereof;
plus (iii) such reasonable allowances for prepaid items and cash working
capital as may from time to time be determined by Vermont Yankee; less (z) the
net proceeds received from the sale of any assets properly included in said
electric plant accounts. However, for purposes of this contract, the net
amount included at any date after the plant completion date in net Unit
investment under clause (I) of the immediately preceding sentence shall in no
event be less than the excess of:
(a) the amount properly chargeable at the plant completion date in accordance
with the Uniform System to electric plant accounts (including construction
work in progress) with respect to the Unit,
over
(b) the sum of (x) the aggregate minimum amount required by this Section 7 to
be included in operating expenses from the plant completion date to the date
in question on account of depreciation accruals (and amortization, if any, or
property losses) plus (y) the amount of net available cash.
The net Unit investment shall be determined as of the plant completion
date and thereafter as of the commencement of each calendar year, or, if
Vermont Yankee elects, at more frequent intervals.
The "Closing Net Unit Investment" means the amount of net Unit investment
determined as of the Effective Date, which amount shall be amortized in equal
monthly amounts during the period beginning on the Effective Date and ending
on the End of License Term.
"Net available cash" means, at any date as of which the amount thereof is
to be determined, the excess of (a) the aggregate amount received by Vermont
Yankee after the plant completion date and prior to two years before the
determination date as insurance proceeds on account of loss or damage to the
Unit or as the proceeds of a sale or condemnation of a portion of the Unit,
over (b) the aggregate amount expended after the plant completion date and
prior to the determination date on account of rebuilding, repairs,
replacements and additions to the Unit, provided that insurance proceeds
received with respect to a particular loss shall be taken into account for
purposes of the foregoing computation only if the amount received with respect
to the loss exceeds $150,000.
"Total Decommissioning Obligation" for any month shall mean the sum of
(I) an amount equal to the principal payment, if any, of the Decommissioning
Borrowing due for such month plus (ii) the interest payment due for such month
on the Decommissioning Borrowing.
"Decommissioning Borrowing" means the balance outstanding from time to
time under (I) the Credit Agreement or (ii) any refinancing of any unpaid
balance of such borrowing.
Vermont Yankee will xxxx the Purchaser, as soon as practicable after the
end of each month, for all amounts payable by the Purchaser pursuant to this
Section 7 with respect to the particular month. Such bills will be rendered
in such detail as the Purchaser may reasonably request and may be rendered on
an estimated basis subject to corrective adjustments in subsequent billing
periods. All bills shall be paid in full within 10 days after receipt thereof
by the Purchaser.
7A. Prepayment Option
-----------------
The Purchaser is hereby granted an option to prepay (the "Prepayment
Option"), (i) in full but not in part, its entitlement percentage of Vermont
Yankee's Closing Net Unit Investment (excluding the portion thereof
represented by the Purchaser's equity investment in Vermont Yankee) and
Decommissioning Borrowing, together with any interest accrued but unpaid
thereon, and (ii) with Vermont Yankee's consent, in full but not in part, the
Purchaser's entitlement percentage of the Equity investment, together with an
amount equal to the equity percentage return accrued and unpaid thereon, all
determined as of the close of business on the day prior to the exercise date;
provided, however that (x) option under clause (ii) may only be exercised
concurrently with, or subsequent to, the exercise of the option under clause
(i) and (y) promptly after such exercise by Purchaser, Vermont Yankee shall
redeem the Purchaser's equity investment in Vermont Yankee. Such option or
options to be exercisable on the Effective Date or on the first day of any
calendar quarter thereafter during the term of this contract (an "exercise
date'). At least 30 days prior to the estimated Effective Date, Vermont
Yankee shall give written notice to the Purchaser providing its best estimate
of the amount subject to these options as of the Effective Date. Thereafter,
upon written request by the Purchaser at least 60 days prior to the next
exercise date, Vermont Yankee shall provide to the Purchaser its
best estimate of the amounts subject to these options as of such exercise
date. Purchaser shall give Vermont Yankee at least 15 days prior written
notice of its intent to exercise one or both of these options, which notice
shall be binding and may not be withdrawn without the prior written consent of
Vermont Yankee. Within ten days after receipt of such notice, Vermont Yankee
shall provide the Purchaser with a calculation of the prepayment amount due
upon exercise. After making such prepayment and, if appropriate, delivering to
Vermont Yankee the certificates evidencing the Purchaser's equity investment
in Vermont Yankee together with duly endorsed stock powers, the Purchaser
shall no longer be responsible for paying any amounts under clause (I) of the
first paragraph of Section 7 with respect to the period following the exercise
of the Prepayment Option or, if the option under clause (ii) above has been
exercised, be a stockholder of Vermont Yankee. "After making the prepayment
due upon exercise of the option under clause (I) above, the Purchaser shall
only remain obligated to pay all other amounts due under this contract,
including, without limitation, amounts billed under clause (ii) of the first
paragraph 7, provided that after the option under clause (ii) above has been
exercised, Purchaser shall not be obligated for any further payments under
clause (ii)(f) of the first paragraph of Section 7."
In the event that any other Purchasers exercise their Prepayment Options
under any of the other Initial Power Contracts and the Purchaser has not
exercised its Prepayment Option, then from and after the exercise of each such
other Prepayment Option the Purchaser shall pay its Adjusted Entitlement
Percentage of amounts due under clause (I) of the first paragraph of Section 7
hereof."
(e) Section 14 of the Power Contract is hereby amended by adding the
following sentence at the end thereof:
"Notwithstanding the foregoing, (a) Purchaser (or its assigns) may assign its
interest in this contract only (I) to a third party that has a credit rating
equal to the higher of that of the assignor or of investment grade as
determined by a nationally rated service, or (ii) to a single purpose entity
whose obligations hereunder are guaranteed by a parent that has such a credit
rating, or (iii) in connection with a merger, consolidation or sale of
substantially all its assets to another party that has a credit rating at
least equal to that of the Purchaser (or its assigns), and (b) the Purchaser
hereby consents to an assignment by Vermont Yankee of its interest in this
contract to the special purpose entity described or referred to in Schedule
7.1(z) of the APA and agrees that Purchaser's obligations hereunder shall not
be affected by such assignment."
5. Additional Power Contract Amendments.
-------------------------------------
The Additional Power Contract is hereby amended as follows:
(a) In recognition of the sale of the Unit being effected pursuant to the
APA and, the intention of the parties to release Vermont Yankee from any
further obligations with respect to operation of the Unit, the text of each of
Sections 3, 4, 6, 8, 9 and 10 of the Additional Power Contract is hereby
deleted and, in lieu thereof in each instance the words "Intentionally Deleted
and This Section Left Blank" shall be inserted.
(b) Section 5 is hereby deleted and a new Section 5A is hereby inserted to
read as follows:
"5A. Termination of Obligation.
All payments pursuant to this Amendatory Agreement and pursuant to the
Power Purchase Agreement Cash-Out Election dated as of November 17, 1999
between AmerGen and Purchaser are made in termination of Purchaser's
obligations and entitlements under former Section 5 of this contract.
Purchaser's obligations and entitlements under former Section 5 of this
contract are hereby terminated."
(c) A new section 10A is hereby inserted immediately following Section 10
to read as follows:
"10A. Definitions.
------------
Unless the context otherwise specifies or requires, each term defined
below, when used in this contract, shall have the meaning indicated below:
"Adjusted Entitlement Percentage" means the percentage derived by dividing the
Purchaser's entitlement percentage by the aggregate entitlement percentages of
all Purchasers that have not exercised their Prepayment Options under their
respective Power Contracts.
"AmerGen" means AmerGen Energy Company L.L.C., a Delaware limited liability
company.
"APA" means the Asset Purchase Agreement, dated as of November 17, 1999,
between Vermont Yankee and AmerGen.
"APA Obligations" means the obligations of Vermont Yankee to AmerGen, a
schedule of which is attached as Exhibit A hereto.
"Closing" means the Closing as defined in the APA.
"Credit Agreement" means the loan agreement entered into between
Vermont Yankee and the lending institutions named therein, to be dated on or
before the Effective Date and relating to the borrowing by Vermont Yankee of
the funds needed to prefund the Decommissioning Trust, prepay its outstanding
Bonds on the Effective Date and defray other costs in connection with the
Closing.
"Effective Date" means the Closing Date under the APA.
"End of License Term" means March 21, 2012.
"End of Term Date" means the earlier of the End of License Term or the date on
which the Unit is permanently removed from service.
"Entitlement percentage" has the meaning provided in Section 1 hereof.
"Initial Power Contracts" means the several Power contracts, dated as of
February 1, 1968, as amended, between Vermont Yankee and each of the
Purchasers.
"Net capacity" means for any period the actual level at which the Unit is
operated, less station service use and transformer losses.
"Operative term" has the meaning provided in Section 2 hereof.
"PPA" means the Power Purchase Agreement, dated November 17, 1999 between
Vermont Yankee, as buyer, and AmerGen, as seller, a complete copy of which is
attached hereto as Exhibit C.
"Prepayment Option" means the option granted to each of the several Purchasers
pursuant to Section 7A of their respective Initial Power Contracts to prepay
their entitlement percentages of certain of Vermont Yankee's costs.
"Purchasers" means the sponsoring utilities named in Section 1 hereof or their
respective successors or assigns.
"TAPA" means the Transmission Asset Purchase Agreement, dated as of November
17, 1999, between Vermont Yankee and Velco.
"TAPA Obligations" shall mean the maintenance and other support obligation
assumed by Vermont Yankee with respect to the transmission assets conveyed to
Velco pursuant to the TAPA, a schedule of which is attached as Exhibit B
hereto.
"Velco" means Vermont Electric Power Company, Inc.
(d) Section 2 of the Additional Power Contract is hereby amended in full
to read as follows:
"The operative term of this contract shall commence on December 1, 2002
notwithstanding the fact that the Unit has been sold to AmerGen and shall
terminate 30 days after the date on which the last of the respective financial
obligations of Vermont Yankee and the Purchaser which constitute elements of
the reimbursed costs calculated pursuant to Section 7 hereof has been
extinguished."
(e) In recognition of the Purchaser's continuing obligation to reimburse
Vermont Yankee for its entitlement percentage of certain of Vermont Yankee's
costs as deferred payment for the capacity and net electrical output of the
Unit previously delivered by Vermont Yankee and to reflect the change in the
manner in which Vermont Yankee will incur costs to supply certain Purchasers
with their aliquot shares of the Future Power to be purchased pursuant to the
PPA by Vermont Yankee from AmerGen, the provisions of Section 7 of the
Additional Power Contract are hereby deleted and a new Sections 7 and 7A are
inserted in lieu thereof as follows:
"7. Reimbursed Costs
----------------
With respect to each month during the operative term of this contract,
the Purchaser will pay Vermont Yankee (I) an amount equal to the Purchaser's
entitlement percentage (or the Purchaser's Adjusted Entitlement Percentage,
whichever is applicable, as provided below,) of each of (a) the portion of
Vermont Yankee's Closing Net Unit Investment applicable to such month,
together with one-twelfth of the composite percentage for such month of the
net Unit investment as most recently determined in accordance with this
Section 7, and (b) Vermont Yankee's Total Decommissioning Obligation for such
month, and (ii) an amount equal to the Purchaser's entitlement percentage of
the sum of (c) Vermont Yankee's total operating expenses for such month, plus
(d) Vermont Yankee's APA Obligations, if any, for such month, plus (e) Vermont
Yankee's TAPA Obligations, if any, for such month, plus (f) to the extent not
duplicative of a payment made under clause (a) above or clause (I) of Section
7A, the portion of Vermont Yankee's net Unit investment represented by the
Purchaser's entitlement percentage of the Equity investment allocable to such
month, together with an amount equal to one-twelfth of the equity percentage
for such month of the Purchaser's entitlement percentage of the Equity
investment, as most recently determined in accordance with this Section 7;
provided, however, for any month during the term of this contract commencing
on or after the date on which the Purchaser has exercised its option under
clause (I) of Section 7A, then for each month thereafter the Purchaser's
Adjusted Entitlement Percentage shall be applicable to the payment required by
clauses (a) and (b) hereof.
"Composite percentage" shall be computed as of the Effective Date and as of
the last day of each month thereafter (the "computation date") and for any
month the composite percentage shall be that computed as of the most recent
computation date. "Composite percentage" as of a computation date shall be
the sum of (I) the equity percentage as of such date multiplied by the
percentage which equity investment as of such date is of the total capital as
of such date, plus (ii) the stated interest rate per annum of each principal
amount of indebtedness (other than the Decommissioning Borrowing) bearing a
particular rate of interest outstanding on such date for money borrowed from
persons other than Purchasers multiplied by the percentage which such
principal amount is of total capital as of such date.
"Equity percentage" as of any date shall be whatever percentage may be
authorized from time to time by FERC.
"Common stock equity investment" as of any date shall consist of equity
investment as of such date less the aggregate par value of all issues of
preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of the sum of (I) all
amounts theretofore paid to Vermont Yankee for all capital stock theretofore
issued (taken at the total par value thereof plus the total of all amounts in
an excess of such par value paid thereon); plus all capital contributions,
loans and advances theretofore made to Vermont Yankee by its Purchasers, less
the sum of any amounts distributed by Vermont Yankee to its Purchasers or
stockholders in the form of stock repurchases or redemptions, return of
capital or repayments of loans and advances; plus (ii) any credit balance in
the capital surplus account (not included under (I)) and in earned surplus
account on the books of Vermont Yankee as of such date.
"Total capital" as of any date shall be the equity investment plus the total
of all indebtedness then outstanding for money borrowed from other than
Vermont Yankee's Purchasers, excluding Decommissioning Borrowing.
"Uniform System" shall mean the Uniform System of Accounts prescribed by the
Federal Power Commission for Class A and Class B Public Utilities and
Licensees as in effect on the date of this contract and as said System may be
hereafter amended to take account of private ownership of special nuclear
material.
Vermont Yankee's "operating expenses" shall include all ordinary and necessary
expenses incurred by Vermont Yankee during the operative term of this contract
for administrative and general expenses which would be properly chargeable to
Administrative and General Expenses by an operating electric utility, less any
applicable credits thereto, in accordance with the Uniform System and (ii) for
expenses resulting from the settlement of claims of dissenting shareholders.
The "net Unit investment" shall consist, in each case with respect to the
Unit, of (I) the aggregate amount properly chargeable at the time in
accordance with the Uniform System of Vermont Yankee's electric plant accounts
(including construction work in progress but excluding the Decommissioning
Borrowing), less the sum of (x) the aggregate amount included in operating
expenses from the plant completion date to the date in question on account of
depreciation accruals (and amortization, if any, of property losses) reduced
by the aggregate of all amounts charged during such period against the
accumulated provision for depreciation plus (y) the amount of net available
cash; plus (ii) the aggregate amount properly chargeable at the time in
accordance with the Uniform System to accounts representing fuel assemblies
and components (including nuclear materials) and other materials and supplies,
less the balance, if any, at the time of the accumulated amortization thereof;
plus (iii) such reasonable allowances for prepaid items and cash working
capital as may from time to time be determined by Vermont Yankee; less (z) the
net proceeds received from the sale of any assets properly included in said
electric plant accounts.
However, for purposes of this contract, the net amount included at any date
after the plant completion date in net Unit investment under clause (I) of the
immediately preceding sentence shall in no event be less than the excess of:
(a) the amount properly chargeable at the plant completion date in accordance
with the Uniform System to electric plant accounts (including construction
work in progress) with respect to the Unit,
over
(b) the sum of (x) the aggregate minimum amount required by this Section 7 to
be included in operating expenses from the plant completion date to the date
in question on account of depreciation accruals (and amortization, if any, or
property losses) plus (y) the amount of net available cash.
The net Unit investment shall be determined as of the plant completion
date and thereafter as of the commencement of each calendar year, or, if
Vermont Yankee elects, at more frequent intervals.
The "Closing Net Unit Investment" means the amount of net Unit investment
determined as of the Effective Date, which amount shall be amortized in equal
monthly amounts during the period commencing on the Effective Date and ending
on the End of License Date.
"Net available cash" means, at any date as of which the amount thereof is
to be determined, the excess of (a) the aggregate amount received by Vermont
Yankee after the plant completion date and prior to two years before the
determination date as insurance proceeds on account of loss or damage to the
Unit or as the proceeds of a sale or condemnation of a portion of the Unit,
over (b) the aggregate amount expended after the plant completion date and
prior to the determination date on account of rebuilding, repairs,
replacements and additions to the Unit, provided that insurance proceeds
received with respect to a particular loss shall be taken into account for
purposes of the foregoing computation only if the amount received with respect
to the loss exceeds $150,000.
"Total Decommissioning Obligation" for any month shall mean the sum of
(I) an amount equal to the principal payment, if any, of the Decommissioning
Borrowing due for such month plus (ii) the interest payment due for such month
on the Decommissioning Borrowing.
"Decommissioning Borrowing" means the balance outstanding from time to
time under (I) the Credit Agreement or (ii) any refinancing of any unpaid
balance of such borrowing.
Vermont Yankee will xxxx the Purchaser, as soon as practicable after the
end of each month, for all amounts payable by the Purchaser pursuant to this
Section 7 with respect to the particular month. Such bills will be rendered
in such detail as the Purchaser may reasonably request and may be rendered on
an estimated basis subject to corrective adjustments in subsequent billing
periods. All bills shall be paid in full within 10 days after receipt thereof
by the Purchaser.
7A. Prepayment Option
-----------------
The Purchaser is hereby granted an option to prepay (the "Prepayment
Option"), (I) in full but not in part, its entitlement percentage of Vermont
Yankee's Closing Net Unit Investment (excluding the portion thereof
represented by the Purchaser's equity investment in Vermont Yankee) and
Decommissioning Borrowing, together with any interest accrued but unpaid
thereon, and (ii) with Vermont Yankee's consent, in full but not in part, the
Purchaser's entitlement percentage of the Equity investment, portion of
Vermont Yankee's Closing Net Unit Investment represented by the Purchaser's
equity investment in Vermont Yankee, together with an amount equal to the
equity percentage return accrued and unpaid thereon, all determined as of the
close of business on the day prior to the exercise date; provided, however
that (x) option under clause (ii) may only be exercised concurrently with, or
subsequent to, the exercise of the option under clause (I) and (y) promptly
after such exercise by Purchaser, Vermont Yankee shall redeem the Purchaser's
equity investment in Vermont Yankee. Such option or options to be exercisable
on the Effective Date or on the first day of any calendar quarter thereafter
during the term of this contract (an "exercise date"). At least 30 days prior
to the estimated Effective Date, Vermont Yankee shall give written notice to
the Purchaser providing its best estimate of the amount subject to these
options as of the Effective Date. Thereafter, upon written request by the
Purchaser at least 60 days prior to the next exercise date, Vermont Yankee
shall provide to the Purchaser its best estimate of the amounts subject to
these options as of such exercise date. Purchaser shall give Vermont Yankee
at least 15 days prior written notice of its intent to exercise one or both of
these options, which notice shall be binding and may not be withdrawn without
the prior written consent of Vermont Yankee. Within ten days after receipt of
such notice, Vermont Yankee shall provide the Purchaser with a calculation of
the prepayment amount due upon exercise. After making such prepayment and, if
appropriate, delivering to Vermont Yankee the certificates evidencing the
Purchaser's equity investment in Vermont Yankee together with duly endorsed
stock powers, the Purchaser shall no longer be responsible for paying any
amounts under clause (I) of the first paragraph of Section 7 with respect to
the period following the exercise of the Prepayment Option or, if the option
under clause (ii) above has been exercised, be a stockholder of Vermont
Yankee. "After making the prepayment due upon exercise of the option under
clause (I) above, the Purchaser shall only remain obligated to pay all other
amounts due under this contract, including, without limitation, amounts billed
under clause (ii) of the first paragraph 7, provided that after the option
under clause (ii) above has been exercised, Purchaser shall not be obligated
for any further payments under clause (ii)(f) of the first paragraph of
Section 7."
In the event that any other Purchasers exercise their Prepayment Options
under any of the other Initial Power Contracts and the Purchaser has not
exercised its Prepayment Option, then from and after the exercise of each such
other Prepayment Option the Purchaser shall pay its Adjusted Entitlement
Percentage of amounts due under clause (I) of the first paragraph of Section 7
hereof."
(f) Section 15 of the Additional Power Contract is hereby amended by
adding the following sentence at the end thereof:
"Notwithstanding the foregoing, (a) Purchaser (or its assigns) may assign its
interest in this contract only (I) to a third party that has a credit rating
equal to the higher of that of the assignor or of investment grade as
determined by a nationally rated service, or (ii) to a single purpose entity
whose obligations hereunder are guaranteed by a parent that has such a credit
rating, or (iii) in connection with a merger, consolidation or sale of
substantially all its assets to another party that has a credit rating at
least equal to that of the Purchaser (or its assigns) and (b) the Purchaser
hereby consents to an assignment by Vermont Yankee of its interest in this
contract to the special purpose entity described or referred to in Schedule
7.1(z) of the APA and agrees that Purchaser's obligations hereunder shall not
be affected by such assignment."
6. Government Regulation.
---------------------
This Amendatory Agreement and all rights and obligations of the Parties
hereunder are subject to all applicable federal, state and local laws and all
duly promulgated orders and duly authorized actions of governmental
authorities having proper and valid jurisdiction over the terms of this
Amendatory Agreement. Purchaser will be obligated to make all payments to
Vermont Yankee for purchases at wholesale of capacity, energy and ancillary
products hereunder regardless of whether or not the Purchaser is permitted to
pass along or recover those payments from its customers. Each of Vermont
Yankee and Purchaser shall not propose, advance or support, and shall
vigorously oppose and defend against, any action by any legislature, agency,
commission, (including the Federal Energy Regulatory Commission), entity or
court that would adversely affect the Parties' rights and benefits hereunder
and each of Vermont Yankee and the Purchaser will vigorously pursue all
actions and remedies to overturn or cure any such action. In addition, the
rates, terms, and conditions contained in this Amendatory Agreement are not
subject to change under Sections 205 or 206 of the Federal Power Act, as
either section may be amended or superseded, absent the mutual written
agreement of the Parties or a finding by the Federal Energy Regulatory
Commission, that this Amendatory Agreement is not in the public interest.
7. Confidentiality.
----------------
Except as otherwise required by law or for implementation of this
Amendatory Agreement, the Parties must keep confidential the transactions
undertaken pursuant hereto; provided, however, that the Purchaser may disclose
such information on a confidential basis to third parties in connection with
good faith negotiation for the assignment of Purchaser's interests hereunder.
Nothing herein shall preclude the Purchaser from disclosing the substance of
this Amendatory Agreement to third parties on a confidential basis in connection
with the negotiation of the assignment of any of its interests herein. Any
information provided by either Party to the other Party pursuant to this
Amendatory Agreement and labeled "CONFIDENTIAL" will be used by the receiving
Party solely in connection with the purposes of this Amendatory Agreement and
will not be disclosed by the receiving Party to any third party, except with
the providing Party's consent. This Section 7 of this Amendatory
Agreement will not prevent either Party from providing any confidential
information received from the other Party to any court or in accordance with a
proper discovery request or in response to the reasonable request of any
governmental agency with jurisdiction to regulate or investigate the
disclosing Party's affairs, provided that, if feasible, the disclosing Party
will give prior notice to the other Party of such disclosure and, if so
requested by such other Party, will have used all reasonable efforts to oppose
or resist the requested disclosure, as appropriate under the circumstances, or
to otherwise make such disclosure pursuant to a protective order or other
similar arrangement for confidentiality.
8. Miscellaneous.
-------------
(a) Mitigation of Damages. In the event of any default by Purchaser,
Vermont Yankee shall have the right to sell the Purchaser's entitlement
percentage of any energy and ancillary products and apply the proceeds thereof
against the amounts owing from the Purchaser.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment by their
respective officers hereto duly authorized, as of the date first above
written.
VERMONT YANKEE NUCLEAR POWER
CORPORATION
By_______________________________________
Its President and Chief Executive Officer
Title
Address: Xxx 000, Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
[PURCHASER]
By______________________________________
Its ____________________________________
Title
Address:
Exhibit A
to
1999 Amendatory Agreement
APA Obligations
Section 2.4 Excluded Liabilities
Section 6.13(b) One-time fee due to DOE under the DOE Standard Contract
Section 6.13(c)Operational phase spend fuel storage facility costs up to 70%
of $20.7 million (1999 dollars).
Section 6.14 DOE Decontamination and Decommissioning fees
Section 8.1(b) Indemnification obligations
Exhibit B
to
1999 Amendatory Agreement
TAPA Obligations:
Section 5.6(a),(b) and (c) Operating and Capital Costs
Sections 7.1(b) and 7.2 Indemnities
Exhibit C
to
1999 Amendatory Agreement
[Attach copy of PPA]
