Exhibit 10.11
CAPITAL FUNDS AGREEMENT, dated as of February 1, 1968, between VERMONT
YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont corporation,
and (the "Sponsor").
It is agreed as follows:
1. Basic Understandings
Vermont Yankee has been organized to provide for the supply of power to
its ten sponsoring utility companies (including the Sponsor). In the spring
of 1967, it commenced the construction of a nuclear electric generating unit
of the boiling water type, which is being designed to have a maximum net
capability of approximately 540 megawatts electric, at a site adjacent to the
Connecticut River at Vernon, Vermont (the unit being herein, together with
the site and all related facilities to be owned by Vermont Yankee, referred
to as the "Unit"). Construction of the Unit is being carried out under
contracts with General Electric Company and Ebasco Services Incorporated.
Each of the ten sponsoring utilities (the "sponsors") has heretofore
committed itself to purchase a stated percentage (its "stock percentage") of
the capacity and output of the Unit and a like percentage of Vermont Yankee's
stock exclusive of directors' qualifying shares. The names of the sponsors
and their respective stock percentages are as follows:
Stock
Sponsors 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 6.0%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
The Hartford Electric Light Company 3.5%
Western Massachusetts Electric Company 2.5%
Montaup Electric Company 2.5%
Cambridge Electric Light Company 2.5%
Vermont Yankee and each of its other sponsors are entering into capital funds
agreements which are identical to this agreement except for the necessary
changes in the names of the parties.
Vermont Yankee represents to Sponsor that all stockholders of Vermont
Yankee other than the above-named sponsors - being 13 directors and
(possibly) certain Vermont electric distribution utilities which may acquire
stock from one or more of the sponsors - have waived or will waive any
preemptive rights which they might possess with respect to future stock
issues by Vermont Yankee.
Vermont Yankee's authorized capital as of the date of this agreement is
$20,010,000 consisting of 200,100 shares of common stock, $100 par value, of
which 13 directors' qualifying shares have been purchased at the par value
thereof by its directors. Vermont Yankee's sponsors have, subject to
obtaining necessary regulatory approvals, entered into subscription
agreements with it covering the purchase of their respective stock
percentages of an aggregate issue of 200,000 shares of Vermont Yankee's
common stock, $100 par value, at the par value thereof. Vermont Yankee's
estimated capital requirements, exclusive of fuel, with respect to the Unit
aggregate $115,000,000. It is the present intention of Vermont Yankee to
finance not less than 65% of the capital requirements of the Unit, whether
incurred before or after plant completion date, through the issuance and sale
of first mortgage bonds or other securities and through borrowings from
others than the sponsors, and the balance through the issuance and sale of
additional common stock to its sponsors or the receipt from its sponsors of
loans, advances or capital contributions.
2. Effective Date and Term
This agreement shall become effective upon receipt by the Sponsor of
notice that Vermont Yankee has entered into capital funds agreements, as
contemplated by Section 1 above, with each of the other sponsors, and the
execution of capital funds agreements by such other sponsors shall constitute
consideration for the obligations of the Sponsor hereunder.
The term of this agreement shall expire December 31, 2002.
3. Construction of the Unit
Vermont Yankee will proceed with due diligence with construction of the
Unit, and will exercise its best efforts to complete and place it in
commercial operation by July 1, 1971, on the presently estimated schedule
therefor and within present cost estimates, and will keep the Sponsor
currently informed as to the progress of construction and expected plant
completion date.
4. Stock Purchases and Capital Contributions to Provide the Capital
Requirements of the Unit
From time to time when Vermont Yankee requires capital to meet the
capital requirements of the Unit, it may offer shares of its common stock to
its sponsors for subscription, or may request capital contributions from its
sponsors, to raise such capital. Subject to the condition in Section 7, (i)
whenever Vermont Yankee determines to offer any such shares for such purpose,
Vermont Yankee agrees to offer to the Sponsor, and the Sponsor agrees to
subscribe for and purchase, for cash at the par value thereof the Sponsor's
stock percentage of the shares so offered, and (ii) whenever Vermont Yankee
requests capital contributions for such purpose after the issuance of common
stock to the sponsors, the Sponsor will contribute in cash its stock
percentage of the total capital contribution so requested.
5. Capital Requirements of the Unit Defined
Vermont Yankee shall be deemed to have capital requirements of the Unit
within the meaning of Section 4 if it requires capital for any of the
following purposes:
(i) to complete construction of the Unit and place it in commercial
operation at a gross capability of at least 520 megawatts electric;
(ii) to make additions and replacements (other than those chargeable to
maintenance) to the Unit which are required to insure the continued regular
operation of the Unit at a gross capability of at least 520 megawatts
electric or to restore it to regular operation at such gross capability;
(iii) to make any changes in or addition to the Unit which must be
effected in order to obtain or maintain, or to meet the conditions of, any
license or other public authorization, regulation or order which is required
for or applicable to the regular operation of the Unit at a gross capability
of at least 520 megawatts electric;
(iv) to provide materials and supplies, or funds for prepaid items or
cash working capital, required for the regular operation of the Unit at a
gross capability of at least 520 megawatts electric, or to finance the cost
of acquiring and maintaining an inventory of nuclear fuel owned by Vermont
Yankee.
If Vermont Yankee shall at any time or times determine that it would be
more feasible, economic or otherwise desirable for regular operation for the
generation of power and energy for delivery under its Power Contracts with
its sponsors for the Unit to operate at a lower gross capability than 520
megawatts and if it holds or can obtain all licenses and other public
authorizations required for the regular operation of the Unit at such lower
level, then the "capital requirements of the Unit" shall include any
additional capital required for any of the foregoing purposes for operation
of the Unit at any such lower level of capability as from time to time
determined.
6. Loans and Advances
In lieu of offering additional shares of its common stock for
subscription and purchase or requesting capital contributions under Section
4, Vermont Yankee may, at its option, request its sponsors to provide
required capital by means of loans or advances. In any case where Vermont
Yankee determines to request such loans or advances in lieu of stock
purchases, Vermont Yankee agrees to offer to the Sponsor, and the Sponsor,
subject to the condition in Section 7, agrees to provide to Vermont Yankee
the Sponsor's stock percentage thereof. However, Vermont Yankee shall not be
entitled to request such loans or advances except in circumstances where it
would be entitled to require the Sponsor to make a stock subscription or
capital contribution pursuant to Section 4.
The terms of any loans and advances requested by Vermont Yankee under
this Section 6, as to interest, maturity date, rights and terms of
prepayment, and otherwise shall be the same for all sponsors. Such terms
shall be as determined by Vermont Yankee in its discretion, except that the
terms of each such loan or advance shall provide for quarterly payments of
interest at an annual rate not less than 11/2% in excess of the lowest prime
rate for commercial loans at the time in effect at any bank in New York, New
York.
Nothing in this agreement shall be construed as prohibiting Vermont
Yankee from requesting and receiving non-interest bearing open account
advances from its sponsors in the nature of interim investment advances to be
applied toward the purchase of stock or capital contributions.
7. Conditions to the Sponsor's Obligations
The obligation of the Sponsor to subscribe for and purchase its stock
percentage of any stock issue under Section 4 and to provide its stock
percentage of any capital contribution under Section 4 or of any loan or
advance under Section 6 shall be subject to the condition that all necessary
regulatory approvals shall have been obtained with respect to both the action
to be taken by Vermont Yankee and the action to be taken by the Sponsor. The
parties will use their best efforts to obtain, or to assist in obtaining, the
foregoing regulatory approvals. Except as expressly provided in this Section
7, no action of, nor failure to act by, Vermont Yankee or any of the several
sponsors referred to in Section 1 shall permit cancellation of, or relieve
the Sponsor from any of its obligations under, this agreement. However, the
failure of any other sponsor to purchase its stock percentage of any stock
issue or to make its stock percentage of any capital contribution, loan or
advance requested by Vermont Yankee shall not require the Sponsor to make
stock purchases (including those under the subscriptions referred to in
Section 1), capital contributions, loans or advances which in the aggregate
exceed the Sponsor's stock percentage of the total capital requirements of
the Unit.
8. Other Financing
Nothing in this agreement shall be construed as precluding Vermont
Yankee from offering shares of its common stock to, or requesting capital
contributions and loans and advances from, its sponsors to finance capital
requirements other than those contemplated by Section 5, or from financing,
in its discretion, its capital requirements (including the capital
requirements contemplated by Section 5) by means other than the sale of its
common stock to the sponsors or capital contributions or loans or advances
from them, but not by the sale of its common stock other than to sponsors.
9. Cooperation by Sponsor
The Sponsor agrees that it will cooperate with Vermont Yankee in taking
all such action as may be necessary or appropriate to effectuate the purposes
of this agreement.
10. Restrictions on Transfer
The Sponsor acknowledges notice of the restrictions on stock transfers
contained in Section 8.1 of Vermont Yankee's by-laws, and agrees to be bound
by said provisions with respect to all shares of Vermont Yankee's capital
stock which it may acquire.
11. Arbitration
In case any dispute shall arise as to the interpretation or performance
of this contract which cannot be settled by mutual agreement, such dispute
shall be submitted to arbitration. The parties shall if possible agree upon
a single arbitrator. In case of failure to agree upon an arbitrator within
15 days after the delivery by either party to the other of a written notice
requesting arbitration, either party may request the American Arbitration
Association to appoint the arbitrator. The arbitrator, after opportunity for
each of the parties to be heard, shall consider and decide the dispute and
notify the parties in writing of his decision. Such decision shall be
binding upon the parties, and the expenses of the arbitration shall be borne
equally by them.
12. Interpretation
The interpretation and performance of this agreement shall be in
accordance with and controlled by the law of the State of Vermont.
13. Addresses
Except as the parties may otherwise agree, any notice, request or other
communication from one party to the other, relating to this agreement or the
rights, obligations or performance of the parties hereunder, shall be in
writing and shall be effective upon delivery to the other party. Any such
communication shall be considered as duly delivered when delivered in person
or mailed by registered or certified mail, postage prepaid, to the respective
address of the other party shown following the signatures of such other party
hereto, or such other address as may be designated by written notice given as
provided in this Section 13.
14. Assignment
This agreement shall be binding upon and shall inure to the benefit of,
and may be performed by, the successors and assigns of the parties, except
that no assignment, pledge or other transfer of this agreement by either
party shall operate to release the assignor, pledgor or transferor from any
of its obligations under this agreement unless consent to the release is
given in writing by the other party (if not theretofore released pursuant to
this Section) and, if the other party has theretofore assigned, pledged or
otherwise transferred its interest in this agreement, by the other party's
assignee, pledgee or transferee, or unless such transfer is incident to a
merger or consolidation with, or transfer of all or substantially all of the
assets of the transferor to, another sponsor which shall, as a part of such
succession, assume all the obligations of the transferor under this
agreement.
15. Corporate Obligations
This agreement is the corporate act and obligation of the parties
hereto, and any claim hereunder against any stockholder, director or officer
of either party, as such, is expressly waived.
16. All Prior Agreements Superseded
This agreement represents the entire agreement between Vermont Yankee
and the Sponsor relating to the subject matter hereof, and all previous
agreements, discussions, communications and correspondence with respect to
the subject matter are hereby superseded and are of no further force and
effect, except that the uncalled portion of the outstanding subscription
agreements referred to in Section 1, between the Sponsor and Vermont Yankee
with respect to the Sponsor's subscription for its stock percentage of
200,000 shares of Vermont Yankee's common stock, $100 par value, is not
superseded and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement by their
respective officers thereunto duly authorized as of the date first above
written.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By
President
77 Grove Street
Rutland, Vermont 05701
By
(Officer)
(Address)