Document:

EXHIBIT 10.25

Exhibit 10.25

 

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked [ * * * ] and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request filed with the Commission.

Goldman, Sachs & Co. | 85 Broad Street | New York, New York 10004 | Tel: 212 902 1000

Opening Transaction

	
To:
	
Computer Sciences Corporation

2100 East Grand Avenue

El Segundo, CA 90245

	
 
	
 

	
A/C:
	
[Insert Account Number]

	
 
	
 

	
From:
	
Goldman, Sachs & Co.

	
 
	
 

	
Re:
	
Collared Accelerated Share Repurchase Transaction 

	
 
	
 

	
Ref. No:
	
[Insert Reference Number]

	
 
	
 

	
Date:
	
June 29, 2006

 

          This master confirmation (this "Master Confirmation"), dated as of June 29, 2006, is intended to supplement the terms and provisions of certain Transactions (each, a "Transaction") entered into from time to time between Goldman, Sachs & Co. ("GS&Co.") and Computer Sciences Corporation ("Counterparty"). This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a Transaction. The terms of any particular Transaction shall be set forth in (i) a Supplemental Confirmation in the form of Schedule A hereto (a "Supplemental Confirmation"), which shall reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation and (ii) a Trade Notification in the form of Schedule B hereto (a "Trade Notification"), which shall reference the relevant Supplemental Confirmation and supplement, form a part of, and be subject to such Supplemental Confirmation. This Master Confirmation, each Supplemental Confirmation and the related Trade Notification together shall constitute a "Confirmation" as referred to in the Agreement specified below.

          The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the "Equity Definitions"), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Master Confirmation. This Master Confirmation, each Supplemental Confirmation and the related Trade Notification evidence a complete binding agreement between the Counterparty and GS&Co. as to subject matter and the terms of each Transaction to which this Master Confirmation, such Supplemental Confirmation and Trade Notification relate and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

          This Master Confirmation, each Supplemental Confirmation and each Trade Notification supplement, form a part of, and are subject to an agreement in the form of the 1992 ISDA Master Agreement (Multicurrency -Cross Border) (the "Agreement") as if GS&Co. and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for (i) the election of Loss and Second Method, New York law (without regard to the conflicts of law principles) as the governing law and US Dollars ("USD") as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to Transactions, (iii) the replacement of the word "third" in the last line of Section 5(a)(i) with the word "first" and (iv) the election that the "Cross Default" provisions of Section 5(a)(vi) shall apply to Counterparty, with a "Threshold Amount" of USD50 million).

          All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation, each Supplemental Confirmation and each Trade Notification except as expressly modified herein. 

 

 

          If, in relation to any Transaction to which this Master Confirmation, a Supplemental Confirmation and a Trade Notification relate, there is any inconsistency between the Agreement, this Master Confirmation, any Supplemental Confirmation, any Trade Notification and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Trade Notification, (ii) such Supplemental Confirmation; (iii) this Master Confirmation; (iv) the Agreement; and (v) the Equity Definitions.

1.          Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions. Set forth below are the terms and conditions which, together with the terms and conditions set forth in the related Supplemental Confirmation and Trade Notification (in respect of the relevant Transaction), shall govern each such Transaction.

General Terms:

	
Conditions to Effectiveness:
	
No Transaction hereunder shall be effective unless GS&Co. has received the Prepayment Amount on the Prepayment Date. For the avoidance of doubt, neither party shall have any right or obligation under any Transaction until such Transaction is effective.

	
 
	
 

	
Trade Date:
	
For each Transaction, as set forth in the Supplemental Confirmation.

	
 
	
 

	
Buyer:
	
Counterparty

	
 
	
 

	
Seller:
	
GS&Co.

	
 
	
 

	
Shares:
	
Shares of common stock, $1.00 par value, of Counterparty, Ticker: CSC

	
 
	
 

	
Forward Price:
	
The average of the VWAP Prices for each Exchange Business Day in the Calculation Period; [ * * * ].

	
 
	
 

	
VWAP Price:
	
For any Exchange Business Day, as determined by the Calculation Agent based on the New York 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) for such Exchange Business Day (without regard to pre-open or after hours trading outside of any regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time on such Exchange Business Day, on Bloomberg page "CSC.N <Equity> AQR_SEC" (or any successor thereto). 

	
 
	
 

	
Forward Price Adjustment Amount:
	
For each Transaction, as set forth in the Trade Notification; [ * * * ].

	
 
	
 

	
Calculation Period:
	
The period from and including the first Exchange Business Day immediately following the Hedge Completion Date to and including the Termination Date (as adjusted in accordance with the provisions hereof).

	
 
	
 

	
Termination Date:
	
For each Transaction, the earlier to occur of date set forth in the Supplemental Confirmation (as the same may be postponed in accordance with the provisions hereof) (the "Scheduled Termination Date") and any Early Settlement Date; provided that, if an Early Settlement Date has not been designated, GS&Co. shall have the right to designate any date (the "Accelerated Termination Date") on or after the First Acceleration Date to be the Termination Date by providing notice to Counterparty of any such designation on the Accelerated Termination Date; provided further, that if GS&Co. provides notice to Counterparty of such designation prior to 9:30 a.m. New York City time on the Accelerated Termination Date, then the Termination Date shall be the Exchange Business Day immediately preceding such Accelerated Termination Date.

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First Acceleration Date:
	
For each Transaction, as set forth in the Supplemental Confirmation.

	
 
	
 

	
Hedge Period:
	
The period from and including the day immediately after the Trade Date to and including the Hedge Completion Date (as adjusted in accordance with the provisions hereof).

	
 
	
 

	
Hedge Completion Date:
	
For each Transaction, the Exchange Business Day on which GS&Co. finishes establishing its initial Hedge Positions in respect of such Transaction, as determined by GS&Co. in its good faith and commercially reasonable discretion, which date shall be as set forth in the Supplemental Confirmation and Trade Notification (as the same may be postponed in accordance with the provisions herein).

	
 
	
 

	
Hedge Period Reference Price:
	
The average of the VWAP Prices for each Exchange Business Day in the Hedge Period.

	
 
	
 

	
Market Disruption Event:
	
The definition of "Market Disruption Event" in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words "at any time during the one-hour period that ends at the relevant Valuation Time" and inserting the words "at any time on any Scheduled Trading Day during the Hedge Period or Calculation Period or" after the word "material," in the third line thereof.

Notwithstanding anything to the contrary in the Equity Definitions, to the extent that any Exchange Business Day in the Hedge Period or the Calculation Period is a Disrupted Day, the Calculation Agent may postpone the Hedge Completion Date or the Termination Date, as the case may be. In such event, the Calculation Agent must determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Hedge Period Reference Price or the Forward Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Hedge Period or the Calculation Period, as the case may be, shall be adjusted by the Calculation Agent for purposes of determining the Hedge Period Reference Price or the Forward Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares.

If a Disrupted Day occurs during the Calculation Period, and each of the 9 immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith commercially reasonable discretion, may either (i) determine the VWAP Price for such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate or (ii) further extend the Calculation Period as it deems necessary to determine the VWAP Price.

	
 
	
 

	
Exchange:
	
New York Stock Exchange

	
 
	
 

	
Related Exchange(s):
	
All Exchanges.

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Prepayment\Variable Obligation:
	
Applicable. The parties agree that any obligation of GS&Co. to deliver Shares to Counterparty shall be conditioned upon its receipt of the Prepayment Amount on the Prepayment Date.

	
 
	
 

	
Prepayment Amount:
	
For each Transaction, as set forth in the Supplemental Confirmation.

	
 
	
 

	
Prepayment Date:
	
The third Exchange Business Day following the Trade Date.

 

Settlement Terms:

	
Physical Settlement:
	
Applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction.

	
 
	
 

	
Number of Shares to be Delivered:
	
A number of Shares equal to (a) the Prepayment Amount divided by (b) the Forward Price minus the Forward Price Adjustment Amount; provided that the Number of Shares to be Delivered will be not less than the Minimum Shares and not greater than the Maximum Shares. The Number of Shares to be Delivered on the Settlement Date shall be reduced, but not below zero, by any Shares delivered pursuant to the Initial Share Delivery described below.

	
 
	
 

	
Excess Dividend Amount:
	
For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.

	
 
	
 

	
Settlement Date:
	
The third Exchange Business Day following the Termination Date.

	
 
	
 

	
Settlement Currency:
	
USD

	
 
	
 

	
Initial Share Delivery:
	
GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a "Settlement Date" for purposes of such Section 9.4.

	
 
	
 

	
Initial Shares:
	
For each Transaction, as set forth in the Supplemental Confirmation.

	
 
	
 

	
Initial Share Delivery Date:
	
Three (3) Exchange Business Days following the Trade Date. 

	
 
	
 

	
Minimum Shares:
	
For each Transaction, as set forth in the Supplemental Confirmation.

	
 
	
 

	
Maximum Shares:
	
For each Transaction, as set forth in the Supplemental Confirmation.

 

Share Adjustments:

	
Adjustments for Stock Split Events:
	
In respect of any Potential Adjustment Event that is a subdivision or consolidation of the Shares, a distribution, or an issue or dividend of Shares to existing holders of Shares, including a free distribution or dividend of any Shares to existing holders by way of bonus, capitalization or similar issue (each, a "Stock Split Event"), the Calculation Agent will (i) make adjustments to one or more of the Forward Price, the VWAP Prices for each day occurring prior to such Stock Split Event, the Forward Price Adjustment Amount, the Minimum Shares, the Maximum Shares and the Ordinary Dividend Amount [ * * * ] and (ii) determine the effective date of such adjustments.

 

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Consequences of Potential Adjustment Events:
	
In respect of any Potential Adjustment Event other than a Stock Split Event, 

[ * * * ].

	
 
	
 

	
Extraordinary Dividend:
	
For any calendar quarter occurring (in whole or in part) during the period from and including the first day of the Calculation Period to and including the Termination Date, any dividend or distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or (B) of the Equity Definitions) (a "Dividend") the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.

	
 
	
 

	
Ordinary Dividend Amount:
	
For each Transaction, as set forth in the Supplemental Confirmation.

 

1.           Extraordinary Events:

	
Consequences of Merger Events and Tender Offers:
	
[ * * * ]

	
 
	
 

	
Tender Offer:
	
Applicable

	
 
	
 

	
Nationalization, Insolvency or Delisting:
	
[ * * * ]; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange or The NASDAQ National Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.

 

Additional Disruption Events:

	
(a)
	
Change in Law:
	
Applicable

	
 
	
 
	
 

	
(b)
	
Failure to Deliver:
	
Applicable

	
 
	
 
	
 

	
(c)
	
Insolvency Filing:
	
Applicable

	
 
	
 
	
 

	
(d)
	
Loss of Stock Borrow:
	
Applicable; provided that Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity Definitions shall be amended by deleting the words "at a rate equal to or less than the Maximum Stock Loan Rate" and replacing them with "at a rate of return equal to or greater than zero".

	
 
	
 
	
 

	
 
	
Hedging Party:
	
GS&Co.

	
 
	
 
	
 

	
 
	
Determining Party:
	
GS&Co.

 

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Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Additional Disruption Event, any Transaction would be cancelled or terminated in accordance with Article 12 of the Equity Definitions, [ * * * ] shall apply.

	
Consequences of Events of Default and Termination Events:
	
[ * * * ]

	
 
	
 

	
[ * * * ]:
	
[ * * * ]

	
 
	
 

	
Non-Reliance/Agreements and Acknowledgements Regarding Hedging Activities/Additional Acknowledgements:
	
Applicable

	
 
	
 

	
Transfer:
	
Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of GS&Co. under this Transaction, in whole or in part, to an affiliate of GS&Co. that is guaranteed by The Goldman Sachs Group, Inc. in form and substance reasonably satisfactory to Counterparty, but without requiring the consent of Counterparty.

	
 
	
 

	
GS&Co. Payment Instructions:
	
Chase Manhattan Bank New York

For A/C Goldman, Sachs & Co.

A/C #930-1-011483

ABA: 021-000021

	
 
	
 

	
Counterparty's Contact Details for Purpose of Giving Notice:
	
To be provided by Counterparty

	
 
	
 

	
GS&Co.'s Contact Details for Purpose of Giving Notice:
	
Telephone No.:   (212) 902-8996

Facsimile No.:    (212) 902-0112

Attention: Equity Operations: Options and Derivatives

With a copy to:

Vijay Culas

Equity Capital Markets

One New York Plaza

New York, NY 10004

Telephone No.:   (212) 902-6247

Facsimile No.:    (212) 902-3000

2.          Calculation Agent.           GS&Co. 

3.          Additional Mutual Representations, Warranties and Covenants. In addition to the representations and warranties in the Agreement, each party represents, warrants and covenants to the other party that:

          (a)           Eligible Contract Participant. It is an "eligible contract participant", as defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction hereunder as principal and not for the benefit of any third party.

          (b)           Accredited Investor. Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), by virtue of Section 4(2) thereof and the provisions of Regulation D thereunder ("Regulation D"). Accordingly, each party represents and warrants to the other that (i) it has the financial ability to bear the economic risk of its 

 

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investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an "accredited investor" as that term is defined under Regulation D, (iii) it will purchase each Transaction for investment and not with a view to the distribution or resale thereof in a manner that would violate the Securities Act, and (iv) the disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.

          (c)           Material Nonpublic Information. For the avoidance of doubt, GS&Co. has implemented reasonable policies and procedures, taking into consideration the nature of its business, to ensure that individuals making investment decisions would not violate laws prohibiting trading on the basis of material nonpublic information. Such individuals shall not be in possession of material nonpublic information during all relevant times beginning the date hereof through and including the Hedge Completion Date.

3A.           Additional Representations, Warranties and Covenants of GS&Co. During the period commencing on the first day of the Hedge Period and ending on the [ * * * ] Exchange Business Day immediately following the end of the Calculation Period, or such earlier day as elected by GS&Co. and communicated to Counterparty on such day (the "Relevant Period"), GS&Co. will use good faith efforts to effect purchases of the Relevant Shares in accordance with Rule 10b-18(b)(2), (3) and (4), and effect calculations in respect thereof, as if those sections applied to GS&Co., taking into account any applicable Securities and Exchange Commission no-action letters as appropriate and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond its control. "Relevant Shares" means, for any Transaction, the excess of the Minimum Shares over the Initial Shares for such Transaction. 

4.           Additional Representations, Warranties and Covenants of Counterparty. In addition to the representations, warranties and covenants in the Agreement and those contained herein, as of (i) the date hereof, (ii) the Trade Date and (iii) to the extent indicated below, each day during the Hedge Period and Calculation Period, Counterparty represents, warrants and covenants to GS&Co. that: 

          (a)           the purchase or writing of each Transaction and the transactions contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); 

          (b)           it is not entering into any Transaction (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares);

          (c)           each Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program; 

          (d)           Counterparty acknowledges that, notwithstanding the generality of Section 13.1 of the Equity Definitions, GS&Co. is not making any representations or warranties with respect to the treatment of any Transaction under FASB Statements 128, 133 as amended, 149 or 150, EITF 00-19 (or any successor issue statements) or under Financial Accounting Standards Board's Liabilities & Equity Project; 

          (e)           Counterparty is in compliance with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

          (f)           Counterparty shall report each Transaction as required under Regulation S-K and/or Regulation S-B under the Exchange Act, as applicable;

          (g)           Counterparty is not, and will not be, engaged in a "distribution" of Shares or securities that are convertible into, or exchangeable or exercisable for Shares for purposes of Regulation M promulgated under the Exchange Act ("Regulation M") at any time during the Hedge Period or the Relevant Period, or the one Exchange Business Days immediately following the Relevant Period unless Counterparty has provided written notice to

 

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GS&Co. of such distribution (a "Regulation M Distribution Notice") not later than the Scheduled Trading Day immediately preceding the first day of the relevant "restricted period" (as defined in Regulation M); Counterparty acknowledges that any such notice may cause the Hedge Period or the Calculation Period to be extended or suspended pursuant to Section 5 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below; 

          (h)           Counterparty acknowledges that each Transaction is a derivatives transaction in which it has granted GS&Co. an option. GS&Co. may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction; 

          (i)           as of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the Minimum Share Delivery Date and the Settlement Date, (i) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities, (ii) the capital of Counterparty is adequate to conduct the business of Counterparty and (iii) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature; 

          (j)           Counterparty is not required to register as an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; 

          (k)           upon entering into each Transaction, the Counterparty covenants that it will immediately retire or hold in treasury the Number of Shares purchased by it in connection with the relevant Transaction; and 

          (l)           it has not, and during any Hedge Period or Relevant Period will not, enter into agreements similar to the Transactions described herein (other than the confirmation of even date herewith between Counterparty and GS&Co. confirming the terms of accelerated Share repurchase transactions between Counterparty and GS&Co.) where any initial hedge period (however defined) or the calculation period (however defined) in such other transaction will overlap at any time (including as a result of extensions in such initial hedge period or calculation period as provided in the relevant agreements) with any Hedge Period or Relevant Period under this Master Confirmation. In the event that the initial hedge period or calculation period in any other similar transaction overlaps with any Hedge Period or Relevant Period under this Master Confirmation as a result of an extension of the Termination Date pursuant to Section 5 herein, Counterparty shall promptly amend such transaction to avoid any such overlap.

5.           Suspension of Hedge Period or Calculation Period. 

          (a)           If Counterparty concludes that it will be engaged in a distribution of the Shares for purposes of Regulation M, Counterparty agrees that it will, on a day no later than the Scheduled Trading Day immediately preceding the start of the relevant restricted period, provide GS&Co. with a Regulation M Distribution Notice. Upon the effectiveness of such Regulation M Distribution Notice, GS&Co. shall halt any purchase of Shares in connection with hedging any Transaction during the relevant restricted period. If on any Scheduled Trading Day Counterparty delivers the Regulation M Distribution Notice in writing (and confirms by telephone) by 8:30 a.m. New York Time (the "Notification Time") then such notice shall be effective as of such Notification Time. In the event that Counterparty delivers such Regulation M Distribution Notice in writing and/or confirms by telephone after the Notification Time, then such notice shall be effective as of 8:30 a.m. New York Time on the following Scheduled Trading Day or as otherwise required by law or agreed between Counterparty and GS&Co. The Calculation Period or the Hedge Period, as the case may be, shall be suspended and the Termination Date or the Hedge Completion Date or both, as the case may be, shall postponed for each Scheduled Trading Day in such restricted period and GS&Co. shall cease effecting purchases of shares in connection with this Transaction; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below, including, without limitation, the requirement that such notice be made at a time at which none of Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

          (b)           In the event that GS&Co. concludes, in its good faith commercially reasonable discretion, based on advice of outside legal counsel, that it is appropriate with respect to any legal, regulatory or self-regulatory 

 

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requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by GS&Co.), for it to refrain from purchasing Shares on any Scheduled Trading Day during the Hedge Period or the Calculation Period, GS&Co. may by written notice to Counterparty elect to suspend the Hedge Period or the Calculation Period, or both, as the case may be, for such number of Scheduled Trading Days as is specified in the notice; provided that GS&Co. may exercise this right to suspend only in relation to events or circumstances that are unknown to it or any of its affiliates at the Trade Date of any Transaction, occur within the normal course of its or any of its affiliates' businesses, and are not the result of deliberate actions of it or any of its affiliates with the intent to avoid its obligations under the terms of any Transaction. The notice shall not specify, and GS&Co. shall not otherwise communicate to Counterparty, the reason for GS&Co.'s election to suspend the Hedge Period or the Calculation Period, or both, as the case may be. The Hedge Period or the Calculation Period, or both, as the case may be, shall be suspended and the Termination Date shall be extended for each Scheduled Trading Day occurring during any such suspension. 

          (c)           In the event that the Calculation Period or the Hedge Period, as the case may be, is suspended pursuant to Section 5(a) or 5(b) above during the regular trading session on the Exchange, such suspension shall be deemed to be an additional Market Disruption Event, and the second paragraph under "Market Disruption Event" shall apply to any Disrupted Day occurring during the Calculation Period or the Hedge Period, as the case may be, solely as a result of such additional Market Disruption Event.

          (d)           In the event that the Calculation Period is extended pursuant to any provision hereof (including, without limitation, pursuant to Section 9(d) below), the Calculation Agent, in its good faith commercially reasonable discretion, shall postpone the Scheduled Termination Date; provided that Counterparty shall not be required to make any additional cash payments or deliver any Shares in connection with any such postponement. 

6.           10b5-1 Plan. Counterparty represents, warrants and covenants to GS&Co. that for each Transaction:

          (a)           Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act ("Rule 10b5-1") or any antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares. Counterparty acknowledges that it is the intent of the parties that each Transaction entered into under this Master Confirmation comply with the requirements of Rule 10b5-1(c)(1)(i)(A) and (B) and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c). 

          (b)           Counterparty will not seek to control or influence GS&Co. to make "purchases or sales" (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this Master Confirmation, including, without limitation, GS&Co.'s decision to enter into any hedging transactions. Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation, each Supplemental Confirmation and each Trade Notification under Rule 10b5-1.

          (c)           Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation, the relevant Supplement Confirmation or Trade Notification must be effected in accordance with the requirements for the amendment or termination of a "plan" as defined in Rule 10b5-1©. Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification, waiver or termination shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

7.           Counterparty Purchases.

          Counterparty (or any "affiliated purchaser" as defined in Rule 10b-18 under the Exchange Act ("Rule 10b-18")) shall not, without the prior written consent of GS&Co., directly or indirectly purchase any Shares, listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Hedge Period or 

 

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Calculation Period (as extended pursuant to the provisions hereof). During this time, any such purchases by Counterparty shall be made through GS&Co., or if not through GS&Co., with the prior written consent of GS&Co., and in compliance with Rule 10b-18 or otherwise in a manner that Counterparty and GS&Co. believe is in compliance with applicable requirements. 

8.           Special Provisions for Merger Transactions. Notwithstanding anything to the contrary herein or in the Equity Definitions, 

          (a)           Counterparty shall, prior to the opening of trading in the Shares on any day during any Hedge Period or Calculation Period on which Counterparty makes, or expects to be made, any public announcement (as defined in Rule 165(f) under the Securities Act of 1933, as amended) of any Merger Transaction, notify GS&Co. of such public announcement;

          (b)           promptly notify GS&Co. following any such announcement that such announcement has been made; and

          (c)           promptly provide GS&Co. with written notice specifying (i) Counterparty's average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the Announcement Date that were not effected through GS&Co. or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the Announcement Date. Such written notice shall be deemed to be a certification by Counterparty to GS&Co. that such information is true and correct. In addition, Counterparty shall promptly notify GS&Co. of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. Counterparty acknowledges that any such notice may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6. 

          "Merger Transaction" means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

9.           Acknowledgments. The parties hereto intend for:

          (a)           Each Transaction to be a "securities contract" as defined in Section 741(7) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the "Bankruptcy Code"), a "swap agreement" as defined in Section 101(53B) of the Bankruptcy Code, or a "forward contract" as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 555, 556, 560 and 561 of the Bankruptcy Code;

          (b)           The Agreement to be a "master netting agreement" as defined in Section 101(38A) of the Bankruptcy Code;

          (c)           A party's right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the [ * * * ] of any Transaction to constitute a "contractual right" (as defined in the Bankruptcy Code);

          (d)           Any cash, securities or other property transferred as performance assurance, credit support or collateral with respect to each Transaction to constitute "margin payments" (as defined in the Bankruptcy Code); and

          (e)           All payments for, under or in connection with each Transaction, all payments for the Shares and the transfer of such Shares to constitute "settlement payments" and "transfers" (as defined in the Bankruptcy Code).

10.           Credit Support Documents. The parties hereto acknowledge that no Transaction hereunder is secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement. 

 

10

 

11.           Limitation on Set-off. (a)           The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:
"(f) Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party or upon the occurrence of an Extraordinary Event that results in the [ * * * ] of any Transaction (such Defaulting Party, Affected Party or, in the case of such an Extraordinary Event, either party, "X"), the other party ("Y") will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation). Y will give notice to the other party of any set-off effected under this Section 6(f). 

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Section 6(f) shall be effective to create a charge or other security interest. This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise)."

           (b)           Notwithstanding anything to the contrary in the foregoing, GS&Co. agrees not to set off or net amounts due from Counterparty with respect to any Transaction against amounts due from GS&Co. to Counterparty under obligations other than Equity Contracts. "Equity Contract" means any transaction relating to Shares between the parties (or any of their affiliates) that qualifies as 'equity' under applicable accounting rules.

12.           Claim in Bankruptcy. GS&Co. agrees that in the event of the bankruptcy of Counterparty, GS&Co. shall not have rights or assert a claim that is senior in priority to the rights and claims available to the shareholders of the common stock of Counterparty.

13.           Governing Law. The Agreement, this Master Confirmation, each Supplemental Confirmation, each Trade Notification and all matters arising in connection with the Agreement, this Master Confirmation, each Supplemental Confirmation and each Trade Notification shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine).

14.           Offices.

          (a)           The Office of GS&Co. for each Transaction is: One New York Plaza, New York, New York 10004.

          (b)           The Office of Counterparty for each Transaction is: 2100 East Grand Avenue, El Segundo, CA 90245.

15.           Arbitration. The Agreement, this Master Confirmation, each Supplemental Confirmation and each Trade Notification are subject to the following arbitration provisions:

 

11

 

           (a)           All parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

           (b)           Arbitration awards are generally final and binding; a party's ability to have a court reverse or modify an arbitration award is very limited.

           (c)           The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

           (d)           The arbitrators do not have to explain the reason(s) for their award.

           (e)           The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

           (f)           The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court.

           (g)           The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.

          Counterparty agrees that any and all controversies that may arise between Counterparty and GS&Co., including, but not limited to, those arising out of or relating to the Agreement or any Transaction hereunder, shall be determined by arbitration conducted before The New York Stock Exchange, Inc. ("NYSE") or NASD Dispute Resolution ("NASD-DR"), or, if the NYSE and NASD-DR decline to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction. 

          No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court. 

          Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent stated herein."

16.           Counterparts.     This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.

 

12

 

 

          Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to any particular Transaction to which this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

	
 
	
Yours faithfully,

	
 
	
GOLDMAN, SACHS & CO.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
By:  /s/ Conrad Langenegger, Vice President                   

	
 
	
                            Authorized Signatory

	
 
	
 

	
 
	
 

	
Agreed and Accepted By:
	
 

	
COMPUTER SCIENCES CORPORATION
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By: /s/ Van B. Honeycutt                                                  
	
 

	
        Name: Van B. Honeycutt
	
 

	
        Title: Chairman & CEO
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By: /s/ Michael E. Keane                                                   
	
 

	
        Name: Michael E. Kean
	
 

	
        Title: Vice President & CFO
	
 

	
 
	
 

 

13

 

 

 

 

SCHEDULE A

SUPPLEMENTAL CONFIRMATION

	
To:
	
Computer Sciences Corporation

2100 East Grand Avenue

El Segundo, CA 90245

	
 
	
 

	
From:
	
Goldman, Sachs & Co.

	
 
	
 

	
Subject:
	
Issuer Collared Accelerated Share Repurchase Transaction 

	
 
	
 

	
Ref. No:
	
[Insert Reference No.]

	
 
	
 

	
Date:
	
[Insert Date]

___________________________________________________________________________________________________________________

          The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. ("GS&Co.") and Computer Sciences Corporation ("Counterparty") (together, the "Contracting Parties") on the Trade Date specified below. This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.           This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of June 29, 2006 (the "Master Confirmation") between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.           The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

	
Trade Date:
	
[                       ]

	
 
	
 

	
Hedge Completion Date:
	
As set forth in the Trade Notification, but in no event later than [                       ].

	
 
	
 

	
Termination Date:
	
The date that follows the Hedge Completion Date by twelve months, subject to GS&Co.'s right to accelerate the Termination Date to any date on or after the First Acceleration Date

	
 
	
 

	
First Acceleration Date:
	
As set forth in the Trade Notification to be the date that follows the Hedge Completion Date by [ * * * ]

	
 
	
 

	
Prepayment Amount:
	
USD [                      ]

	
 
	
 

	
Initial Shares:
	
[                      ] Shares

	
 
	
 

	
Minimum Shares:
	
A number of shares equal to (a) the Prepayment Amount divided by (b) [         ] % of the Hedge Period Reference Price.

	
 
	
 

	
Maximum Shares:
	
A number of shares equal to (a) the Prepayment Amount divided by (b) [         ] % of the Hedge Period Reference Price.

	
 
	
 

	
Ordinary Dividend Amount:
	
For any calendar quarter, USD [           ]

 

3.           Counterparty represents and warrants to GS&Co. that neither it nor any "affiliated purchaser" (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during the four full calendar weeks immediately preceding the Trade Date.

4.           This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

 

 

          Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to this Transaction, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

	
 
	
Yours faithfully,

	
 
	
GOLDMAN, SACHS & CO.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
By:  /s/ Conrad Langenegger, Vice President                   

	
 
	
                            Authorized Signatory

	
 
	
 

	
 
	
 

	
Agreed and Accepted By:
	
 

	
COMPUTER SCIENCES CORPORATION
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By: /s/ Van B. Honeycutt                                                  
	
 

	
        Name: Van B. Honeycutt
	
 

	
        Title: Chairman & CEO
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By: /s/ Michael E. Keane                                                   
	
 

	
        Name: Michael E. Kean
	
 

	
        Title: Vice President & CFO
	
 

	
 
	
 

 

 

SCHEDULE B

TRADE NOTIFICATION

	
To:
	
Computer Sciences Corporation

2100 East Grand Avenue

El Segundo, CA 90245

	
 
	
 

	
From:
	
Goldman, Sachs & Co. 

	
 
	
 

	
Subject:
	
Issuer Collared Accelerated Share Repurchase Transaction

	
 
	
 

	
Ref. No:
	
[Insert Reference No.]

	
 
	
 

	
Date:
	
[Insert Date]

_____________________________________________________________________________________________________________________

          The purpose of this Trade Notification is to notify you of certain terms in the Transaction entered into between Goldman, Sachs & Co. ("GS&Co.") and Computer Sciences Corporation ("Counterparty") (together, the "Contracting Parties") on the Trade Date specified below. 

          This Trade Notification supplements, forms part of, and is subject to the Supplemental Confirmation dated as of [Insert Date of Supplemental Confirmation] (the "Supplemental Confirmation") between the Contracting Parties, as amended and supplemented from time to time. The Supplemental Confirmation is subject to the Master Confirmation dated as of June 29, 2006 (the "Master Confirmation") between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation and the Supplemental Confirmation govern this Trade Notification except as expressly modified below.

	
Trade Date:
	
[                      ]

	
 
	
 

	
Hedge Completion Date:
	
[                       ]

	
 
	
 

	
Termination Date:
	
[                          ], subject to GS&Co.'s right to accelerate the Termination Date to any date on or after the First Acceleration Date.

	
 
	
 

	
First Acceleration Date:
	
[              ]

	
 
	
 

	
Forward Price Adjustment Amount:
	
USD[           ]

	
 
	
 

	
Minimum Shares:
	
[                    ] Shares

	
 
	
 

	
Maximum Shares:
	
[                  ] Shares

 

	 	
Yours sincerely,

GOLDMAN, SACHS & CO.

	 	 
	 	
By:                                                     

	 	
         Authorized Signatory

 

 

 

 

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked [ * * * ] and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request filed with the Commission.

SUPPLEMENTAL CONFIRMATION

	
To:
	
Computer Sciences Corporation

2100 East Grand Avenue

El Segundo, CA 90245

	 	 
	
From:
	
Goldman, Sachs & Co.

	 	 
	
Subject:
	
Issuer Collared Accelerated Share Repurchase Transaction 

	 	 
	
Ref. No:
	
[Insert Reference No.]

	 	 
	
Date:
	
June 29, 2006

________________________________________________________________________________________________________________________

          The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. ("GS&Co.") and Computer Sciences Corporation ("Counterparty") (together, the "Contracting Parties") on the Trade Date specified below. This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.           This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of June 29, 2006 (the "Master Confirmation") between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.           The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

	
Trade Date:
	
June 29, 2006

	
 
	
 

	
Hedge Completion Date:
	
As set forth in the Trade Notification, but in no event later than September 1, 2006

	
 
	
 

	
Termination Date:
	
The date that follows the Hedge Completion Date by twelve months, subject to GS&Co.'s right to accelerate the Termination Date to any date on or after the First Acceleration Date

	
 
	
 

	
First Acceleration Date:
	
As set forth in the Trade Notification to be the date that follows the Hedge Completion Date by [ * * * ]

	
 
	
 

	
Prepayment Amount:
	
USD500,000,000

	
 
	
 

	
Initial Shares:
	
7,142,857 Shares

	
 
	
 

	
Minimum Shares:
	
A number of shares equal to (a) the Prepayment Amount divided by (b) [ * * * ] % of the Hedge Period Reference Price.

	
 
	
 

	
Maximum Shares:
	
A number of shares equal to (a) the Prepayment Amount divided by (b) [ * * * ] % of the Hedge Period Reference Price.

	
 
	
 

	
Ordinary Dividend Amount:
	
For any calendar quarter, USD[ * * * ]

 

3.           Counterparty represents and warrants to GS&Co. that neither it nor any "affiliated purchaser" (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during the four full calendar weeks immediately preceding the Trade Date.

4.           This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

 

 

          Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to this Transaction, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

	
 
	
Yours faithfully,

	
 
	
GOLDMAN, SACHS & CO.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
By:  /s/ Conrad Langenegger, Vice President                   

	
 
	
                            Authorized Signatory

	
 
	
 

	
 
	
 

	
Agreed and Accepted By:
	
 

	
COMPUTER SCIENCES CORPORATION
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By: /s/ Van B. Honeycutt                                                  
	
 

	
        Name: Van B. Honeycutt
	
 

	
        Title: Chairman & CEO
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By: /s/ Michael E. Keane                                                   
	
 

	
        Name: Michael E. Kean
	
 

	
        Title: Vice President & CFOExhibit 10.b.18 Amended & Restated Three Party Transmission Agreement

    Exhibit
      10.1

    AMENDED
      AND RESTATED

    THREE-PARTY
      TRANSMISSION AGREEMENT

     

    AGREEMENT
      dated as of June
      30,
      2006; among Vermont Electric Power Company, Inc., a Vermont corporation
      (“Velco”), Central Vermont Public Service Corporation, a Vermont corporation,
      (“CVP”), Green Mountain Power Corporation, a Vermont corporation (“GMP”),and
      Vermont Transco LLC, a limited liability company duly organized under the laws
      of the State of Vermont (“VTransco”). CVP and GMP are sometimes collectively
      referred to as the “Companies” or either of them
      as
      the
“Company.”

     

    WHEREAS,
      Vermont Yankee Nuclear Power Corporation, a Vermont corporation (“Vermont,
      Yankee”), constructed a nuclear electric generation unit at a site adjacent to
      the Connecticut River at Vernon, Vermont, which unit was designed to have a
      maximum net capability of approximately 540 megawatts electric (said unit,
      being
      herein referred to as the “Vermont Yankee Unit”) of which CVP and GMP agreed to
      purchase an aggregate of 55% of the capacity and net electrical output of the
      Vermont Yankee Unit; and

    

    WHEREAS,
      CVP, and GMP proposed; that such power as they acquire from Vermont Yankee
      (the
“Vermont Yankee power”) would be offered to all of the electric distribution
      companies including the Companies in the State of Vermont whether cooperatively,
      municipally or investor owned (“Distributees”) without preference or
      discrimination and to that end proposed to sell such power at its cost to the
      Companies to Velco for resale to such companies, and

    

    WHEREAS,
      Velco has acquired from time to time, and may from time
      to
      time in
      the future acquire, bulk power from other sources for resale to Distributees;
      and

    

    WHEREAS,
      the transmission of the Vermont Yankee power and of other bulk power throughout
      Vermont required construction and operation of-
      a high
      voltage electric transmission system, including transmission lines, transformer
      substations and switching stations, together with various auxiliary protection,
      control and metering facilities, all in addition to the transmission system
      then
      owned and operated by Velco; and

     

    WHEREAS,
      Velco has agreed to contribute to VTransco substantially all of its electricity
      transmission system, subject to liabilities; and 

     

    WHEREAS,
      substantial economies has been achieved by combining facilities for the
      transmission of the Vermont Yankee power and of other power into an integrated
      electric transmission system including the system presently owned and operated
      by Velco and to be owned and operated by VTransco, and the economic welfare
      of
      the people of Vermont and the interests of users of electric power in Vermont
      can best be served by realizing such economies in cost of electric power; and,
      

    

    WHEREAS,
      VTransco
      proposes
      to construct such additional transmission facilities and to provide transmission
      service in Vermont adequate for transmission of the Vermont Yankee power and
      other power to Distributees, and further proposes that its charges for
      transmission of such power will be without profit and will consist of
      compensation for costs incurred, including cost of money invested in connection
      with such transmission; and

    

    WHEREAS,
      VTransco proposes to finance, in part, construction of .any
      additional facilities by the issuance from time to time of bonds under its
      Indenture of Mortgage dated as of September 1, 1957 (the “Indenture”) and the
      inducements to purchasers in agreeing to purchase bonds will include the
      agreements of the Companies contained in this Agreement;

    

    NOW,
      THEREFORE, in consideration of the premises and of the mutual benefits from
      the
      covenants hereinafter set forth, it is agreed:

    

    ARTICLE
      I. Facilities
      to be provided.

    

    1.1 Nature
      of Transmission System. VTransco
      during the term of this Agreement will provide an electric transmission system
      and associated facilities adequate to receive Vermont Yankee power and other
      power at the points of delivery thereof and to deliver such power (after
      allowance for transmission losses) either directly or through the facilities
      of
      others to Distributees at such delivery voltages and at such delivery points
      as
      may be hereafter specified. Said electric transmission system and accompanying
      facilities, including any additions or extensions which subsequently may be
      made
      as herein provided, shall be designed and constructed in accordance with
      standards of modern practice.

    

    1.2 Initial
      Construction. The
      principal initial additions to the system presently operated by Velco consisted
      of the following: 

    

    (a) A
      115 KV
      transmission line and related facilities from Middlebury to Rutland that was
      to
      be completed by December 1969; 

    

    (b) A
      230 KV
      transmission line and related facilities from Barre to the Comerford Plant
      of
      New England Power Company that was to be completed by July 1970; 

    

    (c) A
      345 KV
      transmission line and related facilities from the Vermont Yankee Unit at Vernon
      to the existing Rutland-Ascutney line near Ludlow that was to be completed
      in
      time to receive the Vermont Yankee power at the point of purchase on April
      1,
      1971 or on such later date as such power becomes available.

    

    Velco
      agreed to use its best efforts to provide for the construction and installation
      of the aforesaid facilities in accordance with the foregoing time
      schedule.

    

    1.3 Subsequent
      Facilities.  Facilities
      to be provided by VTransco hereunder in addition to those described in Section
      1.2 shall be subject to approval by CVP and GMP.

    

    ARTICLE
      II.  Services
      to be provided.

    

    2.1 Transmission.  VTransco
      will transmit power, including Vermont Yankee power, less losses incurred in
      transmission calculated as set forth below, for the account of each Company,
      at
      any time that capacity is available for such purpose in the transmission
      facilities of VTransco. VTransco will undertake to make such capacity available
      at any time when doing so will not interfere with the primary obligation to
      deliver capacity or energy for the Sate of Vermont (the “State”) pursuant to the
      obligations under the Power Transmission Contract with the State dated June
      13,
      1957, as it may be amended from time to time (the “Power Transmission
      Contract”).

    

    2.2 Calculation
      of Losses.  Losses
      of
      power transmitted shall be determined in accordance with sound engineering
      methods and such losses shall include a proportionate amount of all allowances
      for losses on the systems of others pursuant to arrangements by VTransco for
      their use in the delivery of such power.

    

    ARTICLE
      III. Payments.

    

    3.1 During
      transmission by VTransco for the State. So
      long
      as VTransco is transmitting capacity or energy for the State under the Power
      Transmission Contract, VTransco will charge to each Company, and each Company
      will pay to VTransco, each calendar month during the term of this Agreement
      as
      compensation for the use of VTransco’s facilities and for the services performed
      by VTransco hereunder, a monthly transmission capacity charge, for each kilowatt
      of capacity then being purchased by such Company by VTransco , determined by
      the
      following formula: 

    

    A
      =
 __BC__ + FO

    TP+SP   TP

    

    Where:

    

    A
      =
      Monthly charge per kilowatt, 

    

    BC
      = That
      portion of the monthly base charge payable by the State to VTransco pursuant
      to
      the provision of Article IV of the Power Transmission Contract applicable to
      the
      use of “the transmission facilities of VTransco” as hereinafter defined, after
      deductions pursuant to clause (m) of paragraph 4.3 of said Article IV other
      than
      for income received for transmission of power included in TP, 

    

    TP
      =
      Total of all kilowatts of power then being transmitted by VTransco for the
      electric distribution utilities in the Sate of Vermont other than power included
      in SP, 

    

    

    SP
      =
      Total of all kilowatts of power which VTransco is required to transmit for
      the
      State of Vermont pursuant to the Power Transmission Contract, 

    

    FO
      = All
      amounts payable during such month by VTransco for the use of facilities of
      others, if any, in the transmission of power included in TP from the points
      at
      which the power enters the facilities of he Company or an assignee of the
      Company.

    

    except
      that the portion of this transmission capacity charge determined by the first
      fraction of the above formula shall be omitted for such kilowatts of power
      as
      are transmitted for such Company under the terms of the Agreement re charges
      for
      Transmission of Firm Power dated June 19, 1961, as amended, to the extent that
      such kilowatts are not added to such Company’s Accredited Capacity in Schedule A
      of that Agreement and do not thereby reduce the Capacity Deficiency of such
      Company under that Agreement.

    

    For
      the
      purposes of this Section 3.1, the phrase “transmission facilities of VTransco”
shall mean the physical facilities owned and operated by VTransco (with he
      exception of the submarine cable and transmission lines, and associated
      facilities, from the New York-Vermont State boundary to the VTransco substation
      at Essex, Vermont, for those kilowatts included in TP not requiring these
      transmission facilities), plus the facilities of others employed by VTransco
      under contracts, leases, agreements or arrangements with the owners and
      operators thereof.

    

    The
      portion of VTransco’s costs applicable to the submarine cable and transmission
      lines, and associated facilities, from the New York-Vermont state boundary
      to
      the VTransco substation at Essex, Vermont, for the purposes of calculating
      the
      amount to be excluded from item “BC” in the formula included in this Section
      3.1, shall be determined by deducting from the amount of monthly base charge
      otherwise payable under the provisions of Article IV of the Power Transmission
      Contract, an amount obtained by multiplying by a fraction consisting of a
      numerator composed of the original cost (which at November 30, 1967 amounted
      to
      $1,095,440) of the said submarine cable, transmission line and associated
      facilities, and a denominator equal to the total original cost (which at
      November 30, 1967 amounted to $11,175,965) of all of VTransco’s plant
      facilities, the total of the items included in that base charge and contained
      in
      subparagraphs (a), (b), (c), (g), (h), (j) and (k) of paragraph 4.3 of Article
      IV of the Power Transmission Contract.

    

    3.2 When
      no power is being transmitted by VTransco for the State.

    

    (a) When
      no
      capacity or energy is being transmitted by VTransco for the State under the
      Power Transmission Contract, the aggregate amount for any period to be charged
      by VTransco to the Companies and paid by the Companies to VTransco, as
      compensation for the use of VTransco’s facilities and for the services performed
      by VTransco hereunder, shall be equal to VTransco’s Net Costs for such period,
      as hereinafter defined. CVP and GMP each severally agree to pay, as provided
      in
      paragraph (d) of this Section, its share of such net costs determined in
      accordance with paragraph (c) of this Section.

    

    (b) For
      the
      purposes of this Section 3.2, the following definitions shall
      apply:

    

    “Net
      Costs” for any period shall mean the excess of (x) the Total Costs for such
      period over (y) the sum of all amounts received by VTransco during such period
      from all sources other than from companies under this Agreement, including
      revenues from the sale of power or from the transmission thereof.

    

    “Total
      Costs” for any period shall mean the sums of the following for such
      period:

    

    (1) All
      operating expenses, including the cost of purchased power but exclusive of
      charges for depreciation of properties paid for by application of the proceeds
      of securities which by their terms require their amortization, plus

    

    (2) All
      fixed
      charges, including interest and amortization of debt discount and expense and
      premium on debt, plus

    

    (3) Regular
      amortization of principal of securities required by their terms; provided,
      however,
      there
      shall not be included, in the even of the acceleration of the maturity of any
      indebtedness by declaration or otherwise, any amount applicable to the principal
      of any indebtedness in addition to the regular amortization requirements,
      plus

    

    (4) An
      amount
      equal to all taxes including taxes on or measured by income, plus

    

    (5) An
      amount
      for such period which, after provision shall have been made for all of the
      other
      costs including all taxes on or measured by income shall equal on an annual
      basis, 6% of the par value of Velco’s outstanding Class A Common Stock plus 8%
      of the par value of Velco’s outstanding Class B Common Stock, all as shown by
      Velco’s books as of the beginning of such period.

    

    (c) The
      portion to be paid by each of the Companies of the Net Costs for any period
      shall be that percentage of such Net Costs computed by dividing (i) the total
      kilowatts which such Company has for such period agreed to have VTransco
      transmit by (ii) the aggregate kilowatts which both Companies have for such
      period agreed to have VTransco transmit. The obligation of each of the Companies
      to make payments required by this Section 3 shall be several and not joint
      or
      joint and several and shall be limited to payment of its portion as set forth
      in
      this Section 3.

    

    (d) VTransco
      will bill each Company as soon as practicable after the end of each month for
      all amounts payable by each Company for the particular month. Such bills shall
      be due and payable when rendered, shall include such detail as a Company may
      reasonable request, and may be rendered on an estimated basis subject to
      corrective adjustments after rendition. Upon request by a Company, VTransco
      shall provide estimates of such corrective adjustments.

    

    Any
      amount due and remaining unpaid ten days following the date of issuance of
      bills
      shall bear interest at an annual rate, compounded monthly, equivalent to one
      hundred twenty percent (120%) of the current prime rate then in effect at the
      First National Bank of Boston, from the due date to the date payment is received
      by VTransco.

    

    ARTICLE
      IV  General
      Provisions.

    

    4.1 Regulatory
      Authorizations. The
      performance of the obligations of each of the companies hereunder shall be
      subject to all regulatory authorizations necessary to permit it to perform
      all
      the obligations to be performed by it hereunder; and each of Companies covenants
      agrees to use its best efforts to secure and maintain such regulatory
      authorizations. The performance of the obligations of VTransco hereunder shall
      be subject to all regulatory authorizations necessary to permit VT to perform
      all the obligations to be performed by VTransco hereunder; and VTransco
      covenants and agrees to use its best efforts to secure and maintain such
      regulatory authorizations.

    

    4.2 Other
      Transmission for the State. In
      the
      event that the State during the term of this contract shall acquire other power
      of transmission within the State from sources outside the State, other than
      St.
      Lawrence and Niagara Project power, and contracts or arrangements are made
      for
      the transmission of such power pursuant to the provisions of paragraph 2.2
      of
      the Power Transmission Contract, then such adjustments to Section 3.1 of this
      contract as the circumstances may require shall be made by agreement of the
      parties with the approval of the Vermont Public Service Board.

    

    4.3 Assignment. This
      contract shall be binding upon and shall inure to the benefit of the parties
      hereto and their corporate successors and assigns, but neither party hereto
      shall voluntarily assign or transfer its rights hereunder except as security
      for
      indebtedness to the assignor or except in accordance with prior written consent
      of the other party. 

    

    4.4 Uncontrollable
      Forces. VTransco
      shall not be held responsible or liable for any loss or damage to the Companies
      on account of delay in completion of facilities or nondelivery of energy
      hereunder at any time caused by uncontrollable forces; provided, however, that
      delay or nondelivery on account of any such uncontrollable forces shall not
      relieve the Companies from their obligation to pay VTransco any amounts payable
      pursuant to the provisions of Article III hereof. The term “uncontrollable
      forces” shall for purposes hereof mean any cause beyond the control of the party
      affected, including, but no limited to, failure of facilities, flood,
      earthquake, storm, lightning, fire, hurricane, war, riot, civil disturbance,
      labor stoppage, sabotage, and restraint by court or public authority, which
      by
      exercise of due foresight such party could not reasonably have been expected
      to
      avoid.

    

    ARTICLE
      V.  Term.

    

    This
      contract shall become effective upon a date allowed by the Federal Energy
      Regulatory Commission and any other appropriate regulatory body having
      jurisdiction, and shall continue in effect until the Indenture shall have been
      satisfied and discharged and thereafter until terminated by written notice
      from
      any party hereto to the other parties at least six months prior to the
      termination date specified in such notice.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this contract to be executed
      on
      their behalf by their duly authorized representatives, all as of the day and
      the
      year fist herein written.

    

    

    
      	 	
               

              VERMONT
                ELECTRIC POWER COMPANY, INC.

            
	
               

              By:

            	
               

              /s/Thomas
                N. Wies

            
	
               

              Name:

            	
               

              Thomas
                N. Wies

            
	
               

              Title:

            	
               

              Vice
                President

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this contract to be executed
      on
      their behalf by their duly authorized representatives, all as of the day and
      the
      year fist herein written.

    

    

    

    
      	 	
               

              CENTRAL
                VERMONT PUBLIC SERVICE CORPORATION

            
	
               

              By:

            	
               

              /s/William
                J. Deehan

            
	
               

              Name:

            	
               

              William
                J. Deehan

            
	
               

              Title:

            	
               

              Vice
                President, Power Planning and Regulatory
                Affairs

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this contract to be executed
      on
      their behalf by their duly authorized representatives, all as of the day and
      the
      year fist herein written.

    

    

    
      	 	
               

              GREEN
                MOUNTAIN POWER CORPORATION

            
	
               

              By:

            	
               

              /s/Donald
                J. Rendall, Jr.

            
	
               

              Name:

            	
               

              Donald
                J. Rendall, Jr.

            
	
               

              Title:

            	
               

              Vice
                President and General Counsel

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this contract to be executed
      on
      their behalf by their duly authorized representatives, all as of the day and
      the
      year fist herein written.

    

    

    

    
      	 	
               

              VERMONT
                TRANSCO LLC

            
	
               

              By:

            	
               

              /s/John
                J. Donleavy

            
	
               

              Name:

            	
               

              John
                J. Donleavy

            
	
               

              Title:

            	
               

              President
                & CEO of VELCO,

              The
                Manager of Vermont Transco LLC

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