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Exhibit 10.16
AMENDMENT TO
THE MEMORANDUM OF AGREEMENT
ENTERED INTO DECEMBER 11, 1957
BETWEEN
THE CITY OF WATERBURY
AND
THE THOMASTON WATER COMPANY
The Connecticut Water Company (successor to The Thomaston Water
Company), a corporation organized and doing business in the State of
Connecticut and having its principal office in the Town of Clinton, County of
Middlesex and State of Connecticut (the "Company") and the City of Waterbury, a
municipal corporation chartered by the State of Connecticut, situated in New
Haven County in said state, acting hereby by the hand of its Mayor duly
authorized by the Board of Aldermen of the City of Waterbury (the "City"),
hereby agree to amend the Memorandum of Agreement dated December 11, 1957
between the Company and the City (the "Original Agreement") as follows:
1.) All references to The Thomaston Water Company or to the Company in the
Original Agreement (as hereby amended, the Original Agreement is
herein referred to as "the Agreement") now refer to its successor, The
Connecticut Water Company.
2.) Section 1 of the Original Agreement is deleted and the following
Section 1 inserted in its place:
"1.) The City agrees to sell to the Company up to 650,000 gallons
per day of treated water to be made available to the Company
at the connection (the "Connection") between the City's water
system and the Company's water system located on Reynolds
Bridge Road in Thomaston, Connecticut. The City's obligation
to make
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such sales, and the Company's obligation to purchase and pay
for such water, shall continue for the term of this Agreement;
provided, however, that the Company shall be under no
obligation to take, or to pay for, any such water whose
quality does not meet State or Federal standards. The Company
agrees to purchase from the City at least 739,125,000 gallons
of treated water over the five year period beginning on
January 1, 1993, which amount represents an average of 405,000
gallons per day over said five year period."
3.) Section 3 of the Original Agreement is deleted and the following
Section 3 inserted in its place:
"3.) a.) The Company agrees to pay the City for all water
taken through the Connection pursuant to this
Agreement. Except as specified in this Section 3 and
in Section 5 hereof, and notwithstanding any other
provisions of this Agreement, no other charges or
expenses shall be payable by the Company to the City.
b.) The Company agrees to pay the City for water at the
Current Rate (as defined in Section 3(c)) until the
cumulative difference between the total amount billed
to the Company by the City at the Current Rate from
January 1, 1993 through the date of said calculation
and the total amount that would have been so billed
at the Established Rate (as defined in Section 3(c))
shall equal $585,000.
c.) The Current Rate is 110% of the current Standard Rate
Schedule of the City for service within the City, and
the Established Rate shall be $1.00
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for each 100 cubic feet of water delivered to the
Company. The Established Rate equals 110% of the
cost of service rate determined by the City as the
City's cost of providing service under this
Agreement.
d.) Once the cumulative difference between the amount
billed to the Company by the City at the Current Rate
and the amount that would have been so billed at the
Established Rate equals $585,000, the City shall
thereafter bill the Company at the Established Rate
for all subsequent usage.
e.) (i) The Established Rate, as defined in Section
3(c), shall remain unchanged through the first five
years of this Agreement. Subsequent to January 1,
1998, the Established Rate shall change in proportion
to any changes in the City's standard Rate Schedule
in effect on December 31, 1994. Should the City
adopt a rate schedule that includes multiple customer
classes and/or rate blocks, the Established Rate
shall change in proportion to the City's weighted
average rate.
(ii) In addition, if during the term of this
Agreement, the City incurs additional expenses for
capital improvements, excluding those related to
increased capacity, made to its treatment plant(s),
transmission system(s) or reservoir facilities which
are upgradient to the Connection and which relate
directly to providing service to the Company through
the Connection, which expenses are not reflected in
the Established Rate, as the Established Rate may be
changed from time to time, then commencing on January
1, 1998 or on January 1 of the year following
completion of said capital improvements, whichever is
later, the Company shall pay, in
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addition to the Established Rate, a one-time charge
equal to 1.7% of said excess expenses, said payment
to be made in a manner mutually acceptable to both
parties."
4.) Section 4 of the Original Agreement is deleted and the following
Section 4 inserted in its place:
"4.) (i) This Agreement shall be effective as of the date
first above written. This Agreement shall be in full
force and effect and shall be binding on the Company
and the City for ten (10) years from the effective
date, as long as the Company shall not be in default
of its obligations hereunder. Further, the Company
shall have the right of automatic renewal of this
Contract for six (6) additional periods of ten (10)
years, under the same terms and conditions unless the
Company decides to reject the right to renew. Said
rejection of the automatic right to renew must be
given to the Mayor of the City in writing at least
six (6) months prior to the time for renewal. To the
extent required by law, said six (6) automatic
renewals will be contingent upon approval of the
DPHAS, pursuant to Public Act 85-142.
(ii) Notwithstanding the provisions of clause (i) above,
the City shall have the unilateral right to terminate
this Agreement from the point of the first contract
renewal onwards. Any such termination shall be
effective on the later of (1) the date which is five
years after the City has delivered its notice of
termination in writing to the Company, except the
Company shall have the right to extend the date by
two years if needed to secure the
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necessary permits and complete needed construction,
and (2) the date on which the City shall have paid to
the Company an amount equal to the prorated share of
the sum of (a) $585,500 plus (b) any amounts paid by
the Company to the City pursuant to the requirements
of clause (ii) of Subsection 3(e) hereof. The
prorated share shall be an amount equal to the sum
of the amounts referred to in (a) and (b) of the
preceding sentence, multiplied by a percentage, the
denominator of which shall be 70, and the numerator
of which shall be a number equal to the difference
between (A) 70, and (B) the number of full years
which will have been completed under the Agreement by
such termination date. Such payment may be made by
the City within the five-year period contemplated by
clause (1) above through a reduction in the water
rates payable by the Company during such period or in
any other manner mutually acceptable to both parties.
5.) A new Section 6 is added to the Original Agreement as follows:
"6.) The City will deliver water ready for consumption to the
Company. The City will not be held liable for the failure to
deliver water as aforesaid in the event of ruptured mains,
acts of God, or other failure resulting from acts beyond the
control of the City; provided, however, the City shall make
every reasonable effort to prevent interruptions of service
and, when such interruptions occur, shall endeavor to
re-establish service with the shortest possible delay
consistent with the safety of its customers and the general
public. It is understood and agreed that the City will not in
any event be liable to users of water in the system of the
Company for damages for interrupting or diminishing the supply
of water in
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Thomaston, nor shall the City in any event be liable for
damages arising out of any injuries to persons or property on
account of said installation, lack of water supply or water
pressure. It is further agreed that the Company, its
successors or assigns, shall save the City harmless from
claims by any of its customers on account of lack of water
supply or water pressure attributable to the Connection."
6.) A new Section 7 is added to the Original Agreement as follows:
"7.) It is agreed that whenever this Agreement is terminated, the
Company and the City shall automatically be returned to their
respective positions as in effect under the terms of the
Original Agreement prior to the execution of this Amendment."
7.) A new Section 8 is added to the Original Agreement as follows:
"8.) The respective obligations of the parties hereto are subject
to, and contingent upon, such approval of this Agreement as
may be required by the Connecticut Department of Public
Utility Control ("DPUC") and the Connecticut Department of
Public Health and Addiction Services ("DPHAS"). The Company
shall be responsible for the preparation of the DPUC
application for approval and the City shall be responsible for
preparation of the DPHAS application for approval."
All other provisions of the Original Agreement other than as affected
by the foregoing amendments are hereby ratified and affirmed and shall remain
in full force and effect.
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In Witness Whereof, the parties have hereunto executed this Amendment
as of the 4th day of November, 1994.
Signed and delivered in the
presence of
/s/ Michele DiAcri THE CONNECTICUT WATER COMPANY
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/s/ William F. Guillaume By /s/ Marshall T. Chiaraluce
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Its President
/s/ William J. Cook III THE CITY OF WATERBURY
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/s/ Eileen Walsh By /s/ Edward D. Bergin
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Its Mayor
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STATE OF CONNECTICUT )
) ss. Clinton
COUNTY OF MIDDLESEX )
Personally appeared Marshall T. Chiaraluce, duly authorized officer
of The Connecticut Water Company, signer and sealer of the foregoing instrument
and acknowledged the same to be the free act and deed of said corporation, and
his free act and deed as the duly authorized officer of The Connecticut Water
Company, before me.
Elizabeth D. Lebert
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Notary Public
STATE OF CONNECTICUT )
) ss. Waterbury
COUNTY OF NEW HAVEN )
Personally appeared Edward D. Bergin, mayor of the City of Waterbury,
the signer and sealer of the foregoing instrument and acknowledged the same to
be his free act and deed and the free act and deed of the City of Waterbury,
before me.
William J. Cook
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Commission of the Superior Court
Approved as to Form
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Corporation Counsel