SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 2 TO
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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COMMISSION FILE NUMBER 1-6788
THE UNITED ILLUMINATING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-0571640
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
157 CHURCH STREET, NEW HAVEN, CONNECTICUT 06506
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 203-499-2000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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NAME OF EACH EXCHANGE ON
REGISTRANT TITLE OF EACH CLASS WHICH REGISTERED
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The United Illuminating Company Common Stock, no par value New York Stock Exchange
United Capital Funding Partnership L.P.(1) 9 5/8% Preferred Capital New York Stock Exchange
Securities, Series A (Liquidation
Preference $25 per Security)
</TABLE>
(1) The 9 5/8% Preferred Capital Securities, Series A, were issued on April 3,
1995 by United Capital Funding Partnership L.P., a wholly-owned subsidiary
of The United Illuminating Company, and are guaranteed by The United
Illuminating Company.
SECURITIES REGISTERED PURSUANT TO
SECTION 12(G)OF THE ACT: COMMON STOCK, NO PAR VALUE,
OF THE UNITED ILLUMINATING COMPANY
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
non-affiliates on January 31, 1996 was $543,734,759, computed on the basis of
the average of the high and low sale prices of said stock reported in the
listing of composite transactions for New York Stock Exchange listed securities,
published in The Wall Street Journal on February 1, 1996.
The number of shares outstanding of the registrant's only class of common stock,
as of January 31, 1996, was 14,100,091.
DOCUMENTS INCORPORATED BY REFERENCE
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Document Part of this Form 10-K into which document is incorporated
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DEFINITIVE PROXY STATEMENT, DATED MARCH 28, 1996,
FOR ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD ON MAY 15, 1996. III
</TABLE>
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PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
Financial Statements (see Item 8):
Consolidated statement of income for the years ended December 31,
1995, 1994 and 1993
Consolidated statement of cash flows for the years ended December 31,
1995, 1994 and 1993
Consolidated balance sheet, December 31, 1995, 1994 and 1993
Consolidated statement of retained earnings for the years ended
December 31, 1995, 1994 and 1993
Statement of accounting policies
Notes to consolidated financial statements
Report of independent accountants
Financial Statement Schedule (see S-1)
Schedule II - Valuation and qualifying accounts for the years
ended December 31, 1995, 1994 and 1993.
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<PAGE>
Exhibits:
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, certain
of the following listed exhibits, which are annexed as exhibits to previous
statements and reports filed by the Company, are hereby incorporated by
reference as exhibits to this report. Such statements and reports are identified
by reference numbers as follows:
(1) Filed with Annual Report (Form 10-K) for fiscal year ended December 31,
1995.
(2) Filed with Quarterly Report (Form 10-Q) for fiscal quarter ended September
30, 1995.
(3) Filed with Registration Statement No. 2-60849, effective July 24, 1978.
(4) Filed with Quarterly Report (Form 10-Q) for fiscal quarter ended September
30, 1991.
(5) Filed with Quarterly Report (Form 10-Q) for fiscal quarter ended March 31,
1991.
(6) Filed with Registration Statement No. 33-40169, effective August 12, 1991.
(7) Filed with Registration Statement No. 33-35465, effective August 1, 1990.
(8) Filed with Amendment No. 1 to Registration Statement No. 33-55461,
effective October 31, 1994.
(9) Filed with Quarterly Report (Form 10-Q) for fiscal quarter ended March 31,
1995.
(10) Filed with Registration Statement No. 2-57275, effective October 19, 1976.
(11) Filed with Annual Report (Form 10-K) for fiscal year ended December 31,
1991.
(12) Filed with Annual Report (Form 10-K) for fiscal year ended December 31,
1992.
(13) Filed with Registration Statement No. 2-66518, effective February 25, 1980.
(14) Filed with Registration Statement No. 2-49669, effective December 11, 1973.
(15) Filed with Annual Report (Form 10-K) for fiscal year ended December 31,
1993.
(16) Filed with Registration Statement No. 2-54876, effective November 19, 1975.
(17) Filed with Registration Statement No. 2-52657, effective February 6, 1975.
(18) Filed with Quarterly Report (Form 10-Q) for fiscal quarter ended June 30,
1995.
(19) Filed with Amendment No. 2 to Current Report (Form 8-K/A), dated
January 18, 1996.
(20) Filed with Quarterly Report (Form 10-Q) for fiscal quarter ended March 31,
1994.
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<PAGE>
The exhibit number in the statement or report referenced is set forth in
the parenthesis following the description of the exhibit. Those of the following
exhibits not so identified are filed herewith.
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<CAPTION>
Exhibit
Table Exhibit Reference
Item No. No. No. Description
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(3) 3.1a (1) Copy of Restated Certificate of Incorporation of The United Illuminating
Company, dated January 23, 1995. (Exhibit 3.1)
(3) 3.1b (2) Copy of Certificate Amending Certificate of Incorporation By Action of
Board of Directors, dated August 4, 1995. (Exhibit 3.1b)
(3) 3.2a (3) Copy of Bylaws of The United Illuminating Company. (Exhibit 2.3)
(3) 3.2b (4) Copy of Article II, Section 2, of Bylaws of The United Illuminating
Company, as amended March 26, 1990, amending Exhibit 3.2a. (Exhibit 3.23b)
(3) 3.2c (5) Copy of Article V, Section 1, of Bylaws of The United Illuminating Company,
as amended April 22, 1991, amending Exhibit 3.2a. (Exhibit 3.23c)
(4) 4.1 (6) Copy of Indenture, dated as of August 1, 1991, from The United Illuminating
Company to The Bank of New York, Trustee. (Exhibit 4)
(4) 4.2 (7) Copy of Participation Agreement, dated as of August 1, 1990, among
(10) Financial Leasing Corporation, Meridian Trust Company, The Bank of New
York and The United Illuminating Company. (Exhibits 4(a) through 4(h),
inclusive, Amendment Nos. 1 and 2).
(4) 4.3a (8) Copy of form of Amended and Restated Agreement of Limited Partnership of
United Capital Funding Partnership L.P. (Exhibit 4(c))
(4) 4.3b (9) Copy of Action of The United Illuminating Company, as General Partner of
United Capital Funding Partnership L.P., relating to the 9 5/8% Preferred
Capital Securities, Series A, of United Capital Funding Partnership L.P.
(Exhibit 4(b))
(4) 4.3c (8) Copy of form of Indenture, dated as of April 1, 1995, from The United
Illuminating Company to The Bank of New York, as Trustee. (Exhibit 4(e))
(4) 4.3d (9) Copy of First Supplemental Indenture, dated as of April 1, 1995, between
The United Illuminating Company and The Bank of New York, Trustee,
supplementing Exhibit 4.3c. (Exhibit 4(d))
(4) 4.3e (8) Copy of form of Payment and Guarantee Agreement of The United Illuminating
Company, dated as of April 1, 1995. (Exhibit 4(j))
(10) 10.1 (10) Copy of Stockholder Agreement, dated as of July 1, 1964, among the various
stockholders of Connecticut Yankee Atomic Power Company, including The
United Illuminating Company. (Exhibit 5.1-1)
(10) 10.2a (10) Copy of Power Contract, dated as of July 1, 1964, between Connecticut
Yankee Atomic Power Company and The United Illuminating Company.
(Exhibit 5.1-2)
(10) 10.2b (3) Copy of Supplementary Power Contract, dated as of March 1, 1978, between
Connecticut Yankee Atomic Power Company and The United Illuminating
Company, supplementing Exhibit 10.2a. (Exhibit 5.1-6)
(10) 10.2c (11) Copy of Agreement Amending Supplementary Power Contract, dated August 22,
1980, between Connecticut Yankee Atomic Power Company and The United
Illuminating Company, amending Exhibit 10.2b. (Exhibit 10.2b)
</TABLE>
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<TABLE>
<CAPTION>
Exhibit
Table Exhibit Reference
Item No. No. No. Description
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(10) 10.2d (12) Copy of Second Amendment of the Supplementary Power Contract, dated as of
October 15, 1982, between Connecticut Yankee Atomic Power Company and The
United Illuminating Company, amending Exhibit 10.2b. (Exhibit 10.2d)
(10) 10.2e Copy of Second Supplementary Power Contract, dated as of April 30, 1984,
between Connecticut Yankee Atomic Power Company and The United
Illuminating Company, supplementing Exhibit 10.2a.
(10) 10.2f Copy of Additional Power Contract, dated as of April 30, 1984, between
Connecticut Yankee Atomic Power Company and The United Illuminating
Company.
(10) 10.3 (10) Copy of Capital Funds Agreement, dated as of September 1, 1964, between
Connecticut Yankee Atomic Power Company and The United Illuminating
Company. (Exhibit 5.1-3)
(10) 10.4a (10) Copy of Connecticut Yankee Transmission Agreement, dated as of October 1,
1964, among the various stockholders of Connecticut Yankee Atomic Power
Company, including The United Illuminating Company. (Exhibit 5.1-4)
(10) 10.4b (13) Copy of Agreement Amending and Revising Connecticut Yankee Transmission
Agreement, dated as of July 1, 1979, amending Exhibit 10.4a. (Exhibit
5.1-7)
(10) 10.5 (3) Copy of Capital Contributions Agreement, dated October 16, 1967, between
The United Illuminating Company and Connecticut Yankee Atomic Power
Company. (Exhibit 5.1-5)
(10) 10.6a (11) Copy of NEPOOL Power Pool Agreement, dated as of September 1, 1971, as
amended to November 1, 1988. (Exhibit 10.6a)
(10) 10.6b (14) Copy of Agreement Setting Out Supplemental NEPOOL Understandings, dated as
of April 2, 1973. (Exhibit 5.7-10)
(10) 10.6c (11) Copy of Amendment to NEPOOL Power Pool Agreement, dated as of March 15,
1989, amending Exhibit 10.6a. (Exhibit 10.6c)
(10) 10.6d (11) Copy of Agreement Amending NEPOOL Power Pool Agreement, dated as of October
1, 1990, amending Exhibit 10.6a. (Exhibit 10.6d)
(10) 10.6e (15) Copy of Agreement Amending NEPOOL Power Pool Agreement, dated as of
September 15, 1992, amending Exhibit 10.6a. (Exhibit 10.6e)
(10) 10.6f (15) Copy of Agreement Amending NEPOOL Power Pool Agreement, dated as of June 1,
1993, amending Exhibit 10.6a. (Exhibit 10.6f)
(10) 10.7a (11) Copy of Agreement for Joint Ownership, Construction and Operation of New
Hampshire Nuclear Units, dated May 1, 1973, as amended to February 1,
1990. (Exhibit 10.7a)
(10) 10.7b (16) Copy of Transmission Support Agreement, dated as of May 1, 1973, among the
Seabrook Companies. (Exhibit 5.9-2)
(10) 10.7c (4) Copy of Twenty-third Amendment to Agreement for Joint Ownership,
Construction and Operation of New Hampshire Nuclear Units, dated as of
November 1, 1990, amending Exhibit 10.7a. (Exhibit 10.8ab)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Exhibit
Table Exhibit Reference
Item No. No. No. Description
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(10) 10.8a (13) Copy of Sharing Agreement - 1979 Connecticut Nuclear Unit, dated as of
September 1, 1973, among The Connecticut Light and Power Company, The
Hartford Electric Light Company, Western Massachusetts Electric Company,
New England Power Company, The United Illuminating Company, Public Service
Company of New Hampshire, Central Vermont Public Service Company, Montaup
Electric Company and Fitchburg Gas and Electric Light Company, relating to
a nuclear fueled generating unit in Connecticut. (Exhibit 5.8-1)
(10) 10.8b (17) Copy of Amendment to Sharing Agreement - 1979 Connecticut Nuclear Unit,
dated as of August 1, 1974, amending Exhibit 10.8a. (Exhibit 5.9-2)
(10) 10.8c (10) Copy of Amendment to Sharing Agreement - 1979 Connecticut Nuclear Unit,
dated as of December 15, 1975, amending Exhibit 10.8a. (Exhibit 5.8-4,
Post-effective Amendment No. 2)
(10) 10.9a (3) Copy of Transmission Line Agreement, dated January 13, 1966, between the
Trustees of the Property of The New York, New Haven and Hartford Railroad
Company and The United Illuminating Company. (Exhibit 5.4)
(10) 10.9b (11) Notice, dated April 24, 1978, of The United Illuminating Company's
intention to extend term of Transmission Line Agreement dated January 13,
1966, Exhibit 10.9a. (Exhibit 10.9b)
(10) 10.9c (11) Copy of Letter Agreement, dated March 28, 1985, between The United
Illuminating Company and National Railroad Passenger Corporation,
supplementing and modifying Exhibit 10.9a. (Exhibit 10.9c)
(10) 10.10a (18) Copy of Agreement, effective May 16, 1995, between The United Illuminating
Company and Local 470-1, Utility Workers Union of America, AFL-CIO.
(Exhibit 10.10a)
(10) 10.10b (18) Copy of Supplemental Agreement - Part-Time Employees, effective May 16,
1995, between The United Illuminating Company and Local 470-1, Utility
Workers Union of America, AFL-CIO. (Exhibit 10.10b)
(10) 10.11 Copy of Fuel Oil Supply and Management Agreement, dated as of October 1,
1995, between The United Illuminating Company and Bayway Refining
Company.
(10) 10.12 (12) Copy of Coal Sales Agreement, dated as of August 1, 1992, between Pittston
Coal Sales Corp. and The United Illuminating Company. (Confidential
treatment requested) (Exhibit 10.13)
(10) 10.13 (4) Copy of Fossil Fuel Supply Agreement between BLC Corporation and The United
Illuminating Company, dated as of July 1, 1991. (Exhibit 10.31)
(10) 10.14a* (12) Copy of Employment Agreement, dated as of January 1, 1988, between The
United Illuminating Company and Richard J. Grossi. (Exhibit 10.22a)
(10) 10.14b* Copy of Amendment to Employment Agreement, dated as of July 23, 1990,
between The United Illuminating Company and Richard J. Grossi, amending
Exhibit 10.14a.
(10) 10.14c* (18) Copy of Second Amendment to Employment Agreement, dated as of June 1, 1995,
between The United Illuminating Company and Richard J. Grossi, amending
Exhibit 10.14a. (Exhibit 10.15c)
(10) 10.15a* (12) Copy of Employment Agreement, dated as of January 1, 1988, between The
United Illuminating Company and Robert L. Fiscus. (Exhibit 10.23a)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Exhibit
Table Exhibit Reference
Item No. No. No. Description
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<S> <C> <C> <C>
(10) 10.15b* Copy of Amendment to Employment Agreement, dated as of July 23, 1990,
between The United Illuminating Company and Robert L. Fiscus, amending
Exhibit 10.15a.
(10) 10.15c* (18) Copy of Second Amendment to Employment Agreement, dated as of June 1, 1995,
between The United Illuminating Company and Robert L. Fiscus, amending
Exhibit 10.15a. (Exhibit 10.16c)
(10) 10.16a* (12) Copy of Employment Agreement, dated as of January 1, 1988, between The
United Illuminating Company and James F. Crowe. (Exhibit 10.24a)
(10) 10.16b* Copy of Amendment to Employment Agreement, dated as of July 23, 1990,
between The United Illuminating Company and James F. Crowe, amending
Exhibit 10.16a.
(10) 10.16c* (18) Copy of Second Amendment to Employment Agreement, dated as of June 1, 1995,
between The United Illuminating Company and James F. Crowe, amending
Exhibit 10.16a. (Exhibit 10.17c)
(10) 10.17* (11) Copy of Executive Incentive Compensation Program of The United Illuminating
Company. (Exhibit 10.24)
(10) 10.18* Copy of The United Illuminating Company 1990 Stock Option Plan, as amended
on December 20, 1993, January 24, 1994 and August 22, 1994.
(10) 10.19* (20) Copy of The United Illuminating Company Dividend Equivalent Program.
(Exhibit 10.20)
(12),(99) 12 Statement Showing Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividend
Requirements (Twelve Months Ended December 31, 1995, 1994, 1993, 1992 and
1991).
(16) 16 (19) Letter re Change in certifying accountant. (Exhibit (1))
(21) 21 List of subsidiaries of The United Illuminating Company.
(27) 27 Financial Data Schedule
(28) 28.1 (12) Copies of significant rate schedules of The United Illuminating Company.
</TABLE>
(Exhibit 28.1)
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*Management contract or compensatory plan or arrangement.
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<PAGE>
The foregoing list of exhibits does not include instruments defining the
rights of the holders of certain long-term debt of the Company and its
subsidiaries where the total amount of securities authorized to be issued under
the instrument does not exceed ten (10%) of the total assets of the Company and
its subsidiaries on a consolidated basis; and the Company hereby agrees to
furnish a copy of each such instrument to the Securities and Exchange Commission
on request.
(b) Reports on Form 8-K.
Items Financial Statements Date of
Reported Filed Report
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4 None December 15, 1995
(amended January 2, 1996
and January 18, 1996)
The undersigned Registrant hereby amends its Annual Report on Form 10-K for
the fiscal year ended December 31, 1995: (a) to delete from the Description of
Exhibit 10.11 in Item 14(a) the indication that confidential treatment has been
requested for said exhibit, and (b) to file said Exhibit 10.11 in unredacted
form.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE UNITED ILLUMINATING COMPANY
Date: l2/30/96 By: /s/ Robert L. Fiscus
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Robert L. Fiscus
Its President and
Chief Financial Officer
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THE UNITED ILLUMINATING COMPANY
AND
BAYWAY REFINING COMPANY
FUEL OIL SUPPLY
AND MANAGEMENT AGREEMENT
AS OF OCTOBER 1, 1995
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THE UNITED ILLUMINATING COMPANY AND BAYWAY REFINING COMPANY
FUEL OIL SUPPLY AND MANAGEMENT AGREEMENT
CONTENTS PAGE
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I. TERM 1
II. DEFINITIONS 1
III. COMMODITY CONTRACT
A. CONTRACT VOLUME 2
B. QUALITY SPECIFICATIONS 2
C. SALE PRICE 3
D. BTU GUARANTEE & CREDIT ADJUSTMENT 4
E. NOMINATION PROCEDURE & DELIVERY 4
F. TANK TRANSFERS & VESSEL DELIVERIES:
QUANTITY & QUALITY DETERMINATION 4
G. BARRELS CONSUMED 5
H. TITLE AND RISK OF LOSS 5
I. EMERGENCY SUPPLY 5
IV. INVENTORY MANAGEMENT
A. DESCRIPTION OF INVENTORY MANAGEMENT
SERVICE 6
B. NOTIFICATION REQUIREMENTS 7
C. SERVICE FEE 7
D. OPENING INVENTORY & TRANSITION
SERVICE FEE 7
V. INVENTORY FINANCING
A. SERVICE CHARGE 7
VI. RECORDKEEPING, INVOICING & PAYMENT TERMS
A. RECORDKEEPING 8
B. INVOICING & PAYMENT TERMS 9
C. FINANCIAL RESPONSIBILITY 9
VII. FIXED PRICE, FUEL PROCESSING & THIRD PARTY TRANSACTIONS 9
VIII. OTHER PROVISIONS
A. INSURANCE 9
B. CONTACTS 9
C. UCC FILING 10
D. TAXES & FEES ON SELLER'S PRODUCT 10
E. TERMINATION OF AGREEMENT 10
F. GOVERNING LAW 11
G. CONFIDENTIALITY 11
H. ASSIGNMENT 11
I. FORCE MAJEURE 11
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THE UNITED ILLUMINATING COMPANY AND BAYWAY REFINING COMPANY
FUEL OIL SUPPLY AND MANAGEMENT AGREEMENT
CONTENTS
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IX. ATTACHMENTS
A. DISCOUNT FORMULAS FOR ASH & WATER BY DISTILLATION
B. NO. 6 FUEL OIL INVENTORY & CONSUMPTION REPORT
SAMPLE
C. INVOICE & STATEMENT FORMAT SAMPLES
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FUEL OIL SUPPLY AND MANAGEMENT AGREEMENT
THIS AGREEMENT IS MADE AS OF OCTOBER 1, 1995 BETWEEN THE UNITED
ILLUMINATING COMPANY (THE "BUYER"), A CONNECTICUT CORPORATION, WITH ITS
PRINCIPAL PLACE OF BUSINESS AT 157 CHURCH STREET, NEW HAVEN, CONNECTICUT, AND
BAYWAY REFINING COMPANY (THE "SELLER"), A DELAWARE CORPORATION, HAVING ITS
PRINCIPAL PLACE OF BUSINESS AT 1400 PARK AVENUE, LINDEN, NEW JERSEY.
WHEREAS, BUYER AND SELLER WISH TO ENTER INTO AN AGREEMENT FOR THE
PURCHASE/SALE OF NO. 6 FUEL OIL (THE "PRODUCT"), AND THE MANAGEMENT AND
FINANCING OF BUYER'S NO. 6 FUEL OIL INVENTORY;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES, MUTUAL COVENANTS,
PROMISES AND REPRESENTATIONS CONTAINED HEREIN, AND OTHER VALUABLE
CONSIDERATIONS, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED BY THE RESPECTIVE
PARTIES HERETO, BUYER AND SELLER AGREE AS FOLLOWS:
I. TERM
THE TERM OF THIS AGREEMENT SHALL BE FOR ONE YEAR COMMENCING ON OCTOBER 1, 1995
AND EXPIRING ON SEPTEMBER 30, 1996. THIS AGREEMENT MAY BE EXTENDED FOR
ADDITIONAL ONE-YEAR PERIODS PROVIDED BOTH BUYER AND SELLER AGREE TO SUCH AN
EXTENSION NOT LATER THAN SIXTY CALENDAR DAYS PRIOR TO THE EXPIRATION DATE. IF
BUYER AND SELLER DO NOT AGREE TO EXTEND THIS AGREEMENT, THE PROVISIONS OF
SECTION VIII.E. (TERMINATION OF AGREEMENT) SHALL APPLY.
II. DEFINITIONS
A. PRODUCT: NO. 6 FUEL OIL CONFORMING TO THE SPECIFICATIONS CONTAINED IN
SECTION III.B.
B. OPERATING TANK: DESIGNATED TANK AT RELEVANT LOCATION (AS DEFINED IN
SECTION III.A.) INTO WHICH SELLER PUMPS PRODUCT FROM WHICH BUYER SHALL
DRAW FOR CONSUMPTION.
C. SELLER'S LEASED TANKAGE: DESIGNATED TANKS AT RELEVANT LOCATION INTO
WHICH SELLER SHALL STORE PRODUCT PURSUANT TO SELLER'S STORAGE TANK
LEASE & TERMINAL SERVICES AGREEMENT DATED AS OF OCTOBER 1, 1995.
D. DELIVERY MONTH: CALENDAR MONTH DURING WHICH SELLER SHALL DELIVER AND
BUYER SHALL CONSUME PRODUCT.
E. TANK TRANSFER: MOVING PRODUCT FROM ONE TANK TO ANOTHER TANK VIA
PUMPOVER.
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F. VESSEL DELIVERY: PRODUCT DELIVERED TO BUYER'S OPERATING TANK DIRECTLY
FROM A BARGE OR TANKER.
G. BARRELS: ALL BARRELS REFERRED TO HEREIN ARE CORRECTED TO 60 DEGREES F.
H. BARRELS CONSUMED: QUANTITY OF PRODUCT USED BY BUYER IN A DELIVERY
MONTH WILL BE DETERMINED BY OPENING OPERATING TANK(S) INVENTORY
FIGURES PLUS PRODUCT TRANSFERRED OR DELIVERED INTO OPERATING TANK(S)
MINUS CLOSING INVENTORY FIGURES. DAILY AND WEEKLY REPORTS OF BARRELS
CONSUMED WILL BE BASED ON BRIDGEPORT AND NEW HAVEN HARBOR STATION
READINGS.
I. CONTRACT QUARTER: THE THREE MONTH PERIODS ENDING DECEMBER 31, MARCH
31, JUNE 30, AND SEPTEMBER 30.
J. DELIVERY LOCATIONS: THE LOCATIONS TO WHICH SELLER SHALL DELIVER
PRODUCT SHALL BE BUYER'S BRIDGEPORT HARBOR STATION AND BUYER'S NEW
HAVEN HARBOR STATION.
III. COMMODITY CONTRACT
A. CONTRACT VOLUME: SELLER AGREES TO SELL AND DELIVER TO BUYER, AND BUYER
AGREES TO PURCHASE FROM SELLER, 100% OF BUYER'S NO. 6 FUEL OIL
REQUIREMENTS DURING THE TERM OF THIS AGREEMENT. BUYER'S ESTIMATED
ANNUAL REQUIREMENTS FOR BRIDGEPORT HARBOR STATION AND NEW HAVEN HARBOR
STATION ("THE LOCATIONS") ARE 2.2 MILLION BARRELS.
B. QUALITY SPECIFICATIONS: PRODUCT DELIVERED BY SELLER TO BUYER HEREUNDER
SHALL BE COMMERCIALLY ACCEPTABLE AND NOT CONTAIN ANY HAZARDOUS
MATERIALS. PRODUCT MUST NOT CONTAIN PETROCHEMICAL WASTES,
PETROCHEMICAL RESIDUES OR SPENT CHEMICALS, INCLUDING, BUT NOT LIMITED
TO CAUSTICS AND ACIDS, PRODUCT MUST HAVE A MARKETABLE ODOR
CHARACTERISTIC OF RESIDUAL FUEL OIL AND COMPLY WITH THE FOLLOWING
QUALITY SPECIFICATIONS:
SPECIFICATION TABLE:
SPECIFICATION ASTM/IP MIN. MAX.
(1) API GRAVITY ("API") D-287 8.0 --
FLASH POINT, DEG. F D-93 150 --
POUR POINT, DEG. F D-97 -- 115
(2) VIS. SFS @ 122 DEG.F D-445/D-2161 15 300
SULFUR, WT. % D-4294 -- 1.0
SEDIMENT BY EXTRAC. WT.% D-473 -- 0.25
WATER BY DISTILL. VOL.% D-95 -- 0.5
ASH, WT. % D-482 -- 0.15
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<PAGE>
VANADIUM, PPM D-1548 -- 200
ALUMINUM, PPM PER SHIPMENT IP-377 -- 175
PER MONTH -- 125
SILICON, PPM PER SHIPMENT IP-377 -- 175
PER MONTH -- 125
ASPHALTENES % PER SHIPMENT IP-143 -- 15.0
6-MONTH WEIGHTED AVG. -- 8.0
BTU PER GALLON @ 60 DEG. F D-240 145,000 --
(BTU CONTENT BELOW THIS LEVEL WILL CREATE OPERATIONAL PROBLEMS. NOT TO
BE CONFUSED WITH BTU GUARANTEE IN SECTION III.D.)
NOTE 1: API GRAVITY BELOW THE 8.0 MINIMUM MAY BE ACCEPTED IF
COMPATIBILITY TEST RESULTS (ASTM D-4740) ARE LESS THAN 3.0.
NOTE 2: ASTM D-2161 SHALL BE USED TO CONVERT KINEMATIC VISCOSITY TEST
RESULTS (ASTM D-445) TO SAYBOLT FUROL VISCOSITY.
OIL LOADING OR DISCHARGE TEMPERATURE SHALL BE THE GREATER OF 110
DEGREES FAHRENHEIT OR 30 DEGREES FAHRENHEIT ABOVE POUR POINT.
AN INDEPENDENT PETROLEUM INSPECTOR'S REPORT AS TO QUALITY MUST BE
PROVIDED TO BUYER PRIOR TO ANY TANK TRANSFER OR VESSEL DISCHARGE INTO
BUYER'S OPERATING TANK(S). IF THE INSPECTOR CERTIFIES THAT THE RESULTS
FAIL TO MEET ANY OF THE PRECEDING QUALITY CHARACTERISTICS, BUYER MAY
REFUSE TO ACCEPT DELIVERY. IF BUYER ELECTS TO ACCEPT THE NON-CONFORMING
FUEL OIL, SELLER WILL PROVIDE A SALE PRICE DISCOUNT TO BUYER. THE
FORMULAS FOR DETERMINING DISCOUNTS FOR FAILURE TO MEET ASH OR WATER BY
DISTILLATION SPECIFICATIONS ARE PROVIDED IN ATTACHMENT A. THE DISCOUNT
FOR FAILURE TO MEET ANY OTHER SPECIFICATIONS WILL BE NEGOTIATED BETWEEN
BUYER AND SELLER.
C. SALE PRICE:
THE SALE PRICE PER BARREL SHALL BE THE ARITHMETIC AVERAGE OF
EACH AND EVERY PLATTS NEW YORK HARBOR CARGO LOW EFFECTIVE
POSTING FOR 1.0% SULFUR NO. 6 FUEL OIL PUBLISHED DURING THE
ENTIRE DELIVERY MONTH ROUNDED TO THREE DECIMAL PLACES AND ANY
CORRECTIONS TO SUCH PUBLISHED PRICES PLUS $0.11 PER BARREL,
DELIVERED TO BUYER'S BURNER TIP AT THE LOCATIONS.
THE SALE PRICE INCLUDES TRANSPORTATION AND ALL APPLICABLE
TAXES CURRENTLY IN EFFECT INCLUDING IMPORT DUTY, SUPERFUND,
CUSTOMS FEES, HARBOR MAINTENANCE FEE, FEDERAL OIL SPILL TAX,
NEW YORK AND NEW JERSEY SPILL TAX, AND OPA 90 SPILL COVERAGE.
THE CONNECTICUT GROSS RECEIPTS TAX ON PETROLEUM PRODUCTS IS
NOT INCLUDED IN THE SALE PRICE AND BUYER SHALL BE CHARGED
THEREFOR, MONTHLY.
- 6 -
<PAGE>
D. BTU GUARANTEE & CREDIT ADJUSTMENT:
THE GUARANTEED WEIGHTED AVERAGE OF THE BTU CONTENT OF FUEL
CONSUMED HEREUNDER DURING EACH CONTRACT QUARTER SHALL BE
153,000 BTU PER GALLON. IN THE EVENT THAT THE WEIGHTED AVERAGE
BTU CONTENT IS NOT MET DURING A CONTRACT QUARTER, THE BUYER
WILL BE ENTITLED TO A CREDIT DETERMINED AS FOLLOWS:
IF THE ACTUAL WEIGHTED AVERAGE BTU/GALLON FOR THE CONTRACT
QUARTER WHEN DIVIDED BY THE GUARANTEE IS LESS THAN 1.0, THE
DIFFERENCE FROM 1.0 WILL BE MULTIPLIED TIMES THE WEIGHTED
AVERAGE SALE PRICE (PER SECTION III.C.) OF THE FUEL OIL FOR
THE SAME CONTRACT QUARTER. THIS RESULT WILL THEN BE MULTIPLIED
BY THE VOLUME OF FUEL OIL CONSUMED DURING THAT CONTRACT
QUARTER TO DETERMINE THE TOTAL CREDIT DUE THE BUYER. ANY AND
ALL CREDITS DUE BUYER WILL BE REFLECTED ON THE NEXT MONTHLY
INVOICE TO BUYER AFTER THE END OF THE CONTRACT QUARTER.
E. NOMINATION PROCEDURE AND DELIVERY:
ON THE LAST BUSINESS DAY OF EACH WEEK, BUYER WILL PROVIDE
SELLER WITH WRITTEN NOTIFICATION OF ACTUAL BARRELS CONSUMED
FOR THE PREVIOUS TEN DAYS AND A SIXTY-DAY PROJECTION OF ITS
ANTICIPATED CONSUMPTION FOR EACH OF THE LOCATIONS. SEE
ATTACHMENT B FOR SAMPLE FORMAT. WITHIN TWO BUSINESS DAYS OF
RECEIVING BUYER'S PROJECTIONS, SELLER SHALL PROVIDE WRITTEN
NOTIFICATION TO BUYER OF ITS PLANS TO SUPPLY PRODUCT TO MEET
BUYER'S PROJECTIONS IN ACCORDANCE WITH THE MINIMUM INVENTORY
REQUIREMENTS DESCRIBED IN SECTION IV. BUYER SHALL MAKE BEST
EFFORTS TO PROMPTLY ADVISE SELLER OF ANY CHANGES TO ITS
IMMEDIATE FUEL OIL REQUIREMENTS AND ANY SCHEDULED OR
UNSCHEDULED MAINTENANCE OF THE LOCATIONS.
SELLER SHALL DELIVER PRODUCT TO THE BUYER'S BURNER TIP VIA THE
BUYER'S OPERATING TANK AT THE LOCATIONS.
F. TANK TRANSFERS & VESSEL DELIVERIES: QUANTITY AND QUALITY
DETERMINATION:
1. TANK TRANSFERS: THE QUANTITY FOR TANK TRANSFERS INTO
BUYER'S OPERATING TANK WILL BE BASED ON SHORE TANK
MEASUREMENTS OF SELLER'S LEASED TANKAGE PRIOR TO AND
AFTER PUMPOVER TO BUYER'S OPERATING TANK. QUALITY WILL
BE BASED ON COMPOSITE SAMPLES OF THE SHORE TANK(S)
DESIGNATED BY SELLER TAKEN PRIOR TO PUMPOVER TO BUYER'S
OPERATING TANK.
2. VESSEL DELIVERIES: THE QUANTITY FOR VESSEL DELIVERIES
INTO BUYER'S ACTIVE OPERATING TANK WILL BE DETERMINED
BY VESSEL TANK MEASUREMENTS TAKEN PRIOR TO AND AFTER
DISCHARGE OF THE VESSEL. THIS
- 7 -
<PAGE>
VOLUME WILL BE CORRECTED BY THE VESSEL EXPERIENCE FACTOR
(VEF). THE QUANTITY FOR VESSEL DELIVERIES INTO BUYER'S
INACTIVE OPERATING TANK WILL BE BASED ON SHORE TANK
MEASUREMENTS OF OPERATING TANK TAKEN PRIOR TO AND AFTER
VESSEL DISCHARGE. QUALITY WILL BE BASED ON A COMPOSITE OF
SAMPLES TAKEN FROM EACH OF THE VESSEL'S HOLDS DISCHARGED
INTO THE OPERATING TANK.
ALL QUANTITY AND QUALITY MEASUREMENTS SHALL BE CARRIED OUT
BY A MUTUALLY ACCEPTABLE INDEPENDENT LICENSED AND CERTIFIED
PETROLEUM INSPECTION COMPANY WHOSE FINDINGS SHALL BE FINAL
AND BINDING ON THE PARTIES. THE COST OF THESE INSPECTIONS
WILL BE SHARED EQUALLY BETWEEN BUYER AND SELLER.
THE INSPECTOR'S REPORT AS TO QUALITY MUST BE PROVIDED TO
BUYER PRIOR TO TANK TRANSFER OR VESSEL DISCHARGE. IF THE
INSPECTOR CERTIFIES THAT THE RESULTS FAIL TO MEET ANY OF THE
QUALITY CHARACTERISTICS SPECIFIED IN SECTION III.B., BUYER
MAY REFUSE TO ACCEPT DELIVERY. IF BUYER ELECTS TO ACCEPT THE
NON-CONFORMING FUEL OIL, THE DISCOUNT PROVISIONS CONTAINED
IN SECTION III.B. WILL APPLY.
G. BARRELS CONSUMED:
BARRELS CONSUMED BY BUYER WILL BE DETERMINED BY OPENING
OPERATING TANK(S) INVENTORY FIGURES PLUS PRODUCT TRANSFERRED
OR DELIVERED INTO OPERATING TANK(S) MINUS CLOSING INVENTORY
FIGURES. ALL INVENTORY, TANK TRANSFER AND DELIVERY VOLUMES
WILL BE CERTIFIED BY A MUTUALLY ACCEPTABLE INDEPENDENT
LICENSED AND CERTIFIED PETROLEUM INSPECTION COMPANY. CLOSING
INVENTORIES WILL BE MEASURED AT MIDNIGHT ON THE LAST CALENDAR
DAY OF THE MONTH AND SERVE AS THE BASIS FOR THE FOLLOWING
MONTH'S OPENING INVENTORY. THE COST OF THESE INSPECTIONS WILL
BE SHARED EQUALLY BETWEEN BUYER AND SELLER.
H. TITLE AND RISK OF LOSS:
TITLE AND RISK OF LOSS WILL PASS FROM SELLER TO BUYER AT THE
BUYER'S BURNER TIP AT THE LOCATIONS. FOR DETERMINING THE
BARRELS PURCHASED BY BUYER AT THE BURNER TIP, THE PARTIES
SHALL USE THE FORMULA DEFINING BARRELS CONSUMED IN SECTION
II.H.
I. EMERGENCY SUPPLY:
IN THE EVENT THAT BUYER REQUIRES AN EMERGENCY SUPPLY OF
PRODUCT TO MEET UNANTICIPATED FUEL NEEDS AT ITS ELECTRIC
GENERATING STATIONS, SELLER AGREES THAT IT WILL SUPPLY SUCH
PRODUCT WITHIN FOUR DAYS OF NOTICE. EMERGENCY SUPPLY
REQUIREMENTS UNDER THIS PROVISION MAY NOT EXCEED 100,000
BARRELS DURING EACH CONTRACT QUARTER. THE PRICE OF SUCH
ADDITIONAL SUPPLY SHALL BE DETERMINED IN
- 8 -
<PAGE>
ACCORDANCE WITH SECTION III.C. OF THIS AGREEMENT, PLUS OTHER
SUCH DOCUMENTED COSTS INCURRED BY SELLER TO RESPOND TO
BUYER'S EMERGENCY DEMAND.
IV. INVENTORY MANAGEMENT:
A. DESCRIPTION OF INVENTORY MANAGEMENT SERVICE:
SELLER WILL MANAGE BUYER'S REQUIREMENTS FOR NO. 6 FUEL OIL AT
THE LOCATIONS FOR THE SERVICE FEE DESCRIBED IN SECTION IV.C.,
HEREAFTER. SELLER GUARANTEES TO MAINTAIN MINIMUM INVENTORIES
OF PRODUCT IN BUYER'S STORAGE FACILITIES AT THE LOCATIONS AT
ALL TIMES DURING THE TERM OF THIS AGREEMENT. THE MINIMUM
AGGREGATE AMOUNT OF NO. 6 FUEL OIL WHICH THE SELLER SHALL
MAINTAIN IN THE OPERATING TANKS AND SELLER'S LEASED TANKAGE AT
BRIDGEPORT HARBOR AND NEW HAVEN HARBOR STATIONS IS 310,500
BARRELS. SELLER FURTHER AGREES TO MAINTAIN NO LESS THAN A
FIVE-DAY SUPPLY IN THE DESIGNATED OPERATING TANK AT EACH
LOCATION IN ACCORDANCE WITH THE FOLLOWING:
BRIDGEPORT NEW HAVEN
---------- ---------
MINIMUM 5-DAY INVENTORY 100,000 BBLS 100,500 BBLS
IN THE EVENT THAT BRIDGEPORT HARBOR STATION UNIT #3 SWITCHES
FROM COAL TO OIL DURING THE TERM OF THIS AGREEMENT, BUYER WILL
HAVE THE OPTION OF INCREASING THE MINIMUM INVENTORY LEVELS TO
ACCOMMODATE ITS ADDITIONAL SUPPLY REQUIREMENTS.
BUYER WILL MONITOR SELLER'S INVENTORY LEVELS AND PROVIDE
WRITTEN NOTIFICATION OF ACTUAL INVENTORY LEVELS, ACTUAL
BARRELS CONSUMED AND A SIXTY-DAY PROJECTION OF ANTICIPATED
CONSUMPTION FOR EACH LOCATION ON THE LAST BUSINESS DAY OF EACH
WEEK. SEE ATTACHMENT B FOR SAMPLE FORMAT.
IF INVENTORY LEVELS FALL BELOW ANY OF THE MINIMUM LEVELS
DESIGNATED ABOVE DURING ANY MONTH, SELLER WILL FORFEIT THE
SERVICE FEE DESCRIBED IN SECTION IV.C. FOR THAT MONTH AND THE
SERVICE CHARGE UNDER SECTION V.A. WILL BE ADJUSTED
ACCORDINGLY. IF INVENTORY LEVELS FALL BELOW THE DESIGNATED
MINIMUMS ON MORE THAN TWO OCCASIONS, BUYER WILL HAVE THE
OPTION OF TERMINATING THIS AGREEMENT WITHOUT PRIOR NOTICE.
IN THE EVENT THAT SELLER ALLOWS INVENTORIES AT EITHER OF
BUYER'S FACILITIES TO BE DEPLETED TO THE EXTENT THAT THE
BUYER'S GENERATING PLANT MUST REDUCE LOAD OR IS FORCED
OFF-LINE, SELLER WILL REIMBURSE BUYER FOR THE FULL COST OF
REPLACEMENT POWER. BUYER WILL ALSO HAVE THE RIGHT TO TERMINATE
THIS AGREEMENT WITHOUT PRIOR NOTICE.
- 9 -
<PAGE>
B. NOTIFICATION REQUIREMENTS:
SELLER WILL PROVIDE BUYER'S OPERATIONS CONTACT WITH AT LEAST
72 HOURS NOTICE FOR ANY PLANNED TANK TRANSFER OR VESSEL
DELIVERY TO BUYER'S OPERATING TANK(S). THE ESTIMATED DAY OF
TRANSFER OR DELIVERY WILL BE PROVIDED 36 HOURS IN ADVANCE.
WRITTEN NOTIFICATION OF THE HOUR OF VESSEL ARRIVAL WILL BE
PROVIDED 12 HOURS IN ADVANCE.
C. SERVICE FEE:
THE SERVICE FEE SHALL BE A FLAT FEE OF $0.08 PER BARREL ON ALL
BARRELS CONSUMED DURING THE DELIVERY MONTH. THIS FEE WILL BE
INVOICED ON A MONTHLY BASIS IN ACCORDANCE WITH THE PROVISIONS
CONTAINED IN SECTION VI.
D. OPENING INVENTORY & TRANSITION SERVICE FEE:
BUYER WILL PROVIDE SELLER WITH A DETAILED ACCOUNTING OF NO.
6 FUEL OIL INVENTORY IN ITS STORAGE FACILITIES AT BRIDGEPORT
HARBOR AND NEW HAVEN HARBOR STATIONS AS OF OCTOBER 1, 1995.
ALL FUEL OIL INVENTORY OWNED BY BUYER WILL BE CONSUMED
FIRST. SELLER'S BEGINNING INVENTORY FOR BUYER WILL BE ZERO.
DURING THE TRANSITION PERIOD, BUYER WILL MAINTAIN RECORDS
FOR TWO SEPARATE INVENTORIES: 1) BUYER-OWNED BARRELS AND 2)
SELLER-OWNED BARRELS.
DURING THE TRANSITION PERIOD, THE SERVICE FEE CHARGED BY
SELLER IN SECTION IV.C. WILL BE PRORATED UNTIL THE MINIMUM
INVENTORY LEVELS HAVE BEEN ATTAINED BY SELLER. SELLER'S
CONTRIBUTION TOWARD THE MINIMUM INVENTORY LEVELS WILL BE
LIMITED BY BUYER-OWNED BARRELS IN INVENTORY DURING THE
TRANSITION PERIOD. FOR EXAMPLE, IF AT THE END OF OCTOBER 1995
SELLER'S AVERAGE CONTRIBUTION TO THE MINIMUM AGGREGATE
INVENTORY LEVEL IS 100,000 OF THE 310,500 BARRELS OF MINIMUM
AGGREGATE INVENTORY, SELLER WILL ONLY BE ENTITLED TO INVOICE
FOR 100,000/310,500 OR 32.2% OF THE $0.08 PER BARREL SERVICE
FEE, OR $0.026 PER BARREL. NO SERVICE FEE WILL BE APPLIED TO
BUYER-OWNED BARRELS CONSUMED DURING THE TRANSITION.
V. INVENTORY FINANCING:
A. SERVICE CHARGE:
SELLER SHALL CHARGE BUYER A SERVICE CHARGE FOR MAINTAINING
MINIMUM OPERATING INVENTORIES OF NO. 6 FUEL OIL AT BUYER'S
BRIDGEPORT HARBOR AND NEW HAVEN HARBOR GENERATING STATIONS.
THE MONTHLY SERVICE CHARGE HAS TWO COMPONENTS: 1) SERVICE
CHARGE ON BARRELS CONSUMED IN A DELIVERY MONTH, AND 2)
SERVICE CHARGE ON MINIMUM AGGREGATE INVENTORY. THE RATE USED
TO CALCULATE THE SERVICE CHARGE WILL BE THE COMMERCIAL PAPER
RATE FOR GENERAL ELECTRIC (30-44 DAY RANGE) COMMERCIAL PAPER
AS QUOTED IN THE WALL STREET JOURNAL ON THE FIRST BUSINESS
DAY OF EACH DELIVERY MONTH PLUS 1.1%. THE SALE PRICE USED TO
- 10 -
<PAGE>
VALUE BARRELS CONSUMED AND MINIMUM AGGREGATE INVENTORY WILL
BE DETERMINED IN ACCORDANCE WITH SECTION III.C.
1 THE SERVICE CHARGE ON BARRELS CONSUMED IN A DELIVERY
MONTH WILL BE CALCULATED AS FOLLOWS:
((BARRELS CONSUMED*SALE PRICE*RATE)/360 DAYS) * 15 DAYS)
2) THE SERVICE CHARGE ON MINIMUM AGGREGATE INVENTORY WILL BE:
((MIN.INVEN.BARRELS*SALE PRICE*RATE)/360 DAYS)* 30 DAYS)
DURING THE TRANSITION PERIOD, THE SERVICE CHARGE ON MINIMUM
AGGREGATE INVENTORY WILL BE PRORATED UNTIL THE MINIMUM
INVENTORY LEVELS HAVE BEEN ATTAINED BY SELLER. SELLER'S
CONTRIBUTION TOWARD THE MINIMUM INVENTORY LEVELS WILL BE
LIMITED BY BUYER-OWNED BARRELS IN INVENTORY DURING THE
TRANSITION PERIOD. FOR EXAMPLE, IF AT THE END OF OCTOBER 1995
SELLER'S AVERAGE CONTRIBUTION TO THE MINIMUM AGGREGATE
INVENTORY LEVEL IS 100,000 OF THE 310,500 BARRELS OF MINIMUM
AGGREGATE INVENTORY, THE SERVICE CHARGE COMPUTATION WILL BE
BASED ON THE SELLER'S AVERAGE CONTRIBUTION TOWARD THE MINIMUM
INVENTORY LEVELS FOR THE MONTH. NO SERVICE CHARGE WILL BE
APPLIED TO BUYER-OWNED BARRELS CONSUMED DURING THE TRANSITION
PERIOD.
VI. RECORDKEEPING, INVOICING & PAYMENT TERMS:
A. RECORDKEEPING:
BUYER WILL MAINTAIN DETAILED RECORDS OF DAILY INVENTORY
LEVELS, TANK TRANSFERS, VESSEL DELIVERIES AND BARRELS CONSUMED
FOR EACH LOCATION. SEE ATTACHMENT B FOR SAMPLE FORMAT. BOTH
BUYER AND SELLER WILL RECEIVE COPIES OF ALL INDEPENDENT
PETROLEUM INSPECTOR'S REPORTS WITH RESPECT TO QUALITY AND
QUANTITY OF TANK TRANSFERS AND VESSEL DELIVERIES.
SELLER SHALL HAVE THE RIGHT TO AUDIT ALL BUYER'S RECORDS
RELATED TO THIS AGREEMENT AT ANY TIME, UPON REASONABLE NOTICE
TO BUYER.
SELLER WILL MAINTAIN DETAILED RECORDS OF THE DAILY PLATT'S
POSTINGS USED TO DETERMINE THE SALE PRICE IN ACCORDANCE WITH
SECTION III.C. A DETAILED RECORD WILL BE PROVIDED WITH EACH
MONTHLY STATEMENT. SELLER WILL ALSO MAINTAIN A RECORD OF THE
GENERAL ELECTRIC COMMERCIAL PAPER RATE USED IN THE COMPUTATION
OF THE SERVICE CHARGE UNDER SECTION V.A. SEE ATTACHMENT C FOR
SAMPLE INVOICE AND STATEMENT FORMATS.
- 11 -
<PAGE>
B. INVOICING & PAYMENT TERMS:
ON THE FIRST BUSINESS DAY FOLLOWING THE END OF A DELIVERY
MONTH, BUYER WILL PROVIDE SELLER WITH WRITTEN DOCUMENTATION OF
BARRELS CONSUMED AT EACH LOCATION. BY THE SECOND BUSINESS DAY
FOLLOWING THE END OF A DELIVERY MONTH, SELLER SHALL INVOICE
BUYER FOR THE FULL VOLUME OF FUEL OIL CONSUMED DURING THE
DELIVERY MONTH PLUS SERVICE FEE AND SERVICE CHARGE DESCRIBED
IN SECTIONS IV.C. AND V.A. SEE ATTACHMENT C FOR SAMPLE INVOICE
AND STATEMENT FORMATS. PAYMENT SHALL BE MADE VIA AUTOMATIC
CLEARING HOUSE FUNDS (ACH) FOR AVAILABILITY ON THE FIRST
BUSINESS DAY OF THE MONTH FOLLOWING PRESENTATION OF THE
INVOICE AND INSPECTOR'S REPORTS OF QUANTITY AND QUALITY.
IN THE EVENT THAT THE BUYER FAILS TO MAKE FUNDS AVAILABLE ON
OR BEFORE THE DUE DATE, BUYER SHALL BE OBLIGATED TO PAY
INTEREST AT THE RATE OF CHASE MANHATTAN BANK PRIME RATE
PERCENT AS QUOTED ON THE DAY(S) PAYMENT IS LATE, BUT NOT TO
EXCEED THE MAXIMUM RATE PERMITTED BY LAW.
C. FINANCIAL RESPONSIBILITY:
IN THE EVENT SELLER OR BUYER REASONABLY DOCUMENTS THAT THE
OTHER PARTY'S CREDITWORTHINESS HAS DETERIORATED, BOTH SELLER
AND BUYER WILL AGREE IN A COMMERCIALLY REASONABLE MANNER TO
SATISFY SELLER'S OR BUYER'S CONCERNS.
VII. FIXED PRICE, FUEL PROCESSING & THIRD PARTY TRANSACTIONS:
FROM TIME TO TIME, BUYER AND SELLER MAY MUTUALLY AGREE TO ENTER INTO A
FIXED PRICE, FUEL OIL PROCESSING OR THIRD PARTY TRANSACTION IN WHICH
PRODUCT PRICING AND TERMS OF PURCHASE/SALE MAY DEVIATE FROM THE TERMS
CONTAINED IN THIS AGREEMENT. THE TERMS, PRICING AND FEES APPLICABLE TO
SUCH TRANSACTION WILL BE NEGOTIATED BETWEEN THE BUYER AND THE SELLER
AND MAY, IF BOTH PARTIES AGREE, BE INCLUDED UNDER THE INVENTORY
MANAGEMENT AND FINANCING PROVISIONS OF THIS AGREEMENT.
VIII. OTHER PROVISIONS:
A. INSURANCE:
SELLER SHALL BE RESPONSIBLE FOR INSURING PRODUCT UP TO THE
BUYER'S BURNER TIP IN ACCORDANCE WITH INDUSTRY PRACTICE. THE
COST OF THIS INSURANCE WILL BE BORNE BY THE SELLER.
B. CONTACTS:
SELLER'S ADDRESS: BAYWAY REFINING COMPANY
1400 PARK AVENUE
LINDEN, NEW JERSEY 07036
TELEPHONE: TELEFAX:
--------- -------
OPERATIONS: JIM SPATARO 203-326-7554 203-326-7565
- 12 -
<PAGE>
(PAGER:1-800-592-0751)
INVOICING: RICK GORDIMER 908-523-5591 908-523-5365
FINANCIAL: SCOTT NELSON 908-523-5305 908-523-5256
CONTRACTS: MIKE HALL 908-523-5180 908-523-5045
ALL OTHER: DON LUCEY 203-326-7544 203-326-7505
BUYER'S ADDRESS: THE UNITED ILLUMINATING COMPANY
157 CHURCH STREET
P. O. BOX 1564
NEW HAVEN, CT 06506-0901
TELEPHONE: TELEFAX:
--------- -------
OPERATIONS:
BRIDGEPORT: DAVID J. DOMOGALA 203-330-4036 203-330-4014
NEW HAVEN: DONNA R. MELONEY 203-499-3007 203-499-3004
INVENTORY RECORDS, INVOICING
& CONTRACTS: ROBERT M. GILMORE 203-499-2723 203-499-3617
ALL OTHER: KATHRYN A. CRAIG 203-499-2719 203-499-3617
C. UCC FILING:
BUYER AGREES TO ASSIST SELLER IN CAUSING A UCC FILING TO BE
EFFECTED TO EVIDENCE SELLER'S OWNERSHIP OF PRODUCT IN
BUYER'S TANKS. SUCH FILING SHALL REMAIN IN EFFECT FOR THE
ENTIRE TERM OF THIS AGREEMENT.
D. TAXES AND FEES ON SELLER'S PRODUCT:
SELLER WILL PAY ANY INSPECTION FEES, SALES TAXES, AND/OR
PERSONAL PROPERTY TAXES LEVIED ON ITS PRODUCT STORED IN
BUYER'S OPERATING TANK(S) OR SELLER'S LEASED TANKAGE.
E. TERMINATION OF AGREEMENT:
IF BUYER AND SELLER HAVE NOT AGREED TO EXTEND THIS AGREEMENT
IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTION
I(TERM), BUYER HAS THE OPTION OF LOWERING THE MINIMUM
INVENTORY LEVELS DESCRIBED IN SECTION IV TO ACCOMMODATE THE
TRANSITION TO A NEW FUEL OIL SUPPLY AND MANAGEMENT
ARRANGEMENT. ON THE LAST DAY OF THIS AGREEMENT, THE OPERATING
TANK AT EACH LOCATION WILL BE GAUGED AND SAMPLED AT MIDNIGHT
BY AN INDEPENDENT INSPECTOR TO DETERMINE THE CLOSING
INVENTORIES AND COMPOSITE QUALITY. BUYER WILL PURCHASE THE
OPERATING TANK INVENTORIES (INCLUDING TANK BOTTOMS) AT EACH
LOCATION AT THE TERMINATION PRICE DESCRIBED BELOW.
TERMINATION PRICE = THE AVERAGE OF PLATT'S NEW YORK HARBOR
CARGO LOW POSTING FOR 1% SULFUR NO. 6 FUEL OIL IN EFFECT ON
THE THREE BUSINESS DAYS PRECEDING THE CONTRACT TERMINATION
DATE, ROUNDED TO THREE DECIMAL PLACES, PLUS $0.11 PER BARREL,
ADJUSTED FOR ACTUAL VERSUS GUARANTEED BTU CONTENT.
- 13 -
<PAGE>
F. GOVERNING LAW:
THIS AGREEMENT, THE TRANSACTIONS EVIDENCED HEREBY AND THE
OBLIGATIONS OF THE PARTIES HEREUNDER WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE
OF CONNECTICUT WITHOUT REGARD TO ANY CONFLICT OF LAWS RULES.
EACH PARTY EXPRESSLY SUBMITS TO THE JURISDICTION OF THE COURTS
OF THE STATE OF CONNECTICUT AND THE FEDERAL COURT OF THE
UNITED STATES OF AMERICA LOCATED IN NEW HAVEN, CONNECTICUT
WITH RESPECT TO ANY LEGAL ACTION OR PROCEEDING PERTAINING TO
THIS AGREEMENT, THE TRANSACTIONS EVIDENCED HEREBY OR THE
OBLIGATIONS OF THE PARTIES HEREUNDER. IN ANY SUCH ACTION OR
PROCEEDING,SERVICE OF PROCESS MAY BE MAILING BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, A COPY OF THE SUMMONS AND
COMPLAINT, OR OTHER LEGAL PROCESS IN ANY SUCH ACTION OR
PROCEEDING TO THE ADDRESS OF THE PARTY SET FORTH IN SECTION
VIII.B. OF THIS AGREEMENT.
G. CONFIDENTIALITY:
BUYER AND SELLER AGREE TO CAUSE THEIR RESPECTIVE OFFICERS,
AGENTS AND EMPLOYEES TO MAINTAIN THE CONFIDENTIALITY OF THE
TERMS AND CONDITIONS OF THIS AGREEMENT UNLESS DISCLOSURE IS
REQUIRED BY LAW. IN THE EVENT THAT BUYER OR SELLER BECOMES
LEGALLY COMPELLED TO DISCLOSE ANY OF THE TERMS AND CONDITIONS
OF THIS AGREEMENT, THE LEGALLY COMPELLED PARTY SHALL GIVE THE
OTHER PARTY PROMPT WRITTEN NOTICE OF SUCH REQUIREMENT. EITHER
PARTY MAY SEEK A PROTECTIVE ORDER OR TAKE OTHER APPROPRIATE
ACTION.
H. ASSIGNMENT:
THIS AGREEMENT SHALL NOT BE ASSIGNED OR TRANSFERRED BY EITHER
PARTY HERETO WITHOUT THE WRITTEN CONSENT OF BOTH PARTIES,
WHICH SHALL NOT BE UNREASONABLY WITHHELD.
I. FORCE MAJEURE:
SELLER WILL NOT BE LIABLE FOR DAMAGES OR FAILURE OR DELAY IN
PERFORMANCE OF ANY OBLIGATION UNDER THIS AGREEMENT WHERE SUCH
FAILURE OR DELAY IS CAUSED BY FORCE MAJEURE. FORCE MAJEURE
EVENTS ARE LIMITED TO WARS OR RESTRICTIONS IMPOSED BY ANY
GOVERNMENTAL AUTHORITY. STRIKES, SEVERE SHORTAGE OR
UNAVAILABILITY OF CRUDE OIL OR PRODUCT, REFINERY ACCIDENTS OR
EXPLOSIONS, ACTS OF GOD, OR NAVIGATIONAL ACCIDENTS ARE NOT
VALID FORCE MAJEURE CLAIMS FOR SELLER. IF FORCE MAJEURE
CONTINUES FOR MORE THAN THIRTY DAYS, EITHER PARTY MAY
TERMINATE THIS AGREEMENT UPON NOTICE TO THE OTHER.
IF BUYER IS UNABLE TO ACCEPT PRODUCT DELIVERY DUE TO STRIKES,
EQUIPMENT BREAKDOWN, ACCIDENTS, EXPLOSIONS OR ACTS OF GOD,
THEN SELLER WILL NOT BE LIABLE FOR DAMAGES OR FAILURE OR DELAY
IN PERFORMANCE OF ANY OBLIGATION UNDER THIS AGREEMENT.
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<PAGE>
IN WITNESS WHEREOF, BUYER AND SELLER HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR DULY AUTHORIZED REPRESENTATIVES AS OF THE DATE FIRST ABOVE WRITTEN.
THE UNITED ILLUMINATING COMPANY (BUYER):
BY __________________________________
TITLE __________________________________
WITNESS:_____________________________________
BAYWAY REFINING COMPANY (SELLER):
BY __________________________________
TITLE __________________________________
WITNESS:_____________________________________
- 15 -
<PAGE>
ATTACHMENT A
------------
DISCOUNT FORMULAS
DEFINITIONS:
- -----------
SG = SPECIFIC GRAVITY = 141.5 (API OF DELIVERY + 131.5)
BD = BARRELS DELIVERED
8.34 = POUNDS PER GALLON OF WATER
PD = POUNDS DELIVERED = BD * 42 * SG * 8.34
ASH SPECIFICATION MAX. = 0.15%
- ---
THE DISCOUNT FOR NONCOMPLIANCE WITH THE ASH SPECIFICATION IS INTENDED TO
COMPENSATE THE BUYER FOR ADDITIONAL ASH DISPOSAL COSTS OF $0.40 PER POUND.
ASH DISCOUNT $
= PD * (ASH CONTENT OF DELIVERY - 0.15%) * $0.40
---------------------------------
100
WATER BY DISTILLATION SPECIFICATION MAX. = 0.5%
- ---------------------
THE DISCOUNT FOR NONCOMPLIANCE WITH THE WATER BY DISTILLATION SPECIFICATION IS
INTENDED TO COMPENSATE THE BUYER FOR THE SALE PRICE CHARGED ON VOLUMES OF WATER
PURCHASED (AS OPPOSED TO NO. 6 OIL) IN EXCESS OF THE SPECIFICATION.
WATER DISCOUNT $
= (ACTUAL WATER CONTENT % - 0.5%) * BD * SALE PRICE PER BARREL
------------------------------
100
- 16 -
<PAGE>
ATTACHMENT C
------------
PAGE 1 OF 2
SAMPLE INVOICE FORMAT:
- ---------------------
INVOICE DATE: 2/1/96 PAYMENT DUE: 3/1/96
PERIOD COVERED: 1/1/96 - 1/31/96
BARRELS CONSUMED: 200,000
PRICE PER BARREL (1): $ 15.766
--------------
SUBTOTAL: $3,153,116.05
CT PETROLEUM PRODUCTS TAX AT 5.26% $ 165,853.90
-------------
TOTAL INVOICE AMOUNT $3,318,969.95
(1) CONTRACT PRICE TO BURNER TIP.
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<PAGE>
ATTACHMENT C
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PAGE 2 0F 2
SAMPLE STATEMENT FORMAT:
- -----------------------
PERIOD COVERED: 1/1/96-1/31/96
SALE PRICE: $ 15.50 (SEE CALCULATION BELOW)
BARRELS CONSUMED: 200,000
PRICE OF BARRELS CONSUMED: $3,100,000.00
MINIMUM INVENTORY BARRELS: 310,500
INVENTORY VALUE $4,812,750.00
SERVICE CHARGES & FEES:
- ----------------------
ANNUAL RATE 7.00%
BARRELS CONSUMED AT 15 DAYS $ 9,041.67
MINIMUM INVENTORY LEVEL AT 30 DAYS $ 28,074.38
SERVICE FEE ON BARRELS CONSUMED $ 16,000.00
-------------
TOTAL SERVICE CHARGES & FEES $ 53,116.05 ($0.266 PER BARREL CONSUMED)
SUBTOTAL INVOICE AMOUNT $3,153,116.05 ($15.766 PER BARREL CONSUMED)
CT PETROLEUM PRODUCTS TAX AT 5.26% $ 165,853.90
-------------
TOTAL INVOICE AMOUNT $3,318,969.95 ($16.595 PER BARREL CONSUMED)
CALCULATION OF SALE PRICE:
- -------------------------
<TABLE>
<CAPTION>
PLATT'S NY HARBOR CARGO LOW
DATE DAY POSTING FOR 1% SULFUR NO. 6 FUEL OIL COMMENTS
- ---- --- -------------------------------------- --------
<S> <C> <C> <C>
1/1/96 SUN. $ NA NO POSTING
1/2/96 MON. $15.150
1/3/96 TUE. $15.100
ETC...
</TABLE>
SHOW CALCULATION OF AVERAGE PLATT'S POSTING PRICE AND ADDITION OF $0.103 FOR
DETERMINATION OF SALE PRICE PER SECTION III.C.
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