EXHIBIT 10.66
THERMAL ENERGY SERVICE AGREEMENT
THIS THERMAL ENERGY SERVICE AGREEMENT ("Agreement") is entered into as
of the 30th day of June, 1996, by and between ATLANTIC JERSEY THERMAL SYSTEMS,
INC., a Delaware corporation ("Seller"), and TRUMP TAJ MAHAL ASSOCIATES, a New
Jersey general partnership ("Buyer").
WITNESSETH:
WHEREAS, Seller is engaged in the business of producing and selling
heating and cooling energy; and
WHEREAS, Buyer operates the Trump Taj Mahal Casino Resort located at
1000 Boardwalk at Virginia Avenue, Atlantic City, New Jersey as more
specifically described on Schedule A attached hereto and made a part hereof, as
the same may be expanded or improved from time to time ("Buyer's Facilities");
and
WHEREAS, Buyer presently produces its requirements of steam and
chilled water using steam and chilled water production facilities located
on-site at Buyer's Facilities; and
WHEREAS, Seller desires to obtain the exclusive right to use the steam
and chilled water production facilities located on-site at Buyer's Facilities in
order to sell to Buyer all of Buyer's heating and cooling energy requirements
for Buyer's Facilities at a cost savings to Buyer and to offer for sale to third
parties such thermal energy requirements as they may require; and
WHEREAS, Buyer is willing to allow Seller to operate the steam and
chilled water production facilities located on-site at Buyer's Facilities on an
exclusive basis for the aforestated purposes on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
conditions and agreements hereinabove and hereinafter set forth and such other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, Buyer and Seller, each intending to be legally bound, do
hereby agree as follows:
1. DEFINITIONS
Except as otherwise expressly provided herein, all capitalized terms
used in this Agreement shall have the respective meanings as set forth below:
(a) "Billing Month" shall mean any calendar month, or any portion
thereof, during which Buyer receives and Seller delivers Thermal Energy to
Buyer's Facilities in accordance with the terms and conditions of this
Agreement.
(b) "Contractual Obligation" shall mean, as to either party to this
Agreement, any contract, agreement, indenture, instrument or undertaking to
which such party is a party or by which any of its properties is bound or
affected.
(c) "Governmental Authority" shall mean the federal government and
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any other governmental entity with authority over
any aspect of this Agreement or the performance of any of the obligations
hereunder.
(d) "Metering Equipment" shall have the meaning set forth in Section
9.1 of this Agreement.
(e) "Points of Delivery" shall mean the physical point where Thermal
Energy is delivered to Buyer, as more specifically described on Schedule 1(e)
attached hereto and made a part hereof.
(f) "Points of Return" shall mean the physical point where Seller is
anticipated to receive the condensate from Buyer, as more specifically described
on Schedule 1(f) attached hereto and made a part hereof.
(g) "Service Commencement Date" shall have the meaning set forth in
Section 2.2 of this Agreement.
(h) "Thermal Energy" shall mean, as the context requires, quantities
of heating and cooling energy as measured in mmBtu's/hr. and tons, respectively,
extracted from the circulating flows of the steam/condensate and chilled water
provided to Buyer at Buyer's Facilities in accordance with the delivery
specifications set forth on Schedule 7.4 of this Agreement.
(i) "Thermal Energy Capacity Charges" shall mean the capacity charges
for Thermal Energy for each Billing Month determined in accordance with the
capacity charges set forth on Schedule 8.1 of this Agreement.
(j) "Thermal Energy Production Facilities" shall mean the chillers,
boilers, cooling towers, pumps and all appurtenant equipment thereto, together
with any and all parts, supplies and equipment installed or added thereto, and
all improvements, additions or replacements made thereto (on the primary side)
which constitute the steam and chilled water production facilities located at
Buyer's Facilities, all as more specifically identified on Schedule 1(j)
attached hereto and made a part hereof.
(k) "Thermal Energy Usage Charges" shall mean the usage charges for
Thermal Energy for each Billing Month determined in accordance with the usage
charges set forth on Schedule 8.1 of this Agreement.
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2. TERM
2.1 Term. This Agreement shall be in full force and effect and be
legally binding upon the parties and their permitted successors and assigns as
of June 30, 1996 and shall remain in effect for a term of twenty (20) years
following the Service Commencement Date, unless otherwise terminated as provided
herein (the "Term"). To the extent necessary, Seller shall obtain all necessary
corporate approvals by August 15, 1996 or shall notify Buyer by such date that
Seller is unable to do so. Upon the receipt of such notice, Buyer may elect to
terminate this Agreement and retain the payment received under Section 3.2(a)
above.
2.2 Service Commencement Date. Buyer and Seller shall mutually agree
upon a Service Commencement Date upon which Seller shall first make available
and deliver to Buyer's Facilities Thermal Energy as provided herein, but in no
event shall the Service Commencement Date occur any later than September 1,
1996, unless otherwise agreed to in writing by the parties.
3. LICENSE AGREEMENT
3.1 Grant of License. Buyer hereby grants to Seller (i) a
non-exclusive license throughout the Term of this Agreement to enter upon
Buyer's Facilities in order to inspect and gain access to the Thermal Energy
Production Facilities; (ii) an exclusive license commencing on the Service
Commencement Date and continuing thereafter throughout the Term of this
Agreement to use, operate and maintain the Thermal Energy Production Facilities
to the extent and for the purposes set forth herein, which license shall be
irrevocable for so long as the Agreement remains in effect and Seller is not in
default of any of its obligations hereunder; and (iii) a non-exclusive license
to use, without interruption, the electrical service, makeup water lines and
fire control system which support the Thermal Energy Production Facilities to
the extent necessary in the use, operation and maintenance of the Thermal Energy
Production Facilities; provided, however, that Seller shall at no time interfere
with the business operations of Buyer's Facilities including, without
limitation, the operation of the casino-hotel located at Buyer's Facilities.
3.2 Consideration for Licenses. In consideration for the licenses
granted to Seller by Buyer pursuant to the provisions of Section 3.1 above,
Seller hereby agrees to pay to Buyer the sum of Ten Million ($10,000,000.00)
Dollars (the "License Fee"). The License Fee shall be payable as follows:
(a) Upon the execution and delivery of this Agreement by the parties,
the sum of One Million ($1,000,000.00) Dollars shall be paid to Buyer from the
escrow previously established in accordance with the June 20, 1996 Letter of
Intent by and between Buyer and Seller; and
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(b) On the Service Commencement Date, but in no event later than
September 1, 1996, Seller shall pay to Buyer the sum of Nine Million
($9,000,000.00) Dollars in immediately available funds by wire transfer to an
account designated by Buyer.
3.3 Rights of Buyer. Notwithstanding anything herein contained to the
contrary, until and unless Seller commences delivery of the Thermal Energy to
Buyer as provided in this Agreement, Buyer shall retain the exclusive right to
use, operate and maintain the Thermal Energy Production Facilities and Seller
may not act in any way whatsoever so as to interfere with the use, operation and
maintenance by Buyer of the Thermal Energy Production Facilities, provided that
Buyer shall cooperate with Seller to permit the transition to Seller of the
operating responsibilities for the Thermal Energy Production Facilities by the
Service Commencement Date.
4. EASEMENTS
4.1 Easements and Rights-Of-Way; Access. Buyer shall grant, or cause
to be granted, to Seller all rights-of-way, access rights, easements, licenses
and other rights with respect to Buyer's Facilities as may be reasonably
necessary for Seller to perform its obligations and exercise its rights
hereunder. Buyer shall use commercially reasonable efforts to obtain, or cause
to be obtained (in form and substance reasonably satisfactory to Seller)
non-disturbance agreements or, if applicable, waivers and/or consents from each
of its mortgagees or landlords with respect to all rights of way, access rights,
easements, licenses and other property rights which Seller is obligated to
provide or cause to be provided to Seller pursuant to this Article 4.
5. THERMAL ENERGY FACILITIES AND RELATED REQUIREMENTS
5.1 Thermal Energy Production Facilities. Seller will engineer,
permit, construct, finance, operate and maintain the Thermal Energy Production
Facilities so as to produce and deliver Thermal Energy to Buyer throughout the
Term of this Agreement at the agreed upon Points of Delivery.
5.2 Facility Operation. Seller will use, operate and maintain the
Thermal Energy Production Facilities in a manner which meets or exceeds good
industry practice. Throughout the Term of this Agreement, Seller shall secure
and maintain, at its sole cost and expense, all permits necessary for the use,
operation and maintenance of Buyer's Thermal Energy Production Facilities,
provided, however, that Buyer shall be responsible for complying with all
existing requirements with respect to improvements made or to be made to the
existing oil tanks located at Buyer's Facilities. As soon as practicable, but in
no event later than August 30, 1996, Buyer and Seller shall enter into a
definitive Operating Agreement on terms mutually acceptable to each of them
setting forth their
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respective responsibilities for the use, operation and maintenance of the
Thermal Energy Production Facilities.
5.3 Facility Ownership. Title to the Thermal Energy Production
Facilities shall remain with Buyer and Seller shall not remove, alter (except as
otherwise required or permitted under this Agreement) or permit any lien to
exist on such Thermal Energy Production Facilities.
5.4 Scheduled Outages. Whenever it shall become necessary for Seller
to schedule an outage so that Seller may make repairs, replacements or changes
in the Thermal Energy Production Facilities, both parties shall exercise
reasonable efforts to coordinate the timing of the scheduled outage, and, in any
event, Seller shall give Buyer not less than ten (10) days prior written notice
of such outage. Seller shall use reasonable means to limit the duration of the
outage and shall attempt to schedule chilled water outages during winter months
and steam outages during summer months. Both parties agree to act reasonably and
in good faith, recognizing that such outages will, from time to time, be
required. Notwithstanding anything herein contained to the contrary, Seller
agrees that outages shall not and may not result in the interruption of any
Thermal Energy services provided to Buyer hereunder.
5.5 Buyer's Rights During Interruption in Service. Notwithstanding
anything in this Agreement contained to the contrary, in the event Seller shall
fail to provide and deliver Buyer's Thermal Energy requirements at any time
during this Agreement, Buyer may elect, without being in default of its
obligations under this Agreement, to produce its own Thermal Energy (with or
without use of the Thermal Energy Production Facilities) or to purchase and
accept deliveries of Thermal Energy from any other source, and Buyer shall be
excused from making any payments to Seller required hereunder during such period
of interruption.
5.6 Buyer's Gas Requirements. Commencing on the Service Commencement
Date and continuing throughout the Term of this Agreement, Seller shall pay for
all natural gas requirements of Buyer, provided, however, that Buyer shall
reimburse Seller for the as-delivered cost of all gas quantities delivered to
Buyer for use in its kitchen facilities, on a firm basis. Seller shall maintain
a separate meter to measure and record gas delivered to Buyer's kitchen
facilities. Upon the execution and delivery of this Agreement, Seller shall
proceed with due diligence to transfer all natural gas service at Buyer's
Facilities to Seller as of the Service Commencement Date or as soon as
practicable thereafter. If Seller is proceeding diligently with such transfer
but is unable to effect the same as of the Service Commencement Date, Buyer
agrees to take gas service at such meters in its name and Seller shall reimburse
Buyer at cost for all gas service taken in Buyer's name
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for use in Buyer's Facilities until such time as Seller is able to effect such
transfer.
5.7 Buyer's Electric Requirements. Commencing on the Service
Commencement Date and continuing throughout the Term of this Agreement, Seller
shall be responsible for establishing and coordinating the electric submetering
of electric service to the Thermal Energy Production Facilities and Seller shall
grant a credit to Buyer on a monthly basis equal to the cost of such electricity
delivered to Buyer's Thermal Energy Production Facilities, provided, however,
that Buyer shall provide Seller with timely copies of its electric bills. The
parties intend that Buyer shall remain the customer of record for all electric
service to Buyer's Facilities.
5.8 Buyer's Water Requirements. Commencing on the Service Commencement
Date and continuing throughout the Term of this Agreement, Seller shall be
responsible for measuring the make-up water associated with the water
requirements of the Thermal Energy Production Facilities and Seller shall grant
to Buyer a credit on a quarterly basis equal to the cost of such water usage at
the currently applicable tariff rates.
5.9 Buyer's Oil Requirements. Buyer shall have the right throughout
the Term of this Agreement, but not the obligation, to use Seller's oil
inventories stored in Buyer's oil tanks for emergency electric energy generation
purposes, including the testing of the generators and equipment relating
thereto. In the event Buyer uses Seller's oil inventories, Buyer shall reimburse
Seller for the fair market value of the oil utilized.
6. IMPROVEMENTS TO BUYER'S FACILITIES
6.1 Improvements to Thermal Energy Production Facilities. Seller
hereby agrees to make improvements to Buyer's Thermal Energy Production
Facilities by no later than August 1, 1997 through direct capital expenditures
in accordance with Schedule 6.1 attached hereto and made a part hereof (the
"Improvements"). Seller shall submit to Buyer for Buyer's review true copies of
all preliminary and final mechanical plans and specifications, together with any
modifications or change orders relating thereto, for the Improvements prior to
commencing any improvement. All such plans and specification shall be the
property of Buyer and Seller shall execute, acknowledge and deliver such
documents and instruments as Buyer may reasonably require to give effect to or
evidence Buyer's ownership interest in such plans and specifications.
Seller shall complete the Improvements in a manner that meets or
exceeds industry standards for the use and operation of such Improvements.
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7. PURCHASE AND SALE OF THERMAL ENERGY
7.1 Purchase and Sale of Thermal Energy. Commencing on the Service
Commencement Date and continuing thereafter throughout the Term of this
Agreement, Seller will produce and deliver for sale to Buyer, and Buyer will
purchase and receive from Seller, all of Buyer's Thermal Energy requirements for
Buyer's Facilities. Provided Buyer's Thermal Energy requirements do not exceed
the levels of contract capacity specified in Schedule 8.1 attached hereto on
more than two (2) occasions within any two (2) consecutive billing periods, the
costs thereof shall be as set forth in Schedule 8.1. Subject to the provisions
of Section 8.2 hereof which shall control in the circumstances described
therein, if Buyer's Thermal Energy requirements exceed the levels of contract
capacity specified in Schedule 8.1 on more than two (2) occasions within any two
(2) consecutive billing periods, the contract capacity specified in Schedule 8.1
shall be increased to the maximum quantity of capacity delivered to Buyer and
the cost thereof shall be as set forth in Schedule 8.1.
7.2 Points of Delivery and Return. Buyer will obtain its Thermal
Energy, in the case of heating, by extracting heat from and, in the case of
cooling, by transferring heat to, the circulating flows of steam and chilled
water that Seller will make available to Buyer at the agreed upon Points of
Delivery. Buyer agrees to take and accept the flows of steam and chilled water
at such Points of Delivery and return the same to Seller at the agreed upon
Points of Return.
7.3 Point of Transfer, Risk of Loss. The sale of Thermal Energy shall
be deemed to occur at the Points of Delivery and the risk of loss of the
circulating medium shall transfer to Buyer at such points.
7.4 Delivery Specifications. The Thermal Energy delivered by Seller at
the Points of Delivery shall satisfy the conditions of temperature and pressure
specified in Schedule 7.4 attached hereto and made a part hereof.
7.5 Treatment of Condensate and Chilled Water. Buyer shall not
interfere with, or restrict (other than to extract its Thermal Energy
requirements), or contaminate in any way the flows of steam, condensate or
chilled water supplied to or collected from Buyer hereunder. Buyer agrees to
compensate Seller for the reasonable costs of treating or replacing any
condensate or chilled water that is either contaminated or not returned, after
making allowance for reasonable losses occurring within normal operating
conditions by Buyer, as reasonably demonstrated by Seller to Buyer. Further, it
is agreed that Seller may suspend service if Buyer fails to cure any
contamination of steam, condensate or chilled water caused by Buyer, as
reasonably demonstrated by Seller to Buyer, within thirty (30) days after being
advised in writing by Seller of such
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contaminating, provided, however, that if the nature of such contamination is
such that the same cannot reasonably be cured within such thirty (30) day
period, Buyer shall not be deemed to be in default if it shall have commenced
such cure within such thirty (30) day period and thereafter diligently and
continuously prosecutes such cure to completion, and Seller may not suspend
service to Buyer during such period of cure.
8. CHARGES AND PAYMENTS
8.1 Charges for Heating and Cooling Service. For each Billing Month in
which Buyer receives Thermal Energy from Seller, Buyer shall pay Seller the
applicable Thermal Energy Capacity Charges for Thermal Energy set forth in
Schedule 8.1 attached hereto and made a part hereof, and shall pay Seller the
applicable Thermal Energy Usage Charges for Thermal Energy set forth in Schedule
8.1 attached hereto and made a part hereof.
8.2 Adjustment in Thermal Energy Capacity Charges. In the event the
Thermal Energy required by Buyer increases at any time within five (5) years of
the Service Commencement Date as the result of any expansion to Buyer's
Facilities, Seller shall, at Buyer's option exercisable within six (6) months of
Buyer's commencement of any expansion, provide such additional Thermal Energy
requirements to Buyer under the same rates, terms and conditions then applicable
under this Agreement, provided, however, that Buyer shall have provided Seller
with such additional physical space at Buyer's Facilities as is necessary for
Seller to complete any required improvement to the Thermal Energy Production
Facilities as a result of such additional Thermal Energy requirements of Buyer.
8.3 Capacity Charge Payments; No Set-Off. Payment of the Thermal
Energy Capacity Charges and Thermal Energy Usage Charges are each conditioned on
Seller's ability to deliver to Buyer at the Points of Delivery the full Thermal
Energy requirements of Buyer under this Agreement, but, subject to the
provisions of this Agreement, shall not otherwise be subject to any set-off,
counterclaim, abatement, or diminution. If Seller is unable to deliver to Buyer
when required any quantity of Thermal Energy, the applicable Thermal Energy
Capacity Charges shall be adjusted to pro rate for such deficiency.
8.4 Invoice and Payments. Within fifteen (15) days following the close
of each Billing Month, Seller shall send Buyer a detailed invoice setting forth
all charges for Thermal Energy delivered to Buyer by Seller during such calendar
month. Payment, less any credits or rebates due to Buyer pursuant to this
Agreement, will be due and payable within thirty (30) days of receipt by Buyer
of the invoice from Seller, or the first business day following such day if such
day is not a business day. Buyer shall have the right at reasonable hours to
examine the testing records and meter reading
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charts of Seller to the extent reasonably necessary to verify the accuracy of
any invoice. If any such examination reveals any error or inaccuracy in Seller's
invoice, than proper adjustment and correction thereof shall be made as promptly
as practicable thereafter.
8.5 Delinquent Payments. Any invoice tendered for service rendered
hereunder shall be deemed delinquent if not paid within thirty (30) days after
becoming due and payable. The outstanding balance of any delinquent invoice
shall accrue interest from the date due until paid, at the prime rate then in
effect at Citibank, N.A., as published in the Wall Street Journal or comparable
publication, plus one percent (1%) per annum.
8.6 Third Party Sales Rebates. If Seller shall sell or otherwise
transfer quantities of thermal energy produced from the Thermal Energy
Production Facilities to any third party, Seller shall provide Buyer with the
rebates set forth in Schedule 8.1 attached hereto for each unit of heating
energy, measured in mmBtu's, and each unit of cooling energy, measured in
tons/hr., so transferred.
9. METERING
9.1 Metering Equipment. Seller will furnish, install, and maintain for
the Term of this Agreement without charge to Buyer all required meters,
instruments, recording devices, and other related data logging equipment
required to measure and record all charges payable by Buyer under this Agreement
(collectively, the "Metering Equipment").
9.2 Testing. All Metering Equipment will be tested and calibrated by
Seller periodically in accordance with the manufacturer's instructions and good
industry practice. Test and calibration records will be issued to the Buyer upon
request. Further, Buyer may request additional meter tests at any time; however,
if a meter is subsequently found to have a variance for accuracy of less than
three (3%) percent, Buyer will bear the reasonable cost of such testing.
9.3 Adjustment to Prior Invoices. If any test establishes that a meter
is not accurately performing (i.e., in accordance with the manufacturer's
variance specifications), Seller shall make an adjustment in Buyer's invoices,
measured from the date it is determined by Seller or Buyer, in good faith, that
the inaccuracy began.
10. SALE OF THERMAL ENERGY TO THIRD PARTIES
10.1 Resale of Thermal Energy by Buyer. Thermal Energy may be resold
by Buyer to its tenants, provided such tenants occupy Buyer's Facilities and
provided that such resale does not subject
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Seller to any new or additional governmental rules, regulations or laws,
including but not limited to, tax laws or regulations by any New Jersey
regulatory authority. In case of any such resale, Buyer shall remain primarily
liable to Seller for all costs and charges of Thermal Energy delivered to Buyer
pursuant to this Agreement.
10.2 Sale of Third Party Thermal Energy Requirements. Provided that and
for so long as Seller has satisfied all of its obligations under this Agreement
and is not in breach of any of its obligations hereunder, including, without
limitation, the obligations and conditions set forth in Section 6 of this
Agreement, Seller may use Buyer's Thermal Energy Production Facilities to
generate thermal energy for sale to persons or entities other than Buyer ("Third
Party Thermal Energy Requirements").
11. REPRESENTATIONS AND WARRANTIES
11.1 Seller Representations. Seller hereby represents and warrants
that:
(a) It is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has all requisite
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby;
(b) Seller has or will obtain all necessary corporate approvals for
the execution and delivery of this Agreement and the performance of its
obligations hereunder;
(c) This Agreement is a legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms, subject to the
qualification, however, that the enforcement of the rights and remedies herein
is subject to (i) bankruptcy and other similar laws of general application
affecting rights and remedies of creditors and (ii) the application of general
principals of equity (regardless of whether considered in a proceeding in equity
or at law);
(d) To the best knowledge of Seller, as of the date of execution
hereof, no Governmental Approval (other than any Governmental Approvals which
have been previously obtained or disclosed, in writing, to Buyer), is required
to authorize, or is required in connection with the execution, delivery and
performance of this Agreement or the performance of Seller's obligations
hereunder; and
(e) Neither the execution nor delivery of this Agreement by Seller nor
compliance by Seller with any of the terms and provisions hereof (i) conflicts
with, breaches or contravenes the provisions of the corporate charter or bylaws
of Seller or any
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Contractual Obligation of Seller or (ii) results in a condition or event that
constitutes (or that, upon notice or lapse of time or both, would constitute) an
event or default under any Contractual Obligation of the Seller.
11.2 Buyer Representations. Buyer hereby represents and warrants that:
(a) It is a general partnership duly formed, validly and existing and
in good standing under the laws of the state of its formation and has all
requisite power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Agreement and the performance
of its obligations hereunder have been duly authorized by all necessary
partnership action;
(c) This Agreement is a legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms, subject to the
qualification, however, that the enforcement of the rights and remedies herein
is subject to (i) bankruptcy and other similar laws of general application
affecting rights and remedies of creditors and (ii) application of general
principals of equity (regardless of whether considered in a proceeding in equity
or at law);
(d) To the best knowledge of Buyer, as of the date of execution
hereof, no Governmental Approval (other than any Governmental Approvals which
have been previously obtained or disclosed, in writing, to Seller) is required
to authorize, or is required in connection with the execution, delivery and
performance of this Agreement or the performance of Buyer's obligations
hereunder.
(e) Neither the execution and delivery of this Agreement by Buyer nor
compliance by Buyer with any of the terms and provisions hereof (i) conflicts
with, breaches or contravenes the provisions of the Partnership Agreement of
Buyer or any Contractual Obligation of Buyer or (ii) results in a condition or
event that constitutes (or that, upon notice or lapse of time or both, would
constitute) an event of default under any Contractual Obligation of the Buyer.
12. INDEMNIFICATION/INSURANCE
12.1 Seller's Indemnity. Seller hereby agrees to defend, indemnify and
hold harmless Buyer, its employees, officers, shareholders, directors and agents
from and against any and all claims, demands, suits, actions, recoveries,
judgments, and costs and expenses in connection therewith (including, without
limitation, reasonable attorneys' fees and expenses), made, brought
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or obtained on account of the loss of life, property, or injury or damage to the
person or property of any person or persons whomsoever, which loss of life or
property, or injury or damage to persons or property, shall arise out of or in
connection with Seller's or its employees' use, operation and maintenance of the
Thermal Energy Production Facilities, or any act required of or omission by
Seller, or any agent or employee of Seller under this Agreement or in connection
therewith.
12.2 Buyer's Indemnity. Buyer hereby agrees to defend, indemnify and
hold harmless Seller, its employees, officers, shareholders, directors and
agents from and against any and all claims, demands, suits, actions, recoveries,
judgments, and costs and expenses in connection therewith (including, without
limitation, reasonable attorneys' fees and expenses), made, brought or obtained
on account of the loss of life, property, or injury or damage to the person or
property of any person or persons whomsoever, which loss of life or property, or
injury or damage to persons or property, shall arise out of or in connection
with Sellers or its employees' operation of Buyer's Facilities (exclusive of the
Thermal Energy Production Facilities), or any act required of or omission by
Buyer, or any agent or employee of Buyer, under this Agreement or in connection
therewith.
12.3 Seller's Insurance. Seller shall maintain throughout the Term of
this Agreement, at its sole cost and expense, the policies of insurance meeting
the terms and conditions set forth on Schedule 12.3 attached hereto and made a
part hereof.
12.4 Buyer's Insurance. Commencing on the date of this Agreement and
at all times thereafter throughout the Term of this Agreement, Buyer shall
maintain, at is sole cost and expense, comprehensive general public liability
(including contractual) insurance, in an amount not less than $10,000,000, with
respect to any liability, losses, damages, expenses, claims, actions, judgments
and settlement for any personal injury, death or property or economic loss
occurring in Buyer's Facilities or surrounding premises and arising out of or
incident to the operation, maintenance, repair, construction, replacement or
modification of Buyer's Facilities.
12.5 Evidence of Insurance. Prior to commencing any construction or
delivering any Thermal Energy under this Agreement, Seller and Buyer shall each
furnish to the other one or more certificates of insurance evidencing the
existence of the coverages set forth in Sections 12.3 and 12.4, respectively.
Each certificate shall state that the insurance carrier will give Seller and
Buyer at least thirty (30) days written notice of any cancellation or material
change in the terms and conditions of such policy during the periods of
coverage.
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13. DEFAULT
13.1 Seller Default. Anyone of the following events shall constitute
an "Event of Default" hereunder with respect to Seller:
(a) In connection with itself or its assets, Seller shall (i) apply
for or consent to the appointment of or taking of possession by a receiver or
liquidator, (ii) make a general assignment for the benefit of creditors, (ii)
file a petition for relief under the Federal Bankruptcy Code or similar state
law, or (iii) take similar action to commence a proceeding for relief under any
other law relating to the bankruptcy, insolvency, reorganization, or winding up
of itself or the composition or adjustment of its debts;
(b) An action or proceeding shall be commenced, without the
application or consent of Seller, in any court of competent jurisdiction for (i)
the liquidation, reorganization, dissolution, or winding up of Seller of the
composition or adjustment of its debts, (ii) the appointment of a trustee,
receiver, liquidator or custodian of Seller or substantially of all its assets,
or (iii) any similar relief under any law relating to Seller's bankruptcy or
insolvency, provided such proceeding shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continues unstayed for ninety (90) days;
(c) Any representation or warranty made by Seller and
contained in this Agreement shall prove to have been incorrect in any material
respect when made; or
(d) Seller shall fail to (i) timely make any payment required
hereunder, or (ii) comply with any non-payment obligation under this Agreement
and shall fail to cure or remedy such default within thirty (30) days following
notice and written demand by Buyer to cure the same; provided, however, that
Seller's failure to provide and deliver to Buyer the Thermal Energy required
pursuant to this Agreement for any period of three (3) consecutive days, unless
excused due to Force Majeure, shall constitute an immediate Event of Default.
13.2 Buyer Default. Anyone of the following events shall constitute an
"Event of Default" hereunder with respect to Buyer.
(a) In connection with itself or its assets, Buyer shall (i) apply for
or consent to the appointment of or taking of possession by a receiver or
liquidator, (ii) make a general assignment for the benefit of creditors, (ii)
file a petition of relief under the Federal Bankruptcy Code or similar state
law, or (iii) take similar action to commence a proceeding for relief under any
other law relating to the bankruptcy, insolvency,
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reorganization, or winding up of itself or the composition or adjustment of its
debts;
(b) An action or proceeding shall be commenced, without the
application or consent of Buyer, in any court of competent jurisdiction for (i)
the liquidation, reorganization, dissolution, or winding up of the buyer or the
composition or adjustment of its debts, (ii) the appointment of a trustee,
receiver, liquidator or custodian of Buyer or substantially all of its assets,
or (iii) any similar relief under any law relating to Buyer's bankruptcy or
insolvency, provided such proceeding shall continue undismissed or order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed for ninety (90) days;
(c) Any representation or warranty made by Buyer and contained in this
Agreement shall prove to have been incorrect in any material respect when made
by Buyer; or
(d) Buyer shall fail to comply with any provision of this Agreement
and shall fail to cure or remedy such default within thirty (30) days following
notice and written demand by Seller to cure the same.
14. REMEDIES
14.1 Seller's Remedies. Upon an Event of Default by Buyer, Seller may
declare the Buyer to be in material breach of this Agreement and (i) suspend
service until Buyer either cures the default or, in the case of nonpayment,
provides Seller with such assurances and security as Seller may reasonably
request, (ii) terminate this Agreement by written notice to Buyer, or (iii) seek
such other relief to which Seller may be entitled at law or equity.
14.2 Buyer's Remedies. Upon an Event of Default by Seller, Buyer may
(i) to the extent commercially practicable, cure the default by Seller and
obtain reimbursement (through direct cash payment, credit, offset or otherwise
as Buyer may elect) and obtain reimbursement from Seller for all costs and
expenses incurred by Buyer in connection with such cure, (ii) terminate this
Agreement by written notice to Seller, or (iii) seek whatever relief to which
Buyer may be entitled at law or equity.
15. FORCE MAJEURE
15.1 Suspension of Performance. Neither Buyer nor Seller shall be in
default in respect of any obligation under this Agreement if the party is unable
to perform its obligation by reason of an event of Force Majeure, provided (i)
that the suspension of performance shall be commensurate with the nature and
duration of the event of Force Majeure and the non-performing party is using its
best efforts to restore its ability to perform, (ii)
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that for so long as an event of Force Majeure relieves Seller of its obligation
to deliver Thermal Energy to Buyer as required under this Agreement, Buyer may
elect, without being in default of its obligations hereunder, to produce its own
Thermal Energy or to purchase and accept deliveries of Thermal Energy from any
other source.
15.2 Termination by Reason of Force Majeure. Notwithstanding anything
in this Agreement contained to the contrary, if a party's performance is
suspended for more than one (1) year, the other party may terminate this
Agreement upon thirty (30) days written notice to the other, provided (with
respect to an event of Force Majeure by Seller) that upon such termination Buyer
is able to generate its own Thermal Energy or to obtain Thermal Energy from a
third party.
15.3 Force Majeure Defined. Force Majeure shall mean any event that
prevents or delays a party from performing in whole or in part any obligation
arising under this Agreement and neither was within the reasonable control of
the non-performing party nor could have been prevented by reasonable actions
taken by the non-performing party, including, without limitation, an act of God,
explosion, fire, lightening, earthquake, hurricane, storm, civil disturbance,
strike, lock-out, unavailability or fuel or power, order, changes in law, orders
of governmental authorities, and equipment failures that are not due to the
negligence of the non-performing party.
16. TERMINATION
This Agreement shall terminate at the end of the Term and may
otherwise be sooner terminated only: (i) by Buyer upon the occurrence of an
Event of Default by Seller, (ii) by Seller upon the occurrence of an Event of
Default by Buyer, (iii) by either party in accordance with the provisions of
Section 15.2 of this Agreement, or (iv) by Buyer in the event of any increase in
the Thermal Energy Capacity Charges resulting from the imposition of any law or
regulation, whether now existing or hereafter enacted, (including without
limitation any rate regulation by the State of New Jersey Board of Regulatory
Commissions) or the administration or interpretation thereof by any Governmental
Authority.
17. MISCELLANEOUS
17.1 Assignment. Neither Party shall assign this Agreement without
first having obtained the written consent of the other party, provided, however,
that either party may assign its rights and delegate its duties hereunder
without first obtaining the other party's consent to any subsidiary or
affiliated entity controlled by the assigning party, on the condition that the
assignee agrees in writing to assume all of the obligations of the assigning
party hereunder, further provided, however, that either party may assign,
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pledge or mortgage this Agreement as security for the obligations or
indebtedness of such party without the approval of the other party.
17.2 Notice. All notices hereunder shall be sufficient if sent by
registered or certified mail postage prepaid, addressed, if to Seller: Atlantic
Jersey Thermal Systems, Inc., 5100 Harding Highway, Route 40 & 32 Avenue, Mays
Landing, New Jersey 08330, Attention: President; and if to Buyer: Trump Taj
Mahal Associates, 1000 Boardwalk at Virginia Avenue, Atlantic City, New Jersey
08401, Attention: President and Chief Operating Officer, provided that either
Seller or Buyer may by like notice designate any further or different address or
addresses or person to which notices shall be sent.
17.3 Limitation of Liability. Except in the case of willful misconduct
or gross negligence, neither Seller nor Buyer, nor their respective officers,
officials, partners, agents, employees, subsidiaries, parents or affiliates
shall be liable to the other party, or their respective officers, officials,
directors, partners, agents, employees, subsidiaries, parents or affiliates for
claims for incidental, special, direct or consequential damages of any nature,
including lost profits and opportunity costs in connection with or resulting
from performance or non-performance of their respective obligations under or in
connection with this Agreement. Nothing in this Section 17.3, however, shall
limit either party's rights or remedies to recover any direct damages for a
breach of this Agreement.
17.4 Confidentiality. Each of the parties agrees to hold in confidence
any information supplied to it by the other and designated in writing as
confidential unless the recipient is required to disclose the information as a
matter of law, in which case, the recipient shall give the other party prior
written notice.
17.5 Counterparts. This Agreement may be executed in separate and
several counterparts, each of which shall be deemed an original and all of which
shall constitute one and the same instrument.
17.6 Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction and to the
fullest extent permitted by applicable law, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and without affecting the validity or enforceability of any provision in
any other jurisdiction.
17.7 Casino Control Commission Approval. During the Term of this
Agreement, all provisions of the New Jersey Casino Control Act shall be complied
with by Buyer and Seller, and Seller agrees to
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apply for a casino service industry license, if required by the New Jersey
Casino Control Commission. In addition, Seller agrees to file a vendor
registration if it has not already done so.
17.8 Governing Law. This Agreement shall be construed in accordance
with and shall be enforceable under the laws of the State of New Jersey.
17.9 Entire Agreement. The Agreement constitutes the entire agreement
between the Parties with respect to the matters contained herein and all prior
agreements with respect thereto are superseded hereby. No amendment or
modification hereof shall be binding unless duly executed by both Parties.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the date and day first above written.
ATLANTIC JERSEY THERMAL SYSTEMS, INC.
By: /s/ FRANK E. DICOLA
-------------------------
Name: Frank E. DiCola
Title: President
TRUMP TAJ MAHAL ASSOCIATES
By: TRUMP ATLANTIC CITY CORPORATION,
General Partner
By: /s/ BRUCE R. McKEE
--------------------------
Name: Bruce R. McKee
Title:
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