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Exhibit 10.53









FIRST AMENDMENT TO
INDUSTRIAL STEAM SALES CONTRACT







dated as of







December 16, 2003







By and Between







NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP





and





HERCULES INCORPORATED

 

 

FIRST AMENDMENT TO
INDUSTRIAL STEAM SALES CONTRACT



THIS FIRST AMENDMENT TO INDUSTRIAL STEAM SALES CONTRACT
(this " Amendment ") is made as of the 16th day of December 2003, between Hercules Incorporated, a Delaware corporation (" Buyer ") and North Jersey Energy Associates, A Limited Partnership, a New Jersey limited partnership (" Seller "). Buyer and Seller are individually referred to herein as a " Party " and are collectively referred to herein as the " Parties ". Terms used and not otherwise defined in this Amendment shall have the meanings set forth in the Original Agreement (as defined in the first recital below).


W I T N E S S E T H :


WHEREAS , Buyer and Seller entered into an Industrial Steam Sales Contract dated as of June 5, 1989 (the " Original Agreement " and as amended by this Amendment, the " Agreement ") pursuant to which the Seller is obligated to sell and Buyer is obligated to purchase the Steam generated at the Facility;


WHEREAS , Buyer sold a portion of the Buyer's Plant used for the production of nitrocellulose (the " Nitrocellulose Facility ," as defined in the Termination Agreement (defined below)) to Green Tree Chemical Technologies Inc. (" Green Tree ") and entered into a Utilities Agreement pursuant to which Buyer resells a portion of the steam it purchases from Seller to Green Tree;


WHEREAS , Seller is restructuring its power purchase agreement with Jersey Central Power & Light Company (" JCP&L ") and has entered into an Amended and Restated Power Purchase Agreement with JCP&L dated as of May 16, 2003, as amended by that First Amendment to Amended and Restated Power Purchase Agreement dated as of October 21, 2003 (the " Amended and Restated Power Purchase Agreement ") pursuant to which Seller sells the electrical output of the Facility to JCP&L, and in connection therewith, the New Jersey Board of Public Utilities (" NJBPU ") has approved such restructuring transaction (the " Restructuring ");


WHEREAS , in connection with the Restructuring, the Parties entered into a Termination Agreement dated as of October 21, 2003 (the " Original Termination Agreement ") pursuant to which they agreed to terminate the Original Agreement in consideration for which Seller agreed to pay to Buyer, for the purposes of promoting the continuation of employment at the Hercules Facility and Nitrocellulose Facility and to mitigate the increased cost of steam due to the Restructuring, Monthly Employment Incentive Payments (as defined in the Termination Agreement) per month, which will be funded in part by Seller and in part, indirectly, by JCP&L; and


WHEREAS , the Parties wish to amend the Original Agreement to accommodate the parties' operations notwithstanding the Restructuring and, contemporaneously herewith, have amended the Original Termination Agreement (as so amended, the " Termination Agreement ") to permit Seller the right to terminate the Agreement as provided in the Termination Agreement;


WHEREAS , in light of the foregoing, Buyer and Seller desire to amend the Original Agreement as described herein.


NOW, THEREFORE , in consideration of the premises and of the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:


1. Definitions .


The following new definition shall be added, in alphabetical order, to Article II (Definitions):


"Amended PPA Effective Date" means the "Effective Date" under and as defined in that Amended and Restated Power Purchase Agreement, as amended by a First Amendment thereto dated as of October 21, 2003 and a Second Amendment thereto to be dated on or about December 23, 2003 (together, the "Amendments") which together obligate JCP&L to fund a portion of the damages that may be payable hereunder during the Interim Period, which Amendments shall be substantially in the forms attached hereto as Appendix 2 and Appendix 3 respectively, with any such changes to which Seller may agree so long as such changes do not affect Buyer.


"Base Damage Payment" has the meaning set forth in Paragraph 2 of Article VI.


"Cessation of Operations" shall be deemed to have occurred at either the Hercules Facility or the Nitrocellulose Facility on the 30th consecutive calendar day on which (i) the number of full-time employees (A) at the Hercules' Facility, falls below forty (40) or (B) at the Nitrocellulose Facility, falls below one hundred (100) during calendar years 2004 and 2005, ninety (90) during calendar year 2006, or eighty (80) during calendar year 2007 or any year thereafter (if applicable) or (ii) there has been a cessation of substantially all of the manufacturing and production operations at either such Facility.


"Cure Period" has the meaning set forth in Paragraph 4(b) of Article VI hereof.


"First Tier Reduction" has the meaning set forth in Paragraph 4(a)(i) of Article VI hereof.


"Green Tree" means Green Tree Chemical Technologies Inc., the entity which, as of the date hereof, owns the Nitrocellulose Facilities.


"Hercules Facility" means the Buyer's Plant, except for the Nitrocellulose Facility.


"Interim Period" means the date on or about December 18, 2003, as designated by Seller in its sole discretion in a written notice to Hercules (the "Notice Date"), through the earlier to occur of the Restructuring Effective Date (as defined in the Termination Agreement) and the date that is forty-eight (48) months after the Notice Date.


"Interim Period Force Majeure" means circumstances beyond the control of the party concerned and resulting in or causing a failure or substantial interference in the operation of the Hercules Facility or the Nitrocellulose Facility, as the case may be, which circumstances cannot be overcome by the exercise of due diligence by the party concerned. Subject to the foregoing, such circumstances may include riots, wars (declared or undeclared), insurrections, sabotage, rebellions, terrorist acts, civil disturbances, acts of God, explosions, fires, major equipment failures beyond the control of the party affected, and interruptions beyond the control of the party affected of fuel supply, power, water, utilities, wastewater disposal, feedstock, or product distribution; provided, however, that (a) any lack of money, (b) changes in market conditions, or (c) strikes, lockouts or other labor difficulties involving personnel of Buyer (or its Affiliates or successors or assigns) or Green Tree (or its Affiliates or successors or assigns) shall not constitute Interim Period Force Majeure.


"Interim Period Outage" means an outage at the Facility for at least fifteen (15) continuous minutes, which results in a curtailment of Equivalent Steam at least 10% below the lesser of (i) the Designated Steam Requirement and (ii) the quantity of Equivalent Steam purchased by Buyer in the last Clock Hour prior to such outage.


"Monthly Certificate" has the meaning set forth in Paragraph 4(d) of Article VI hereof.


"Monthly Damage Payment" has the meaning set forth in Paragraph 2 of Article VI.


"Nitrocellulose Facility" has the meaning set forth in the recitals..


"Required Levels" has the meaning set forth in Paragraph 4(b) of Article VI hereof.


"Second Tier Reduction" has the meaning set forth in Paragraph 4(a)(ii) of Article VI hereof.


2. Amendments to Article III (Scope and Quantity of Steam ) .


There shall be inserted at the beginning of the first sentence of Paragraph 2 of Article III, the words "Except during the Interim Period," and at the end of such sentence, the following proviso:


; provided, further, that during the Interim Period, Buyer acknowledges that one or both of the gas turbines may not be fully operational and in light of such fact, Seller's obligation hereunder during the Interim Period shall be to deliver Steam to Buyer whenever the Facility is, or the Buyer reasonably projects that the Facility will be, operating at baseload conditions for at least 144 consecutive hours.


3. Amendments to Article VI (Defaults; Remedies) and Article XVIII (Liability Limitations) .


(a) Paragraph 2 of Article VI is hereby amended and restated in its entirety to read as follows:


2. Any of the following events shall constitute a default by Seller hereunder: (i) fraudulent use by Seller of any meters provided hereunder; (ii)  except during the Interim Period , at any time (A) twelve months after the Commencement Date (as such term is defined in the Amended and Restated Operation and Maintenance Agreement to be entered into by and between Seller and Westinghouse Electric Corporation, a Delaware corporation) if the First Delivery Date shall have occurred on or prior to the Commencement Date or (B) twenty-four months after the Commencement Date if the First Delivery Date shall have occurred after the Commencement Date, but in any event not more than twenty-four months after the First Delivery Date in the case of either clause (A) or (B) above, any failure of Seller to deliver, on an annual average basis, with each such annual period commencing on the immediately preceding anniversary of the Commencement Date eighty-five percent (85%) of the total Steam used by Buyer at Buyer's Plant up to a maximum of the Designated Steam Requirement; or (iii)  except during the Interim Period , in any full calendar year after the First Delivery Date, any Total Forced Outages in excess of five (5) per year or any Partial Forced Outages in excess of fifteen (15) per year. As regards clause 2(i) above, in the event of such default, B


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