________________________________________________________________________________
EXHIBIT 10.25
CONSENT AND AGREEMENT
(Asset Management Agreement)
Dated as of December 6, 1999
by
NIAGARA MOHAWK ENERGY MARKETING, INC.
________________________________________________________________________________
CONSENT AND AGREEMENT
(Asset Management Agreement)
1. NIAGARA MOHAWK ENERGY MARKETING, INC., a Delaware corporation (the
"Undersigned") hereby acknowledges that pursuant to the Security Agreement dated
as of December 6, 1999 ("Security Agreement"), between Project Orange
Associates, L.P., a Delaware limited partnership (the "Borrower"), and U.S. Bank
Trust National Association, as collateral agent ("Agent") for the benefit of the
Secured Parties, and that Indenture dated as of December 6, 1999 (the "Financing
Agreement"), between Borrower and U.S. Bank Trust National Association, as
Trustee (the "Trustee") on behalf of and for the benefit of the holders of the
Borrower's 10.5% Senior Secured Notes due 2007 (the "Holders" and, together with
the Trustee, the "Secured Parties"), Borrower has assigned its interest under
that certain Asset Management Letter Agreement, dated as of December 6, 1999
(the "Contract"), between the Undersigned and Borrower, to the Agent for the
benefit of the Secured Parties. The Undersigned consents to such assignment and
agrees with the Agent as follows:
(a) Unless otherwise defined, all terms used herein which are defined
in the Security Agreement or, if not defined therein, in the Financing
Agreement, shall have their respective meanings as defined therein.
(b) The Undersigned agrees that the Agent shall be entitled to
exercise all rights and to cure any defaults of the Borrower under the
Contract. Upon receipt of notice from the Agent, the Undersigned agrees to
accept such exercise and cure by the Agent and to render all performance
due by it under the Contract and this Consent and Agreement to the Agent.
The Undersigned agrees to make all payments (if any) to be made by it under
the Contract directly to Agent upon receipt of Agent's written
instructions.
(c) The Undersigned will not, without the prior written consent of the
Agent (such consent not to be unreasonably withheld), (i) cancel or
terminate the Contract except as provided in the Contract and, with respect
to any termination on account of any default or breach by Borrower, in
accordance with paragraph l(d) hereof, or consent to or accept any
cancellation or termination thereof by the Borrower, (ii) sell, assign
(except as authorized under the Contract with respect to assignments of the
Contract to an affiliate of the Undersigned or payments to a third party
agent for financing collateral purposes) or otherwise dispose (by operation
of law or otherwise) of any part of its interest in the Contract, or (iii)
amend or modify the Contract in any material respect. The Undersigned will
deliver duplicates or copies of all notices delivered under or pursuant to
the Contract to the Agent promptly upon receipt thereof and will advise the
Agent of any material amendments to the Contract.
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(d) The Undersigned will not terminate the Contract on account of any
default or breach of Borrower thereunder without written notice to the
Agent and first providing to the Agent (i) forty-five (45) days from the
date on which notice of default or breach is delivered to Agent to cure
such default if such default is the failure to pay amounts to the
Undersigned which are due and payable under the Contract or (ii) a
reasonable time as is necessary to cure such default if the breach or
default cannot be cured by the payment of money to the Undersigned so long
as they have commenced to cure the default within a ninety (90) day period
from the date on which notice of default or breach is delivered to Agent
and either Borrower or Agent thereafter diligently pursues such cure to
completion and continues to perform any monetary obligations under the
Contract and all other obligations under the Contract are performed by the
Borrower or the Agent. If possession of the Project is necessary to cure
such breach or default, and the Agent declares Borrower in default and
commences foreclosure proceedings, the Agent will be allowed a reasonable
period to complete such proceedings. If the Agent is prohibited by any
court order or bankruptcy or insolvency proceedings from curing the default
or from commencing or prosecuting foreclosure proceedings, the foregoing
time periods shall be extended until such prohibition is removed and Agent
is permitted to cure the default or foreclosure, but in no event for longer
than one hundred and twenty (120) days. The Undersigned consents to the
transfer of Borrower's interest under the Contract to the Agent, for the
benefit of the Secured Parties, or a purchaser or grantee at a foreclosure
sale by judicial or nonjudicial foreclosure and sale or by a conveyance by
Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale
or conveyance, the Undersigned shall recognize the Agent or any other
purchaser or grantee as the applicable party under the Contract so long as
there are no uncured defaults.
(e) In the event that the Contract is rejected by a trustee or debtor-
in-possession in any bankruptcy or insolvency proceeding, or if the
Contract is terminated for any reason other than a default which could have
been but was not cured by the Agent as provided in paragraph l(d) above,
and if, within forty-five (45) days after such termination, the Agent or
its successors or assigns shall so request, the Undersigned will execute
and deliver to the Agent a new Contract, which Contract shall be on the
same terms and conditions as the original Contract for the remaining term
of the Contract before giving effect to such termination and shall only
take effect once properly authorized by the trustee in bankruptcy or
debtor-in-possession.
(f) In the event Agent or its designee or assignee elect to perform
Borrower's obligations under the Contract or to enter into a new Contract
as provided in subparagraph (d) or (e) respectively above, the Agent, the
Secured Parties, their designees and assignees, shall not have personal
liability to the Undersigned for the performance of such obligations, and
the sole recourse of the Undersigned in seeking
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the enforcement of such obligations shall be to such parties' interest in
the Project. In the event Agent succeeds to the Borrower's interest under
the Contract, or performs any of Borrower's obligations under the Contract,
Agent shall cure any defaults for failure to pay amounts owed under the
Contract within the time periods specified in paragraph 1(d), but shall not
otherwise be required to perform (or be subject to any defenses or offsets
by reason of) any of the Borrower's other obligations under the Contract
that were unperformed at such time. Agent shall have the right to assign
all or part of its interest in the Contract or a new Contract entered into
pursuant to subparagraph (e) to a person or entity to whom the Project is
transferred, provided such transferee assumes the obligations of the
Borrower (or the Agent) under the Contract and has a financial capability
at least equivalent to that of Borrower on the date hereof. Upon such
assignment, the Agent (including its agents, employees and contractors)
shall be released from any further liability thereunder to the extent of
the interest assigned.
(g) The Undersigned hereby acknowledges and agrees that its rights to
receive payment of the fees, expenses and other amounts under the Contract
are subordinate in right of payment to the rights of the Secured Parties
under the Financing Agreement and that payments of such fees and expenses
shall be made from time to time (but no more frequently than monthly)
solely out of, and shall be due and payable only to the extent of, proceeds
held in the Subordinated Asset Management Fee Account of Borrower created
under Section 2.02 of the Depositary Agreement, to the extent such proceeds
are available after the application of project revenues to waterfall items
(1) through (6) (Capital Expenditure Reserve Account) under Section 3.01(c)
of the Depositary Agreement; provided that the Undersigned shall receive
written notice of any modifications or additions to such waterfall
provisions.
2. The Undersigned hereby represents and warrants that (a) the execution,
delivery and performance by the Undersigned of the Contract and this Consent and
Agreement have been duly authorized by all necessary corporate action, and do
not and will not require any further consents or approvals which have not been
obtained, or violate any provision of any law, regulation, order, judgment,
injunction or similar matters or materially breach any agreement presently in
effect with respect to or binding on the Undersigned; (b) this Consent and
Agreement and the Contract are legal, valid and binding obligations of the
Undersigned enforceable against the Undersigned; (c) all government approvals
necessary for the execution, delivery and performance by the Undersigned of its
obligations under the Contract have been obtained and are in full force and
effect; (d) as of the date hereof, the Contract is in full force and effect, has
not been amended, supplemented or modified and the Undersigned has no reason to
expect that any necessary governmental approvals required in the future may not
be obtained without undue delay or expense; and (e) to the best of the
Undersigned's knowledge Borrower has fulfilled all of its obligations under the
Contract, and there are no breaches or
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unsatisfied conditions presently existing (or which would exist after the
passage of time and/or giving of notice) under the Contract.
3. All Notices required or permitted hereunder shall be in writing and
shall be effective (i) upon receipt if hand delivered, (ii) when the appropriate
answer back is received if sent by telex and (iii) if otherwise delivered, upon
the earlier of receipt or two (2) Business Days after being sent registered or
certified mail, return receipt requested, with proper postage affixed thereto,
or by private courier or delivery service with charges prepaid, and addressed as
specified below:
If to the Undersigned:
Niagara Mohawk Energy Marketing, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President, Business Development
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent:
U.S. Bank Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
4. This Consent and Agreement shall be binding upon and benefit the
successors and assigns of the Undersigned, the Borrower, the Agent, and their
respective successors, transferees and assigns. No termination, amendment,
variation or waiver of any provisions of this Consent and Agreement shall be
effective unless in writing and signed by the Undersigned, the Agent and the
Borrower. This Consent and Agreement shall be governed by the laws of the State
of New York.
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IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent and Agreement as of the date set
forth below.
Dated: December 6, 1999
NIAGARA MOHAWK ENERGY MARKETING, INC.,
a New York corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Accepted:
U.S. BANK TRUST NATIONAL ASSOCIATION,
for itself and as Agent for the benefit of
the Secured Parties
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________________
Name:
Title:
PROJECT ORANGE ASSOCIATES, L.P.,
a Delaware limited partnership
By: G.A.S. ORANGE ASSOCIATES, L.L.C.
a Delaware limited liability company
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
________________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
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