EXHIBIT 10.23
=====================================================================
CONSENT AND AGREEMENT
(Interruptible Gas Transportation Agreement,
Firm Gas Transportation Agreement,
Hot Tap Reimbursement Agreement
and Letter of Credit Drawing Agreement)
Dated as of December 6, 1999
by
Tennessee Gas Pipeline Company,
a Delaware corporation
=====================================================================
CONSENT AND AGREEMENT
(Interruptible Gas Transportation Agreement,
Firm Gas Transportation Agreement,
Hot Tap Reimbursement Agreement
and Letter of Credit Drawing Agreement)
1. Tennessee Gas Pipeline Company, a Delaware corporation (the
"Undersigned") has been informed that pursuant to the Security Agreement dated
as of December 6, 1999 ("Security Agreement"), between Project Orange
Associates, L.P., a Delaware limited partnership ("Borrower"), and U.S. Bank
Trust National Association ("Agent"), as agent for the benefit of the Secured
Parties to that certain Indenture ("Financing Agreement") dated as of December
6, 1999, between U.S. Bank Trust National Association, as Trustee for the
benefit of the holder's of the Borrower's 10.5% Senior Secured Notes due 2007
(the "Holders") and, together with Trustee, the "Secured Parties") has assigned
its interest under (i) that certain Gas Transportation Agreement between the
Undersigned and Borrower dated as of November 11, 1999 relating to interruptible
gas transportation services (the "Interruptible Gas Transportation Contract");
(ii) that certain Firm Natural Gas Transportation Agreement between the Borrower
and the Undersigned, dated March 29, 1991 (the "Firm Gas Transportation
Contract"); (iii) that certain Letter of Credit Drawing Agreement dated as of
March 29, 1991 between the Undersigned and Borrower, as amended by that certain
Amendment No. 1 to Letter of Credit Drawing Agreement dated as of June 26, 1992
(the "Letter of Credit Drawing Agreement"); and (iv) that certain agreement
relating to installation of a Hot Tap, Measurement and DAC (the "Reimbursement
Agreement") between G.A.S. Orange Development, Inc., a New York corporation
("Development") and the Undersigned dated May 25, 1988, as amended by that
certain amendatory letter dated August 11, 1988, and as assigned to Borrower
pursuant to an Assignment and Assumption Agreement between Development and
Borrower dated November 30, 1990 (collectively referred to as the "Contracts")
to Agent for the benefit of the Secured Parties. The Undersigned consents to
such assignment (including the assignments, described in the respective
descriptions of the Contracts above) and agrees with the Agent for the benefit
of the Secured Parties 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 Agent shall be entitled to
exercise all rights and to cure any defaults of the Borrower under the
Contracts in the manner and within the times allowed to Borrower under the
Contracts. Upon receipt of notice from Agent, the Undersigned agrees to
accept such exercise and cure by Agent and to render all performance due by
it under the Contracts and this Consent and Agreement to Agent. The
Undersigned agrees to make all payments (if any) to
-1-
be made by it under the Contracts directly to Agent upon receipt of Agent's
written instructions. Borrower agrees to the foregoing provisions of this
paragraph 1(b) and agrees that the Undersigned shall under no circumstances
incur liability to Borrower as a result of honoring notices and accepting
cure from, and rendering performance under the Contracts to, the Agent.
(c) The Undersigned will not, without using reasonable efforts to
obtain the prior written consent of Agent (such consent not to be
unreasonably withheld) (i) cancel or terminate any of the Contracts except
as provided in the Contracts and, if such cancellation or termination will
result in breach or default thereof by Borrower, in accordance with
paragraph 1(d) hereof, or consent to or accept any cancellation or
termination thereof by Borrower, (ii) sell, assign or otherwise dispose (by
operation of law or otherwise) of any part of its interest in the Contracts
except as provided in the Contracts and unless the purchaser or assignee of
the Contracts agrees to be bound by the terms hereof or (iii) amend or
modify the Contracts in any material respect; provided, however, that (A)
nothing in this Consent and Agreement shall prevent the Undersigned from
proposing or making any modification or amendment to the Undersigned's gas
tariff or the rates or charges payable to the Undersigned pursuant to such
tariff and (B) nothing in this Consent and Agreement shall prevent the
Undersigned from making any modification or amendment of the Contracts
necessary, in the Undersigned's good faith judgment, to conform with the
requirements of any governmental or regulatory authority having
jurisdiction.
The Undersigned will use reasonable efforts to deliver duplicates
or copies of all notices of default or breach delivered under or pursuant
to the Contracts to Agent promptly upon receipt thereof and will use
reasonable efforts to advise Agent of any material amendments to the
Contracts. Failure or delay by the Undersigned to deliver any such notice
to Agent shall not constitute a waiver of any breach or default by Borrower
under the Contracts, provided that this sentence shall not affect the
operation of paragraph 1(d) hereof.
(d) The Undersigned will not terminate any of the Contracts on
account of any default or breach of Borrower thereunder without first
providing to Agent (i) thirty (30) days from the date 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
such Contracts or (ii) a reasonable opportunity, but not fewer than ninety
(90) days, to cure such breach or default if the breach or default cannot
be cured by the payment of money to the Undersigned so long as Agent or its
designee shall have commenced to cure the breach or default within such 90
day period and thereafter diligently pursues such cure to completion and
continues to perform any monetary obligations under the Contracts and all
other
-2-
obligations under the Contracts are performed by Borrower or Agent. If
possession of the Project is necessary to cure such non-monetary breach of
default, and Agent declares Borrower in default and commences foreclosure
proceedings, Agent will be allowed a reasonable period to complete such
proceedings. If 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 by the period of such prohibition. The Undersigned consents to the
transfer of Borrower's interest under the Contracts 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 upon receipt of written notice
recognize the Agent or other purchase or grantee as the applicable party
under the Contracts.
(e) In the event that any of the Contracts is terminated by virtue
of being rejected by a trustee or debtor-in-possession in any bankruptcy or
insolvency proceeding and if, within 45 days after such termination, the
Agent or its successors or assigns shall so request, the Undersigned will
execute and deliver to the Agent new contracts, which Contracts shall be on
the same terms and conditions as the original Contracts for the remaining
term of the Contracts before giving effect to such termination; provided,
however, that if any regulatory approvals are required for the Undersigned
to enter into or perform under any such new Contract, the effectiveness of
such new Contract shall be subject to such regulatory approvals to the
extent required by law, and the Undersigned agrees to diligently pursue
such regulatory approvals in good faith and to use its best efforts to
obtain such approvals in good faith and to use its best efforts to obtain
such approvals as rapidly as possible.
(f) In the event Agent or its designee or assignee elect to
perform Borrower's obligations under the Contracts or to enter into new
contracts as provided in paragraph 1(d) or 1(e) respectively above, 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 the enforcement of such
obligations shall be to such parties' interest in the Project; provided,
however, that any successors to Borrower's interest under the Contracts, or
any new Contracts entered into pursuant to paragraph 1(e) hereof, agree
that the obligation to provide security under the Letter of Credit Drawing
Agreement shall remain in full force and effect. In the event Agent
succeeds to Borrower's interest under the Contracts, or performs any of
Borrower's obligations under the Contracts, Agent shall cure any defaults
for failure to pay amounts owed under the Contracts, but shall not
otherwise be required to perform any of Borrower's other obligations under
the Contracts that were unperformed at such
-3-
time. Agent shall have the right to assign all or part of its interest in
the Contracts or new contracts entered into pursuant to paragraph 1(e) to a
person or entity to whom the Project is transferred, provided such
transferee assumes the obligations of Borrower (or Agent) under the
Contracts (including the obligation to provide security under the Letter of
Credit Drawing Agreement) and has a financial capability at least
equivalent to that of Borrower on the date hereof. Upon such assignment,
the Secured Parties (including their agents, employees and contractors)
shall be released from any further liability thereunder to the extent of
the interest assigned.
(g) The Undersigned agrees that the defined term "Security and
Collection Agreement" contained in the Contracts shall be deemed to mean
the Letter of Credit Drawing Agreement.
2. The Undersigned hereby represents and warrants that, assuming the due
authorization, execution and delivery of the Contracts and this Consent and
Agreement by the other parties thereto, (a) the execution and delivery by the
Undersigned of the Contracts and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of the Undersigned, and
do not and will not require any further consents or approvals on the part of the
Undersigned which have not been obtained, the performance by the Undersigned of
the Contracts and this Consent and Agreement has been duly authorized by all
necessary corporate action and does not, as of the date hereof, require any
consents or approvals on the part of the Undersigned which have not been
obtained and such execution, delivery and performance do not 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 Contracts are
legal, valid and binding obligations of the Undersigned enforceable against the
Undersigned except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or other similar
laws, and subject to general equitable principles, (c) all government approvals
necessary as of the date hereof for the execution, delivery and performance by
the Undersigned of its obligations under the Contracts have been obtained and
are in full force and effect 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, (d) as of the date hereof, the Contracts are in
full force and effect as against the Undersigned and have not been amended,
supplemented or modified, and (e) to the best of the Undersigned's knowledge
Borrower has fulfilled all of its obligations under the Contracts, and to the
best of the Undersigned's knowledge there are no breaches or unsatisfied
conditions presently existing (or which would exist after the passage of time
and/or giving of notice) under the Contracts.
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
-4-
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:
For the Reimbursement Agreement and this Consent and Agreement:
Tennessee Gas Pipeline Company
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Facility Contracts
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
For the Interruptible Gas Transportation Contract, the Firm Gas
Transportation Contract and the Letter of Credit Drawing Agreement:
Tennessee Gas Pipeline Company
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: Transportation Services
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
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, Borrower, Agent, the Secured Parties,
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, Agent and
Borrower. Each and every provision of this Consent and Agreement is entirely
subject to any governmental approvals which may be required in connection
herewith; provided, however, that no signatory is aware that any such approval
required as of the date
-5-
hereof has not been obtained. This Consent and Agreement shall be governed by
the laws of the State of New York.
-6-
IN WITNESS WHEREOF, the Undersigned by its officer hereunto duly authorized, has
duly executed this Consent and Agreement as of the date set forth below.
Dated: November 18, 1999
TENNESSEE GAS PIPELINE COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Agent and Attorney-in-Fact
Accepted:
U.S. BANK TRUST NATIONAL ASSOCIATION,
for itself and as Agent for the benefit
of the Secured Parties
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name:
Title:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
_______________________________
Name:
Title:
PROJECT ORANGE ASSOCIATES, L.P.,
a Delaware limited partnership
By: G.A.S. ORANGE ASSOCIATES, LLC
a Delaware limited liability company,
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
___________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
-7-