EXHIBIT 10.24
CONSENT AND AGREEMENT
TransCanada PipeLines Limited ("TransCanada"), a corporation organized
under the laws of Canada, hereby consents upon the terms and conditions
herein set forth to the collateral assignment of the Assigned Agreement (as
defined below) by Canadian Hunter Exploration Ltd. ("Canadian Hunter"), an
Alberta corporation, to Project Orange Associates, L.P. ("Project Orange"),
a Delaware limited partnership pursuant to that certain Collateral
Assignment of the Firm Service Agreement dated as of April 5, 1991 between
Canadian Hunter and Project Orange ("Collateral Assignment").
TransCanada hereby consents upon the terms and conditions herein set
forth to the assignment of the Assigned Agreement (as defined below) by
Project Orange to U.S. Bank Trust National Association, as collateral agent
("Agent") pursuant to that certain Security Agreement dated as of December
6, 1999 between Agent and Project Orange (the "Security Agreement").
For purposes of this Consent and Agreement, the term "Assigned
Agreement" shall mean the Firm Service Contract entered into by TransCanada
and Canadian Hunter made as of October 11, 1990, as such Firm Service
Contract may be amended or supplemented from time to time.
Canadian Hunter, Project Orange, Agent and TransCanada agree as
follows:
1. (a) Project Orange or Agent, as the case may be, may at its election,
upon (i) satisfying TransCanada's financial assurance requirements; (ii)
supplying TransCanada with all information reasonably requested by
TransCanada pertaining to gas supply and upstream and downstream
transportation arrangements and TransCanada being satisfied with such
information; (iii) providing TransCanada with evidence that Project Orange
or the Agent, as the case may be, has obtained such certificates, permits,
orders, licenses and authorizations from regulators or other governmental
agencies in the United States of America or Canada, as the case may be, as
are necessary to enable Project Orange or the Agent, as the case may be, to
remove from the province of production and deliver to TransCanada at the
Receipt Point(s) (as defined in the Assigned Agreement) and to receive from
TransCanada, export from Canada, import and deliver into the United States
of America at the Delivery Point(s) (as defined in the Assigned Agreement)
the quantities of gas to be transported by TransCanada under the Assigned
Agreement; and (iv) prior written notice to TransCanada and Canadian
Hunter:
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(i) given at any time after the termination of the Restated Gas
Sale and Purchase Agreement dated as of March 18, 1991 (the
"Restated Gas Sale and Purchase Agreement"), by and between
Project Orange and Canadian Hunter (as successor by assignment
to Noranda Inc.), by Project Orange pursuant to Section 12.1 of
the Restated Gas Sale and Purchase Agreement, exercise any and
all rights of Canadian Hunter under the Assigned Agreement in
accordance with the terms of the Assigned Agreement to the same
extent as if Project Orange or Agent were a party to the
Assigned Agreement in the place of Canadian Hunter, or assign
any and all of Canadian Hunter's rights under the Assigned
Agreement to any person or entity to whom Project Orange or
Agent is authorized to assign the rights and obligations of
Canadian Hunter under the Assigned Agreement pursuant to
Section 1(f) hereof (such person or entity, a "Permitted
Assignee"), whereupon the Permitted Assignee shall be entitled
to exercise any and all rights of Canadian Hunter under the
Assigned Agreement in accordance with the terms of the Assigned
Agreement; or
(ii) given at any time after the occurrence of a default by Canadian
Hunter under the Restated Gas Sale and Purchase Agreement such
that Project Orange has the right to obtain and is obtaining
Substitute Supplies (as defined in the Restated Gas Sale and
Purchase Agreement), at Project Orange's or Agent's election,
exercise any and all rights of Canadian Hunter under the
Assigned Agreement in accordance with the terms of the Assigned
Agreement, to the same extent as if Project Orange or Agent, as
the case may be, were a party to the Assigned Agreement in the
place of Canadian Hunter, for so long as Project Orange is
obtaining Substitute Supplies in respect of the particular
default (provided that such notice may be given only during the
continuance of such default unless the termination of the
Restated Gas Sale and Purchase Agreement as contemplated in
clause (i) has occurred);
provided, however, that TransCanada does not waive any rights it may have
pursuant to the Assigned Agreement, and provided further that any
assignment of rights under the Assigned Agreement to anyone other than
Project Orange or Agent, or any reassignment by any assignee of Project
Orange or Agent, shall be subject to the provisions of Section 1(f) hereof.
Canadian Hunter agrees with TransCanada that TransCanada is authorized to
act in accordance with the exercise by Project Orange, Agent or any
Permitted Assignee of Canadian Hunter's rights in accordance with this
Section 1(a) and that TransCanada shall bear no liability to Canadian
Hunter in connection therewith, provided however, that nothing contained in
this sentence will affect any claim which Canadian Hunter, Project Orange,
Agent or any such Permitted Assignee may have against any other such
Person.
(b) Canadian Hunter, Project Orange and Agent agree that the
conditions under which Project Orange or Agent may exercise the rights or
make an assignment as
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described in Section 1(a) hereof are subject to further restrictions
contained in Section 3 of the Collateral Assignment. Such restrictions
shall not in any manner be binding upon TransCanada, nor shall TransCanada
be required to inquire whether such restrictions have been complied with.
(c) Any notice to TransCanada from Agent (or an assignee of Agent)
shall be given priority by TransCanada over any notice from Project Orange
(or an assignee of Project Orange), notwithstanding the time of giving
notice. Project Orange (or an assignee of Project Orange) may exercise
Canadian Hunter's rights in accordance with Section 1(a) hereof provided
that and only for such period of time as TransCanada has not received
notice that Agent intends to exercise Canadian Hunter's rights in
accordance with such Section l(a). In the event TransCanada receives
notices from both Project Orange (or an assignee of Project Orange) and
Agent (or an assignee of Agent) the parties hereto agree that TransCanada
shall give priority to and act in accordance with the notice from Agent (or
any assignee of Agent) and shall bear no liability to Agent (or any
assignee of Agent) or to Project Orange (or any assignee of Project Orange)
in connection therewith.
(d) TransCanada may in good faith rely conclusively on any notice
received from Project Orange or Agent pursuant to Section 1(a) hereof,
without inquiring as to the circumstantial basis for such notice.
(e) In the event that Project Orange or Agent exercises or succeeds
to any or all of Canadian Hunter's rights and interests under the Assigned
Agreement, whether by foreclosure or otherwise, Project Orange or Agent, as
the case may be, shall assume liability for all of Canadian Hunter's
obligations under the Assigned Agreement, including without limitation,
payment of all amounts due and owing to TransCanada under the Assigned
Agreement, whether such amounts shall have accrued before or after the date
of succession, and for the performance of the representations, warranties
and conditions of Canadian Hunter under the Assigned Agreement from and
after the date of succession. Unless and until Project Orange or Agent
notifies TransCanada pursuant to Section 1(a) that it is exercising or
succeeding to any or all of the rights of Canadian Hunter under the
Assigned Agreement, neither Project Orange nor Agent shall have any
obligations or liabilities whatsoever to TransCanada under or in connection
with the Assigned Agreement and TransCanada shall have no obligation or
liability to Project Orange or Agent other than each such party's
obligation to comply with the terms of this Consent and Agreement. Nothing
in this Section 1(e) is intended to or shall: (i) limit the right of
TransCanada to proceed against Canadian Hunter for recovery in respect of
any default or unperformed obligations under the Assigned Agreement
accruing or arising in respect of any period prior to the effective date of
such exercise or succession; or (ii) diminish any liability or obligation
of Canadian Hunter to Project Orange or Agent
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(including but not limited to any obligation to indemnify Project Orange or
Agent) under the Collateral Assignment; provided, however, that such
liability or obligation of Canadian Hunter to Project Orange or Agent shall
not affect the rights of TransCanada with respect to Project Orange or
Agent arising under this Consent and Agreement and the Assigned Agreement.
(f) Upon the exercise by Project Orange or Agent, as the case may
be, of any of the remedies which it is entitled to exercise after a default
by Canadian Hunter under the Restated Gas Sale and Purchase Agreement and
during the continuance thereof, Project Orange or Agent, as the case may
be, may assign the rights and interests of Canadian Hunter under the
Assigned Agreement to any person or entity if such person or entity shall
assume all of the obligations of Canadian Hunter under the Assigned
Agreement including, without limitation, payment of all amounts due and
owing to TransCanada under the Assigned Agreement, whether such amounts
shall have accrued before or after the date of assignment, and for the
performance of the covenants and agreements of Canadian Hunter under the
Assigned Agreement from and after the date of assignment; provided that any
such assignment shall be subject to: (i) the prior written consent of
TransCanada, which consent shall not be unreasonably withheld or delayed if
TransCanada reasonably determines that the assignee satisfies the
requirements of TransCanada's Gas Tariff and TransCanada's financial
assurance requirements (which financial assurance requirements may exceed
those set forth in TransCanada's Gas Tariff); and (ii) the assignee's prior
execution and delivery to TransCanada of an assumption agreement
substantially in the form attached hereto as Exhibit A, and, provided
further, that TransCanada does not waive any rights it may have pursuant to
the Assigned Agreement. Upon such assignment, assumption and consent by
TransCanada, Canadian Hunter, Project Orange or Agent, as the case may be,
shall be relieved of all obligations, if any, which it may have under or
with respect to the Assigned Agreement arising after such assignment and
assumption.
(g) Upon receipt by TransCanada of a notice from a person who is an
assignee of the Assigned Agreement pursuant to Section l(f) above that such
person requests that Canadian Hunter succeed to such person's rights and
obligations under the Assigned Agreement (which notice shall be based on
the circumstances described in Section 4 of the Collateral Assignment, as
to which circumstances TransCanada shall in no manner be required to
inquire), such person may assign the rights and interests under the
Assigned Agreement to Canadian Hunter if Canadian Hunter shall assume all
of the obligations of such person under the Assigned Agreement including,
without limitation, payment of all amounts due and owing to TransCanada
under the Assigned Agreement, whether such amounts shall have accrued
before or after the date of assignment, and for the performance of the
covenants and agreements of such person under the Assigned Agreement from
and after the date of assignment; provided that any such assignment
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shall be subject to: (i) the prior written consent of TransCanada, which
consent shall not be unreasonably withheld or delayed if TransCanada
reasonably determines that Canadian Hunter satisfies the requirements of
TransCanada's Gas Tariff and TransCanada's financial assurance requirements
(which financial assurance requirements may exceed those set forth in
TransCanada's Gas Tariff); and (ii) Canadian Hunter's prior execution and
delivery to TransCanada of an assumption agreement substantially in the
form attached hereto as Exhibit A, and, provided, further, that TransCanada
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does not waive any rights it may have pursuant to the Assigned Agreement.
Upon such assignment, assumption and consent by TransCanada, such person
shall be relieved of all obligations, if any, which it may have under or
with respect to the Assigned Agreement arising after such assignment and
assumption.
(h) References in the Assigned Agreement to the defined term
"Consent and Agreement" shall be deemed to refer to this Consent and
Agreement.
2. (a) TransCanada acknowledges that Canadian Hunter has agreed with
Project Orange that Canadian Hunter will obtain the consent of Project
Orange for any amendment to the Assigned Agreement (which consent will not
be unreasonably withheld) and further acknowledges that Project Orange has
agreed pursuant to the Financing Agreement (as defined in the Security
Agreement) that Project Orange will obtain the consent of the Trustee (as
defined in the Security Agreement) for certain amendments to the Assigned
Agreement, provided that: (i) it shall be Canadian Hunter's responsibility
to ensure compliance with its agreement with Project Orange (and
TransCanada shall not be required to inquire whether Canadian Hunter has
fulfilled this responsibility); (ii) it shall be Project Orange's
responsibility to ensure compliance with its agreement with Agent (and
TransCanada shall not be required to inquire whether Project Orange has
fulfilled this responsibility); (iii) neither agreement shall prevent
TransCanada from proposing or making any modification or amendment to
TransCanada's Gas Tariff; and (iv) neither agreement shall prevent
TransCanada from making any modification or amendment of the Assigned
Agreement necessary, in TransCanada's good faith judgment, to conform with
the requirements of any governmental or regulatory authority having
jurisdiction, including but not limited to the National Energy Board
("NEB").
(b) Canadian Hunter has agreed with Project Orange to provide
Project Orange promptly with a copy of each material notice sent by
TransCanada to Canadian Hunter in connection with the Assigned Agreement.
It shall be Canadian Hunter's responsibility to ensure compliance with its
agreement with Project Orange and any failure by Canadian Hunter to do so
shall not affect TransCanada's ability to exercise any rights that it has
under the Assigned Agreement.
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3. TransCanada will deliver to Project Orange and Agent notice of
default or breach by Canadian Hunter of the Assigned Agreement concurrently
with delivery of any such notice to Canadian Hunter. Project Orange and
Agent will be given the same time period allowed to Canadian Hunter to cure
such default or breach. If through inadvertence, TransCanada fails to
deliver such notice to Project Orange or Agent, TransCanada shall incur no
liability therefor to any party hereto or to any successor or assign
thereof.
4. (a) Any notice, request or demand ("Notice") to or upon the
respective parties hereto shall be in writing and shall be validly
communicated by the delivery thereof to its addressee, either personally or
by courier, first class mail, or telecopier to the address hereinunder
mentioned:
In the case of TransCanada:
Mailing Address:
TransCanada PipeLines Limited
X.X. Xxx 0000
Xxxxxxx X
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Vice President, Transportation
FAX: (000) 000-0000
Delivery Address:
TransCanada PipeLines Limited
TransCanada PipeLines Tower
3000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Vice President, Transportation
In the case of Project Orange:
Project Orange Associates, L.P.
c/o G.A.S. Orange Associates, LLC
00 Xxxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
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In the case of Canadian Hunter:
Canadian Hunter Exploration Ltd.
2800, 000 0/xx/ Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Vice President, Marketing
FAX: (000) 000-0000
In the case of Agent:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
FAX: (000) 000-0000
(b) Any such Notice shall be sent in order to ensure prompt receipt
of such Notice by the other party(ies). Such Notice sent as aforesaid shall
be deemed to have been received by the party to whom it is sent at the time
of its delivery if personally delivered or if sent by telecopier, or on the
business day following the transmittal thereof if sent by courier, or on
the third business day following the transmittal thereof if sent by first
class mail, provided however, that in the event normal mail service,
courier service, or telecopier service shall be interrupted by a cause
beyond the control of the parties hereto, then the party sending the Notice
shall utilize any service that has not been so interrupted or shall deliver
such Notice. Each party shall provide Notice to the other parties of any
change of address for the purposes hereof.
5. Notwithstanding anything herein to the contrary, TransCanada agrees
that Project Orange or Agent may, without TransCanada's consent, assign its
rights, but not its obligations, under this Consent and Agreement to any
person and entity.
6. TransCanada hereby represents that: (i) this Consent and Agreement
has been duly authorized, executed and delivered by TransCanada, and is in
full force and effect on the date hereof and constitutes the legal, valid
and binding obligation of TransCanada, enforceable in accordance with its
terms, except as (a) enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditor's rights generally, and (b) the availability of any particular
remedy may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at
law; (ii) no consent, license, approval or authorization of, or filing,
registration or declaration with, or exemption by, any governmental body,
authority, bureau or agency is required in connection with the
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execution, delivery or performance by TransCanada of this Consent and
Agreement other than those which have been duly obtained and are in full
force and effect.
7. The obligations of TransCanada hereunder are subject to all
applicable valid rules, orders, regulations and laws of governmental and
regulatory authorities having jurisdiction, including but not limited to
the NEB.
8. This Consent and Agreement shall be governed by, and construed in
accordance with, the laws of the Province of Alberta and, when applicable,
the laws of Canada.
9. Notwithstanding any other provision of this Consent and Agreement,
nothing herein set forth is intended to or shall amend, modify or in any
other way change the Assigned Agreement and TransCanada does not waive any
rights it may have pursuant to the Assigned Agreement.
10. This Consent and Agreement sets forth the terms and conditions upon
which TransCanada consents to the collateral assignment of the Assigned
Agreement by Canadian Hunter to Project Orange pursuant to the Collateral
Assignment and the collateral assignment of the Assigned Agreement and the
Collateral Assignment by Project Orange to the Agent pursuant to the
Security Agreement. To the extent that there is a conflict between any term
or provision set forth in this Consent and Agreement and any term or
provision of the Collateral Assignment or the Security Agreement, the terms
and provisions of this Consent and Agreement shall govern with respect to
TransCanada's rights and obligations but the terms and provisions of the
Collateral Assignment shall govern as to the rights and obligations of
Project Orange and Canadian Hunter to each other and the terms and
provisions of the Security Agreement shall govern as to the rights and
obligations of Project Orange and Agent to each other. Furthermore, except
as explicitly stated in this Consent and Agreement, TransCanada does not
consent to any term or provision of the Collateral Assignment or the
Security Agreement.
[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto by their respective officers
thereunto duly authorized, have duly executed this Consent and Agreement as
of the date set forth below.
Dated: December 6, 0000
XXXXXXXXXXX PIPELINES LIMITED
By: /s/ Xxx Xxxxxxx
______________________________
Name: Xxx Xxxxxxx
Title: Senior Vice President
Customer Sales & Services
By: /s/ Xxxxxx X. Xxxxxx
______________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice-President
Market Development
CANADIAN HUNTER EXPLORATION LTD.
By: /s/ Xxxx Xxxxx
______________________________
Name: Xxxx Xxxxx
Title: Treasurer
By: /s/ Xxxxxx Xxxxx
______________________________
Name: Xxxxxx Xxxxx
Title: VP, Engineering
PROJECT ORANGE ASSOCIATES, L.P.
By: G.A.S. ORANGE ASSOCIATES, LLC
a Delaware limited liability company
By: /s/ Xxxxxxx Xxxxxxx
____________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
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U.S. BANK TRUST NATIONAL ASSOCIATION
as Agent
By: /s/ Xxxx X. Xxxxxxx
______________________________
Name:
Title:
By: /s/ Xxxx Xxxxxx
______________________________
Name:
Title:
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Exhibit A
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, dated as of ________________________,
BETWEEN: _______________________________________________________
(hereinafter referred to as the "Assignee")
AND: TRANSCANADA PIPELINES LIMITED, a Canadian corporation (hereinafter
referred to as "TransCanada").
RECITALS:
Canadian Hunter Exploration Ltd., an Alberta Corporation ("Canadian
Hunter") and TransCanada are parties to that certain Firm Service Contract made
as of October 11, 1990 (the "Firm Service Contract"). Pursuant to the
Collateral Assignment of the Firm Service Agreement dated as of April 5, 1991
(the "Collateral Assignment") between Canadian Hunter and Project Orange
Associates, L.P., a Delaware limited partnership (the "Partnership"), Canadian
Hunter assigned to the Partnership its rights under the Firm Service Contract in
order to secure the payment and performance of the obligations of Canadian
Hunter (as successor by assignment to Noranda Inc., an Ontario corporation)
under that certain Restated Gas Sale and Purchase Agreement dated as of March
18, 1991. Pursuant to the Security Agreement, dated as of December 6, 1999 (the
"Security Agreement") by and between the Partnership and U.S. Bank Trust
National Association, as collateral agent ("Agent"), the Partnership assigned to
the Agent its rights under the Firm Service Contract in order to secure the
payment and performance of the obligations of the Partnership under the
Financing Agreement (as defined in the Security Agreement). TransCanada,
Canadian Hunter, Agent and the Partnership have all entered into a Consent and
Agreement dated as of December 6, 1999 (the "Consent") pursuant to which
TransCanada consented to the assignment of Canadian Hunter's rights in, to and
under the Firm Service Contract to the Partnership and to the assignment of the
Partnership's rights in, to and under the Firm Service Contract to the Agent, as
the Partnership's assignee, on the terms specified in the Consent.
The Partnership or Agent, as the case may be, has assigned its rights under
the Firm Service Contract, as set forth in the Collateral Assignment of the Firm
Service Contract, to the Assignee and the Assignee desires to effect such
assignment under the terms of the Consent by executing and delivering this
Assumption Agreement to TransCanada.
The Assignee and TransCanada agree as follows:
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1. Assumption. The Assignee hereby assumes liability for all of
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Canadian Hunter's obligations under the Consent and the Firm Service Contract
including, without limitation, its obligations for payment of all amounts due
and owing to TransCanada under the Firm Service Contract, whether such amounts
shall have accrued before or after the date hereof, and for the performance of
the covenants and agreements of Canadian Hunter under the Consent and the Firm
Service Contract from and after the date hereof. Nothing herein is intended to
limit the right of TransCanada or the Agent to proceed against Canadian Hunter
for recovery in respect of any default or unperformed obligations of Canadian
Hunter under the Consent or the Firm Service Contract accruing or arising in
respect of any period prior to the effective date of this Assumption Agreement.
The Assignee agrees to be bound by the terms of the Consent and the Firm Service
Contract as if it were substituted for Canadian Hunter.
2. Acknowledgment. The Assignee acknowledges that any rights of the
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Partnership, or any assignee of the Partnership, are subordinate to the rights
of the Agent, or any assignee of the Agent, under the Firm Service Contract as
set forth in the Security Agreement and the Consent, including the right to
assume the Firm Service Contract and request that TransCanada render performance
thereunder directly to Agent or such assignee notwithstanding this Assumption
Agreement. Assignee acknowledges and agrees that if the Assignee is an assignee
of the Partnership, then forthwith upon receipt by TransCanada of a notice from
the Agent pursuant to Paragraph 1(a) of the Consent or upon an assignment by the
Agent pursuant to Paragraph 1(f) of the Consent, the Assignee shall thereupon
have no further rights or obligations under the Firm Service Contract provided
that the Assignee shall continue to be bound by those of its obligations that
arose prior to the date of receipt of such notice or the date of such
assignment, as the case may be. Assignee agrees that TransCanada shall bear no
liability to Assignee resulting from rendering performance under the Firm
Service Contract directly to the Agent or from such assumption of the Firm
Service Contract by a subsequent person.
3. Release of the Partnership. Upon the satisfaction of the
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requirements set forth in paragraph l(f) of the Consent, the Partnership shall
be relieved of all obligations to TransCanada, if any, which it may have under
or with respect to the Firm Service Contract arising after the date hereof.
4. Notices. The address of the Assignee for the purposes of Section
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6.1 of the Firm Service Contract and Article 4 of the Consent shall be:
_______________________________
_______________________________
Attention:_____________________
FAX:___________________________
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5. Assignment. The Assignee may assign its rights in, to and under the
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Firm Service Contract in accordance with the terms and conditions of the
Consent.
6. Governing Law, etc. This Assumption Agreement shall be governed by,
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and construed in accordance with, the laws of the Province of Alberta and, when
applicable, the laws of Canada. The obligations of TransCanada are subject to
all applicable valid rules, orders, regulations and laws of governmental and
regulatory authorities having jurisdiction, including but not limited to the
National Energy Board.
IN WITNESS WHEREOF, the parties hereto by their respective officers
thereunto duly authorized, have duly executed this Assumption Agreement as of
the date set forth below.
Dated: ___________
ASSIGNEE:
By: _________________________
Title: ______________________
TRANSCANADA PIPELINES LIMITED
By: _________________________
Title:_______________________
By: _________________________
Title:_______________________
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