EXHIBIT 10.22
CONSENT AND AGREEMENT
(Restated Gas Sale and Purchase Agreement)
Dated December 6, 1999
by
Canadian Hunter Exploration Ltd.,
an Alberta corporation
CONSENT AND AGREEMENT
(Restated Gas Sale and Purchase Agreement)
1. Canadian Hunter Exploration Ltd., an Alberta corporation ("Canadian
Hunter"), as successor by assignment to Noranda Inc. ("Noranda") under the
Contract (as defined herein), 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 ("Borrower"), and U.S.
Bank Trust National Association, ("Agent"), as collateral agent for the benefit
of the Secured Parties, and that certain Indenture ("Financing Agreement") dated
as of December 6, 1999, between Borrower and U.S. Bank Trust National
Association, as Trustee (the "Trustee") on behalf 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"),
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Borrower has assigned its interest under that certain Restated Gas Sale and
Purchase Agreement dated as of March 18, 1991 (the "Contract") to the Agent for
the benefit of the Secured Parties. Canadian Hunter consents to such assignment.
Canadian Hunter, Borrower and Agent hereby agree 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) Canadian Hunter agrees that the Agent shall be entitled to exercise
all rights and to cure any defaults of Borrower under the Contract. Upon receipt
of notice to that effect from the Agent, Canadian Hunter 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. Canadian Hunter 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 to that effect. Canadian Hunter is
hereby irrevocably authorized by Borrower to accept and act upon any notice,
instruction, representation or curative act by the Agent, and shall not in any
way be bound to inquire into the authorization or legitimacy of the same.
(c) Canadian Hunter 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 in accordance with paragraph
1(d) hereof, or consent to or accept any cancellation or termination thereof by
the Borrower, (ii) sell, assign 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. Borrower will not purport to cancel or
terminate the Contract, and Canadian Hunter will not be bound or entitled to
accept any cancellation or termination of the Contract purported to be made by
Borrower, unless Borrower has first obtained and delivered to Canadian Hunter
such written consent of Agent. Borrower acknowledges that no cancellation,
termination, material amendment or material modification of the Contract will be
effective until written consent of Agent is received. Canadian Hunter will
deliver duplicates or copies of all extraordinary notices delivered under or
pursuant to the Contract to the Agent promptly upon receipt or delivery thereof
and will advise the Agent of any material amendments to the Contract. If the
consent of the Agent as contemplated in Section 1(c) has been requested by
Canadian Hunter, and the Agent has not within 30 days after receiving such
request notified Canadian Hunter in writing that it refuses to give its consent,
the Agent shall have been deemed to have given its written consent to the
cancellation, termination, amendment, modification, sale, assignment or
disposition, as the case may be, in respect of which its consent was so
requested.
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(d) The termination of the Contract resulting from an election by Canadian
Hunter to terminate the Contract on account of any default or breach by Borrower
thereunder will not be effective until the later of the date on which such
termination is to be effective in accordance with the terms of the Contract and
(i) in the case of a default or breach which is the failure to pay amounts of
money to Canadian Hunter which are due and payable under the Contract, thirty
days from the date on which notice of default or breach is delivered to Agent to
cure such default, or (ii) if the breach or default cannot be cured by the
timely or late payment of money to Canadian Hunter, at the end of such a
reasonable period of time as is necessary to cure the default, so long as Agent
has commenced to cure the default within thirty days from the date on which
notice of default or breach is delivered to Agent and 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 Borrower or Agent. If the breach or default cannot be cured by the
payment of money to Canadian Hunter, and possession of the Project is necessary
to cure such breach or default, and Agent declares Borrower in default and
commences foreclosure proceedings, Agent will be allowed a reasonable period of
time to complete such proceedings, provided it pursues such proceedings
diligently and without delay. Canadian Hunter hereby:
(A) 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 non-
judicial foreclosure and sale or by a conveyance by Borrower in
lieu of foreclosure; and
(B) agrees that upon such foreclosure, sale or conveyance, it shall
recognize the Agent or such other purchaser or grantee as the
Buyer under the Contract;
provided that the Agent or any purchaser or grantee (1) has stockholders' equity
of not less than U.S. $150,000,000 unless Canadian Hunter otherwise consents
(such consent not to be unreasonably withheld), (2) assumes and agrees pursuant
to a written instrument reasonably satisfactory to Canadian Hunter to perform
all of the obligations of the Borrower under the Contract, other than past
obligations which do not constitute or relate to the payment of money and are
not reasonably capable at the time of being performed and (3) is the owner of
the Project. Nothing in this paragraph or elsewhere in this Consent and
Agreement shall in any way affect the rights or ability of Canadian Hunter to
suspend deliveries of natural gas (x) during any period when it is permitted to
do so under Sections 2.4,
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3.7(m), 6.2, 9.2 and 11.1 of the Contract or (y) if the Unconsumed Entitlement
is reduced to zero.
(e) Canadian Hunter will forthwith notify the Agent of each single
reduction of the Unconsumed Entitlement (as defined in the Contract) pursuant to
subsection 12.2(a) thereof if the particular single reduction exceeds 2,000,000
MMBtu's and of any such single reduction of the Unconsumed Entitlement if the
particular reduction, together with all previous reductions pursuant to
subsection 12.2(a), aggregates more than 2,000,000 MMBtu's.
(f) 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 1(d) above, and if, within 45 days
after such termination, the Agent or its successors or assigns shall so request,
Canadian Hunter will execute and deliver to the Agent a new contract ("New
Contract"), which New Contract shall be on the same terms and conditions as the
original Contract as in effect on the date of termination of the Contract,
including rights and remedies of the parties and the Unconsumed Entitlement on
such date and the New Contract shall terminate on the same date as the Contract
would have terminated in accordance with the provisions thereof had it remained
in force, the only effect of the New Contract being effectively a reinstatement
of the Contract substituting a different party as Buyer thereunder.
(g) In the event Agent or its designee or assignee elects to perform
Borrower's obligations under the Contract or to enter into a New Contract as
provided in paragraph 1(d) or 1(f) respectively above, the Agent, the Secured
Parties and their designees and assignees, shall not have personal liability to
Canadian Hunter for the performance of such obligations, and the sole recourse
of Canadian Hunter in seeking 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, 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 paragraph 1(f) to a person or entity to
whom the Project is transferred, provided such transferee satisfies the
conditions contained in clauses 1(d)(1), (2) and (3). Upon such assignment and
assumption, the Agent (including its agents, employees and contractors) shall be
released from any further liability thereunder to the extent of the interest
assigned.
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(h) If Borrower pays or causes the payment of the proceeds of the
"Deferral Account" (as defined in the Contract) as of the date hereof to
Canadian Hunter, then Canadian Hunter agrees that Borrower may terminate the
Deferral Account and all provisions relating thereto, including, without
limitation, Section 3.7, shall be of no further effect.
2. Canadian Hunter hereby represents and warrants that:
(a) Canadian Hunter is the successor to all of Noranda's right, title and
interest in and to the Contract and has assumed all of Noranda's obligations
under the Contract;
(b) the execution, delivery and performance by it of the Contract and this
Consent and Agreement have been duly authorized by all necessary corporate
action on its part, and do not and will not require any further consents or
approvals to be obtained by Canadian Hunter 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 Canadian Hunter;
(c) the Contract and this Consent and Agreement constitute legal, valid
and binding obligations of Canadian Hunter enforceable against Canadian Hunter
in accordance with their respective terms;
(d) all government approvals necessary to be obtained by Canadian Hunter
for the execution, delivery and performance by Canadian Hunter of its
obligations under the Contract have been obtained and are in full force and
effect;
(e) as of the date hereof, the Contract is in full force and effect and
Canadian Hunter has no reason to expect that any necessary governmental
approvals required to be obtained by Canadian Hunter in the future may not be
obtained without undue delay or expense, and, as of the date hereof, the
Contract has not been amended, supplemented or modified other than pursuant to
(i) this Consent and Agreement, (ii) that certain letter agreement dated March
18, 1991 between Borrower and Noranda relating to the calculation and payment of
interest pursuant to the Contract and (iii) that certain Assignment, Amendment
and Release Agreement dated as of December 6, 1999 among Noranda, Canadian
Hunter and Borrower; and
(f) to the best of Canadian Hunter's knowledge, Borrower has fulfilled all
of its obligations heretofore having arisen under the Contract and there are no
breaches or unsatisfied conditions presently existing under the Contract.
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3. Borrower hereby represents and warrants that:
(a) the execution, delivery and performance by it 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, nor will they 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 Borrower;
(b) the Contract and this Consent and Agreement constitute legal, valid
and binding obligations of Borrower enforceable against the Borrower in
accordance with their respective terms;
(c) all government approvals necessary for the execution, delivery and
performance by Borrower 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 and
Borrower has no reason to expect that any necessary governmental approvals
required in the future may not be obtained without undue delay or expense, and,
as of the date hereof, the Contract has not been amended, supplemented or
modified; and
(e) to the best of Borrower's knowledge, Canadian Hunter has fulfilled all
of its obligations heretofore having arisen under the Contract and there are no
breaches or unsatisfied conditions presently existing under the Contract.
4. All Notices required or permitted hereunder shall be in writing and
shall be effective (i) upon receipt if hand delivered and (ii) 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 Canadian Hunter:
Canadian Hunter Exploration Ltd.
2800, 000 0/xx/ Xxx. X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Vice President, Marketing
FAX: (000) 000-0000
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If to Agent:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Administration
FAX: (000) 000-0000
If to Borrower:
Project Orange Associates, L.P.
c/o G.A.S. Orange Associates, LLC
00 Xxxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
FAX: (000) 000-0000
5. This Consent and Agreement shall be binding upon and benefit the
successors and assigns of Canadian Hunter, 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 Canadian Hunter, the Agent and the
Borrower. The Agent and Borrower acknowledge that Canadian Hunter is not
obligated to inquire into the entitlement of the Agent to act or exercise any of
the Secured Parties' rights under the Security Agreement, the Financing
Agreement or this Consent and Agreement or otherwise. This Consent and Agreement
shall be governed by the laws of the State of New York.
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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, 1999
CANADIAN HUNTER EXPLORATION LTD.,
an Alberta corporation
By: /s/ Xxxx Xxxxx
______________________________________________________
Name: Xxxx Xxxxx
Title: Treasurer
By: /s/ Xxxxxx Xxxxx
______________________________________________________
Name: Xxxxxx Xxxxx
Title: VP, Engineering
U.S. BANK TRUST NATIONAL ASSOCIATION,
for itself and as Agent for the benefit of the Secured
Parties
By: /s/ Xxxx X. Xxxxxxx
______________________________________________________
Name:
Title:
By: /s/ Xxxx Xxxxxx
______________________________________________________
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/ Xxxxxxx Xxxxxxx
____________________________________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
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