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EXHIBIT 10.8.31
CAPACITY RELEASE TRANSFER AGREEMENT
CAPACITY RELEASE TRANSFER AGREEMENT, dated as of June 29, 2001 (this
"Agreement"), by and between Sithe/Independence Power Partners, L.P., a Delaware
limited partnership ("Independence") and Enron North America Corp., a Delaware
corporation ("Enron").
W I T N E S S E T H:
WHEREAS, Independence and ANR Pipeline Company, a Delaware corporation
("ANR"), have entered into those certain agreements relating to the gathering
and transportation of natural gas for use at Independence's gas-fired generating
plant of approximately 1,032 MW net capacity located in the Town of Scriba, New
York (the "Facility"), each as listed on ANNEX A hereto (the "ANR Gas
Transportation Agreements");
WHEREAS, Independence and Great Lakes Gas Transmission Limited
Partnership, a Delaware limited partnership ("Great Lakes"), have entered into
that certain agreement relating to the transportation of natural gas for use at
the Facility, as listed on ANNEX B hereto (the "Great Lakes Gas Transportation
Agreement"); and
WHEREAS, Independence and Panhandle Eastern Pipe Line Company, a Delaware
corporation ("Panhandle" and, together with ANR and Great Lakes, the
"Transporters", and each such party, a "Transporter"), have entered into those
certain agreements relating to the transportation of natural gas for use at the
Facility, as listed on ANNEX C hereto (the "Panhandle Gas Transportation
Agreements" and, together with the ANR Gas Transportation Agreements and the
Great Lakes Gas Transportation Agreement, the "Gas Transportation Agreements");
and
WHEREAS, Independence desires (i) to permanently release, and Enron
desires to acquire, all of the gas transportation capacity and associated
service rights available to Independence (the "Capacity") under the Gas
Transportation Agreements, and (ii) to be permanently released from any and all
obligations, under the Gas Transportation Agreements; and
WHEREAS, until Enron acquires the permanent release of the Capacity and
until Independence is permanently released from any and all obligations under
the Gas Transportation Agreements, Independence desires to provide Enron, from
time to time at Enron's request, with a temporary release of the Capacity.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Independence and Enron, intending to be legally bound, hereby
agree as follows:
1. Independence hereby agrees with Enron to "permanently release" (within
the meaning of 18 CFR 284.8 (2000)) all of the Capacity in accordance with and
subject to the regulations of the Federal Energy Regulatory Commission (the
"FERC") and the procedures of the applicable FERC Gas Tariff ("Tariff") of each
Transporter, at the rate or rates set forth in the applicable Gas Transportation
Agreement (the "Contract Rate"). Until such time as the Capacity
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under each Gas Transportation Agreement is permanently released to Enron and
until Independence is permanently released from any and all obligations under
the Gas Transportation Agreements, Independence shall, from time to time at the
request of Enron and at Enron's sole expense, temporarily release that portion
of the Capacity to which such request relates in accordance with the regulations
of the FERC and the Tariff of such Transporter. Independence and Enron
acknowledge and agree that Independence shall not maintain or reserve any right,
title or interest in, to or under all or any part of such Capacity following the
permanent release of Capacity contemplated herein.
2. Independence and Enron hereby agree that Enron will be designated as
the prearranged replacement shipper for each of the capacity release
transactions pursuant to Section 1 hereof. To the extent necessary under the
procedures of each Transporter's Tariff, Enron agrees to reaffirm its
willingness to acquire all of the Capacity released by Independence pursuant to
Section 1 hereof and to pay the Contract Rate for such Capacity. From and after
July 1, 2001 (the "Effective Date"), Enron agrees to pay or perform all of
Independence's liabilities, responsibilities and obligations under the Gas
Transportation Agreements. Enron shall, upon the receipt of reasonable
documentation substantiating any such claim, promptly reimburse Independence for
any payment made by Independence to a Transporter pursuant to any of the Gas
Transportation Agreements attributable solely to periods on and after the
Effective Date. Enron shall be solely liable for all liabilities,
responsibilities and obligations arising under the Gas Transportation Agreements
for periods on and after the Effective Date.
3. Independence hereby agrees with Enron to execute and deliver to the
Transporters and/or Enron, as applicable, release notices and such further
documents and instruments, and to take such further actions, as may be necessary
or reasonably requested by the Transporters and/or Enron to effect such
permanent release of the Capacity to Enron, and to permanently release
Independence from any and all obligations under Gas Transportation Agreements,
as contemplated herein. Independence and Enron acknowledge and agree that Enron
shall have primary responsibility for ensuring compliance with the Transporter's
tariffs and for obtaining all third party consents or consents required by any
applicable tariff of the Transporters, and approvals of any governmental agency
or any other person required, in connection with the permanent release and
assignment of the Capacity from the Transporters to Enron, and the permanent
release of Independence from all obligations, under the Gas Transportation
Agreements; PROVIDED, that Independence shall cooperate with Enron's efforts
hereunder upon Enron's reasonable request.
4. Independence agrees that it shall be solely liable for all liabilities,
responsibilities and obligations arising under the Gas Transportation Agreements
for periods prior to the Effective Date. Independence shall, upon the receipt of
reasonable documentation substantiating any such claim, promptly reimburse Enron
for any payment made by Enron to a Transporter pursuant to any of the Gas
Transportation Agreements attributable solely to periods prior to the Effective
Date.
5. If Enron receives any refunds or credits under the Gas Transportation
Agreements relating to periods prior to the Effective Date, or if Independence
receives any refunds or credits under the Gas Transportation Agreements relating
to periods on or after the Effective Date,
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Enron or Independence, as the case may be, shall promptly remit such refund or
credit to the other party in the form received.
6. [Reserved].
7. (a) Independence shall, except as set forth in this Section 7,
indemnify, reimburse, defend and hold harmless Enron, its affiliates and their
respective directors, officers, stockholders, partners, employees, agents,
representatives, successors, permitted transferees and permitted assigns, from
and against any and all demands, actions or causes of action, assessments,
losses, liabilities, damages, costs and expenses, judgments, claims and tax
claims (including, without limitation, interest, fines, penalties, reasonable
legal, consultants' and experts' fees and expenses) suffered or incurred by
Enron by reason of or resulting from the inaccuracy or breach of any
representation, warranty or covenant of Independence contained in this
Agreement. Enron shall, except as set forth in this Section 7, indemnify,
reimburse, defend, and hold harmless Independence, its affiliates and their
respective directors, officers, stockholders, partners, employees, agents,
representatives, successors, permitted transferees and permitted assigns, from
and against all demands, actions or causes of action, assessments, losses,
liabilities, damages, costs and expenses, judgments, claims and tax claims
(including, without limitation, interest, fines, penalties, reasonable legal,
consultants' and experts' fees and expenses) suffered or incurred by
Independence by reason of or resulting from the inaccuracy or breach of any of
the representations, warranties or covenants of Enron contained in this
Agreement. The indemnity provision contained in this Section 7(a) shall be the
parties' sole remedies as a result of the breach by any party hereto of any of
its representations, warranties, covenants or agreements contained in this
Agreement.
(b) No party shall be entitled to recover damages in respect of any claim
for breach of any warranty, representation or covenant or otherwise obtain
reimbursement or restitution more than once in respect of any one such breach or
any fact, event or circumstance or set of facts, events or circumstances.
(c) If Independence or Enron, as the case may be ("Claimant"), has a claim
against the other party hereunder ("Indemnifying Party"), Claimant will transmit
to the Indemnifying Party a written notice with respect to such claim,
specifying the basis therefor; PROVIDED, HOWEVER, that any failure or delay in
providing such notice to the Indemnifying Party will not relieve the
Indemnifying Party of any obligation hereunder except and only to the extent the
Indemnifying Party was actually prejudiced by such delay or failure. The
Indemnifying Party shall within 30 days from its receipt of such notice either
notify Claimant that the Indemnifying Party disputes such claim, or pay the
amounts owing by the Indemnifying Party under such claim in cash. If a claim may
be deemed to involve both a direct claim (and thus subject to the terms of this
Section 7(c)) and a claim involving a third party (and thus subject to the terms
of Section 7(d)), it will be treated hereunder as a claim involving a third
party.
(d) Promptly after receipt of written notice of a claim involving a third
party, Claimant will give Indemnifying Party written notice of any such claim;
PROVIDED, HOWEVER, that any failure or delay in providing such notice to
Indemnifying Party will not relieve Indemnifying Party of any obligations
hereunder except and only to the extent Indemnifying Party was actually
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prejudiced by such delay or failure. Indemnifying Party will have the right to
undertake the defense, compromise or settlement of such claim and Indemnifying
Party will not be liable for the fees or expenses of separate counsel for
Claimant, unless the counsel designated by Indemnifying Party is unable, due to
a conflict (as determined under applicable law, bar rules and regulations and
canons of ethics) arising in connection with representation of Indemnifying
Party and Claimant, to fully represent Claimant with respect to such claim, in
which case Indemnifying Party will be liable for the fees and expenses of one
separate counsel for Claimant. Claimant will use its reasonable efforts to
cooperate fully with respect to the defense of any claim. Unless Indemnifying
Party has delivered to Claimant a written statement in form and substance
acceptable to Claimant acknowledging and confirming that a subject claim is
fully within the scope of indemnification obligations of Indemnifying Party
under this Agreement, if after the passage of a reasonable period of time after
notice of any claim, Indemnifying Party has not initiated a defense against such
claim, Claimant will have the right to undertake the defense, compromise or
settlement of such claim at any time prior to settlement, compromise or final
determination thereof and any action so taken by Claimant with regard to such
defense, compromise or settlement will be deemed to be within the protection
afforded by this Agreement; PROVIDED, HOWEVER, that any settlement of any such
claim shall require the prior written consent of Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. Notwithstanding anything
in this Section 7(d) to the contrary, (i) if there is a reasonable possibility
that a claim may materially adversely affect Claimant other than as a result of
money damages or other money payments that are within the protection afforded by
this Agreement, Claimant will have the right, at Indemnifying Party's cost and
expense, to defend, and, with the consent of Indemnifying Party (which consent
will not be unreasonably withheld or delayed), to compromise or settle such
claim, and (ii) Indemnifying Party will not settle or compromise any claim or
consent to the entry of any judgment that does not include as an unconditional
term thereof the giving by the third party claimant or plaintiff to Claimant a
full, irrevocable and unconditional release from all liability in respect of
such claim.
8. Independence and Enron acknowledge that, in order to induce
Independence to enter into this Agreement and to consummate the transactions
contemplated hereby, Enron Corp., an affiliate of Enron, has executed on the
date hereof a guaranty pursuant to which Enron Corp. shall, among other things,
irrevocably and unconditionally guarantee Enron's obligations under this
Agreement.
9. Enron, to induce Independence to enter into this Agreement, represents
and warrants to Independence that:
(a) AUTHORIZATION AND VALIDITY. This Agreement and the transactions
contemplated hereby have been duly authorized by it, and this Agreement has been
duly executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject,
however, to applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally and except as the
enforceability thereof may be limited by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
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(b) NO VIOLATION. The execution and delivery of this Agreement by it and
the performance by it of this Agreement and the consummation of the transactions
contemplated hereby, do not and will not (i) violate or conflict with any
provision of its certificate of incorporation or by-laws, (ii) violate any
existing statute or law or any judgment, decree, order, regulation or rule of
any court or governmental authority applicable to it, which violation will have
a material and adverse effect on its ability to perform its obligations under
this Agreement or (iii) under existing law require any consent, approval or
authorization of, or designation, declaration or filing with, any governmental
authority on the part of Enron, other than as described in this Agreement.
(c) LEGAL PROCEEDINGS. There are no judicial or administrative actions,
proceedings, or to its knowledge, investigations (including, without limitation,
bankruptcy, reorganization or insolvency actions, proceedings or investigations)
pending or, to its knowledge, threatened that (i) challenge the validity of this
Agreement or the transactions contemplated hereby, (ii) seek to restrain or
prevent any action taken or to be taken by it in connection with this Agreement
or (iii) if adversely determined, would have a material and adverse effect on
its ability to perform its obligations under this Agreement.
10. Independence, to induce Enron to enter into this Agreement, represents
and warrants to Enron that:
(a) AUTHORIZATION AND VALIDITY. This Agreement and the transactions
contemplated hereby have been duly authorized by it, and this Agreement has been
duly executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject,
however, to applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally and except as the
enforceability thereof may be limited by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
(b) NO VIOLATION. The execution and delivery of this Agreement by it and
the performance by it of this Agreement and the consummation of the transactions
contemplated hereby, do not and will not (i) violate or conflict with any
provision of its limited partnership agreement, (ii) violate any existing
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental authority applicable to it, which violation will have a material
and adverse effect on its ability to perform its obligations under this
Agreement or (iii) under existing law require any consent, approval or
authorization of, or designation, declaration or filing with, any governmental
authority on the part of Independence, other than as described in this
Agreement.
(c) LEGAL PROCEEDINGS. There are no judicial or administrative actions,
proceedings, or to its knowledge, investigations (including, without limitation,
bankruptcy, reorganization or insolvency actions, proceedings or investigations)
pending or, to its knowledge, threatened that (i) challenge the validity of this
Agreement or the transactions contemplated hereby, (ii) seek to restrain or
prevent any action taken or to be taken by it in connection with this Agreement
or (iii) if adversely determined, would have a material and adverse effect on
its ability to perform its obligations under this Agreement.
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11. (a) This Agreement and all of the provisions hereof shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, except to an
affiliate or successor, by either party hereto, whether by operation of law or
otherwise, without the prior written consent of the other party, which consent
may not be unreasonably withheld or delayed. No assignment of all or any portion
of the rights, interests or obligations permitted pursuant to the immediately
preceding sentence shall relieve or discharge the assignor from any of its
obligations under this Agreement without the prior written consent of the
non-assigning party, which consent shall not be unreasonably withheld or
delayed. Any assignment of this Agreement in violation of the foregoing shall
be, at the option of the non-assigning party, void.
(b) Notwithstanding the foregoing provisions of Section 11(a),
Independence may assign, transfer, pledge or otherwise dispose of its rights and
interests hereunder to a trustee or lending institution for the purposes of
financing or refinancing any of its assets, including upon or pursuant to the
exercise of remedies with respect to such financing or refinancing, or by way of
assignments, transfers, pledges or other dispositions in lieu thereof. Enron
agrees to execute and deliver such documents as may be reasonably necessary to
accomplish any such assignment, transfer, pledge or other disposition of rights
hereunder, including, without limitation, the Acknowledgement and Consent in the
form attached hereto as ANNEX D, so long as Enron's rights under this Agreement
are not thereby altered, amended, diminished or otherwise impaired.
12. This Agreement shall be governed by and construed in accordance with
the law of the State of New York as to all matters (without giving effect to
conflict of law principles other than Section 5-1401 of the New York General
Obligations Law). Each of Independence and Enron hereby irrevocably waives, to
the fullest extent permitted by law, any and all right to trial by jury in any
legal proceedings arising out of or relating to this Agreement.
13. Each of Independence and Enron hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement, or for recognition and enforcement of any judgment
in respect thereof, to the non- exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern District
of New York and appellate courts from any thereof;
(b) consents and agrees that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the other party at its
address set forth in Section 14, or at such other address of which the other
party shall have been notified pursuant thereto; and
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(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law.
14. Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
(including delivery by an express or overnight delivery service), when received
by facsimile transmission or when sent by registered mail, return receipt
requested, addressed:
IF TO SELLER, at:
Sithe/Independence Power Partners, L.P.
P.O. Box 1046
76 Independence Way
Oswego, New York 13126
Attention: General Manager
Telefax: (315) 342-8425
with a copy to:
Sithe Energies, Inc.
335 Madison Avenue
28th Floor
New York, NY 10017
Attention: General Counsel
Telefax: (212) 351-0800
IF TO PURCHASER, at:
Enron North America Corp.
Compliance Department
1400 Smith Street
Houston, Texas 77002
Attention: Donna Lowry
Telefax: (713) 646-4039
15. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof. The invalidity of a particular provision in a particular jurisdiction
shall not invalidate such provision in any other jurisdiction.
16. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
17. This Agreement shall be effective as of 8:00 a.m. (Central time) on
June 29, 2001.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
SITHE/INDEPENDENCE POWER PARTNERS, L.P.
By: SITHE/INDEPENDENCE, INC., as its sole
general partner
By: /s/ Martin B. Rosenberg
-------------------------------------
Name: Martin B. Rosenberg
Title: Senior Vice President
ENRON NORTH AMERICA CORP.
By: /s/ Jeffrey M. Donahue
--------------------------------------
Name: Jeffrey M. Donahue
Title: Managing Director
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ANNEX A
ANR GAS TRANSPORTATION AGREEMENTS
1. FTS-1 Service Agreement (Contract No. 19600), dated August 23, 1994,
between ANR Pipeline Company and Sithe/Independence Power Partners, L.P.,
as amended by the Second Amended and Restated Agreement dated August 23,
1994 between ANR Pipeline Company and Sithe/Independence Power Partners,
L.P., and as further amended by the Amendment dated April 15, 1997 between
ANR Pipeline Company and Sithe/Independence Power Partners, L.P.
2. FTS-1 Service Agreement (Contract No. 19630), dated April 15, 1997,
between ANR Pipeline Company and Sithe/Independence Power Partners, L.P.
3. Gathering Agreement (Contract No. GA69600), dated May 1, 1994, between ANR
Pipeline Company and Sithe/Independence Power Partners, L.P., as amended
by the Amendment dated August 15, 1996 between ANR Pipeline Company and
Sithe/Independence Power Partners, L.P.
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ANNEX B
GREAT LAKES GAS TRANSPORTATION AGREEMENT
1. Transportation Service Agreement (FT089), dated May 6, 1997, between
Sithe/Independence Power Partners, L.P. and Great Lakes Gas Transmission
Limited Partnership, as amended or supplemented from time to time.
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ANNEX C
PANHANDLE GAS TRANSPORTATION AGREEMENTS
1. FT Transportation Agreement (Contract No. 012941), dated July 13, 1994,
between Sithe/Independence Power Partners, L.P. and Panhandle Eastern Pipe
Line Company, as amended by the Amendment to Transportation Agreement
dated November 30, 1998.
2. Alternative Rate Letter Agreement, dated March 20, 1992, between
Sithe/Independence Power Partners, L.P. and Panhandle Eastern Pipe Line
Company.
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ANNEX D
ACKNOWLEDGEMENT AND CONSENT
Acknowledgment and Consent (this "CONSENT") dated as of June 29, 2001
between Enron North America Corp., a Delaware corporation (together with its
successors and assigns, the "COMPANY") and Sithe/Independence Power Partners,
L.P., a Delaware limited partnership (together with its successors and assigns,
the "PARTNERSHIP"), to and for the benefit of Manufacturers and Traders Trust
Company, a New York banking corporation, in its capacity as collateral agent
(together with its successors and assigns in that capacity, the "COLLATERAL
AGENT").
SECTION 1. CONSENT TO ASSIGNMENTS, ETC.
The Company hereby (a) acknowledges that it has been advised of that
certain Security Agreement and Assignment of Contracts dated as of January 1,
1993 (as amended, supplemented or modified and in effect from time to time, the
"SECURITY AGREEMENT") between the Collateral Agent and the Partnership, (b)
consents, subject to the provisions of this Consent, to the collateral
assignment by the Partnership of the Capacity Release Transfer Agreement dated
as of June 29, 2001 between the Company and the Partnership (as amended,
supplemented or modified and in effect from time to time, the "ASSIGNED
CONTRACT") as collateral for the Partnership's obligations to the Secured
Parties (as defined in the Security Agreement), and any subsequent assignments
by the Collateral Agent, on behalf of the Secured Parties, (c) acknowledges the
right of the Collateral Agent, following an Event of Default (as defined in the
Security Agreement) by the Partnership, to make all demands, give all notices,
take all actions and exercise all rights of the Partnership under the Assigned
Contract, and (d) acknowledges and agrees that the Collateral Agent succeeding
to the rights and obligations of the Partnership under the Assigned Contract
shall not, in and of itself, constitute or cause a default by the Partnership
under the Assigned Contract.
SECTION 2. PAYMENT OF ASSIGNED SUMS
All payments (if any) to be made by the Company to the Partnership under
the Assigned Contract shall be made by wire transfer to the account entitled
"Project Revenue Fund" maintained by the Partnership with The Bank of New York,
Account No. 229289, 101 Barclay Street, Floor 21W, New York, New York, 10286, or
to such other person or account as shall be specified from time to time by the
Partnership to the Company in writing. Any payments being wired to the
above-referenced account should be directed to ABA 021000018; The Bank of New
York; Corporate Trust/GLA 111-565; for further credit to TAS Account 229289;
REF: Sithe Independence PWR Project Revenue Fund.
SECTION 3. REPRESENTATIONS OF COMPANY
(a) The Company represents and warrants that as of the date hereof:
(i) AUTHORIZATION. The execution, delivery and performance by the
Company of this Consent has been duly authorized by all necessary action on the
part of the Company and does not require any approval or consent of any
shareholder of the Company or any holder (or
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any trustee for any holder) of any indebtedness or other obligation of the
Company, except as has been heretofore obtained.
(ii) EXECUTION; DELIVERY; BINDING AGREEMENT. This Consent has
been duly executed and delivered on behalf of the Company by the appropriate
officers of the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium and other similar laws
applicable to creditors' rights generally and except as the enforceability
thereof may be limited by general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
(iii) NO DEFAULT OR AMENDMENT. As of the date hereof, neither
the Company nor, to the knowledge of the Company, the Partnership is in default
under the Assigned Contract. The Company has no existing claims, counterclaims,
offsets or defenses against the Partnership in respect of the Assigned Contract
except for routine claims for payment under the Assigned Contract.
SECTION 4. RIGHTS OF SECURED PARTIES
The Company agrees that, subject to the provisions of this Consent, the
Secured Parties shall have the following rights with respect to the Assigned
Contract:
(a) Notwithstanding anything to the contrary contained in the Assigned
Contract, the Assigned Contract shall not be terminated or cancelled by action
of the Company and shall not be deemed abandoned or surrendered without prior
notice in writing to the Collateral Agent specifying the Partnership's default
(hereinafter called a "NOTICE"). Any such Notice shall contain a copy of the
notice of default sent to the Partnership and shall be delivered to the
Collateral Agent when the Company delivers a notice of default to the
Partnership under the Assigned Contract. The Collateral Agent shall have the
right (but not the obligation) to cure the defaults listed in any Notice within
the same period of time provided in the Assigned Contract for the Partnership to
cure such default; PROVIDED, HOWEVER, if the nature of any non-monetary default
on the part of the Partnership under the Assigned Contract is such that it
cannot be cured by the Collateral Agent without the Collateral Agent having
taken possession of the Project (as defined in the Security Agreement), then the
Collateral Agent's time for commencing such cure shall be extended for such
reasonable period of time as is necessary for the Collateral Agent to lawfully
obtain possession of the Project; PROVIDED, FURTHER, that the Collateral Agent
shall at all times be seeking by all reasonable and lawful means to obtain such
possession. Once the defaults listed in any Notice are timely cured by the
Collateral Agent, there shall no longer be deemed to be any default under the
Assigned Contract in respect of such defaults so cured. The curing of any
defaults under the Assigned Contract shall not in and of itself be construed as
an assumption by the Collateral Agent or any of the Secured Parties of any of
the obligations, covenants or agreements of the Partnership under the Assigned
Contract.
(b) If a notice of election is delivered to the Company as provided in
Section 5 below, the Company will accept performance of the Partnership's
obligations (as specified in such notice of election) under the Assigned
Contracts by the Collateral Agent, or its nominee(s) acting
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for the Secured Parties, as the case may be, in lieu of the Partnership's
performance of such obligations.
(c) Upon any transfer of the Partnership's rights under the Assigned
Contract pursuant to the exercise of the Collateral Agent's rights under this
Consent, the Collateral Agent or any third party to which such rights are
transferred by the Collateral Agent (hereinafter, a "THIRD PARTY TRANSFEREE")
shall, upon the Company's reasonable satisfaction with the Collateral Agent's or
such Third Party Transferee's financial condition and subject to all applicable
laws, rules and regulations, succeed to all of the Partnership's right, title
and interest under and in connection with the Assigned Contract and shall be
obligated to perform all of the terms and conditions of the Assigned Contract,
except that the Collateral Agent or any Third Party Transferee shall not be
required to perform or cause to be performed any of the Partnership's
obligations under the Assigned Contract (except for the Partnership's obligation
for the payment of all amounts due and payable to the Company under the terms of
the Assigned Contract including any interest applicable thereon) that remain
unperformed at the time that the Collateral Agent or such Third Party Transferee
is transferred such Assigned Contract other than continuing non-monetary
defaults under the Assigned Contract which are capable of performance by the
Collateral Agent or the Third Party Transferee or be liable for any prior act or
omission of the Partnership, and upon the transfer by the Collateral Agent of
its rights and interests and the rights and interests of the Partnership under
the Assigned Contracts to a Third Party Transferee, the Collateral Agent and the
Partnership shall be relieved of all obligations under the Assigned Contract
arising after such transfer.
(d) In the event that (i) the Assigned Contract is rejected by a trustee
or any person exercising the powers of a trustee in any bankruptcy or insolvency
proceeding applicable to the Partnership or (ii) the Assigned Contract is
terminated as a result of any bankruptcy or insolvency proceeding applicable to
the Partnership, the Company shall, subject to all applicable laws, rules and
regulations, execute and deliver to the Collateral Agent and its designees,
successors and assigns a new contract; PROVIDED that the Company shall be
required to execute a new contract with the Collateral Agent only if the
Collateral Agent or its designees, successors or assigns shall within ten (10)
business days of entering into such new contract, cure all defaults for failure
to pay all amounts due and payable to the Company under the Assigned Contract,
including any interest applicable thereon. The new contract shall, subject to
all applicable laws, rules and regulations, contain the same covenants,
agreements, terms, provisions and limitations as the Assigned Contract (except
for any requirements with respect to past performance which have been fulfilled
by the Partnership or the Collateral Agent or its designees, successors and
assigns hereunder).
SECTION 5. LIABILITY OF SECURED PARTIES
The Collateral Agent, on behalf of the Secured Parties, and its successors
and assigns, shall have no right or power to enforce the Assigned Contract, and
assumes no duty or obligation thereunder unless and until the Collateral Agent
shall have notified the Company that it has elected to exercise its rights and
remedies under the Security Agreement and to substitute itself in the position
of the Partnership under the Assigned Contracts and has agreed in a written
instrument executed by the Collateral Agent to be bound by all terms and
conditions of the Assigned Contract applicable to the Partnership.
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SECTION 6. FURTHER ASSURANCES
The Company hereby agrees to execute and deliver all such instruments and
take all such actions as may be reasonably necessary to effectuate fully the
purposes of this Consent.
SECTION 7. NOTICES
All notices and other communications hereunder shall be in writing, shall
refer on their face to the Assigned Contract (although failure to so refer shall
not render any such notice or communication ineffective), shall be sent by first
class mail, facsimile, by hand or overnight courier service and shall be
directed:
(a) if to the Company, in accordance with the Assigned Contract;
(b) if to the Collateral Agent, addressed to:
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust Department
(c) if to the Partnership, in accordance with the Assigned Contract; and
(d) to such other address as any party may designate by notice to the
other party hereto given pursuant hereto.
SECTION 8. TERMINATION
Notwithstanding anything in this Consent to the contrary, this Consent
shall terminate upon the earlier of (a) the termination of the Security
Agreement and (b) the date Assignor is fully released (pursuant to an instrument
reasonably satisfactory to the Partnership) from all liability under all of the
Gas Transportation Agreements (as defined in the Assigned Contract).
SECTION 9. MISCELLANEOUS
(a) GOVERNING LAW. This Consent shall be governed by and construed in
accordance with the law of the State of New York as to all matters (without
giving effect to conflict of law principles other than Section 5-1401 of the New
York General Obligations Law). Each of the Company and the Partnership hereby
irrevocably waives, to the fullest extent permitted by law, any and all right to
trial by jury in any legal proceedings arising out of or relating to this
Consent.
(b) SUBMISSION TO JURISDICTION. Each of the Parties hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Consent, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States for the
Southern District of New York and appellate courts from any thereof;
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(ii) consents and agrees that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the other
Party at its address set forth in Section 7, or at such other address of which
the other Party shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law.
(c) HEADINGS. The descriptive headings of the Articles and Sections of
this Consent are inserted for convenience only and are not intended to affect
the meaning, interpretation or construction of this Consent.
(d) WAIVER. Except as otherwise provided in this Consent, any failure of a
party to comply with any obligation, covenant, agreement or condition herein may
be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver shall not
operate as a waiver of, or estoppel with respect to, any subsequent failure of
the first party to comply with such obligation, covenant, agreement or
condition.
(e) SEVERABILITY. Any provision of this Consent which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(f) SUCCESSORS AND ASSIGNS. This Consent shall be binding upon and inure
to the benefit of the Company, the Collateral Agent, the Partnership and their
respective permitted successors and assigns.
(g) COUNTERPARTS. This Consent may be executed in counterparts, all of
which shall constitute one and the same Consent and each of which shall be
deemed to be an original.
(h) EFFECTIVE TIME. This Agreement shall be effective as of 8:00 a.m.
(Central time) on June 29, 2001.
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IN WITNESS WHEREOF, the parties hereto have executed this Consent as of
the day and year first above written.
ENRON NORTH AMERICA CORP.
By:
-------------------------------------------
Name: Jeffrey M. Donahue
Title: Managing Director
SITHE/INDEPENDENCE POWER PARTNERS, L.P.
By: SITHE/INDEPENDENCE, INC.,
its General Partner
By:
-------------------------------------------
Name: Martin B. Rosenberg
Title: Senior Vice President
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