Document:

<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

                                                                   Exhibit 10.15

                              THE CITY OF SYRACUSE

                                      and

                        PROJECT ORANGE ASSOCIATES, L.P.

                                      and

                           SYRACUSE HOUSING AUTHORITY

                                   AGREEMENT
                                   ---------

                             Dated:  April 5, 1991
                             ---------------------
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

     THIS AGREEMENT, dated as of April 5, 1991, by and between PROJECT ORANGE
ASSOCIATES, L.P., a Delaware limited partnership, its successors and assigns
(hereinafter referred to as the "Company"), developer of the proposed Syracuse
University Co-Generation Facility at Syracuse, New York, whose office is located
at 6780 Northern Boulevard, Suite 501, East Syracuse, New York 13057; CITY OF
SYRACUSE (hereinafter referred to as the "City"), a municipal corporation duly
formed and operating pursuant to the Laws of the State of New York, having an
office at City Hall, Syracuse, New York 13202; and the SYRACUSE HOUSING
AUTHORITY (hereinafter referred to as "SHA"), a municipal housing authority
formed and operating pursuant to the Public Housing Law of the State of New
York, with offices located at 516 Burt Street, Syracuse, New York 13202;

     WITNESSETH:

     WHEREAS, it is the intention of the Company to build and operate a natural
gas co-generation facility of up to 80 megawatts (hereinafter referred to as the
"Project") at the present site of the Syracuse University steam plant at Taylor
and McBride Streets, Syracuse, New York; and

     WHEREAS, the residents of the area surrounding the Project are expected to
bear the burden and inconvenience of the development and operation of the
Project; and

     WHEREAS, the Company recognizes its responsibility and obligations to the
health, safety and welfare of the residents of the neighborhoods surrounding the
Project; and

     WHEREAS, many of those residents are tenants of the SHA and are housed and
otherwise assisted by the SHA; and

                                      -2-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

     WHEREAS, the City has agreed to assist the Company, through one of its
agencies (the Syracuse Industrial Development Agency), with the development of
the Project; however, the City desires to minimize the impact of the Project
upon its citizens and especially the residents of the neighborhoods surrounding
the Project; and

     WHEREAS, the parties to this Host Community Agreement (hereinafter referred
to as the "Agreement") have agreed that the best way to minimize the disruption
and inconvenience caused to the residents of the area surrounding the Project is
by the construction of a multi--purpose community center (hereinafter referred
to as the "Center");

     NOW, THEREFORE, in consideration of the matters above recited and in order
to induce the City to allow its agency, the Syracuse Industrial Development
Agency, to continue to assist the Company, the parties hereto formally covenant,
agree and bind themselves as follows, to wit:

                                   ARTICLE I
                                   ---------

                         REPRESENTATIONS AKD WARRANTIES
                         ------------------------------

Section 2.02.  Representations and Warranties by Company
               -----------------------------------------

               The Company does hereby represent and warrant as follows:

               (a) Power:  The Company is a limited partnership duly organized
                   -----
and validly existing under the laws of the State of Delaware, and is authorized
by all required action of its partners to execute, deliver and perform this
Agreement.

               (b) Authorization:  The Company is authorized and has the power
                   -------------
under the laws of the State of Delaware and its partnership agreement to enter
into this Agreement and the transactions contemplated hereby and to perform and
carry out all covenants and obligations it is to perform under and pursuant to
this Agreement. The Company is not prohibited from entering

                                      -3-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

into this Agreement and discharging and performing all covenants and obligations
it is to perform under and pursuant to this Agreement by (and the execution,
delivery and performance of this Agreement, the consummation of the transactions
contemplated hereby and the fulfillment of and compliance with the provisions of
this Agreement will not conflict with or violate or constitute a breach of or a
default under) the terms, conditions or provisions of its Certificate or
Agreement of Limited Partnership, or any other restriction or any law, rule,
regulation or order of any court or other agency or authority of government, or
any contractual limitation, restriction or outstanding indenture, deed of trust,
mortgage, loan agreement, other evidence of indebtedness or any other agreement
or instrument to which the Company is a party or by which it or any of its
property is bound, and neither the Company's entering into this Agreement nor
the Company's discharging and performing all covenants and obligations on its
part to be performed under and pursuant to this Agreement will be in conflict
with or result in a breach of or constitute (with due notice and/or lapse of
time) a default under any of the foregoing, or result in the creation or
imposition of any lien of any nature upon any of the property of the Company
under the terms of any of the foregoing, and this Agreement is the legal, valid
and binding obligation of the Company enforceable in accordance with its terms.

Section 1.02.  Representations and Warranties by Municipality
               ----------------------------------------------

               The Municipality does hereby represent and warrant as follows:

               (a) Authorization:  The Municipality has secured all approvals
                   -------------

of appropriate officers, boards and bodies of the Municipality necessary to duly
authorize the execution, delivery and performance of this Agreement by the
Municipality and the performance by the Municipality of its obligations
hereunder.

                                      -4-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

               (b) Validity: The Municipality is not prohibited from entering
                   --------
into this Agreement and discharging and performing all covenants and obligations
on its part to be performed under and pursuant to this Agreement by the terms,
conditions or provisions of any law, any order of any court or other agency or
authority of government, or any agreement or instrument to which the
Municipality is a party or by which the Municipality is bound.

Section 1.03.  Representations and Warranties by SHA
               -------------------------------------

               The SHA does hereby represent and warrant as follows:

               (a) Existence and Power: The SHA has been duly established under
                   -------------------
the provisions of the Public Housing Law of the State of New York and has the
power to enter into the transactions contemplated by this Agreement and to carry
out its obligations hereunder.

               (b) Authorization: The SHA is authorized and has the power under
                   -------------
the Public Housing Law of the State of New York, its by-laws and the laws f the
State of New York to enter into this Agreement and the transactions contemplated
hereby and to perform and carry out all the covenants and obligations on its
part to be performed under and pursuant to this Agreement. By proper action on
the part of its governing board, the SHA has duly authorized the execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated.

               (c) Validity: The SHA is not prohibited from entering into this
                   --------
Agreement and performing all covenants and obligations on its part to be
performed under and pursuant to this Agreement by the terms, conditions or
provisions of the Public Housing Law of the State of New York, any other law,
any order of any court or other agency or authority of government, or any
agreement or instrument to which the SHA is a party or by which the SHA is
bound.

                                      -5-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

                                   ARTICLE II

                            COVENANTS AND AGREEMENTS
                            ------------------------

Section 2.01.  Payments by Company.
               -------------------

               (a) Payment of Initial Amount. At the time that the Company
                   -------------------------
commences the construction of the Project, it shall pay to the SHA the sum of
One Hundred Thousand Dollars ($100,000.00), said money to be held by the SHA as
a fund to commence the development of the Center, at a site mutually agreeable
to both the City and the SHA and of a type and construction that will benefit
the residents of the neighborhoods surrounding the Project.

               (b) Annual Maintenance and Operations Payments.  Following the
                   ------------------------------------------
commencement of the Project, on an annual basis for a period of forty (40)
years, the Company shall pay to the SHA, on January 1st of each year, commencing
January 1, 1992, a sum of money that the SHA shall hold to use solely for the
operation and maintenance of the Center. This annual sum shall be Ten Thousand
Dollars ($10,000.00) in the first year, payable on the first day of January
immediately following the commencement of the construction on the Project.
Following this first payment, the annual amount shall be increased by five per
cent (5%) per year, which increase will compound yearly over the life of the
forty (40) year payment period (Ex. The Year 2 payment shall be $10,500.00, and
the Year 3 payment shall be $11,025.00).

               (c) Annual Payments to the City. The Company shall pay to the
                   ---------------------------
City, commencing on June 1, 1992, and continuing for a period of nineteen (19)
years thereafter, a sum of money that the City shall deposit in its general fund
as an offset to any interest that the City may be required to pay on bonds or
other financing that the City undertakes on behalf of the development or
construction of the Center. This annual sum shall be Ten Thousand Dollars

                                      -6-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

($10,000.00) in the first year, payable on the 1st day of June, 1992. Following
this first payment, the annual amount shall be increased by five per cent (5%)
per year, which increase will compound yearly over the life of the twenty (20)
year payment period (Ex. The 2nd Year's payment, payment due on June 1, 1993,
shall be $10,500.00; the 3rd Year's payment, due on June 1, 1994, shall be
$11,025.00).

               These payments to the City shall be in addition to all other
payments required to be made to the City, including but not limited to Payments
in Lieu of Taxes due the City under a separate agreement between the City, the
City of Syracuse Industrial Development Agency, and Project Orange Associates,
L.P.

Section 2.02.  Payments by SHA and the City.
               ----------------------------

               (a) Funds to be Contributed by SHA. The SHA shall provide a sum
                   ------------------------------
of Two Hundred Fifty Thousand Dollars ($250,000.00) from such sources as the SHA
shall designate for the Centers design costs, construction costs, and such other
costs as the SHA incurs in outfitting the Center.

               (b) SHA to Consult. Prior to and throughout the development of
                   --------------
the Center, to the extent it is feasible, the SHA covenants and agrees that it
shall seek the advice and counsel of the tenants and governing bodies of,
Pioneer Homes, Almus Oliver Towers, Central Village, The Toomey Abbott Towers
Committee, and the Board of Directors of the Citywide Council of Syracuse Low
Income Housing Residents, in all matters pertaining to the design, construction,
outfitting and equipping of the Center. Once plans and specifications for the
Center have been developed, SHA will present said plans and specifications in a
prompt and timely manner to the Citywide Council of Syracuse Low Income Housing
Residents for their review.

                                      -7-

<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

          The SHA further covenants and agrees that it will manage and  operate
the Center as, and to the standards of, other SHA facilities of similar types
and construction. Management of the operations and programming for the Center
shall be provided by a Board of Directors composed of: the Director of the SHA,
two (2) designees of the Director of the SHA, the Chairperson of the Citywide
council of Syracuse Low Income Housing Residents, and five (5) other
representatives selected from among the residents of Pioneer Homes, Almus Oliver
Towers, Central Village, and Toomey Abbott Towers by the Board of Directors of
the Citywide Council of Syracuse Low Income Housing Residents. The organization
of the Board of Directors for the Center shall be as set forth in the By-Laws to
be developed by the Board of Directors.

          (c) The SHA Shall Fund Staff and Expenses for the Center. The SHA
              ----------------------------------------------------
covenants and agrees that following construction of the Center and for the life
of said Center, it will provide all necessary funding, exclusive of the Company
a payments and any City financing, for the operating expenses of the Center,
including but not limited to utility expenses, supplies, insurance and
maintenance expenses for the Center, as well as all salaries and wages necessary
to fully staff the Center and implement the policies and directives of the
Center's Board of Directors.

          (d) City's Participation in the Center. Upon the selection of a site
              ----------------------------------
for the Center, and upon the approval of the requisite capital expenditure, the
City agrees to seek bonding or other suitable financing for the development and
construction costs of the Center in excess of those funds provided by the
Company and the SHA. Following completion of the Center, the City further agrees
that it will lease the Center to the SHA for a period not to exceed the term of
the City's capital financing vehicle for the Center. The lease terms shall
require that

                                      -8-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

SHA make an annual lease payment of One Dollar ($1.00) to the City and that the
SHA shall purchase the Center from the City at the end of the lease term.

                                  ARTICLE III

                   LIMITED OBLIGATION 0F THE CITY AND THE SHA
                   ------------------------------------------

Section 3.01.  No Recourse; Limited Obligation of the City and the SHA.
               -------------------------------------------------------

               (a) No Recourse. All covenants, stipulations, promises, agreement
                   -----------
and obligations of the City and the SHA contained in this Agreement shall be
deemed to be the covenants, stipulations, promises, agreements and obligations
of the City and the SHA and not of any member, officer, agent, servant or
employee of the City and the SHA in his individual capacity, and no recourse
under or upon any obligation, covenant or agreement contained in this Agreement,
or otherwise based or in respect of this Agreement, or for any claim based
thereon or other- wise in respect thereof, shall be had against any past,
present or future member, officer, agent, servant or employee, as such, of the
City or the SHA or any successor public benefit corporation or political
subdivision or any person executing this Agreement on behalf of the City or the
SHA, either directly or through the City or the SHA or any successor public
benefit corporation or political subdivision or any person so executing this
Agreement. It is expressly understood that this Agreement is a corporate
obligation, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, any such member, officer,

                                      -9-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

agent, servant or employee of the City or the SHA or of any successor public
benefit corporation or political subdivision or any person so executing this
Agreement under or by reason of the obligations, covenants or agreements
contained in this Agreement or implied therefrom. Any and all such personal
liability of, and any and all such rights and claims against, every such member,
officer, agent, servant or employee under or by reason of the obligations,
covenants or agreements contained in this Agreement or implied therefrom are, to
the extent permitted by law, expressly waived and released as a condition of,
and as a consideration for, the execution of this Agreement.

               (b) Limited Obligation. The obligations and agreements of the
                   ------------------
City or the SHA contained herein shall not constitute or give rise to an
obligation of the State of New York. Furthermore, such obligations and
agreements shall not constitute or give rise to a general obligation of the City
or the SHA, but rather shall constitute limited obligations of the City or the
SHA payable solely from. the funds of the City and the SHA specifically obtained
and earmarked for the development and construction of the Center.

                                   ARTICLE IV

                               EVENTS OP DEFAULT
                               -----------------

Section 4.01.  Events of Default.
               -----------------

               Any one or more of the following events shall constitute an event
of default under this Agreement, and the terms "Event of Default" or "Default"
shall mean, whenever they are used in this Agreement, any one or more of the
following events:

               (a) Failure of the Company to pay any amount due and payable by
it pursuant to this Agreement.

               (b) Any warranty, representation or other statement by or on
behalf of the Company contained in this Agreement shall prove to have been false
or incorrect in any material respect on the date when made or on the effective
date of this Agreement.

                                      -10-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

Section 4.02.  Remedies on Company Default.
               ---------------------------

               Whenever any Event of Default under Sections 4.01(a) or 4.01(b)
shall have occurred with respect to this Agreement, the City or the SHA may take
whatever action at law or in equity as may appear necessary or desirable to
collect the amount then in default or to otherwise enforce the performance, or
the covenants or obligations of the Company under this Agreement.

Section 4.03.  Payment of Attorney's Fees and Expenses.
               ---------------------------------------

               If the Company should default in performing any of its
obligations, covenants and agreements under this Agreement and the City or the
SHA should employ attorneys or incur other expenses to enforce that performance
or for the collection of any amounts payable by the Company, the Company agrees
that it will, on demand therefor, pay to the City or the SHA the fees and
disbursements of such attorneys and such other expenses so incurred.

Section 4.04.  Remedies: Waiver and Notice.
               ---------------------------

               (a) No Remedy Exclusive. No remedy herein conferred upon or
                   -------------------
reserved to the City and the SHA is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute.

               (b) Delay. No delay or omission in exercising any right or power
                   -----
accruing upon the occurrence of any Event of Default hereunder shall impair any
such right or power or shall be construed to be a waiver thereof, but any such
right or power may be exercised from time to time and as often as may be deemed
expedient.

                                      -11-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

               (c) Notice Not Required. In order to entitle the City or the SHA
                   -------------------
or both to exercise any remedy reserved to it in this Agreement, it shall not be
necessary to give any notice, other than such notice as may be expressly
required in this Agreement.

               (d) No Waiver. In the event any provision contained in this
                   ---------
Agreement should be breached by any party and thereafter duly waived by the
other party so empowered to act, such waiver shall be limited to the particular
breach so waived and shall not be deemed to be a waiver of any other breach
hereunder. No waiver, amendment, release or modification of this Agreement shall
be established by conduct, custom or course of dealing.

                                   ARTICLE V

                                 MISCELLANEOUS
                                 -------------

Section 5.01.  Term of Agreement.
               -----------------

               (a) General. This Agreement shall become effective and the
                   -------
obligations of the City, the SHA and the Company shall arise absolutely and
unconditionally upon the execution and delivery of this Agreement.

Section 5.02.  Company Acts.
               ------------

               Where the City, the SHA or the Company is required to do or
accomplish any act or thing hereunder, the City, the SHA or the Company may
cause the same to be done or accomplished with the same force and effect as if
done or accomplished by the City, the SHA or the Company.

Section 5.03.  Damage or Destruction.
               ---------------------

               In the event that all or substantially all of the Center shall be
damaged or destroyed, the construction or the opening of the Center is delayed
and/or the Center is

                                      -12-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

temporarily or permanently closed for any reason, the
payments due under this Agreement shall continue and the City and the SHA shall
be entitled to use those funds at their sole discretion.

Section 5.04.  Interest.
               --------

               If the Company shall fail to make any payment required by this
Agreement when due, its obligation to make the payment so in default shall
continue as an obligation of the Company until such payment in default shall
have been made in full, and the Company shall pay the same, together with
interest thereon, to the extent permitted by law, at eighteen per cent (18%) per
annum.

Section 5.05.  Amendment of Agreement.
               ----------------------

               This Agreement may not be amended, changed, modified, altered or
terminated unless such amendment, change, modification, alteration or
termination (i) is in writing and signed by the City, the SHA and the Company,
and (ii) in the case of any amendment, change, modification or alteration of
this Agreement, unless the City, the SHA and the Company, and their successors
and assigns, shall assume in writing the obligations of such amended, changed,
modified or altered Agreement.

Section 5.06.  Notices.
               -------

               All notices, certificates or other communications hereunder shall
be in writing and shall be sufficiently given and shall be deemed given when
mailed by United States registered or certified mail, postage prepaid, return
receipt requested, to the City, the SHA, the Company, as the case may be,
addressed as follows:

                                      -13-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

          (a) To the City:
              -----------
                   City of Syracuse
                   City Hall
                   Syracuse, New York 13202
                        Attention: Mayor
                        Attention: Corporation Counsel

          (b) To the SHA:
              ----------
                   Syracuse Housing Authority
                   516 Burt Street
                   Syracuse, New York 13202
                        Attention: Frederick Murphy, Director

          (c) To the Company:
              --------------
                   Project Orange Associates, L.P.
                   c/o North Canadian Power, Inc.
                   1100 Town & Country Road
                   Orange, California 92668
                        Attention: President

provided, that the City, the SHA and the Company may, by notice given hereunder
to each of the others, designate any further or different addresses to which the
subsequent notices, certificates or other communications to them shall be sent.

Section 5.07.  Binding Effect.
               --------------

               This Agreement shall inure to the benefit of, and shall be
binding upon the City, the SEA and the Company, and their respective successors
and assigns.

Section 5.08.  Severability.
               ------------

               If any article, section, subdivision, paragraph, sentence,
clause, phrase, provision or portion of this Agreement shall for any reason be
held or adjudged to be invalid or illegal or unenforceable by any court of
competent jurisdiction, such article, section, subdivision, paragraph, sentence,
clause, phrase, provision or portion so adjudged invalid, illegal or
unenforceable shall be deemed separate, distinct and independent and the
remainder of this

                                      -14-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

Agreement shall be and remain in full force and effect and shall not be
invalidated or rendered illegal or unenforceable or otherwise affected by such
holding or adjudication.

Section 5.09.  Counterparts.
               ------------

               This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

Section 5.10.  Applicable Law.
               --------------

               This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

     IN WITNESS WHEREOF, the City, the SHA and the Company have caused this
Agreement to be executed in their respective names on this the 5th day of
April, 1991.

ATTEST:                                   CITY OF SYRACUSE
/s/ Robert J. Visser
___________________________               By: /s/ Thomas G. Young
Robert J. Visser                             ___________________________
City Clerk                                   Thomas G. Young, Mayor

                                          SYRACUSE HOUSING AUTHORITY

                                          By: /s/ Frederick Murphy
                                             ___________________________
                                             Frederick Murphy, Director

                                          PROJECT ORANGE ASSOCIATES, L.P.
                                          By NCP SYRACUSE, INC., ITS
                                          MANAGING GENERAL PARTNER

                                          By: /s/ Kenneth Ross
                                             ___________________________
                                             Vice President

                                      -15-
<PAGE>

NEFF  GAS-SHA.AGR                                                  April 4, 1991

STATE OF NEW YORK       )
COUNTY OF ONONDAGA      )  SS
CITY OF SYRACUSE        )

     On this 10th day of April, 1991, before me personally came THOMAS G.
YOUNG, Mayor of the City of Syracuse, with whom I am personally acquainted, who,
being by me duly sworn, did depose and say:  That he resides in the City of
Syracuse, New York; that he is the Mayor of the City of Syracuse, the
corporation described in and which executed the within instrument; that he knows
the corporate seal of said City and it was so affixed pursuant to the Charter of
the City; that he signed said instrument as Major of said City of Syracuse by
like authority; and that said THOMAS G. YOUNG further says that he is acquainted
with Robert J. Visser and knows him to be the Municipality Clerk of said City of
Syracuse; that the signature of Robert J. Visser was thereto subscribed pursuant
to said Charter.

                                  /s/ David H. Neff
                                  ___________________________
                                  Notary Public

STATE OF NEW YORK       )
                        )  SS
COUNTY OF ONONDAGA      )

     On this 4th day of April, 1991, before me personally came FREDERICK
MURPHY, to me personally known, who, being by me duly sworn, did depose and say
that he resides in the City of Syracuse, New York; and he is the Director of the
SYRACUSE HOUSING AUTHORITY, a municipal housing authority formed and operating
pursuant to the Public Housing Law of the State of New York, named in and which
executed the foregoing instrument and that he signed his name thereto by
authority of the members of said municipal housing authority.

                                  /s/ David H. Neff
                                  ___________________________
                                  Notary Public

STATE OF NEW YORK       )
COUNTY OF ONONDAGA      )  SS
CITY OF SYRACUSE        )

     On the 11th day of April, 1991, before me personally came Kenneth Ross,
to me known and known to me, and he being duly sworn, did depose and say: That
he resides at _______________________________; that he is the Vice-President of
NCP SYRACUSE, INC., the corporation which is the Managing General Partner of
PROJECT ORANGE ASSOCIATES, L.P., the Limited Partnership described in and which
executed the within instrument; that he knew the seal of said corporation; that
the seal affixed to said instrument was such corporate seal; that it was so
affixed to said instrument by order of the Board of Directors of said
corporation; and that he signed his name thereto by like order.

                                  /s/ Doreen M. Midwinter
                                  ___________________________
                                  Notary Public

                                      -16-<PAGE>

                                                                   EXHIBIT 10.16

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, NY 10017
ATTN:  Bernadette Sullivan
       Legal Assistant

                            CONSENT AND AGREEMENT
                            ---------------------

       1.   Reference is made to the Steam Contract dated as of February 27,
1990 (as amended and in effect from time to time, the "Steam Contract"), between
Project Orange Associates, L.P. (the "Borrower") and Syracuse University
("Syracuse"), the Lease Agreement dated as of February 27, 1990 (as amended and
in effect from time to time, the "Lease"), the Operating Agreement dated as of
February 27, 1990 (as amended and in effect from time to time, the "Operating
Agreement"), the Easement Agreement dated as of November 1, 1990, the Easement
Agreement dated as of November 2, 1990 (collectively as amended and in effect
from time to time the "Easement Agreement") between the Borrower and Syracuse.
The Steam Contract, the Lease, the Operating Agreement and the Easement
Agreement, as the same are modified by this Consent and Agreement, are
collectively the "Syracuse Documents." Reference is also made to (i) that
certain Indenture dated as of December 6, 1999 (the "Financing Agreement"),
among the Borrower, and U.S. Bank Trust National Association ("U.S. Bank
Trust"), as trustee for the holders of the Borrowers.% Senior Secured Notes
due 2007 (the "Trustee") and together with the holders of such Senior Secured
Notes, the "Secured Parties"), and (ii) the Collateral Documents and the other
Financing Documents (as such terms are defined in the Financing Agreement).
References herein to the "Agent" shall mean U.S. Bank Trust in its capacity as
collateral agent under the Collateral Documents and reference herein to the
"Issuer" shall mean the City of Syracuse Industrial Development Authority.
Anything in the Syracuse Documents to the contrary notwithstanding, the parties
agree as follows:

       2.   References herein to the Financing Agreement, the Collateral
Documents and the other Financing Documents refer to such agreement and
documents as the same are modified by this Consent and Agreement and as they may
hereafter be supplemented or amended in accordance with their terms.

                                      -1-
<PAGE>

Unless otherwise defined herein, all terms used herein which are defined in the
Syracuse Documents shall have their respective meanings set forth therein.

       3.   Syracuse hereby acknowledges notice and receipt of the Financing
Agreement and the Collateral Documents (other than the Consents), and agrees
that the Collateral Documents (other than the Consents) as in force on the date
of this Consent and Agreement constitute a "Permitted Mortgage" for purposes of
the Syracuse Documents.  Syracuse consents to the assignment of the Syracuse
Documents to the Agent and the assignment of certain Syracuse Documents to
Issuer.  Nothing herein shall imply any consent or agreement on the part of
Syracuse to subject the estate and interest of Syracuse in the Premises (as
defined in the Lease Agreement and as described on Exhibit "A" hereto) or in the
Easements (as defined in the Easement Agreement) to any mortgage, security
interest, encumbrance or charge.  Syracuse has been advised that sales by the
Borrower of energy and capacity transacted through the New York Independent
System Operator and Power Exchange, constitute sales to a "public utility" for
the purposes of Section 2.01(C) of the Steam Contract.

       4.   Syracuse will pay all moneys due and to become due to the Borrower
under the Syracuse Documents directly to the Agent for deposit in the Project
Orange Operating Account, or to such other person or in such other manner as the
Agent may from time to time specify in writing to Syracuse.

       5.   Except as otherwise expressly provided herein or in any Syracuse
Document to which the Agent or any Secured Party shall be or become a party,
neither the Agent nor the Secured Parties shall be liable for the performance or
observance of any of the obligations or duties of the Borrower under the
Syracuse Documents, nor shall any assignment of any Syracuse Document to the
Agent or the Secured Parties give rise to any duties or obligations whatsoever
on the part of the Agent or the Secured Parties owing to Syracuse except that,
insofar as the Agent or the Secured Parties exercise their rights under the
Syracuse Documents or the Financing Documents or make any claims with respect to
any payments, deliveries or other obligations under the Syracuse Documents, the
terms and conditions of the Syracuse Documents applicable to such exercise of
rights or such claims shall apply to the Agent and the Secured Parties to the
same extent as the Borrower.

       6.   The Borrower and Syracuse will not amend, terminate, waive or
supplement any Syracuse Document without the prior written consent of the
Secured Parties (or such number of percentage of the Secured Parties as may be
required under the terms of the Financing Agreement, the Collateral Documents
and the other Financing Documents).

                                      -2-
<PAGE>

       7.   Syracuse will furnish to the Agent at its address at 100 Wall
Street, Suite 1600, New York, New York 10005, Attention:  Corporate Trust
Administration, concurrently with the delivery thereof to the Borrower, a copy
of each notice or demand delivered by Syracuse to the Borrower under any
Syracuse Document.

       8.   (a) Syracuse agrees that, notwithstanding any right it may have
under any Syracuse Document, it shall not terminate any Syracuse Document unless
it shall have given the Agent at least 120 days, prior written notice of its
intent to terminate such Syracuse Document and the Agent or the Secured Parties
shall not cure within such time period the condition giving rise to such right
of termination.  Syracuse's right to exercise remedies as a secured creditor
against Borrower shall be limited by the provisions of Section 10 hereof.

       If the Secured Parties are prohibited by any process or injunction issued
by any court or by reason of any action by any court having jurisdiction of any
bankruptcy or insolvency proceedings involving Borrower, from commencing or
prosecuting foreclosure or other appropriate proceedings in the nature thereof,
the times specified in this subparagraph for commencing or prosecuting such
foreclosure or other proceedings shall be extended for the period of such
prohibition.

       (b)  Syracuse agrees that the provisions of subsection (3) of Section
3.03C of the Steam Contract entitling Syracuse to assume operating control of
the Facility under certain circumstances shall not be construed or enforced so
as to limit or restrict the exercise of any rights or remedies available to the
Agent or the Secured Parties in their capacities as secured creditors under the
Financing Documents and the Collateral Documents so long as there exists any
default or event of default (as defined under the Financing Agreement or such
documents) which permits or with the passage of time or the giving of notice or
both would permit the holder of any indebtedness of the Borrower to the Agent or
any Secured Party under the Financing Agreement or any of such documents to
accelerate the maturity of such indebtedness. Syracuse acknowledges that (i)
such rights and remedies of the Agent or the Secured Parties include the rights
(in its own name or through an agent, assignee or designee) to take possession
of or obtain entry to the Facility, to assume and exercise operating control of
the Facility, and to foreclose upon and sell and transfer Borrower's interest in
the Facility and the Syracuse Documents, (ii) in so assuming or exercising
operating control of the Facility the Agent or the Secured Parties may exclude
or prevent Syracuse from assuming or exercising operating control of the
Facility, and (iii) the assumption or exercise of operating control of the
Facility by the Agent or the

                                      -3-
<PAGE>

Secured Parties in the exercise of any of such rights and remedies shall not
in and of itself give rise to any liability or obligation to Syracuse on the
part of the Agent or the Secured Parties. In the event the Agent or the Secured
Parties shall assume or exercise operating control of the Facility as
contemplated by clause (ii) above and in so doing shall exclude or prevent
Syracuse from assuming or exercising operating control of the Facility, then
Syracuse shall be entitled to give written notice to the Agent of its intent to
exercise its right of termination of the Steam Contract pursuant to Section
3.03C(2) thereof if reimbursement to Syracuse as required thereunder is not made
within eight months after the interruption of service, so that the requirement
of prior written notice to the Agent pursuant to subparagraph (a) of this
Section 8 shall not extend or delay the passage of time required prior to the
exercise of such right of termination as set forth in said Section 3.03C(2).
Nothing in this Section 8(b) shall be deemed to limit or restrict any of the
other rights and remedies available to Syracuse under the Syracuse Documents
including, without limitation, the right of Syracuse to assume and exercise
operating control of the Existing Plant pursuant to Section 20.02(e) of the
Operating Agreement. The Agent and the Secured Parties (or their agent, assignee
or designee) shall exercise their rights to exclude or prevent Syracuse from
assuming or exercising operating control of the Facility by delivering written
notice to Syracuse that the Secured Parties intend to exercise their rights
under the Collateral Documents and then diligently exercising such rights.

     If Syracuse shall exercise any rights it may have including its rights
under Section 3.03(C)(3) of the Steam Contract to assume possession or operating
control of the Facility, Syracuse shall use its reasonable efforts to operate
the Facility in accordance with the Syracuse Documents and the Power Purchase
Contract (as defined in the Financing Agreement) and not knowingly operate the
Facility so that its net electrical output exceeds 75 megawatts.

     (c)  If a default under any Syracuse Document is of such nature that it
cannot practicably be cured without first taking possession of or obtaining
entry to the Facility or if such default is of such a nature that it is not
susceptible of being cured by the Agent or the Secured Parties then Syracuse
shall not be entitled to terminate any Syracuse Document by reason of such
default if and so long as the Agent or the Secured Parties (or their agent,
assignee or designee) shall proceed diligently to obtain possession of or entry
to the Facility pursuant to the rights of the Agent and the Secured Parties
under the Financing Documents (including possession or entry by a receiver), and
upon obtaining such possession the Agent and the Secured Parties (or their
agent, assignee or designee) shall proceed diligently to cure such default if
such default is susceptible of being cured by the Agent and the Secured Parties.
In the event the Agent or the Secured Parties (or their agent, assignee or
designee) elect to perform Borrower's obligations under

                                      -4-
<PAGE>

the Syracuse Documents or to enter into new Syracuse Documents as provided in
subparagraph 8(f) below, such entity or person shall not have personal liability
to Syracuse for the performance of such obligations (other than indemnity claims
under Article 5 of the Steam Contract, Article 19 of the Lease and Article 14 of
the Operating Agreement) and the sole recourse of Syracuse shall be to the
Secured Parties' interests in the Facility and the Collateral (as defined in the
Financing Agreement). The Agent and the Secured Parties' determination that a
default under the Syracuse Documents is of such a nature that it cannot
practicably be cured without first taking possession of or obtaining entry to
the Facility shall, if reasonably made in good faith, be binding on Syracuse,
the Agent and the Secured Parties (and their agents, assignees or designees).

       (d)  Neither the Agent nor the Secured Parties shall be required to
continue to proceed to obtain possession or entry, or to continue in possession
of the Facility, pursuant to the foregoing subparagraph (c) if and when such
default shall be cured. If the Agent, any Secured Party or any nominee, or a
purchaser at the foreclosure sale, shall acquire title to the Facility and shall
cure all defaults which are susceptible of being cured by the Agent, a Secured
Party or such purchaser, as the case may be, then any default of the Borrower
which is not susceptible of being cured by the Agent, a Secured Party or such
purchaser, as the case may be, shall no longer be deemed to be a default under
any Syracuse Document; provided, however, that nothing in this Section 8(d)
shall be deemed to be a waiver by Syracuse of any rights or remedies it may have
against the Borrower for any such defaults which are not susceptible of cure,
subject, however, to the limitations on the exercise of such remedies provided
in this Consent and Agreement.

       (e)  The Secured Parties may assign their rights and interests and the
rights and interests of Borrower under the Syracuse Documents to any purchaser
or transferee of the Facility, upon notice to Syracuse, if such purchaser or
transferee is reputable and solvent, will not be rendered insolvent by such
assumption, and assumes the obligations of Borrower under the Syracuse
Documents. Syracuse hereby acknowledges, consents to and shall be bound by any
such assignment and assumption which does not by its terms modify the provisions
of the Syracuse Documents. Upon such assignment and assumption, the Secured
Parties shall be relieved of all obligations arising under the Syracuse
Documents after such assignment and assumption. If the purchaser or transferee
of Borrower's interest under the Syracuse Documents shall execute and deliver to
the Secured Parties a mortgage and/or a security agreement with respect to such
purchaser or transferee's interests in the Facility, the Syracuse Documents and
the Premises, this Consent and Agreement shall remain in full force and effect,
and such new mortgage and or security agreement (if their substantive terms are
the

                                      -5-
<PAGE>

same as those comprising the Collateral Documents) shall be deemed to be the
Collateral Documents hereunder.

       (f)  In the event that any Syracuse Document is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding or terminates
prior to the date it would otherwise expire, for any reason other than with the
consent of the Agent, and if, within ninety (90) days after such rejection or
termination, the Secured Parties or their designee(s) shall so request, Syracuse
will, upon cure of all defaults under the rejected or terminated Syracuse
Documents (other than those no longer deemed to be defaults by virtue of the
provisions of Sections 8(c) and 8(d) above), execute and deliver to the Secured
Parties or such designee(s), a new Syracuse Document, which shall be for the
balance of the remaining term under the original Syracuse Document before giving
effect to such rejection or termination and shall contain the same conditions,
agreements, terms, provisions and limitations as the original Syracuse Document
(except for any requirements which have been fulfilled by Borrower prior to such
rejection or termination). References in this Consent and Agreement to any
"Syracuse Document" shall be deemed also to refer to such new Syracuse Document.

       (g)  Foreclosure of any Collateral Document, or any sale thereunder by
the Agent or any Secured Party, whether by judicial proceeding or any power of
sale, or any conveyance from the Borrower in lieu thereof, shall not require the
consent of Syracuse or constitute a breach of any Syracuse Document. Upon
receipt of notice of such foreclosure, sale or conveyance, Syracuse shall
recognize the Secured Parties or their transferee, as the case may be, as the
party to the relevant Syracuse Document, subject, however, to the assumption by
such party of the obligations of the Borrower under the Syracuse Documents and
to compliance with the provisions of Section 8(e) above.

       9.   The parties hereto acknowledge and agree that the subordination of
the user charge (as defined in the Syracuse Documents) is terminated and no
longer effective, including without limitation for purposes of Section 5.03 of
the Operating Agreement.

       10.  Anything herein to the contrary notwithstanding, Syracuse shall not
exercise any remedy as a secured creditor (whether at equity or law) without
first providing the Agent not less than thirty (30) days prior written notice of
its intent to take such action and the reasons therefore, nor shall Syracuse
take any such action if the Borrower or the Agent shall provide Syracuse
additional security,

                                      -6-
<PAGE>

reasonably satisfactory to Syracuse, for the Borrower's obligations under the
University Security Documents (as defined in the Financing Agreement).

       11.   Except as otherwise expressly provided in Section 17 below,
application of insurance or condemnation proceeds, proceeds from surety bonds or
similar obligations relating to the Facility or from damage claims arising from
any contract relating to the Facility, and decisions to sue, compromise, settle
or release claims arising from or related to any of the foregoing shall be made
by the Agent pursuant to the terms of the Collateral Documents. Notwithstanding
the express provisions of any surety bond, insurance policy or other similar
obligation wherein or whereby Syracuse may be named as a co-obligee or
additional insured, Syracuse shall have no interest or other right in respect of
any of the foregoing matters until all Senior Debt shall be paid in full, except
with respect to its rights as to the application of any proceeds thereof as
provided in Section 17. Syracuse shall execute all such releases, waivers and
other instruments as the Agent may reasonably request to further evidence or
implement the intent or carry out the purposes of this Section 11.

       12.   In the event that any conflict shall exist between the terms of
this Consent and Agreement and the terms of any Syracuse Document, the terms of
this Consent and Agreement shall prevail. Except as otherwise expressly provided
herein and in that certain Subordination Agreement dated as of the date hereof
among Syracuse, Agent  and Borrower, (i) this Consent and Agreement shall not
limit or restrict the availability to or exercise by Syracuse of any of its
rights and remedies under the Syracuse Documents and (ii) nothing in the
Financing Documents shall be construed to amend, modify, alter, waive, restrict
or limit any of the terms, conditions or provisions of any of the Syracuse
Documents or increase the obligations or diminish the rights of Syracuse under
the Syracuse Documents.

       13.   Syracuse shall not be released from its obligations under the
Syracuse Documents pursuant to any assignment or transfer (including by reason
of a merger, consolidation, sale of substantially all of its assets or
otherwise) unless the Agent shall have previously consented in writing to such
release.

       14.   (a) Anything in this Consent and Agreement, the Financing
Documents, the Collateral Documents and the other Financing Documents to the
contrary notwithstanding, and so long as Syracuse shall not be in default under
any of its obligations established by this Consent and Agreement or by the
Syracuse Documents which is susceptible of cure by Syracuse, or if in default,
so long as it is proceeding diligently to cure such default, the Agent and the
Secured Parties shall not exercise any of the rights or remedies available to
them under any

                                      -7-
<PAGE>

of such documents or otherwise, in such manner so as to cause the removal from
the Premises of all of the Facility or any portion of the Facility material to
its operation; provided, however, that this provision shall not be construed to
impose upon the Agent or the Secured Parties any affirmative obligation to
preserve, protect or maintain the Facility; provided, further, that prior to the
Commercial Operation Date (as defined in the Steam Contract), if (i) following
an Event of Default (as defined in the Financing Agreement) with respect to
which the Secured Parties (or their agent, assignee or designee) accelerate the
Borrower's obligations under the Financing Agreement, the Secured Parties (or
their agent, assignee or designee) determine not to acquire the Facility by way
of foreclosure of their lien or otherwise under the Financing Documents and the
Collateral Documents or (ii) the Secured Parties (or their agent, assignee or
designee) determine to remove any or all of the Facility from the Premises
(Syracuse hereby agreeing that the Secured Parties, their agent, assignee or
designee shall have such right to remove the Facility), then the Agent shall
give Syracuse forty-five (45) days prior written notice of their intent to do so
and offer Syracuse the opportunity to purchase the Facility or any portion
thereof or any of the Collateral (but excluding accounts and general intangibles
(other than contract rights, permits and the rights of a like nature),
instruments and money as defined in the UCC) (the "Purchased Assets"), in cash,
"as is," "where is," for the lesser of the Purchased Assets' fair market value
or original purchase price (the "Purchase Price"); provided, however, that the
purchase price for that certain Restated Gas Sales and Purchase Agreement (the
"Gas Sales Agreement") dated March 18, 1991 between Borrower and Noranda, Inc.
("Noranda") shall be the greater of its fair market value, the price Noranda is
required to pay Borrower pursuant to the terms of the Gas Sales Agreement or
Eighty-Eight Million Dollars ($88,000,000). Agent's offer shall specify the fair
market value and original purchase price of the Purchased Assets, and, subject
to the last paragraph of this Section 14(a), Syracuse shall have thirty (30)
days to notify the Agent in writing of whether it accepts the Secured Parties'
offer. If Syracuse accepts the Secured Parties' offer, the parties will
consummate the purchase and sale of the Purchased Assets within sixty (60) days
by the Bank's delivery to Syracuse of a bill of sale covering the Purchased
Assets and Syracuse's delivery of the Purchase Price to the Agent. For purposes
of this section, "fair market value" shall be determined by taking into account
any liens, charges and encumbrances on the Purchased Assets other than those
liens, charges and encumbrances of the Secured Parties or Syracuse.

     If Syracuse objects to the Agent's determination of fair market value, then
within ten (10) days of Agent's receipt of written notice thereof, a
professional consultant experienced in operation of cogeneration facilities and
valuation of natural gas supply and transportation agreements (the "consultant")
shall be selected by Agent and Syracuse. If Agent and Syracuse are unable to
agree upon a

                                      -8-
<PAGE>

mutually acceptable consultant, Agent and Syracuse within five (5) days after
expiration of the ten (10) day period, shall each select a consultant and the
two consultants, within ten (10) days of their selection, shall select a third
consultant who shall be the consultant.

     Upon the first available opportunity, the consultant shall have access to
the Purchased Assets for the purpose of determining (the "determination") the
fair market value of the Purchased Assets. Agent and Syracuse shall cooperate
with the consultant and shall provide him with such records and information
relating to the Purchased Assets that are within their possession or available
to them. The consultant shall make his determination as soon as reasonably
practical, but no later than thirty (30) days after his selection. The
consultant's determination shall be binding upon the Secured Parties and
Syracuse. The fees and expenses of each consultant in each determination made
pursuant to this Section shall be borne as follows:

            (i)  the fees and expenses of the consultant, if any, mutually
     acceptable to the Secured Parties and Syracuse shall be borne equally by
     the Secured Parties and Syracuse;

            (ii) if the Secured Parties and Syracuse are unable to agree upon a
     mutually acceptable consultant, each party shall pay the fees and expenses
     of the consultant it selects and the fees and expenses of the third
     consultant shall be borne equally by the Secured Parties and Syracuse.

     Syracuse shall have thirty (30) days following its receipt of the Secured
Parties' consultant's determination to notify the Agent in writing of whether it
accepts the offer (fair market value under such circumstances being the fair
market value as determined by the consultant pursuant to the preceding
paragraph). If Syracuse accepts the Secured Parties' offer, the parties will
consummate the purchase and sale of the Purchased Assets within sixty (60) days
by the Secured Parties' delivery to Syracuse of a bill of sale covering the
Purchased Assets and Syracuse's delivery of the Purchase Price (fair market
value under such circumstances being the fair market value as determined by the
consultant pursuant to the preceding paragraph) to the Agent.

       (b)  From the date hereof, (i) if an Event of Default occurs and is
continuing under the Financing Documents or a breach or default occurs and is
continuing under any of the Syracuse Documents and upon written notice from
Syracuse to Agent or Agent to Syracuse or (ii) if the Secured Parties shall have
determined to sell or otherwise dispose of all or any part of the Collateral
(except (i) in the ordinary course of business of the operation of the Facility
as contemplated by the Operative Documents (as defined in the Financing

                                      -9-
<PAGE>

Agreement) (so long as such sale or disposition does not involve assets valued
in excess of $50,000 in any instance, or increase the value of all assets
transferred within a one year period to greater than $200,000) and (ii)
obsolete, worn out or replaced property not useful in the business of the
Facility) and, prior to such sale or other disposition, the Secured Parties have
not theretofore undertaken or offered to undertake negotiations with Syracuse in
the nature of those set forth below with respect to the particular Collateral to
be disposed of or sold, then the Agent shall give notice to Syracuse and, in
each such event, the Agent on behalf of the Secured Parties and Syracuse shall
undertake in good faith, exclusive negotiations for a period of forty-five (45)
days after such written notice (the "Negotiation Period") whereby Syracuse may
offer to purchase and Agent may agree to sell at a price and on terms and
conditions mutually acceptable to Syracuse and the Secured Parties, any or all
of the Gas Contracts and the other Collateral (but excluding accounts and
general intangibles (other than contract rights, permits and rights of a like
nature), instruments and money as defined in the UCC). Nothing in this Section
14(b) shall be construed to permit the Agent or the Secured Parties to remove or
to cause the removal from the Premises of all of the Facility or any portion of
the Facility material to its operation.

     In the event that the Secured Parties agree to sell and Syracuse agrees to
purchase any or all of the Secured Parties' interests under the Gas Contracts or
other Collateral (but excluding accounts and general intangibles (other than
contract rights, permits and rights of a like nature), instruments and money as
defined in the UCC) Syracuse shall: (i) purchase the Gas Contracts or such other
Collateral, as the case may be, "as is", "where is" and pay to Agent the
aggregate purchase price for the Gas Contracts or such other Collateral, as the
case may be, in cash, (ii) enter into any and all reasonable documentation
required to transfer the Gas Contracts or such other Collateral, as the case may
be.  Any and all negotiation(s) between Agent and Syracuse shall terminate on
the day after the last day of the Negotiation Period; provided however, that the
Negotiation Period may be extended by the mutual written consent of the Agent
and Syracuse. For purposes of this Section 14(b) the term "Gas Contracts" shall
mean the Noranda Agreements and the Tenneco Agreements (as defined in the
Financing Agreement).

     If the Secured Parties sell any or all of the Secured Parties' interests in
the Gas Contracts or such other Collateral to a party other than Syracuse, then,
promptly following the consummation of such sale, the Agent shall notify
Syracuse in writing of, and only of (i) the occurrence of such sale, (ii) the
Disposition Price (as hereinafter defined), and (iii) the party to whom the
Secured Parties sold the Gas Contracts and/or such other Collateral; provided,
however, that, in connection with such disclosure, Syracuse agrees to execute
such

                                      -10-
<PAGE>

confidentiality agreements as the purchaser of the Gas Contracts and/or such
other Collateral, the Agent and/or the Secured Parties may reasonably request.

       (c)  Syracuse hereby covenants and agrees that any lien, charge or
encumbrance that Syracuse has on or with respect to the Gas Contracts pursuant
to the Syracuse Documents or the University Security Documents (as defined in
The Financing Agreement) (the "Lien") shall be limited to an amount equal to any
then due but unpaid user charges plus interest and any accrued user charges
pursuant to Article 5 of the Operating Agreement plus any Excess Steam Payments
plus interest then due and unpaid under Article 3 of the Steam Sale Agreement.
Syracuse further covenants and agrees to release and discharge the Lien if the
Disposition Price the Secured Parties can obtain for the Gas Contracts is less
than or equal to all amounts then due and owing to the Secured Parties under the
Financing Agreements. For purposes of this Section 14(c) "Disposition Price"
shall mean an amount equal to the net proceeds realized by the Secured Parties
from any sale or other transfer (by foreclosure or otherwise) of any or all of
the Gas Contracts.

       (d)  Syracuse shall have the right upon reasonable advance notice to
inspect the books and records of the Agent and Borrower as they relate to the
Purchased Assets.

       (e)  Nothing in this Section 14 shall be construed to restrict the rights
of the Agent or the Secured Parties to terminate the Gas Sales Agreement
pursuant to Section 12.1 thereof on account of Seller's (as defined in the Gas
Sales Agreement) default thereunder.

       15.   Syracuse hereby represents and warrants that (i) it is an
educational corporation duly organized, validly existing and in good standing
under the laws of New York, (ii) each of the Syracuse Documents is in full force
and effect on the date hereof and constitutes a valid and binding obligation of
Syracuse, enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
principles of equity, (iii) no consent, license, approval or authorization of,
or filing, registration or declaration with, or exemption by, any governmental
body, bureau or agency or any other person is required in connection with the
execution, delivery and performance by Syracuse of any Syracuse Documents or
this Consent and Agreement other than those which have been duly obtained and
are in full force and effect, (iv) the representations and warranties of
Syracuse contained in each Syracuse Document are true and correct on the date
hereof with the same effect as if made on and as of the date hereof, (v) no
event of default, or event with which

                                      -11-
<PAGE>

notice or lapse of time would become an event of default, exists and is
continuing under any Syracuse Document and (vi) Syracuse has duly complied with
all agreements and conditions contained in the Syracuse Documents required to be
performed or complied with by it prior to the date hereof.

       16.   This Consent and Agreement is for the benefit of Syracuse, the
Agent and the Secured Parties and no other party shall derive any rights by the
execution of this Consent and Agreement; provided, however, that Syracuse agrees
that the provisions of Section 3 of this Consent and Agreement shall also be for
the benefit of the Issuer and the Borrower.

       17.   (a) In the event of any damage to or destruction of the Facility,
the Agent and the Secured Parties will consider in good faith the application of
the use of proceeds of any insurance policy for the reconstruction of the
Facility and will in any event permit the application of such proceeds for
rebuilding or reconstruction if and for so long as (i) there exists no default
or event of default (as defined under the Financing Agreement, the Collateral
Documents or the Financing Documents) which permits or with the giving of notice
or the passage of time or both would permit the holders of any indebtedness of
the Borrower to the Agent or any Secured Party under the Financing Agreement,
the Collateral Documents and the other Financing Documents, to accelerate the
maturity of such indebtedness, (ii) the aggregate of such proceeds and all other
funds available for such rebuilding or reconstruction are sufficient to complete
such rebuilding or reconstruction within a reasonable time, and (iii) either (x)
the conduct of such rebuilding or reconstruction or the operation of the
Facility after completion of such rebuilding or reconstruction are not likely in
the reasonable judgment of the Agent to give rise to such a default or event of
default or (y) the amount of insurance proceeds required to effect such
rebuilding or reconstruction does not exceed the greater of (i) 35% of the
replacement value of the Facility or (ii) the replacement cost of one of the gas
turbines comprised in the Facility.

       (b)  In the event of any taking of the Premises or the Facility by
Condemnation Proceedings, Syracuse, Borrower and Agent shall cooperate in the
prosecution of the Condemnation Proceedings and the condemnation proceeds shall
be made available to, and shall be applied by, Syracuse, Borrower and Agent, as
the case may be, in the manner provided in Article 21 of the Lease Agreement.

       18.   This Consent and Agreement shall be binding upon, and shall inure
to the benefit of, Syracuse, the Agent and the Secured Parties and their
respective successors and assigns.

                                      -12-
<PAGE>

       19.   (a) If the Secured Parties succeed to Borrower's interests in the
Lease or any of the Syracuse Documents pursuant to the Collateral Documents or
if the Secured Parties shall acquire a new Lease pursuant to this Agreement the
Secured Parties and their designee shall not be required to cure any defaults by
Borrower under the first and last sentences of Section 23.06 or Section 27.01(f)
of the Lease.

       (b)  Syracuse acknowledges that the provisions of Sections 27.05 and
27.06 of the Lease are subject to the limitation set forth in Section 3.03 of
the Steam Contract that Syracuse shall have no right to terminate any of the
Syracuse Documents except as expressly provided in such Syracuse Documents.

       (c)  Syracuse acknowledges and agrees and covenants that notwithstanding
the union of the fee simple title and the leasehold estate created under the
Lease or the merger of any other Syracuse Document in Syracuse, the Borrower,
the Secured Parties, or any other person or entity, either by purchase,
foreclosure or otherwise, it is the declared intention of the parties hereto
that the separation of the fee simple estate and the leasehold estate in the
Lease and the separation of the parties' interests in the other Syracuse
Documents shall be maintained and a merger shall not take place without the
prior written consent of the Secured Parties; provided, however, that nothing in
this paragraph shall limit or restrict in any manner the right of Syracuse to
terminate any of the Syracuse Documents in accordance with their terms and the
terms hereof.

                                      -13-
<PAGE>

          This Consent and Agreement is dated as of December 6th, 1999.

                                 SYRACUSE UNIVERSITY
                               ---------------------------------------

                                 By: /s/ Louis G. Marcoccia
                                    ___________________________
                                    Name: Louis G. Marcoccia
                                    Title: Senior Vice President for Business
                                           Finance and Administrative Services

                                 PROJECT ORANGE ASSOCIATES, L.P.

                                 By:   G.A.S. Orange Associates, LLC
                                       general partner
                               ---------------------------------------

                                 By: /s/ Douglas Corbett
                                    ____________________________
                                    Name: Douglas Corbett
                                    Title: Vice President

                                 U.S BANK TRUST NATIONAL
                                     ASSOCIATION
                                 as Collateral Agent
                               ---------------------------------------

                                 By: /s/ Ward A. Spooner
                                    ____________________________
                                    Name: Ward A. Spooner
                                    Title: Vice President

<PAGE>

STATE OF NEW YORK  )
                   )ss.:
COUNTY OF NEW YORK )

On the 2nd day of December in the year 1999 before me, the undersigned, a notary
public in and for said state, personally appeared Louis G. Marcoccia,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

                                                        /s/ Joseph Zagraniczny
                                                        ______________________
                                                        Notarial Officer
(Seal, if any)

____________________
Title (and rank)

My commission expires: 12/31/2001

<PAGE>

                                                              POA Acknowledgment

STATE OF NEW YORK  )
                   )ss.:
COUNTY OF NEW YORK )

On the 3rd day of December in the year 1999 before me, the undersigned, a notary
public in and for said state, personally appeared Douglas Corbett, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

                                                     /s/ Bernadette M. Sullivan
                                                     __________________________
                                                     Notarial Officer
(Seal, if any)

____________________
Title (and rank)

My commission expires: 6/30/00

<PAGE>

                                                 Collateral Agent Acknowledgment

STATE OF NEW YORK  )
                   )ss.:
COUNTY OF NEW YORK )

On the 3rd day of December in the year 1999 before me, the undersigned, a notary
public in and for said state, personally appeared Ward A. Spooner, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

                                                   /s/ Bernadette M. Sullivan
                                                   _________________________
                                                   Notarial Officer
(Seal, if any)

____________________
Title (and rank)

My commission expires: 6/30/00

<PAGE>

                                   EXHIBIT A

                          DESCRIPTION OF THE PREMISES

                                   [attached]

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