1
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(o)
CONFIDENTIAL AND PROPRIETARY
AMENDED AND RESTATED LEASE AGREEMENT
Dated as of May 16, 1997
BETWEEN
Trinidad Ammonia Company, Limited Partnership
as Lessor
AND
PCS Nitrogen Fertilizer, L.P.
as Lessee
THIS AMENDED AND RESTATED LEASE HAS BEEN ASSIGNED AS
SECURITY FOR INDEBTEDNESS OF THE LESSOR. SEE SECTION 21.
This Amended and Restated Lease has been manually executed in 8 counterparts,
numbered consecutively from 1 through 8, of which this is No. __. To the extent,
if any, that this Amended and Restated Lease constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction) no security interest in this Amended and Restated Lease may be
created or perfected through the transfer or possession of any counterpart other
than the original executed counterpart which shall be the counterpart identified
as counterpart No. 1.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
CONFIDENTIAL
AMENDED AND RESTATED LEASE AGREEMENT
Amended and Restated Lease Agreement, dated as of May 16, 1997
(as the same may be further amended, restated, modified or supplemented from
time to time as permitted by and in accordance with the Operative Documents,
this "Lease"), between Trinidad Ammonia Company, Limited Partnership, a Delaware
limited partnership, as lessor (the "Lessor"), and PCS Nitrogen Fertilizer, L.P.
(formerly Arcadian Fertilizer, L.P.), a Delaware limited partnership, as lessee
(the "Lessee").
The Lessor and the Lessee entered into a Lease Agreement, dated
as of June 29, 1995, as amended, and said parties now desire to further amend
and restate said Lease Agreement. Accordingly, said Lease Agreement and all
Exhibits thereto are hereby amended and restated in their entirety as herein
provided:
SECTION 13. DEFINED TERMS.
Unless the context otherwise requires, each term defined in this
Section 1 shall, when used in this Lease, have the meaning indicated:
"Accrued Default Obligations" has the meaning set forth in
paragraph (e) of Section 19 hereof.
"Acquisition Cost" means, (i) in the case of a Parcel of Property
or Unit of Equipment acquired and built pursuant to the Agreement for Lease, the
Unit Acquisition Cost (as defined in the Agreement for Lease) therefor; (ii)
with respect to any other Unit of Equipment, an amount equal to the sum of (a)
the vendor's invoice price to the Lessor therefor, including any progress
payments, costs of labor, delivery or installation, sales, use, excise or
similar taxes and any other charges included in such invoice, after deduction
for any refundable fleet or other discounts or credits actually used by the
Lessee or the Lessor, (b) any construction or assembly costs, expenses or
charges paid by the Lessor in connection therewith, (c) similar amounts paid or
payable with respect to such Unit to parties other than the vendor of such Unit,
including by way of reimbursement, (d) similar costs incurred with respect to
such Unit by the Lessee, and (e) legal, printing, reproduction, closing and
other normally capitalizable administrative fees and expenses paid by the Lessee
and approved by the Lessor; and (iii) with respect to any Parcel of Property not
acquired and built pursuant to the Agreement for Lease, an amount equal to the
amounts included in (ii)(e) above which are applicable to such Parcel plus (a)
the vendor's contract price therefor or the appraised value thereof, (b)
vendee's closing costs, including, without limitation, title
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
insurance premiums, survey and survey inspection charges, recording and filing
fees, title closer fees, vendee's attorneys' fees and brokerage commissions, (c)
other costs related to the acquisition, including, without limitation,
appraisal, architectural, engineering, soil analysis, environmental analysis and
market analysis fees, and (d) any amounts paid by vendee on behalf of vendor in
addition to, and not as a credit against the contract price, including, without
limitation, payments made in satisfaction of prior liens, and payment of any
transfer, transfer gains or similar taxes imposed in respect of the conveyance
of such Property.
"Additional Insureds" has the meaning set forth in paragraph (e)
of Section 10 hereof.
"Additional Rent" has the meaning set forth in paragraph (c) of
Section 7 hereof.
"Affiliate" of any Person means any other Person controlling,
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; provided that, in any event, any Person
which owns directly or indirectly more than 10% of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or more than 10% of the partnership or other ownership interest of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"AFL Unit Leasing Record" means an instrument, substantially in
the form of Exhibit B hereto, evidencing the lease under this Lease of Equipment
or Property and related personal property acquired and built pursuant to the
Agreement for Lease. The terms "lease" or "leased" when used in this Lease shall
be deemed to mean "sublease" or "subleased" when referenced to the Equipment or
Property subleased pursuant to the AFL Unit Leasing Record.
"Agreement for Lease" means the Agreement for Lease, dated as of
June 29, 1995, as amended, between the Lessor, as owner, and the Lessee, as
agent, as amended and restated as of the date hereof and as the same may be
further amended, restated, modified or supplemented from time to time as
permitted by and in accordance with the Operative Documents.
"Ammonia Project" means the Equipment and improvements
constituting the Ammonia Project described in Exhibit D hereto to be located on
and including the Parcel of Property described in Exhibit F hereto located in
the Republic of Trinidad and Tobago in which the Lessor has acquired or will
acquire a leasehold interest. To the extent that
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
portions of the Ammonia Project are personal or real property, respectively, the
provisions of this Lease in respect to Equipment or Property, respectively,
shall be applicable thereto.
"Ancillary Facility Agreement" means any of the contracts entered
into by the Lessee or an Affiliate of the Lessee and assigned to the Lessor
which provide for the use of and access to storage tanks, loading and unloading
facilities, pipelines and similar facilities and equipment necessary for the
operation and maintenance of and access to the Ammonia Project and the License
Agreement relating to pipelines and similar facilities necessary for the
operation and maintenance of the Ammonia Project.
"Appraisal Procedure" means the following procedure whereby an
independent appraiser shall be appointed by the Lessor and the Lessee, with the
consent of the Assignee, to determine the amount, if any, by which the sales
price of the Ammonia Project has been reduced as the direct result of wear and
tear in excess of the wear and tear that would have occurred if the Lessee's
obligations contained in the second sentence of paragraph (b) of Section 9 of
this Lease had been satisfied, if such determination is required under Section
19 of this Lease. If no such appraiser is appointed by the Lessor and the Lessee
within thirty (30) days after the written request of either the Lessor or the
Lessee that an appraiser be appointed, the Lessor and the Lessee shall each
appoint an independent appraiser within thirty (30) days thereafter, and the two
appraisers so appointed shall appoint a third independent appraiser. Each
appraiser appointed pursuant to the foregoing procedure shall, within thirty
(30) days after appointment of the last appraiser, independently determine the
amount, if any, by which the sales price of the Ammonia Project has been reduced
as the direct result of wear and tear in excess of the wear and tear that would
have occurred if the Lessee's obligations contained in the second sentence of
paragraph (b) of Section 9 of this Lease had been satisfied. If the Lessor or
the Lessee shall fail to appoint an independent appraiser within the
above-mentioned thirty (30) day period, the appraiser appointed by the other
party shall determine such amount. If a single appraiser is appointed, such
appraiser's determination shall be final. If three appraisers are appointed, the
amounts determined by the three appraisers shall be averaged, the amount which
differs the most from such average shall be excluded, the remaining two amounts
shall then be averaged and such average shall be final. The expenses of all
appraisers shall be paid by the Lessee. Each appraiser appointed pursuant to
this "Appraisal Procedure" shall be an independent engineering firm of
recognized standing and shall have experience in the construction, maintenance
and operation of ammonia production plants.
"Assignee" means each Person to which any part of the Lessor's
interest under this Lease or in any Parcel of Property or Unit of Equipment
shall at the time have been collaterally assigned, conditionally or otherwise,
by the Lessor in accordance with Section 21 of this Lease.
"Assignment" means each assignment agreement referred to in
Section 21 hereof, between the Lessor and a third party, pursuant to which the
Lessor assigns certain of its rights under this Lease to such third party, as
the same may be amended, restated, modified or supplemented from time to time.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Average Ammonia Market Price" means, for any calendar month, the
average of the Weekly Average Ammonia Price, FOB Trinidad, for each calendar
week. "Weekly Average Ammonia Price, FOB Trinidad" means, for any calendar week
that begins during such calendar month, the average of the "Green Markets
Caribbean Price", the "Fertecon Caribbean Price", and the "FMB Trinidad Price",
except that (x) if, for any reason, any such price cannot be determined with
respect to such calendar week, the Weekly Average Ammonia Price, FOB Trinidad
shall be the average of such prices as can be so determined (or, if only one
such price can be so determined, such price), and (y) if no such price can be so
determined, the Weekly Average Ammonia Price, FOB Trinidad shall be determined
in a manner as shall be mutually agreed to between the Lessee and the Lessor.
(a) The "Green Markets Caribbean Price" for any calendar week
shall be the average of:
(i) the low International Caribbean Market Price for
Anhydrous Ammonia on the spot market as reported
for such week in the Table "International Market
Prices" by the publication Green Markets
Fertilizers Market Intelligence Weekly (a Pike &
Fischer publication); and
(ii) the high International Caribbean Market Price for
Anhydrous Ammonia on the spot market as reported
for such week in the manner aforesaid by the said
publication.
(b) The "Fertecon Caribbean Price" for any calendar week shall
be the average of:
(i) the low FOB Caribbean Ammonia Spot Price as
reported for such week in the Table "AMMONIA SPOT
PRICE INDICATIONS" by the publication Fertecon
Weekly Ammonia Fax (a Fertecon Limited
publication); and
(ii) the high FOB Caribbean Ammonia Spot Price as
reported for such week in the manner aforesaid by
the said publication.
(c) The "FMB Trinidad Price" for any calendar week shall be
the average of:
(i) the low Ammonia - FOB Trinidad Spot Price as
reported for such week in the table "FMB
International Price Guide" under the heading "RAW
MATERIALS/INTERMEDIATES" by the publication FMB
Fertilizer Market Bulletin (a FMB Consultants Ltd.
publication); and
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(ii) the high ammonia - FOB Trinidad Spot Price as
reported for such week in the manner aforesaid by
the said publication.
If the Green Markets Caribbean Price, the Fertecon Caribbean
Price or the FMB Trinidad Price is quoted for other than short ton of anhydrous
ammonia (for example tonne), the quotation shall be converted to a short ton
basis using generally accepted conversion methods.
"Basic Rent" means, with respect to any Parcel of Property or
Unit of Equipment commencing on the Effective Date with respect to such Parcel
of Property or Unit of Equipment:
13.1 for each calendar month during the Lease Term of such Parcel
or Unit, an amount computed by multiplying the following:
(i) the Acquisition Cost of such Parcel or Unit, by
(ii) a fraction having a numerator equal to the number of days
in such month and a denominator of 365, or in a leap year,
366, by
(iii) the decimal equivalent of 0.06% plus the Lessor's weighted
average percentage cost per annum (including, without
duplication, any interest accruing at a default rate and
any facility, commitment or other fees under a Credit
Agreement) of borrowings outstanding at any time during
the period from and including the 20th day of the
preceding calendar month to and including the 19th day of
the calendar month for which Basic Rent is being computed
(the "Computation Period") to finance or refinance the
acquisition and ownership of Property or Equipment; and
13.2 for any partial first calendar month during the Lease Term
of such Parcel or Unit, an amount computed by multiplying the following:
(a) the Acquisition Cost of such Parcel or Unit, by
(b) a fraction having a numerator equal to the number of days
such Parcel or Unit is under lease during such partial
first month and a denominator of 365, or in a leap year,
366, by
(c) the decimal referred to in paragraph (a)(iii) above,
provided that, if the Effective Date for such Parcel or
Unit falls on or after the Lease Rate Date during such
partial first calendar month, such decimal shall be the
decimal determined as of the next succeeding Lease Rate
Date.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Basic Rent Payment Date" means the 20th day of each calendar
month during the Lease Term of any Property or Equipment and the Lease
Termination Date therefor or, if such day is not a Business Day, the next
succeeding Business Day.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions in the City of New York or the City of London
are authorized by law to close.
"Capital" means, at any particular time, the aggregate of:
(a) Debt at such time; and
(b) Equity at such time.
"Cash Reserve Account" shall have the meaning set forth in
paragraph (q) of Section 2 hereof.
"Cash Reserve Requirement Amount" means an amount equal to the
quotient of 50% of the Acquisition Cost of the Ammonia Project divided by the
number of Scheduled Reserve Payment Dates.
"Cash Reserve Trigger Event" means each of (i) the date that the
Guarantor's senior unsecured long-term credit is first rated below BBB- by
Standard & Poor's Ratings Group (or any successor entity thereto) and below Baa3
by Moody's Investors Services, Inc. (or any successor entity thereto) and (ii)
the date following any CRA Release Event that the Guarantor's senior unsecured
long-term credit is again rated below BBB- by Standard & Poor's Ratings Group
(or any successor entity thereto) and below Baa3 by Moody's Investors Services,
Inc. (or any successor entity thereto).
"Code" means the Internal Revenue Code of 1986, as amended.
"Companies Act" means Companies Act, Chapter 31, No. 1, of May 1,
1939, as amended.
"Computation Period" has the meaning set forth in subclause
(a)(iii) of the definition of Basic Rent in Section 1 hereof.
"Consent" means each consent or acknowledgement or similar
instrument of the Lessee with respect to an Assignment, as the same may be
amended, restated, modified or supplemented from time to time.
"CRA Agreement" means the Cash Reserve Account Agreement to be
entered into among the Lessee, the Lessor and the CRA Bank within five (5)
Business Days following the initial occurrence of a Cash Reserve Trigger Event,
which agreement shall be substantially in the form of Exhibit G hereto.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"CRA Bank" means the bank party to the CRA Agreement.
"CRA Release Event" means the date, following any Cash Reserve
Trigger Event, that the Guarantor's senior unsecured long-term credit is rated
BBB- or higher by Standard & Poor's Ratings Group (or any successor entity
thereto) and Baa3 or higher by Moody's Investors Services, Inc. (or any
successor entity thereto).
"Credit Agreement" means each credit or loan agreement, including
any amendment, restatement, modification or supplement with respect thereto,
which has been entered into between the Lessor and a lender or lenders related
to the financing of Property or Equipment, as the same may be amended, restated,
modified or supplemented from time to time.
"Debt" means, at any particular time, the aggregate of (without
duplication):
(a) the aggregate of the amounts which would, in
accordance with generally accepted accounting
principles, be classified on the consolidated
balance sheet of the Guarantor at such time as
indebtedness for borrowed money of the Guarantor
and as capital leases of the Guarantor (but
specifically excluding Subordinated Debt); and
(b) the aggregate indebtedness for borrowed money of
entities other than the Guarantor and its
consolidated subsidiaries to the extent guaranteed
by any of the Guarantor and its consolidated
subsidiaries at such time;
provided that, for the Fiscal Quarter ending March 31, 1997 or
the Fiscal Quarter ending June 30, 1997 (each, a "Transition
Fiscal Quarter"), there shall be deducted from the foregoing
aggregate amount, when measured as at the last day of each
Transition Fiscal Quarter, the least of (i) net cash on hand of
PCS Nitrogen, Inc. at such time which is not subject to any
restrictions on its use and is not dedicated to any purpose other
than the repayment of Debt, (ii) Debt of PCS Nitrogen, Inc. at
such time and (iii) $300,000,000.
"EBITDA" means, for any particular period, Net Income of the
Guarantor for such period plus, to the extent deducted in the determination of
Net Income of the Guarantor for such period, the aggregate of:
(a) Interest Expense of the Guarantor for such period;
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) consolidated income tax expenses (both current and
deferred) of the Guarantor (including, without
limitation, those reported on the consolidated
income statement of the Guarantor as "provincial
mining and other taxes") for such period; and
(c) consolidated depreciation, amortization and other
non-cash expenses of the Guarantor for such period;
provided, however, that, with respect to any calculation of the
ratio referred to in clause (ii) of paragraph (p) of Section 2
hereof which involves a calculation of EBITDA for the first
Fiscal Quarter of 1997 or for any of the three immediately
preceding Fiscal Quarters, "EBITDA" for such Fiscal Quarter shall
mean the pro forma combined Net Income of the Guarantor and PCS
Nitrogen, Inc. for such Fiscal Quarter plus, to the extent not
included in the pro forma combined Net Income of the Guarantor
and PCS Nitrogen, Inc., the aggregate of:
(d) the pro forma combined Interest Expense of the
Guarantor and PCS Nitrogen, Inc. for such Fiscal
Quarter;
(e) the pro forma combined income tax expenses (both
current and deferred) of the Guarantor and PCS
Nitrogen, Inc. (including, without limitation,
those reported on the consolidated income statement
of the Guarantor as "provincial mining and other
taxes") for such Fiscal Quarter;
(f) the pro forma combined depreciation, amortization
and other non-cash expenses of the Guarantor and
PCS Nitrogen, Inc. for such Fiscal Quarter.
"Effective Date" means, with respect to any Parcel of Property or
Unit of Equipment, the date on which such Parcel or Unit becomes subject to this
Lease, as evidenced by execution by the Lessor of an AFL Unit Leasing Record or
a Unit Leasing Record.
"Equipment" means personal property of any type leased or to be
leased hereunder and, when leased, evidenced by Unit Leasing Records or AFL Unit
Leasing Records, and all related appliances, appurtenances, accessions,
furnishings, materials and parts leased or to be leased by the Lessor to the
Lessee as provided herein and including all replacements and subsequent
replacements of such related appliances, appurtenances, accessions, furnishings,
materials and parts. "Unit", when referring to the personal property leased
under this Lease, means a particular item of Equipment, as the context may
require.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Equity" means, at any particular time, the aggregate of (i) the
amount which would, in accordance with generally accepted accounting principles,
be classified upon the consolidated balance sheet of the Guarantor at such time
as shareholders' equity and (ii) the amount of Subordinated Debt at such time.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated thereunder.
"ERISA Affiliate" means any Person that, for purposes of Title IV
of ERISA, is a member of the controlled group of the Lessee, or under common
control with the Lessee, within the meaning of Section 414 of the Code.
"ERISA Event" means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA; (d) the cessation of operations at a facility of the
Lessee or any ERISA Affiliate in the circumstances described in Section 4062(e)
of ERISA; (e) the withdrawal by the Lessee or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Event of Default" has the meaning set forth in Section 18
hereof.
"Expiration Covenants" has the meaning set forth in paragraph (b)
of Section 13 hereof.
"Final Advance" has the meaning set forth for such term in the
Agreement for Lease.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Fiscal Quarter" means any of the three-month periods ending on
the last day of March, June, September and December in each year.
"Gas Contract" means the Gas Supply Contract dated November 25,
1994 between the National Gas Company of Trinidad and Tobago Limited and
Arcadian Trinidad Ammonia Limited (which by novation assigned its obligations,
rights and benefits thereunder to Arcadian Trinidad Limited, currently PCS
Nitrogen Trinidad Limited, by agreement dated January 27, 1997).
"Governmental Action" has the meaning set forth in paragraph (d)
of Section 2 hereof.
"Ground Lease" has the meaning set forth in Section 28 hereof.
"Guarantor" means Potash Corporation of Saskatchewan Inc., a
corporation organized under the laws of the Province of Saskatchewan and an
Affiliate of the Lessee, and its successors.
"Indemnified Person" has the meaning set forth in Section 11
hereof.
"Initial Advance" means any advance made by the Lessor to the
Lessee upon satisfaction or waiver of the conditions set forth in Section 4 of
the Agreement for Lease.
"Initial Term" has the meaning set forth in paragraph (a) of
Section 6 hereof.
"Insurance Requirements" means all terms of any insurance policy
covering or applicable to any Property or Equipment, all requirements of the
issuer of any such policy, all statutory requirements and all orders, rules,
regulations and other requirements of any governmental body related to insurance
applicable to any Property or Equipment.
"Interest Expense" of any particular Person means, for any
particular period, the amount which would, in accordance with generally accepted
accounting principles, be classified on the consolidated income statement of
such Person for such period as gross interest expense.
"Lease Rate Date" has the meaning set forth in paragraph (b) of
Section 7 hereof.
"Lease Term" means, with respect to any Parcel of Property or
Unit of Equipment, the Initial Term plus the Renewal Term thereof, if any.
"Lease Termination Amount" shall mean, as to any Parcel of
Property or Unit of Equipment, an amount equal to (i) at any time during or at
the end of the Initial
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Term, 85% of the Acquisition Cost of such Parcel or Unit or (ii) at any time
during or at the end of the Renewal Term, a percentage of the Acquisition Cost
of such Parcel or Unit to be agreed to between the Lessee and the Lessor prior
to the commencement of such Renewal Term.
"Lease Termination Date" means for any Parcel of Property or Unit
of Equipment, the earlier of (i) the last day of the Initial Term of such Parcel
or Unit (unless the lease hereunder of such Parcel or Unit has been renewed
pursuant to Section 12 hereof), (ii) if the lease of such Parcel or Unit has
been renewed pursuant to Section 12 hereof, the last day of the Renewal Term of
such Parcel or Unit or (iii) the day on which PCS Nitrogen Fertilizer
Operations, Inc. purchases such Parcel or Unit pursuant to the terms of the
Purchase Option.
"Legal Requirements" means all laws, judgments, decrees,
ordinances and regulations and any other governmental rules, orders and
determinations and all requirements having the force of law of governmental
entities or agencies, courts or arbitral panels which have jurisdiction over or
application to any Property or Equipment leased hereunder, the Lessee or the
Lessor, now or hereinafter enacted, made or issued, whether or not presently
contemplated, including, without limitation, compliance with all requirements of
labor laws and environmental statutes (including, without limitation, all
environmental laws and statutes of the Republic of Trinidad and Tobago),
compliance with which is required at any time from the date hereof through the
Lease Term, whether or not such compliance shall require structural, unforeseen
or extraordinary changes to any Property or Equipment or the operation,
occupancy or use thereof, except any thereof promulgated by a governmental
authority of the jurisdiction of organization of the Lessor with application
exclusively to the Lessor.
"Lessee" has the meaning set forth in the first paragraph of this
Lease.
"Lessor" means Trinidad Ammonia Company, Limited Partnership or
any successor or successors to all of its rights and obligations as the Lessor
hereunder.
"License Agreement" means the License Agreement dated June 26,
1995 and made by Arcadian Trinidad Ammonia Limited, which by novation assigned
its obligations, rights and benefits thereunder to Arcadian Trinidad Limited
(currently PCS Nitrogen Trinidad Limited) by agreement dated January 27, 1997,
the said Arcadian Trinidad Limited (currently PCS Nitrogen Trinidad Limited) and
the Lessor.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), or other
security agreement or charge or preferential arrangement having the same
economic effect as any of the foregoing of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
any of the foregoing, or the filing of any financing statement or the
recordation or registration of any security interest or charge under the Uniform
Commercial Code or Companies Act or comparable law of any jurisdiction in
respect of any of the foregoing).
"Long Term Debt" means, at any particular time, that portion of
Debt at such time which would not, in accordance with generally accepted
accounting principles, be considered to be current liabilities at such time.
"Material Subsidiaries" means Potash Corporation of Saskatchewan
Sales Limited, LLC, PCS Nitrogen, Inc., PCS Phosphate Company, Inc. and any
other subsidiary of the Guarantor whose book value of assets is greater than 20%
of the book value of the assets of the Guarantor on a consolidated basis or
whose gross sales are greater than 20% of the gross sales of the Guarantor on a
consolidated basis.
"Merrill Leasing" means ML Leasing Equipment Corp., a Delaware
corporation.
"Merrill Lynch" means Merrill Lynch & Co., Inc., a Delaware
corporation.
"Mortgageable Ground Lease" means a Ground Lease for a Parcel of
Property to be subleased to the Lessee which is delivered to the Lessor for
execution by the Lessor, or assigned to the Lessor by an assignment in form and
substance satisfactory to the Lessor, and having such terms and characteristics
as may be required by the Lessor and any Assignee, which terms and
characteristics shall include, without limitation, the following: (a) free
assignability to any lender as security for a borrowed money obligation of the
Lessor and, upon foreclosure of such security, by such lender to any third
party; (b) a term of at least five years in excess of the Initial Term of the
Parcel of Property to which such Ground Lease relates; (c) no provisions for
percentage or variable rent; and (d) no provision for a security deposit. A
Mortgageable Ground Lease shall be delivered with such estoppel certificates,
recognition and attornment agreements, or confirmation of customary mortgagee
protection as are reasonably acceptable to the Lessor and any Assignee.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Lessee or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees the Lessee
or any ERISA Affiliate and at least one Person other than the Lessee and the
ERISA Affiliates or (b) was so maintained and in respect of which the Lessee or
any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Net Income" of a particular Person means, for any particular
period, the amount which would, in accordance with generally accepted accounting
principles, be classified on the consolidated income statement of such Person
for such period as the net income after all unusual and extraordinary items
other than any gains or losses on the disposition of property, plant and
equipment and any non-cash writedowns of assets.
"Operating Agreement" means the certain Operating Agreement dated
as of June 26, 1995 and made between the Lessor and Arcadian Trinidad Ammonia
Limited (which by novation assigned its obligations rights and benefits
thereunder to Arcadian Trinidad Limited, currently PCS Nitrogen Trinidad
Limited, by agreement dated January 27, 1997).
"Operative Documents" has the meaning set forth in the Agreement
for Lease.
"Operator" means PCS Nitrogen Trinidad Limited (formerly Arcadian
Trinidad Urea Limited, Arcadian Trinidad Ammonia Limited and Arcadian Trinidad
Limited), a private limited liability company incorporated under the laws of the
Republic of Trinidad and Tobago.
"PCS Guaranty" means the guaranty agreement, dated as of the date
hereof, made by the Guarantor in favor of the Lessor, as the same may be
amended, restated, modified or supplemented from time to time.
"PCS Lease Group" means the Lessee, PCS Nitrogen Trinidad
Fertilizer Corporation, a Delaware corporation (formerly Arcadian Fertilizer
Corporation), and the Seller.
"PCS/NT Ltd. Agreement" means the Estoppel Certificate Consent
and Agreement dated June 26, 1995 in respect of the Sublease, as supplemented by
the Letter of Agreement dated April 30, 1997 relating thereto.
"PCS Term Credit Agreement" means the Term Credit Agreement, made
as of October 4, 1996, among The Bank of Nova Scotia, as Agent, the Co-Agents
and the Lenders named therein and the Guarantor.
"Permitted Contest" has the meaning set forth in paragraph (a) of
Section 27 hereof.
"Permitted Liens" means the following Liens and other matters
affecting the title of any Parcel of Property or Unit of Equipment: (a) Liens
securing the payment of taxes, assessments and other governmental charges or
levies which are either not delinquent or, if delinquent, are being contested by
the Lessee in good faith as a Permitted Contest;
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) zoning and planning restrictions, subdivision and platting restrictions,
easements, rights-of-way, licenses, reservations, covenants, conditions,
waivers, restrictions on the use of any Parcel of Property, minor encroachments
or minor irregularities of title, none of which materially impairs the intended
use or value of such Parcel of Property by the Lessee; (c) reservations of
mineral interests; (d) any Lien created by an Operative Document; (e) leases and
licenses in effect with respect to any Parcel of Property which are permitted by
this Lease or which are delivered to and accepted by the Lessor prior to such
Parcel's Effective Date; (f) materialmen's, mechanics', worker's, repairmen's,
employees', or similar Liens incurred in good faith and in the ordinary course
of business which are not yet delinquent or which are the subject of a Permitted
Contest; (g) Liens arising out of any judgment or award against the Lessee,
unless there exists a material risk of the sale, forfeiture or loss of such
Parcel of Property or Unit of Equipment or any interest therein or any use
thereof or unless such judgment or award shall not in any event, within 45 days
after the entry thereof, have been discharged, vacated, reversed or execution
thereof stayed pending appeal or shall not have been discharged, vacated or
reversed within 45 days after the expiration of such stay; (h) any Lien with
respect to which the Lessee shall have provided a bond or other security in an
amount and under terms reasonably satisfactory to the Lessor; and (i) such other
or additional matters as may be approved in writing by the Lessor, such approval
not to be unreasonably withheld or delayed.
"Permitted Sublessee" means any entity within the PCS Lease Group
which becomes a sublessee in accordance with the terms hereof.
"Person" means any individual, corporation, partnership, limited
liability company, private limited company, joint venture, association,
joint-stock company, trust, unincorporated organization of government or any
agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3
of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by the Lessee or any Related Person or to
which the Lessee or any Related Person is or has been obligated to contribute,
or an employee benefit plan as to which the Lessee or any Related Person would
be treated as a contributory sponsor under Section 4069 or Section 4212 of ERISA
if such plan were terminated.
"Potential Default" means any event which, but for the lapse of
time, or giving of notice, or both, would constitute an Event of Default.
"Property" means any and all parcels of land together with all
buildings and other improvements (including, without limitation, the
attachments, appliances, equipment, machinery and other affixed property which,
in each case, would constitute "fixtures" under Section 9-313(1)(a) of the
Uniform Commercial Code) now or hereafter located on such parcels of land,
leased or to be leased hereunder and when leased, evidenced by Unit Leasing
Records or AFL Unit Leasing Records, and the respective easements, rights and
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
appurtenances relating to such parcels of land, buildings and improvements.
"Parcel" or "Parcel of Property" means a specific parcel or parcels of Property.
"Purchase Agreement" means that certain Amended and Restated
Purchase Option Agreement, dated as of the date hereof, between PCS Nitrogen
Fertilizer Operations, Inc. (the general partner of the Lessee) and the Lessor,
as the same may be further amended, restated, modified or supplemented from time
to time.
"Purchase Option" means the right of PCS Nitrogen Fertilizer
Operations, Inc. to purchase the Ammonia Project on the terms and subject to the
conditions set forth in the Purchase Agreement.
"Reconciliation Amount" has the meaning set forth in paragraph
(e) of Section 7 hereof.
"Related Person" means any trade or business, whether or not
incorporated, which, as of any date of determination, would be treated as a
single employer together with the Lessee, under Section 414 of the Code.
"Renewal Term" means the additional sixty (60) month term during
which, if the conditions set forth in Section 12 hereof are met, a Parcel of
Property or Unit of Equipment may be leased pursuant to the provisions of this
Lease, which term would commence on the day following the end of the Initial
Term with respect to such Parcel of Property or Unit of Equipment.
"Responsible Officer" shall mean the President, any Vice
President or any Treasurer or Assistant Treasurer of the general partner of the
Lessee, or any other officer or similar official of the general partner of the
Lessee responsible for the administration of the obligations of the Lessee with
respect to this Lease.
"Scheduled Reserve Payment Date" has the meaning set forth in
paragraph (q) of Section 2 hereof.
"Seller" means PCS Nitrogen Fertilizer Limited (formerly Arcadian
Fertilizer Limited), a Trinidad and Tobago private limited liability company.
"Site Lease" means the Deed of Lease, dated as of August 24,
1983, between Point Lisas Industrial Port Development Corporation Limited and
the National Energy Corporation of Trinidad and Tobago ("NEC"), which was
assigned to the Operator by Deed of Assignment dated as of September 7, 1990
between NEC and the Operator (previously Trinidad and Tobago Urea Company
Limited), as the same may be amended, restated, modified or supplemented from
time to time as permitted by and in accordance with the Operative Documents.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Sublease" means the Deed of Sub-Lease dated as of June 29, 1995
between Arcadian Trinidad Urea Limited (subsequently Arcadian Trinidad Limited
and currently PCS Nitrogen Trinidad Limited) and the Lessor, as the same may be
amended, restated, modified or supplemented from time to time as permitted by
and in accordance with the Operative Documents.
"Subordinated Debt" means, at any particular time, unsecured
indebtedness of the Guarantor (for greater certainty, excluding its consolidated
subsidiaries) which would otherwise be Debt but which is subordinated, in
writing, on terms satisfactory to the Lessor acting reasonably (including,
without limitation, subordination and postponement of principal repayments and
restrictions on rights to accelerate and commence proceedings), to the
indebtedness of the Guarantor to the Lessor under the PCS Guaranty.
"Surplus Earnings" means, for each Surplus Earnings Period, the
lesser of:
(a)(i) the after-tax income of the Seller from ammonia sales from
the Ammonia Plant, as determined in accordance with U.S.
generally accepted accounting principles as in effect on
the date hereof, plus
(ii) income taxes, depreciation expenses, depletion expenses
and amortization expenses,
in each case determined in accordance with U.S. generally accepted accounting
principles as in effect on the date hereof, minus
(iii) cash spending during the Surplus Earnings Period for
capital expenditures, turnaround expenditures, income
taxes, and deposits into the Cash Reserve Account pursuant
to paragraph (q) of Section 2 hereof,
or
(b)(i) (A) the sum of the Average Ammonia Market Prices during
such Surplus Earnings Period, divided by six, minus
(B) $160.00, multiplied by
(ii) the number of short tons of ammonia sold by the Seller
from the Ammonia Plant during such Surplus Earnings
Period.
"Surplus Earnings Period" means each whole six-month period
following the date of a Cash Reserve Trigger Event (but not including any period
of less than six months following the date of such Cash Reserve Trigger Event)
ending on June 30 or December 31
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
during the Initial Term, beginning with the first whole six-month period
following the date of such Cash Reserve Trigger Event the first day of which
occurs during the Initial Term and ending with the last whole six-month period
following the date of such Cash Reserve Trigger Event to occur in the Initial
Term; provided that, if a CRA Release Event shall occur between the date of the
Cash Reserve Trigger Event and the end of such whole six-month period, no
"Surplus Earnings Period" shall be deemed to occur.
"Surplus Earnings Reduction Amount" means, with respect to any
payment pursuant to paragraph (t) of Section 2 hereof, an amount equal to (a)
the amount of such payment, divided by (b) the number of Scheduled Reserve
Payment Dates occurring after the date of such payment.
"Taking" has the meaning set forth in paragraph (a) of Section 16
hereof.
"Tangible Net Worth" means, at any particular time, Equity at
such time less the aggregate of the amounts which would, in accordance with
generally accepted accounting principles, be classified on the consolidated
balance sheet of the Guarantor at such time as intangible assets, including,
without limitation, goodwill and deferred expenses.
"Unit Leasing Record" means an instrument, substantially in the
form of Exhibit C hereto, evidencing, except in the case of any Parcel or
Parcels of Property acquired and built pursuant to the Agreement for Lease, the
lease of any Parcel or Parcels of Property or Unit or Units of Equipment under
this Lease.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 14. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE.
The Lessee represents, warrants and covenants to the Lessor:
14.1 Partnership Matters. The Lessee (i) has been duly organized
and is validly existing as a limited partnership in good standing under the laws
of the State of Delaware, (ii) has full power, authority and legal right to own
and operate its properties and to conduct its business as presently conducted
and to execute, deliver and perform its obligations under this Lease and any
other Operative Document to which it is or is to be a party and to consummate
the transactions contemplated hereby and by the other Operative Documents, and
(iii) is duly qualified to do business in good standing in each jurisdiction in
which its ownership or leasing of properties or the conduct of its business or
the consummation of the transactions contemplated hereby and by the other
Operative Documents requires such qualification, except whether the failure to
so qualify would not
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
materially impair the ability of the Lessee to perform its obligations hereunder
or under the other Operative Documents. The sole general partner of the Lessee
on the date hereof is PCS Nitrogen Fertilizer Operations, Inc.
14.2 Binding Agreement. This Lease has been duly authorized,
executed and delivered by the Lessee and, assuming the due authorization,
execution and delivery of this Lease by the Lessor, this Lease is a legal, valid
and binding obligation of the Lessee, enforceable according to its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
14.3 Compliance with Other Instruments. None of the execution,
delivery and performance by the Lessee of this Lease and any Consent will result
in any violation of any term of the certificate of limited partnership or the
partnership agreement of the Lessee or require the approval or consent of any
limited partner or general partner of the Lessee except such as have been
obtained prior to the date hereof and will not conflict with or result in a
breach in any material respect of any terms or provisions of, or constitute a
default under, or result in the creation or imposition of any Lien (other than a
Permitted Lien) upon any property or assets of the Lessee under, any indenture,
mortgage or other agreement or instrument to which the Lessee is a party or by
which it or any of its property is bound, or any existing applicable law, rule,
regulation, license, judgment, order or decree of any government, governmental
body or court having jurisdiction over the Lessee or any of its activities or
properties.
14.4 Governmental Consents. There are no consents, licenses,
orders, authorizations, approvals, waivers, extensions or variances of, or
notices to or registrations or filings with (each a "Governmental Action"), any
governmental or public body or authority in any jurisdiction which are or will
be required in connection with or are necessary to the valid execution, delivery
and performance of this Lease and the Operating Agreement, or any Governmental
Action (i) which is or will be required in connection with any participation by
the Lessor in the transaction contemplated by, or the exercise of remedies or
the enforcement of rights by Lessor under, this Lease, the Site Lease, the
Sublease, any bill of sale, deed, assignment, assumption, ownership agreement,
operating agreement, or other agreement relating to any Property or Equipment or
(ii) which is or will be required to be obtained by the Lessor, the Lessee, any
Assignee or any Affiliate of the foregoing, during the term of this Lease, with
respect to any Property or Equipment except the Governmental Action of the Town
and Country Planning Authority in the Republic of Trinidad and Tobago, which
Governmental Action the Lessee reasonably believes will be obtained in the
normal course, and such other Governmental Actions, (A) as have been duly
obtained, given or accomplished, with true copies thereof delivered to the
Lessor, (B) as may be required by applicable law not now in effect, (C) which,
individually or in the aggregate, if not obtained or effected, (x) will not
place either the Lessor or any Assignee in any danger of any monetary civil
liability for which the Lessor or any Assignee is not
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
adequately indemnified (the Lessee's obligations under Section 11 of this Lease
shall be deemed to be adequate indemnification if no Event of Default exists) or
any other material civil liability or penalty or subject the Lessor or any
Assignee to any criminal liability as a result of a failure to comply therewith,
(y) will not result in a material diminution in the value of any Property or
Equipment or in any material risk of the loss, sale or forfeiture or loss of use
of any thereof, and (z) will not materially impair the ability of the Lessee to
perform its obligations hereunder, (D) as may be required for the construction
or operation of the Ammonia Project and have been or will be timely obtained, or
(E) which may be required as a result of the business, properties or activities
of the Lessor, any Assignee or any Affiliate of the foregoing and which are not
solely dependent on the nature of the Property or Equipment leased hereunder or
the business of the Lessee.
14.5 Financial Statements. The Lessee has furnished to the Lessor
copies of the annual audited financial statements of the Guarantor and its
consolidated subsidiaries for the fiscal year ended December 31, 1996, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 of the
Guarantor and its consolidated subsidiaries and the Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 1997 of the Guarantor and its
consolidated subsidiaries. The financial statements contained in such documents
fairly present in all material respects the financial position, results of
operations and statements of cash flows of the Guarantor and its consolidated
subsidiaries taken as a whole as of the dates and for the periods indicated
therein and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as stated therein or in the
notes thereto.
14.6 Changes. Since March 31, 1997, there has been no material
adverse change in the financial condition or business of the Guarantor and its
consolidated subsidiaries taken as a whole, nor any change which would
materially impair the ability of the Lessee to perform its obligations under
this Lease or the Guarantor to perform its obligations under the PCS Guaranty.
14.7 Litigation. Except as disclosed in the most recent audited
financial statements of the Guarantor and its consolidated subsidiaries, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 of the
Guarantor and its consolidated subsidiaries and the Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 1997 of the Guarantor and its
consolidated subsidiaries, there is no action, suit, proceeding or investigation
at law or in equity by or before any court, governmental body, agency,
commission or other tribunal now pending or, to the knowledge of the Lessee,
threatened against or affecting the Lessee or any property or rights of the
Lessee which questions the enforceability of this Lease or which affects or
relates to any Parcel of Property or Unit of Equipment which, if adversely
determined, would have a reasonable possibility of causing a material adverse
impact on the business of the Lessee in the aggregate or would materially impair
the ability of the Lessee to perform its obligations hereunder.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
14.8 Delivery of Information. The Lessee shall deliver to the
Lessor from time to time, (i) promptly upon their becoming available (but in any
event, within 120 days after the end of each fiscal year with respect to annual
statements and within 90 days after the end of each fiscal quarter with respect
to quarterly statements), copies of the annual audited financial statements of
the Guarantor and its consolidated subsidiaries and the quarterly unaudited
financial statements (balance sheet, income statement and cash flow statement)
of the Guarantor and its consolidated subsidiaries, (ii) promptly upon request,
such other information with respect to the Lessee's or the Guarantor's
operations, business, properties, assets, financial condition or litigation as
the Lessor shall reasonably request, (iii) promptly after a Responsible Officer
of the Lessee obtains knowledge of any Event of Default or any Potential Default
hereunder or under the PCS Guaranty, a certificate of a Responsible Officer of
the Lessee specifying to the extent known the nature and period of existence of
such Event of Default or Potential Default, and what action, if any, the Lessee
or the Guarantor has taken, is taking, or proposes to take with respect thereto
and (iv) promptly after a Responsible Officer of the Lessee obtains knowledge of
any material adverse change in the financial condition or business of the Lessee
or the Guarantor or of any litigation of the type described in paragraph (g) of
this Section 2, a certificate of a Responsible Officer of the Lessee describing
such change or litigation as the case may be.
14.9 Compliance with Legal Requirements and Insurance
Requirements. The operation, use and physical condition of the Property and
Equipment are in full compliance with all Legal Requirements and Insurance
Requirements, except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (i) will not place either the Lessor or any
Assignee in any danger of any monetary civil liability for which the Lessor or
any Assignee is not adequately indemnified (the Lessee's obligations under
Section 11 of this Lease shall be deemed to be adequate indemnification if no
Event of Default exists) or any other material civil liability or penalty or
subject the Lessor or any Assignee to any criminal liability as a result of a
failure to comply therewith and (ii) will not result in a material diminution in
the value of any Property or Equipment or in any material risk of the loss, sale
or forfeiture or loss of use of any thereof.
14.10 Liens. No Property or Equipment is subject to any Lien,
except Permitted Liens.
14.11 Agreement for Lease. The Property and Equipment acquired
and built pursuant to the Agreement for Lease was acquired and built in
accordance with the terms of the Agreement for Lease. The representations and
warranties of the Lessee in the Agreement for Lease are true and correct in all
material respects.
14.12 ERISA. (a) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90 percent, other than with respect to Plans whose
unfunded current liability does not exceed $1,000,000 in the aggregate,
and there has been no material adverse change in the funding status of
any such Plan since such date.
(c) The Lessee has not incurred or is reasonably expected to
incur any Withdrawal Liability to any Multiemployer Plan.
(d) The Lessee has not been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no
such Multiemployer Plan is reasonably expected to be in reorganization
or to be terminated, within the meaning of Title IV of ERISA.
(e) Except as set forth in the financial statements referred to
in paragraph (e) of Section 2 hereof, the Lessee and its Subsidiaries
have no material liability with respect to "expected post retirement
benefit obligations" within the meaning of Statement of Financial
Accounting Standards No. 106.
(f) The execution and delivery of this Lease will not involve any
non-exempt "prohibited transaction" within the meaning of Section 406 of
ERISA or Section 4975 of the Code.
14.13 Operating Agreement. The Operating Agreement has been duly
authorized, executed and delivered by the Operator and, assuming the due
authorization, execution and delivery of the Operating Agreement by the Lessor,
is a legal, valid and binding obligation of the Operator, enforceable according
to its terms.
14.14 Gas Contract. The Gas Contract has been duly authorized,
executed and delivered by the Operator and, assuming the due authorization,
execution and delivery of the Gas Contract by The National Gas Company of
Trinidad and Tobago Limited, is a legal, valid and binding obligation of the
Operator, enforceable according to its terms.
14.15 Ancillary Facility Agreements. Each Ancillary Facility
Agreement has been duly authorized, executed and delivered by the Lessee or an
Affiliate of the Lessee and, assuming the due authorization, execution and
delivery of each Ancillary Facility Agreement by the parties thereto other than
the Lessee or an Affiliate of the Lessee, is a legal, valid and binding
obligation of the Lessee or such Affiliate, enforceable according to its terms.
14.16 Financial Covenants. The Guarantor shall (i) at all times
maintain or cause to be maintained Tangible Net Worth in an amount greater than
or equal to
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
$1,250,000,000; (ii) maintain or cause to be maintained the ratio of Long Term
Debt as at the last day of each Fiscal Quarter to EBITDA for the four
consecutive Fiscal Quarters ending on such day in a ratio of less than or equal
to 3.5 to 1; and (iii) at all times maintain or cause to be maintained the ratio
of Debt to Capital in a ratio of less than or equal to 0.55 to 1.
14.17 Cash Reserve Account. Upon the first occurrence of a Cash
Reserve Trigger Event, the Lessee shall, within five (5) Business Days of such
Cash Reserve Trigger Event, enter into a CRA Agreement, providing for the
establishment and administration of an interest-bearing account for the benefit
of the Lessor (the "Cash Reserve Account"). The Lessee agrees that following
each Cash Reserve Trigger Event, it shall deposit or cause to be deposited with
the CRA Bank, commencing on the first day of the fourth month commencing after
the month in which such Cash Reserve Trigger Event occurs and on the first day
of each six-month period thereafter which is prior to March 27, 2003 (each such
date being a "Scheduled Reserve Payment Date"), an amount in immediately
available funds equal to (i) the Cash Reserve Requirement Amount, minus (ii) the
aggregate amount of all Surplus Earnings Reduction Amounts with respect to
payments pursuant to paragraph (t) of Section 2 hereof theretofore made, to be
held and administered by the CRA Bank pursuant to the CRA Agreement; provided,
however, that (A) the Lessee's obligation to make any deposit pursuant to the
CRA Agreement shall immediately cease upon the occurrence of a CRA Release Event
(subject to such obligation being reinstated upon any subsequent occurrence of a
Cash Reserve Trigger Event) and (B) upon such occurrence of a CRA Release Event,
any funds previously deposited with the CRA Bank by the Lessee shall, within one
(1) Business Day thereof, be released to the Lessee by the CRA Bank.
14.18 Site Lease. The Lessee agrees to pay or cause to be paid,
on or before the first Business Day of each calendar year throughout the Lease
Term, all rent to be due under the Site Lease for such calendar year.
14.19 PCS Guaranty. The PCS Guaranty has been duly authorized,
executed and delivered by the Guarantor and constitutes a legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor according
to its terms, subject to bankruptcy, insolvency, moratorium, and similar laws
affecting creditors' rights generally and equitable principles.
14.20 Earnings Recapture. The Lessee agrees that in the event the
Average Ammonia Market Price for any Surplus Earnings Period exceeds $160.00,
then all Surplus Earnings for such Surplus Earnings Period shall be paid into
the Cash Reserve Account as follows: (i) if such Surplus Earnings Period ends on
June 30 of any year, on July 31 of such year, and (ii) if such Surplus Earnings
Period ends on December 31 of any year, on January 31 of the following year. The
Lessee will, by the date on which any payment of Surplus Earnings in respect of
any Surplus Earnings Period is due hereunder (or would be
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
due, if any Surplus Earnings had existed in respect of such Surplus Earnings
Period), deliver to the Lessor reasonable detail as to the manner in which such
Surplus Earnings were calculated or in which it was determined that no Surplus
Earnings existed.
SECTION 15. LEASE OF PROPERTY OR EQUIPMENT.
15.1 Subject to the terms and conditions hereof, the Lessor shall
lease to the Lessee, and the Lessee may lease from the Lessor pursuant to this
Lease, any Property or Equipment of the type listed on Exhibit A hereto, when
and as the Lessee has need of such Property or Equipment; provided, that:
(a) such Property or Equipment is available for purchase;
(b) except with respect to any Parcel of Property acquired and built
pursuant to the Agreement for Lease, the Lessor has approved the
purchase order or acquisition with respect to such Equipment or
the acquisition with respect to such Property (which approval
shall be in the reasonable discretion of the Lessor, such
approval not to be unreasonably withheld);
(c) at the time any such Property or Equipment is to be ordered or
leased hereunder there exists no Event of Default or Potential
Default;
(d) with respect to any Parcel of Property or Unit of Equipment
acquired and built pursuant to the Agreement for Lease, the
conditions for the Lessee to execute an AFL Unit Leasing Record
shall have been satisfied and the Lessor shall have executed an
AFL Unit Leasing Record with respect to such Parcel of Property
or Unit of Equipment; and
(e) the sum of (A) the Acquisition Cost of such Property or Equipment
and (B) the aggregate Acquisition Cost of all other Property or
Equipment leased hereunder would not, at the time any such
Property or Equipment is to be leased hereunder, exceed such
amount as the Lessor and the Lessee may from time to time agree.
15.2 The lease hereunder of Property and Equipment acquired and
built pursuant to the Agreement for Lease shall be evidenced by an AFL Unit
Leasing Record, including a revised AFL Unit Leasing Record, if any, delivered
pursuant to subsection 2.3(b) of the Agreement for Lease. Subject to the terms
of paragraph (a) of Section 3 hereof, upon Substantial Completion (as defined in
the Agreement for Lease) of a Parcel or Parcels of Property or a Unit or Units
of Equipment acquired and built pursuant to the Agreement for Lease, or, if
Substantial Completion will not occur prior to the Designated Effective Date (as
defined in the Agreement for Lease), at least five (5) days prior to the
Designated Effective Date, the Lessee shall prepare an AFL Unit Leasing Record.
The
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
AFL Unit Leasing Record shall give a full description of the Property and
Equipment, its Acquisition Cost, its Initial Term and Renewal Term, the Basic
Rent with respect to such Property, and such other details as the Lessor and the
Lessee may from time to time agree. The AFL Unit Leasing Record shall have an
Effective Date as of the earlier of the date of execution by the Lessor of the
AFL Unit Leasing Record or the Designated Effective Date, as the case may be.
Execution and delivery by the Lessee of an AFL Unit Leasing Record shall
constitute (i) acknowledgment by the Lessee that the Equipment and Property, if
any, specified in such AFL Unit Leasing Record has been delivered to the Lessee
in condition in all respects satisfactory to the Lessee and has been accepted
for lease hereunder by the Lessee as of the Effective Date of such AFL Unit
Leasing Record, (ii) acknowledgment by the Lessee that the Property and
Equipment, if any, specified in such AFL Unit Leasing Record is subject to all
of the covenants, terms and conditions of this Lease, and (iii) certification by
the Lessee that the representations and warranties contained in Section 2 of
this Lease are true and correct in all material respects on and as of the
Effective Date of such AFL Unit Leasing Record as though made on and as of such
date and that there exists on such date no Event of Default or Potential
Default.
15.3 The lease of each Parcel of Property, other than a Parcel of
Property acquired and built pursuant to the Agreement for Lease, or Unit of
Equipment, other than a Unit of Equipment appropriately included in an AFL Unit
Leasing Record, to the Lessee under this Lease shall be evidenced by a Unit
Leasing Record. The Lessee shall prepare and execute a Unit Leasing Record with
respect to each such Parcel of Property or Unit of Equipment (which Unit Leasing
Record may relate to more than one Unit of Equipment) and deliver it promptly to
the Lessor. Contemporaneously with the payment required by paragraph (b) of
Section 5 hereof, the Lessor shall execute the acceptance of such Unit Leasing
Record and promptly return one copy of such Unit Leasing Record to the Lessee.
15.4 The Lessee shall prepare each Unit Leasing Record pursuant
to the procedures provided by the Lessor. Each Unit Leasing Record and AFL Unit
Leasing Record shall give a full description of the Parcel or Parcels of
Property or Unit or Units of Equipment covered thereby, the Acquisition Cost of
each such Parcel or Unit, the Initial Term and Renewal Term for each such Parcel
or Unit, its location and such other details as the Lessor and the Lessee may
from time to time agree.
15.5 Execution by the Lessee of a Unit Leasing Record or AFL Unit
Leasing Record shall constitute (i) acknowledgment by the Lessee that the
Property or Equipment specified in such Unit Leasing Record or AFL Unit Leasing
Record has been delivered to the Lessee in good condition and has been accepted
for lease hereunder by the Lessee as of the Effective Date thereof, (ii)
acknowledgment by the Lessee that the Property or Equipment specified in such
Unit Leasing Record or AFL Unit Leasing Record is subject to all of the
covenants, terms and conditions of this Lease, and (iii) certification by the
Lessee that the representations and warranties contained in Section 2 of this
Lease and in Section 8 of the Agreement for Lease are true and correct in all
material respects on and as
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
of such Effective Date as though made on and as of such Effective Date and that
there exists on such Effective Date no Event of Default or Potential Default.
15.6 In connection with any Parcel of Property or Unit of
Equipment acquired and built pursuant to the Agreement for Lease, until May 15,
1998, the Lessee may deliver to the Lessor a Certificate of Increased Cost (as
defined in the Agreement for Lease) pursuant to the Agreement for Lease setting
forth the actual amount expended by the Lessee for items included in the Unit
Budget (as defined in the Agreement for Lease) with respect to such Parcel or
Unit. If, based upon such Certificate of Increased Cost, a Completion Advance
(as defined in the Agreement for Lease) is to be made, the Lessor shall execute
within five (5) days of receipt of such Certificate of Increased Cost from the
Lessee a revised AFL Unit Leasing Record to amend the Acquisition Cost for such
Parcel or Unit to reflect the increase in the Acquisition Cost. In the event the
Lessee shall receive a Completion Advance with respect to the Ammonia Project on
a date following the date of a Cash Reserve Trigger Event (unless a CRA Release
Event has occurred since the date of such Cash Reserve Trigger Event), the
Lessee shall, on the Business Day immediately succeeding such Completion
Advance, deposit or cause to be deposited into the Cash Reserve Account an
amount equal to 50% of such Completion Advance, to be held by the CRA Bank
pursuant to the CRA Agreement.
SECTION 16. OPERATING LEASE.
The Lessor and the Lessee hereby declare that it is their mutual
intent that for accounting and regulatory purposes this Lease be treated as an
operating lease and not an instrument or evidence of indebtedness, and that the
relationship between the Lessor and the Lessee under this Lease shall be that of
lessor and lessee only. Title to and ownership of any Property or Equipment
shall at all times remain in the Lessor and at no time become vested in the
Lessee except in accordance with an express provision of this Lease. The Lessee
does not hereby acquire any right, equity, title or interest in or to any
Property or Equipment except pursuant to the terms hereof.
SECTION 17. DELIVERY.
17.1 The Lessee shall acquire or order and accept Property or
Equipment, other than Property and Equipment acquired and built pursuant to the
Agreement for Lease, pursuant to the procedures, if any, provided by the Lessor.
17.2 Upon acceptance for lease of a Parcel of Property, other
than Property acquired and built pursuant to the Agreement for Lease, or a Unit
of Equipment, other than a Unit of Equipment acquired and built pursuant to the
Agreement for Lease, by the Lessee and the Lessor and receipt by the Lessor of
(i) the vendor's invoice or invoices for such Unit of Equipment and a contract
of sale and deed with respect to each Parcel of Property, (ii) invoices or other
evidence satisfactory to the Lessor for any amounts included
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
in the Acquisition Cost of such Parcel or Unit payable to parties other than the
vendor, (iii) invoices or other evidence satisfactory to the Lessor (including
an appraisal with respect to a Parcel of Property or Unit of Equipment) for any
amounts included in the Acquisition Cost of such Parcel or Unit that have been
paid to the vendor or other parties by the Lessee and for any costs included in
the Acquisition Cost of such Parcel or Unit incurred by the Lessee, (iv) a Unit
Leasing Record with respect to such Parcel or Unit duly prepared and executed by
the Lessee and (v) such other documentation as the Lessor may reasonably
require, the Lessor shall (A) pay to such vendor the amount of the vendor's
invoice or invoices and/or contract of sale for such Parcel or Unit except to
the extent previously paid by the Lessee, (B) pay to such other parties such
amounts payable, except to the extent previously paid by the Lessee and (C)
reimburse or pay to the Lessee for such amounts paid to the vendor or other
parties by the Lessee, for such costs incurred by the Lessee and, if agreed
between the Lessor and the Lessee, for the appraised value of the Property or
Equipment; provided, however, that in no event shall the sum of all payments
made pursuant to clauses (A), (B) and (C) above exceed the Acquisition Cost of
such Property or Equipment.
17.3 The requirements for acceptance for lease hereunder of the
Property and Equipment acquired and built pursuant to the Agreement for Lease
shall be the requirements set forth in the Agreement for Lease.
17.4 The obligations of the Lessee to pay all amounts payable
pursuant to this Lease (including specifically and without limitation amounts
payable under Sections 7 and 11 hereof) shall be absolute and unconditional
under any and all circumstances of any character (including, without limitation,
the circumstances set forth in clauses A through L below), and such amounts
shall be paid without notice, demand, defense (except the defense of prior
payment), set-off, deduction or counterclaim and without abatement, suspension,
deferment, diminution or reduction of any kind whatsoever, except as herein
expressly otherwise provided. Without limitation of the foregoing, the
obligation of the Lessee to lease and pay Basic Rent for any and all Property or
Equipment accepted for use pursuant to this Lease is without any warranty or
representation, express or implied, as to any matter whatsoever on the part of
the Lessor or any Assignee or any Affiliate of either, or anyone acting on
behalf of any of them.
THE LESSEE HAS SELECTED AND SHALL SELECT ALL PROPERTY OR
EQUIPMENT ACQUIRED OR ORDERED ON THE BASIS OF ITS OWN JUDGMENT. NEITHER THE
LESSOR NOR ANY ASSIGNEE NOR ANY AFFILIATE OF EITHER, NOR ANYONE ACTING ON BEHALF
OF ANY OF THEM MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE SAFETY, TITLE,
CONDITION, QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO
SPECIFICATION, OR ANY OTHER CHARACTERISTIC, OF ANY PROPERTY OR EQUIPMENT, OR AS
TO WHETHER ANY PROPERTY OR
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EQUIPMENT OR THE OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH
ANY LAWS, RULES, REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN THE LESSEE AND THE LESSOR, ANY ASSIGNEE OR ANY
INDEMNIFIED PERSON, THE LESSEE WAIVES ANY AND ALL DEFENSES (EXCEPT THE DEFENSE
OF FINAL AND INDEFEASIBLE PRIOR PAYMENT), SET-OFFS, DEDUCTIONS, COUNTERCLAIMS
(OTHER THAN COMPULSORY COUNTERCLAIMS) (OR OTHER RIGHTS), EXISTING OR FUTURE, AS
TO THE LESSEE'S OBLIGATION TO PAY BASIC RENT AND ALL OTHER AMOUNTS PAYABLE
HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR
USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY PROPERTY OR EQUIPMENT, LATENT OR NOT;
(B) ANY SET-OFF, COUNTERCLAIM (OTHER THAN COMPULSORY
COUNTERCLAIMS), RECOUPMENT, ABATEMENT, DEFENSE (EXCEPT THE DEFENSE OF FINAL AND
INDEFEASIBLE PRIOR PAYMENT) OR OTHER RIGHT WHICH THE LESSEE MAY HAVE AGAINST THE
LESSOR, ANY ASSIGNEE OR ANY INDEMNIFIED PERSON FOR ANY REASON WHATSOEVER ARISING
OUT OF THIS OR ANY OTHER TRANSACTION OR MATTER;
(C) ANY DEFECT IN TITLE OR OWNERSHIP OF PROPERTY OR EQUIPMENT OR
ANY TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE PROPERTY OR
EQUIPMENT;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR
DESTRUCTION OF, OR DAMAGE TO, ANY PROPERTY OR EQUIPMENT, IN WHOLE OR IN PART, OR
CESSATION OF THE USE OR POSSESSION OF ANY PROPERTY OR EQUIPMENT BY THE LESSEE
FOR ANY REASON WHATSOEVER AND OF WHATEVER DURATION, OR ANY CONDEMNATION,
CONFISCATION, REQUISITION, SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY
PROPERTY OR EQUIPMENT, IN WHOLE OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE,
OWNERSHIP, OCCUPANCY OR POSSESSION OF THE PROPERTY OR EQUIPMENT BY THE LESSEE;
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST THE LESSEE OR THE LESSOR OR ANY ASSIGNEE;
(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER
TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS,
AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS LEASE;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS LEASE OR ANY OTHER
INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF THE LESSOR OR THE LESSEE
TO ENTER INTO THIS CONTRACT;
(I) THE INVALIDITY OR UNENFORCEABILITY OF ANY BILL OF SALE OF ANY
PROPERTY OR EQUIPMENT EXECUTED IN CONNECTION WITH THIS LEASE OR ANY OTHER
INFIRMITY THEREIN OR LACK OF POWER OR AUTHORITY OF ANY PARTY THERETO TO ENTER
INTO SUCH BILL OF SALE;
(J) ANY RESTRICTION ON THE EXCHANGE OF THE CURRENCY OF THE
REPUBLIC OF TRINIDAD AND TOBAGO INTO U.S. DOLLARS OR THE TRANSFER OF FUNDS TO
THE UNITED STATES;
(K) THE LESSEE OR ANY OTHER PERSON AT ANY TIME HAVING IMMUNITY
FROM SUIT, PREJUDGMENT, ATTACHMENT, ATTACHMENT IN AID OF EXECUTION OR EXECUTION
ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE; OR
(L) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER RELATING TO
THE TRANSACTIONS CONTEMPLATED BY THIS LEASE, WHETHER OR NOT SIMILAR TO ANY OF
THE FOREGOING.
THE LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY
BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE, CANCEL, QUIT,
RESCIND OR SURRENDER THIS LEASE EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS
HEREOF. Each payment of Basic Rent, Additional Rent and any other amount
due hereunder made by the Lessee shall be final, and the Lessee, without waiving
any other remedies it may have, will not seek or have any right to recover all
or any part of such payment from the Lessor or any Assignee for any reason
whatsoever. The making of payments under this Lease by the Lessee (including
without limitation payments pursuant to Section 11 hereof) shall not be deemed
to be a waiver of any claim or claims that the Lessee
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
may assert in a separate action against the Lessor or any other Person. The
Lessor agrees to repay the Lessee amounts paid to the Lessor to the extent such
payments were in error and are not required by any of the terms and provisions
of this Lease.
17.5 Notwithstanding any other provision contained in this Lease,
it is specifically understood and agreed that neither the Lessor nor any
Assignee nor any Affiliate of either, nor anyone acting on behalf of any of them
makes any warranties or representations, nor, except as set forth in Section 22
of this Lease, has the Lessor or any Assignee or any Affiliate of either, or
anyone acting on behalf of any of them made any covenants or undertakings, as to
the accounting treatment to be accorded the Lessee or as to the Canadian, U.S.
Federal or any state income or any other tax consequences, if any, to the Lessee
as a result of or by virtue of the transactions contemplated by this Lease.
SECTION 18. INITIAL TERM; RENEWAL TERM.
18.1 The "Initial Term" with respect to any Parcel of Property or
Unit of Equipment leased hereunder shall commence on the Effective Date set
forth in the Unit Leasing Record or the AFL Unit Leasing Record for such Parcel
of Property or Unit of Equipment and shall continue for the period agreed in
writing between the Lessee and the Lessor, unless terminated earlier pursuant to
the provisions of this Lease. The Initial Term applicable to the Ammonia Project
shall be the period from the Effective Date therefor until March 27, 2003.
18.2 In the event this Lease is renewed pursuant to the terms of
Section 12 hereof, the Renewal Term with respect to any Parcel of Property or
Unit of Equipment shall commence on the first day of the calendar month
following the last day of the Initial Term of such Parcel or Unit and shall
continue for sixty (60) calendar months, unless terminated earlier pursuant to
the provisions of this Lease.
18.3 With respect to each Unit of Equipment or Parcel of
Property, it is understood and agreed that the Initial Term of each Parcel of
Property or Unit of Equipment shall in no event exceed 75% of its economic
useful life remaining after the Effective Date for such Parcel or Unit.
18.4 Notwithstanding anything contained in this Section 6, the
provisions of Sections 10 and 11 hereof and paragraph (a) of Section 15 hereof
shall apply with respect to any Property or Equipment from the time such
Property or Equipment is acquired by the Lessor, and from the date hereof as to
all property and equipment acquired, constructed, assembled or improved in
connection with the Ammonia Project.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 19. RENT AND OTHER PAYMENTS.
19.1 The Lessee hereby agrees to pay the Lessor on each Basic
Rent Payment Date, the amount of Basic Rent due and payable on such Basic Rent
Payment Date.
19.2 The Lessor shall provide notice to the Lessee on the fourth
(4th) day prior to each Basic Rent Payment Date of the amount of Basic Rent due
and payable from the Lessee to the Lessor on such Basic Rent Payment Date (the
"Lease Rate Date"). Subject to paragraph (e) of Section 7 hereof, the Lessor's
determination of Basic Rent shall be conclusive and binding absent manifest
error. At least two (2) Business Days prior to each Basic Rent Payment Date the
Lessor shall furnish the Lessee with a summary of the calculations of Basic Rent
payable on such Basic Rent Payment Date, which calculations shall be consistent
with the Minimum Lease Payment Calculations attached as Exhibit E hereto.
19.3 Without prejudice to the full exercise by the Lessor of its
rights under Sections 18 and 19 hereof, the Lessee shall pay to the Lessor from
time to time, on the Lessor's written demand, as additional rent ("Additional
Rent") (i) amounts required to reimburse the Lessor for its obligations, costs
and expenses (not previously included in Basic Rent) incurred in leasing the
Property or Equipment (including, without limitation, all obligations of the
Lessor under or in respect of any interest rate swap, cap, collar or other
financial hedging arrangement and any amounts payable by the Lessor under any
such arrangement to reduce the notional amount thereof by the amount of any
prepayment of any borrowing to which such interest rate swap, cap, collar or
other financial hedging arrangement relates), and (ii) to the extent legally
enforceable, an amount computed by multiplying (A) all sums not paid by the
Lessee to the Lessor as provided in this Lease on or before the date such
payments are due, by (B) the decimal equivalent of the percentage referred to in
paragraph (a)(iii) of the definition of "Basic Rent" used in the calculation of
the most recent Basic Rent amount, and by (C) a fraction having a numerator
equal to the number of days in the period from but excluding such due date to
and including the date of payment thereof and a denominator of 365, or in a leap
year, 366. The Lessee shall also pay to the Lessor on the Lessor's written
demand an amount equal to any expenses (including the reasonable fees and
disbursements of counsel) incurred by the Lessor in collecting such unpaid sums.
Prior to the payment of any Additional Rent, the Lessor shall supply to the
Lessee a statement which describes the obligations, costs and expenses incurred,
and, if appropriate, a calculation of the amount of such Additional Rent. Such
statement shall be conclusive and binding absent manifest error.
19.4 Basic Rent and Additional Rent and any other amount payable
by the Lessee to the Lessor shall be paid such that immediately available funds
in the full amount due are available on the date due, to the account of the
Lessor at such bank, or to such account of such other Person at such bank, or
otherwise as the Lessor may from time to time designate.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
19.5 During the Lease Term of any Parcel of Property or Unit of
Equipment, the Lessor shall calculate, on or before each Lease Rate Date (except
the first Lease Rate Date hereunder), the difference, if any, between (i) the
Basic Rent paid by the Lessee for the previous calendar month and (ii) an amount
equal to what the Basic Rent would have been for such calendar month had the
Basic Rent been calculated using the weighted average percentage cost per annum
of the borrowings outstanding at any time (as specified in subparagraph (a)(iii)
of the definition of Basic Rent) during the entirety of the previous calendar
month, provided that, with respect to the Basic Rent for the last month of the
Lease Term, such calculation shall occur on the last day of the Lease Term. On
each Lease Rate Date (except the first Lease Rate Date hereunder) and on the
last day of the Lease Term, the Lessor shall furnish to the Lessee a calculation
of the difference between the amounts determined under clause (i) above and the
correlating amounts determined under clause (ii) above (the "Reconciliation
Amount") for the previous calendar month. The Lessor and the Lessee agree that
if the Reconciliation Amount is a positive number, then such amount shall be
credited against the amount of Basic Rent that the Lessee is required to pay on
the next Basic Rent Payment Date (or Basic Rent Payment Dates, if such amount
shall exceed the amount of Basic Rent payable in the next succeeding month), and
if the Reconciliation Amount is a negative number, then such amount shall be
payable by the Lessee on the next Basic Rent Payment Date in addition to the
amount of Basic Rent due and payable on such Basic Rent Payment Date, except
that with respect to the Reconciliation Amount computed on the last day of the
Lease Term, such amount shall be paid by the Lessor to the Lessee (in the case
of a positive number) or by the Lessee to the Lessor (in the case of a negative
number) on the last day of the Lease Term. Any notices required by this
paragraph (e) which are furnished to the Lessee by the Lessor shall be
conclusive, absent manifest error, as to the contents thereof.
SECTION 20. RESTRICTED USE; COMPLIANCE WITH LAWS.
20.1 So long as no Event of Default shall have occurred and be
continuing, the Lessee may use the Property or Equipment in the course of its
business for any lawful purpose. Without limitation of any of its other
obligations hereunder or under any other Operative Document, the Lessee agrees
that the Lessee will not do or permit any act or thing which could reasonably be
expected to materially impair the value or utility of any Property or Equipment.
20.2 The Lessee shall promptly and duly execute, deliver, file
and record, at the Lessee's expense, all such documents, statements, filings and
registrations, and take such further action as the Lessor or any Assignee shall
from time to time reasonably request and shall install such signs or other
markings as shall be required by any applicable Legal Requirement in order to
establish, perfect and maintain the Lessor's or any Assignee's title to and
interest in the Property or Equipment and any Assignee's interest in this Lease
or any Property or Equipment as against the Lessee or any third party in any
applicable jurisdiction. The Lessor agrees that it will not change the location
of the Ammonia Project.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
At the reasonable request of the Lessor, but, so long as no Event of Default has
occurred and is continuing no more than once each year, the Lessee shall advise
the Lessor in writing where all Equipment leased hereunder as of such date is
principally located.
20.3 The Lessee shall use every commercially reasonable
precaution to prevent loss or damage to Property or Equipment and to prevent
injury to third persons or property of third persons. The Lessee shall cooperate
fully with the Lessor and any additional insured or loss payee and all insurance
companies providing insurance pursuant to Section 10 hereof in the investigation
and defense of any claims or suits arising from the ownership, operation or use
of any Equipment or ownership, use, or occupancy of the Property and the Lessor
and any Indemnified Person shall comply, at the expense of the Lessee, with all
reasonable requests for assistance of the Lessee and any insurance companies in
connection therewith, provided that nothing contained in this paragraph (c)
shall be construed as imposing on the Lessor any duty to investigate or defend
any such claims or suits. The Lessee shall comply and shall use reasonable
efforts to cause all Persons using or operating Equipment or using or occupying
Property to comply with all Insurance Requirements and Legal Requirements
applicable to such Property or Equipment and to the acquiring, titling,
registering, leasing, insuring, using, occupying, operating and disposing of
Property or Equipment, and the licensing of operators thereof; except any Legal
Requirements, the non-compliance with which, individually or in the aggregate,
(i) will not place either the Lessor or any Assignee in any danger of monetary
civil liability for which the Lessor or any Assignee is not adequately
indemnified (the Lessee's obligations under Section 11 of this Lease shall be
deemed to be adequate indemnification if no Event of Default exists) or any
other material civil liability or penalty or subject the Lessor or any Assignee
to any criminal liability as a result of a failure to comply therewith and (ii)
will not result in a material diminution in the value of any Property or
Equipment or in any material risk of the loss, sale or forfeiture or loss of use
of any thereof.
20.4 Upon at least five (5) Business Days written notice (or upon
two (2) Business Days written notice if an Event of Default shall have occurred
and be continuing), the Lessor or any Assignee or any authorized representative
of either may during reasonable business hours from time to time inspect
Property or Equipment and deeds, registration certificates, certificates of
title and related documents covering Property or Equipment wherever the same may
be located, but neither the Lessor nor any Assignee shall have any duty to make
any such inspection, provided that the Lessee shall be permitted to withhold
from the Lessor or any Assignee any information with respect to its business or
work products not related to any Property or Equipment. The Lessor may recover
from Lessee as Additional Rent (i) the reasonable costs and expenses associated
with any inspection of the Ammonia Project during the first six months after the
Lease Termination Date (as defined in the Lease) with respect thereto, in an
amount not to exceed, when aggregated with the expenses referred to in clause
(i) of subsection 9.4 of the Agreement for Lease, $100,000 in the aggregate, and
(ii) the reasonable costs and expenses associated with any such inspection
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
which are incurred following the occurrence and during the continuation of any
Event of Default throughout the Lease Term of the Ammonia Project.
20.5 The Lessee shall not, without the prior written consent of
the Lessor, permit, or suffer to exist, any Lien on, other than Permitted Liens
or those Liens placed thereon by, or arising from, the Lessor's own actions or
which are subject to a Permitted Contest, nor may it assign any right or
interest herein or in, any Property or Equipment. The Lessee shall not, without
the prior written consent of the Lessor, sublease or otherwise relinquish
possession of any Property or Equipment, except that (i) the Lessee may
relinquish possession of Property or Equipment to any contractor for use in
performing work for the Lessee on such Property or Equipment, provided that such
relinquishment of possession shall in no way affect the obligations of the
Lessee or the rights of the Lessor hereunder and with respect to the Property or
Equipment and (ii) the Lessee may sublease any Parcel of Property or Unit of
Equipment to a Person within the PCS Lease Group; provided that (A) the terms of
the instrument of sublease shall be subject to the prior written approval of the
Lessor which approval shall not be unreasonably withheld or delayed, (B) each
such sublease shall expressly be made subject and subordinate to the provisions
hereof, shall not permit any act or omission not permitted hereby and shall, at
the sole option of the Lessor, by its terms be subject to termination upon the
termination for any reason of this Lease, (C) no such sublease shall modify or
limit any right or power of the Lessor hereunder or affect or reduce any
obligation of the Lessee hereunder, and all such obligations shall continue in
full force and effect as obligations of a principal and not of a guarantor or
surety, as though no such subletting had been made, and (D) any such sublease
made otherwise than as expressly permitted by this paragraph (e) shall be void
ab initio and of no force and effect. As additional security to the Lessor for
the performance of the Lessee's obligations under this Lease, the Lessee hereby
assigns to the Lessor all of its right, title and interest in and to all
subleases permitted hereby and agrees to cause any sublessee to enter into
attornment agreements with the Lessor as the Lessor shall request. The Lessor
shall have the present and continuing right to collect and enjoy all rents and
other sums of money payable under any such sublease, and the Lessee hereby
irrevocably assigns such rents and other sums to the Lessor for the benefit and
protection of the Lessor, provided that, unless an Event of Default shall have
occurred and be continuing hereunder, the Lessee shall be entitled to collect
and enjoy such rents and other sums. The Lessee shall, within thirty (30) days
after the execution of any such sublease, deliver a conformed copy thereof to
the Lessor. Nothing contained in this Lease shall be construed as constituting
the consent or request of the Lessor, express or implied, to or for the
performance by any contractor, laborer, materialman or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to any Property or Equipment or
any part thereof. Notice is hereby given that the Lessor will not be liable for
any labor, services or materials furnished or to be furnished to the Lessee, or
to anyone holding any Property or Equipment or any part thereof through or under
the Lessee, and that no mechanics' or other liens for any such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
labor, services or materials shall attach to or affect the interest of the
Lessor in and to the Property or Equipment.
20.6 The Lessee shall register and title all automotive Equipment
in the name of the Lessor except that, where required or permitted by law or
regulation, Equipment may, with the written approval of the Lessor be registered
(but not titled) in the name of the Lessee. If requested by the Lessor, the
Lessee shall cause one of the officers of its general partner to hold in his
custody and control all registration certificates and certificates of title
covering automotive Equipment, as custodian for the Lessor. The Lessee agrees to
cause such officer to furnish to the Lessor, upon reasonable request, a
certificate to the effect that all registration certificates and certificates of
title pursuant to any Legal Requirement have been obtained and are being held on
behalf of the Lessor.
20.7 The Lessee shall comply with all Legal Requirements pursuant
to which it is necessary that a Unit of Equipment or any component thereof be
labeled to provide notice of the Lessor's or any Assignee's interest in such
Unit of Equipment.
20.8 If any Lien or charge of any kind or any judgment, decree or
order of any court or other governmental authority (including, without
limitation, any state or local tax lien affecting the Property or Equipment),
whether or not valid, shall be asserted or entered which might interfere with
the due and timely payment of any sum payable or the exercise of any of the
rights or the performance of any of the duties or responsibilities under this
Lease, the Lessee shall (and without limiting any other obligation of the Lessee
hereunder), upon a Responsible Officer's obtaining knowledge thereof or upon
receipt of notice to that effect from the Lessor, promptly take such action as
may be necessary to prevent or terminate such interference.
SECTION 21. MAINTENANCE, IMPROVEMENT AND REPAIR OF PROPERTY OR
EQUIPMENT.
21.1 The Lessor, so long as no Event of Default shall have
occurred and be continuing, hereby assigns and agrees to make available to the
Lessee any and all rights the Lessor may have under any vendor's or
manufacturer's warranties or undertakings with respect to any Property or
Equipment. If any Event of Default shall have occurred and be continuing, the
assignment of such rights from the Lessor to the Lessee shall be deemed to be
suspended.
21.2 The Lessee shall pay all costs, expenses, fees and charges
incurred in connection with the Lessor's ownership, and the Lessee's use or
occupancy of any Parcel of Property or the Lessor's ownership, and the Lessee's
use and operation of any Unit of Equipment. Except as otherwise provided in
Section 15 hereof, the Lessee shall at all times, at its own expense, and
subject to reasonable wear and tear, keep Property or Equipment in good
operating order, repair, condition and appearance. The foregoing
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undertaking to maintain Property or Equipment in good repair shall apply
regardless of the cause necessitating repair and regardless of whether the
Lessee has possession of the Property or Equipment, and as between the Lessor
and the Lessee all risks of damage to Property or Equipment are assumed by the
Lessee.
21.3 With respect to any Parcel of Property, the Lessee shall
pay: (i) all taxes, assessments, levies, fees, water and sewer rents and
charges, and all other governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, which are, at any time, imposed or
levied upon or assessed against (A) the Parcel, (B) any Basic Rent, any
Additional Rent or other sum payable hereunder or (C) this Lease, the leasehold
estate hereby created, or which arises in respect of the ownership, operation,
occupancy, possession or use of the Parcel; (ii) all gross receipts or similar
taxes (i.e., taxes based upon gross income which fail to take into account all
customary deductions (e.g., ordinary operating expenses, depreciation and
interest) relating to the Parcel) imposed or levied upon, assessed against or
measured by any Basic Rent, or any Additional Rent or other sum payable
hereunder; (iii) all sales, value added, use and similar taxes at any time
levied, assessed or payable on account of the acquisition, leasing or use of the
Parcel; and (iv) all charges of utilities and communications services serving
the Parcel. The Lessee shall not be required to pay any franchise, estate,
inheritance, transfer, income or similar tax of the Lessor (other than any tax
referred to in clause (ii) above) unless such tax is imposed, levied or assessed
in substitution for any other tax, assessment, charge or levy which the Lessee
is required to pay pursuant to this paragraph (c); provided, however, that if at
any time during the term of this Lease, the method of taxation shall be such
that there shall be levied, assessed or imposed on the Lessor a capital levy or
other tax directly on the rents received therefrom, or upon the value of any
Parcel or any present or any future improvement or improvements on any Parcel,
then all such taxes, assessments, levies or charges or the part thereof so
measured or based, shall be payable by the Lessee, but only to the extent that
such taxes would be payable if the Property affected were the only property of
the Lessor, and the Lessee shall pay and discharge the same as herein provided.
The Lessee will furnish to the Lessor, promptly after demand therefor, proof of
payment of all items referred to above which are payable by the Lessee. If any
such assessments may legally be paid in installments, the Lessee may pay such
assessment in installments; in such event, the Lessee shall be liable only for
installments which become due and payable during the Lease Term and any Renewal
Term.
21.4 The Lessee may make alterations to any Equipment, provided
such alterations do not materially impair the value or utility of such Equipment
and shall make, at its expense, all modifications and improvements which are
necessary pursuant to any Legal Requirement or Insurance Requirement. Any
improvements or additions to any Equipment shall become and remain the property
of the Lessor, except that any addition to Equipment made by the Lessee, if it
can be removed from such Equipment without impairing the value or utility
thereof or without violating Legal Requirements or Insurance Requirements, may
be removed by the Lessee, and if removed title thereto shall pass to the Lessee.
In the event
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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the Lessee shall receive a Completion Advance from the Lessor with respect to
any such improvements or additions, the Lessee agrees to furnish promptly to the
Lessor a revised Unit Leasing Record or AFL Unit Leasing Record to amend the
Acquisition Cost for such Parcel or Unit to reflect the increase in the
Acquisition Cost.
21.5 So long as no Event of Default shall have occurred and be
continuing, the Lessee may, at its expense, make additions to and alterations to
any Parcel of Property; provided that upon completion of such additions or
alterations (i) neither the fair market value or utility of the Parcel of
Property shall be materially impaired, (ii) such additions or alterations shall
not result in a change of use of such Parcel of Property and (iii) no exterior
walls of any building or other improvement constituting a part of a Parcel of
Property shall be demolished unless the Lessee has made adequate provision
according to sound and prudent engineering and architectural standards to
preserve and maintain the structural integrity of the Parcel of Property and for
the restoration of such Parcel of Property to a structurally sound architectural
whole. Any and all such additions and alterations shall be and remain part of
the Parcel of Property and shall be subject to this Lease. Notwithstanding
anything contained herein, the Lessee shall not perform any addition or
alteration to any Parcel of Property which would have an estimated cost in
excess of $5,000,000, without the Lessor's prior written consent, which consent
shall not be unreasonably withheld.
21.6 The Equipment constituting or included in the Ammonia
Project and leased by the Lessee shall be maintained, repaired, refurbished or
replaced by the Lessee when necessary in order to ensure that all Equipment
located at the Ammonia Project will include the Equipment listed on the AFL Unit
Leasing Record with respect to the Ammonia Project or replacements for such
Equipment of the kind, quality and in the quantities included in the AFL Unit
Leasing Record with respect to the Ammonia Project (provided that the Lessee
may, subject to compliance with other requirements of this Section 9, replace
Equipment at the Ammonia Project with equipment of different kind, quality and
in different quantities if such replacement equipment is of equal or greater
value and serviceability) and will be in such condition and sufficient to allow
the Ammonia Project to be operated in accordance with industry standards as an
ammonia production plant. As equipment is substituted at the Ammonia Project for
Equipment at the Ammonia Project and subject to this Lease, title to such
substitute equipment shall automatically vest in the Lessor and such equipment
shall be subject to this Lease and title to the existing Equipment at the
Ammonia Project for which such equipment is being substituted shall be
transferred by the Lessor at the direction of the Lessee.
21.7 The Lessee shall (i) maintain the Ammonia Project in a
condition (ordinary wear and tear excepted) such that Ammonia Project will have
the capacity and functional ability to perform, in normal commercial operation,
the functions for which it was designed at the operational levels contemplated
therefor, which operational levels shall be achieved no later than January 31,
1998 and (ii) operate, service, maintain and repair the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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Ammonia Project and replace all necessary components thereof (A) so that the
condition and operating efficiency will be maintained and preserved (ordinary
wear and tear excepted) in accordance with industry standards for an ammonia
production plant, (B) in accordance with such operating standards as shall be
required to take economic advantage of and enforce all available warranties to
the extent such warranties are material to the value or operation of the Ammonia
Project, (C) in accordance with all Insurance Requirements applicable to the
Ammonia Project and (D) in accordance with all Governmental Actions relating
thereto.
21.8 The Lessee has obtained or will obtain prior to the time
required and shall maintain in full force and effect all operating licenses, if
any, relating to the Ammonia Project which are required for the operation of the
Ammonia Project.
SECTION 22. INSURANCE.
22.1 General Liability Insurance with Respect to Equipment. The
Lessee will carry at its own expense general liability insurance and property
damage insurance with respect to all Equipment (i) in amounts which are not less
than the general liability and property damage insurance applicable to similar
equipment owned, leased or held by the Lessee, provided that in no event shall
such amounts in respect of the Ammonia Project be less than $5,000,000 per
occurrence, (ii) of the types usually carried by Persons engaged in the same or
a similar business, similarly situated with the Lessee, and owning or operating
similar equipment and which cover risk of the kind customarily insured against
by such Persons, and (iii) which are maintained in effect with insurers of
recognized responsibility and reputation satisfactory to the Lessor and any
Assignee. The insurance required by this paragraph (a) may be subject to such
deductibles and the Lessee may self-insure with respect to the required coverage
to the extent consistent with the Lessee's customary practice with respect to
similar property owned by the Lessee.
22.2 Insurance Against Loss or Damage to Equipment. The Lessee
will maintain in effect with insurers of recognized responsibility and
reputation satisfactory to the Lessor and any Assignee, at its own expense,
all-risk physical damage insurance with respect to all Equipment, which is of
the type usually carried by Persons engaged in the same or similar business,
similarly situated with the Lessee, and owning or operating similar equipment
and which cover risk of the kind customarily insured against by such Persons,
and in substantially the amount applicable to similar equipment owned, leased or
held by the Lessee, provided that such insurance shall at all times be in an
amount not less than the aggregate Acquisition Cost of such Unit of Equipment.
The insurance required by this paragraph (b) may be subject to reasonable
deductibles and the Lessee may self-insure with respect to the required coverage
to the extent consistent with the Lessee's customary practice with respect to
similar property owned by the Lessee.
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22.3 Insurance with respect to Property. The Lessee will maintain
or cause to be maintained insurance of the following character, on each Parcel
of Property:
(a) All risk insurance coverage against losses by fire and
lightning and other risks for the full insurable
replacement value of each Parcel of Property or portion or
component thereof, with agreed amount endorsement or
endorsements providing equivalent protection, including
loss by windstorm, flood, hail, explosion, riot (including
riot attending a strike), civil commotion, aircraft,
vehicles, smoke damage, and vandalism and malicious
mischief, in amounts not less than the full insurable
replacement value of all buildings and other improvements
on each Parcel of Property, but in no event less than the
Acquisition Cost of each Parcel of Property. The term
"full insurable replacement value" as used herein means
the actual replacement cost, including the costs of debris
removal, but excluding the cost of constructing foundation
and footings.
(b) Comprehensive general public liability insurance covering
the legal liability of the Lessor and the Lessee against
claims for bodily injury, death or property damage,
occurring on, in or about each Parcel of Property or
occurring as a result of ownership of facilities located
on each Parcel of Property or as a result of the use of
products or materials manufactured, stored, processed,
constructed or sold, or services rendered, on each Parcel
of Property, in the minimum amount of $5,000,000 with
respect to any one occurrence, accident or disaster or
incidence of negligence.
(c) The Lessee shall comply with applicable workers'
compensation laws of the jurisdiction where each Parcel of
Property is located, and shall maintain such insurance if
and to the extent necessary for such compliance.
(d) Such other insurance, in such amounts and against such
risks, as is customarily maintained by operators of
similar properties.
The insurance required under this paragraph (c) shall be maintained in effect
with insurers of recognized responsibility and reputation satisfactory to the
Lessor and any Assignee. Such insurance may provide for such deductibles and the
Lessee may self-insure with respect to the required coverage to the extent
consistent with the Lessee's customary practice with respect to similar property
owned by the Lessee.
Insurance claims by reason of damage or destruction to any Parcel
of Property shall be adjusted by the Lessee, subject to the approval of the
Lessor, which
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
approval the Lessor agrees not to unreasonably withhold or delay, provided that,
if the amount claimed exceeds $5,000,000, the Lessor may participate in such
adjustment, at the Lessee's expense.
22.4 Political Risk Insurance. The Lessee shall, as agent for the
Lessor, procure or cause to be procured and maintain or cause to be maintained
in respect of Property or Equipment not located in the United States, for the
Lessor, with the Multilateral Investment Guaranty Agency, the American
International Group, or such other insurance company as shall be reasonably
acceptable to the Lessor and any Assignee, a policy of political risk insurance
covering (i) transfer restrictions, (ii) expropriation and (iii) to the extent
reasonably available from public or private market insurers or any combination
thereof, war and civil disturbance, provided that in no event shall the amount
of such political risk insurance in respect of the Ammonia Project be less than
20% of the Acquisition Cost of the Ammonia Project.
22.5 Additional Insureds; Notice. Any policies of insurance
carried in accordance with this Section 10 and any policies taken out in
substitution or replacement for any such policies (i) shall name the Lessor, the
general partner of the Lessor and its shareholders, officers and directors, the
limited partners of the Lessor, and each Assignee as additional insureds (the
"Additional Insureds"), as their respective interests may appear in relation to
the Property and Equipment (but without imposing upon any such Person any
obligation imposed on the insured, including, without limitation, the liability
to pay the premium for any such policy), (ii) with respect to insurance carried
in accordance with the preceding paragraphs (b), (c)(i) and (c)(iv) shall name
the Assignee, if any, or the Lessor, if no Assignment has been made, as loss
payee, (iii) with respect to insurance carried in accordance with the preceding
paragraphs (b) and (c), shall provide that as against the Lessor the insurers
shall waive any rights of subrogation, provided that the exercise by insurers of
rights of subrogation derived from rights retained by the Lessee shall not in
any way delay payment of a claim that would otherwise be paid by such insurers,
(iv) shall provide that if the insurers cancel such insurance for any reason
whatsoever, or any substantial change is made in the coverage or the same is
allowed to lapse for nonpayment of premium or such insurance coverage is
reduced, such cancellation, change, lapse or reduction shall not be effective as
to the Additional Insureds or any loss payee for ten (10) days after receipt by
the Lessor and any Assignee of written notice by such insurers of such
cancellation, change, lapse or reduction, and (v) shall provide that in respect
of the interest of the Additional Insureds or any loss payee in such policies
the insurance shall not be invalidated by any action or inaction of the Lessee
or any other Person (other than an Additional Insured in respect of its own
interest) and shall insure the interests of the Additional Insureds or any loss
payee as they appear, regardless of any breach or violation of any warranties,
declarations or conditions contained in such policies by the Lessee or any other
Person, provided that, subject to the specific requirements of this Section 10,
the coverage afforded the Additional Insureds shall not be broader than the
coverage afforded the named insured. Each liability policy (A) shall be primary
without right of contribution
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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from any other insurance which is carried by the Lessor with respect to its
interest as such in the Property or Equipment and (B) shall expressly provide
that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering each
insured.
22.6 Application of Insurance Proceeds for Loss or Taking. As
between the Lessor and the Lessee it is agreed that any insurance payments
received as the result of the occurrence of (i) any event of loss described in
paragraph (c) of Section 15 hereof with respect to any Parcel of Property or
Unit of Equipment, or (ii) any event of Taking described in Section 16 hereof
shall be paid to an account of the Lessor and disposed of, as set forth in
paragraph (c) of Section 15 hereof.
22.7 Application of Insurance Proceeds for Other than Loss or
Taking. As between the Lessor and the Lessee, the insurance proceeds of any
property damage loss to any Property or Equipment will be held in an account of
the Lessor and applied in payment (or to reimburse the Lessee) for repairs or
replacement in accordance with the terms of paragraph (b) of Section 15 hereof,
provided that, in the event that any insurance payments received pursuant to
this paragraph (g) are less than $2,000,000, such payments shall be paid to, or
retained by, the Lessee. The Lessee shall be entitled (i) to receive the amounts
so deposited against certificates, invoices or bills satisfactory to the Lessor,
delivered to the Lessor from time to time as such work or repair progresses, and
(ii) to direct the investment of the amounts so deposited as provided in
paragraph (h) of this Section 10. To the extent that the cost of such work or
repair shall exceed the amount of proceeds, the Lessee shall make payment
thereof. Any moneys remaining in the aforesaid account after final payment for
repairs has been made shall be paid to the Lessee.
22.8 Investment. The Lessor, at the Lessee's instruction and
risk, may invest the amounts deposited with the Lessor pursuant to paragraph (g)
of this Section 10 in any investments permitted under a Credit Agreement. Such
investments shall mature in such amounts and on such dates so as to provide that
amounts shall be available on the draw dates sufficient to pay the amounts
requested by and due to the Lessee. Any interest earned on investments of such
funds shall be paid to the Lessee. The Lessor shall not be liable for any loss
resulting from the liquidation of any such investment and the Lessee shall bear
the risk of such loss, if any.
22.9 Application in Default. Any amount referred to in paragraphs
(e), (f), (g) or (h) of this Section 10 which is payable to the Lessee shall not
be paid to the Lessee or, if it has been previously paid to the Lessee, shall
not be retained by the Lessee, if at the time of such payment an Event of
Default shall have occurred and be continuing. In such event, all such amounts
shall be paid to and held by the Lessor as security for the obligations of the
Lessee hereunder or, at the Lessor's option, applied by the Lessor toward
payment of any of such obligations of the Lessee at the time due hereunder as
the Lessor may elect. At such time as there shall not be continuing any Event of
Default, all such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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amounts at the time held by the Lessor in excess of the amount, if any, which
the Lessor shall have elected to apply as above provided shall be paid to the
Lessee.
22.10 Certificates, Etc. On or before the execution of this
Lease, on the Effective Date with respect to any Parcel of Property or Unit of
Equipment, and annually on or before the anniversary of the date of this Lease,
the Lessee will furnish to the Lessor certificates of an independent insurance
broker reasonably satisfactory to the Lessor or other evidence reasonably
acceptable to the Lessor certifying that the insurance then carried and
maintained on each Parcel of Property or Unit of Equipment complies with the
terms hereof.
22.11 Use or Operation of Property and Equipment. The Lessee
covenants that it will not use or operate any Equipment or use or occupy any
Property or permit the use or occupancy of any Property or the use or operation
of any Equipment at a time when the insurance required by this Section 10 is not
in force with respect to such Property or Equipment.
22.12 Prosecution of Claims. The Lessee may, so long as no Event
of Default shall have occurred and be continuing, at its cost and expense,
prosecute any claim against any insurer or contest any settlement proposed by
any insurer, and the Lessee may, so long as no Event of Default shall have
occurred and be continuing, bring any such prosecution or contest in the name of
the Lessor, the Lessee, or both, and the Lessor will join therein at the
Lessee's request, provided that the Lessee shall indemnify the Lessor against
any losses, costs or expenses (including reasonable attorneys' fees) which the
Lessor may incur in connection with such prosecution or contest whether or not
it is at the request of the Lessee.
SECTION 23. INDEMNITIES.
The Lessee shall, and hereby does, indemnify and hold harmless
the Lessor, Merrill Lynch, Merrill Leasing, any Assignee, any successor or
successors, and any Affiliate of each of them, and their respective officers,
directors, incorporators, shareholders, partners (general and limited,
including, without limitation, the general and limited partners of the Lessor),
employees, agents and servants (each of the foregoing an "Indemnified Person")
from and against all liabilities (including, without limitation, strict
liability in tort), taxes, losses, obligations, claims (including, without
limitation, strict liability in tort), damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, attorneys' and
accountants' fees and expenses) or judgments of any nature relating to or in any
way arising out of:
23.1 The Operative Documents and the transactions contemplated
thereby and the ordering, delivery, acquisition, construction, assembly,
installation, title on acquisition, rejection, installation, possession,
titling, retitling, registration, reregistration,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
custody by the Lessee of title and registration documents, ownership, use,
non-use, misuse, financing (including, without limitation, all obligations of
the Lessor under or in respect of any interest rate swap, cap, collar or other
financial hedging arrangement and any amounts payable by the Lessor under any
such arrangement to reduce the notional amount thereof by the amount of any
prepayment of any borrowing to which such interest rate swap, cap, collar or
other financial hedging arrangement relates), refinancing, operation,
transportation, repair, return, delivery or control of any Property or Equipment
or the past, present or future presence or the release of hazardous substances
on, under, to or from, or the generation or transportation of hazardous
substances to or from, or the failure to report, disclose or remediate the
foregoing with respect to any Property or Equipment, leased or to be leased
hereunder or any Operative Document or any transaction contemplated by any
thereof, including any failure by the Lessee to comply with any provision of any
thereof, (i) except to the extent that such costs are included in the
Acquisition Cost of such Property or Equipment within the limitations provided
in paragraph (a)(v) of Section 3 hereof (or within any change of such
limitations agreed to in writing by the Lessor and the Lessee), (ii) except for
any general administrative expenses of the Lessor, (iii) except the income taxes
with respect to which indemnification is excluded under paragraph (c) of this
Section 11 and (iv) except that this indemnity shall not increase any payment
required to be made by the Lessee pursuant to Section 13 of this Lease or
paragraph (j) of Section 19 of this Lease;
23.2 The assertion of any claim or demand based upon any
infringement or alleged infringement of any patent or other right, by or in
respect of any Property or Equipment; provided, however, the Lessor will make
available to the Lessee the Lessor's rights under any similar indemnification
arising from any manufacturer's or vendor's warranties or undertakings with
respect to any Property or Equipment;
23.3 All U.S. Federal, state, county, municipal, foreign
(including, without limitation, the Republic of Trinidad and Tobago) or other
fees and taxes of whatsoever nature, including but not limited to license,
qualification, franchise, sales, use, withholding, gross income, gross receipts,
ad valorem, business, personal property, real estate, value added, excise, motor
vehicle, occupation fees and stamp or other taxes or tolls of any nature
whatsoever, and penalties and interest thereon, whether assessed, levied against
or payable by the Lessor or otherwise, with respect to any Property or Equipment
or the acquisition, purchase, sale, rental, use, operation, control, ownership
or disposition of any Property or Equipment (including, without limitation, any
claim by any Governmental Authority for transfer tax, transfer gains tax,
mortgage recording tax, filing or other similar taxes or fees in connection with
the acquisition of any Property by the Lessor or otherwise in connection with
this Lease) or measured in any way by the value thereof or by the business of,
investment in, or ownership by the Lessor with respect thereto, provided that
this indemnity shall not apply to Federal net income taxes, or to state and
local net income taxes, except that such indemnity shall apply to state and
local net income taxes (A) to the extent imposed by reason in whole or in part
of (1) a relation or asserted relation of any
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
such taxing jurisdiction to the Property or Equipment or to the transactions
contemplated herein or (2) the actual or deemed use by any Person of the
Property or Equipment in such taxing jurisdiction, other than in the case of
both clauses (1) and (2), taxes to the extent such taxes would have been imposed
by a taxing jurisdiction because of a relationship between the Lessor and such
taxing jurisdiction without regard to the circumstances described in clauses (1)
and (2), and (B) to the extent imposed as a result of the inability to claim,
disallowance or other loss by Trinidad Ammonia Company, Limited Partnership of
deductions customarily allowed in computing net income (e.g., interest expense,
financing, administrative, ordinary operating expenses and other fees and
expenses, but not including depreciation in respect of Property or Equipment);
or
23.4 Any violation, or alleged violation by the Lessee, of this
Lease or any other Operative Document or of any contracts or agreements to which
the Lessee is a party or by which it is bound or of any laws, rules,
regulations, orders, writs, injunctions, decrees, consents, approvals,
exemptions, authorizations, licenses and withholdings of objection, of any
governmental or public body or authority and all other Legal Requirements.
The Lessee shall forthwith upon demand reimburse any Indemnified
Person for any sum or sums expended with respect to any of the foregoing or,
upon request from any Indemnified Person, shall pay such amounts directly. Any
amount payable to any Indemnified Person pursuant to this Section 11 shall be
paid promptly upon receipt of a written demand therefor from such Indemnified
Person accompanied by a written statement describing in reasonable detail the
claims which are the subject of and basis for such indemnity and the computation
of the amount so payable. Any payment made to or on behalf of any Indemnified
Person pursuant to this Section 11 shall be increased to such amount as will,
after taking into account all taxes imposed with respect to the accrual or
receipt of such payment (as the same may be increased pursuant to this
sentence), equal the amount of the payment, reduced by the amount of any savings
in such taxes actually realized by the Indemnified Person as a result of the
payment or accrual of the amounts in respect of which the payment to or on
behalf of the Indemnified Person hereunder is made. To the extent that the
Lessee in fact indemnifies any Indemnified Person under the indemnity provisions
of this Lease, the Lessee shall be subrogated to such Indemnified Person's
rights in the affected transaction and shall have a right to determine the
settlement of claims therein.
The indemnities contained in this Section 11 shall survive and
shall not be affected by any termination of this Lease as a whole or in respect
of any Parcel of Property or Unit of Equipment leased hereunder or any failure
or refusal of the Lessee to accept any Property or Equipment acquired or ordered
pursuant to the terms hereof.
Notwithstanding any provisions of this Section 11 to the
contrary, the Lessee shall not indemnify and hold harmless any Indemnified
Person against any claims and
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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liabilities arising solely from the gross negligence or willful misconduct of
such Indemnified Person. Each Indemnified Person shall give prompt notice to the
Lessee by telephone confirmed in writing of any event or circumstance which will
give rise to a claim for indemnification but delay or failure in giving such
notice shall not affect the Lessee's obligations hereunder except to the extent
that any increase in liability is a direct result of such failure or delay.
In the event any Indemnified Person shall be a party defendant to
any litigation in respect of which indemnification is applicable under this
Section 11, such Indemnified Party shall give prompt notice thereof to the
Lessee by telephone and in writing. No failure or delay of such Indemnified
Person to give the notice required by this Section 11 shall excuse the
obligation of the Lessee to indemnify each Person with respect to such
litigation except to the extent that any increase in liability is a direct
result of such failure or delay. In the event any claim, action, proceeding or
suit is brought against an Indemnified Person with respect to which the Lessee
has acknowledged its obligation to indemnify such Indemnified Person (provided
that such acknowledgement shall not be binding upon the Lessee in the event of a
final determination in a judicial proceeding that the Lessee was not liable in
such claim, action, proceeding or suit), the Lessee shall have the right to
assume the defense thereof, including the employment at its expense of counsel,
provided that the Lessee shall not have such right, to the extent that such
Indemnified Person shall deliver to the Lessee a written notice waiving the
benefits of the indemnification of such Indemnified Person provided by this
Section 11 in connection with such claim, action, proceeding or suit.
Notwithstanding the foregoing, if (i) any criminal proceeding is brought against
an Indemnified Person, (ii) the claim, action, proceeding or suit seeks damages
of more than $10,000,000 or material non-monetary civil liability or penalty, or
(iii) independent counsel to an Indemnified Person shall advise such Indemnified
Person in writing that there may be a conflict of interest or defenses available
to the Indemnified Person which are different from, or additional to, and may
conflict with those available to the Lessee, the Lessee shall not have the right
to assume the defense of any such action on behalf of the Indemnified Person if
such Indemnified Person chooses to defend such action, and all reasonable costs,
expenses and attorneys' fees incurred by the Indemnified Person in defending
such action, including any damages or any settlement amount, shall be borne by
the Lessee. Notwithstanding the assumption of its defense by the Lessee pursuant
to this paragraph, any Indemnified Person shall have the right to employ
separate counsel and to participate in its defense, but the fees and expenses of
such counsel shall be borne by the Indemnified Person. In addition, the Lessee
will not be liable for any settlement of any claim, action, proceeding or suit
unless the Lessee has consented thereto in writing (which consent shall not be
unreasonably withheld or delayed). Any decision by an Indemnified Person to
employ its own counsel rather than counsel selected by the Lessee (whether or
not at the Lessee's expense) shall in no way affect any rights of such
Indemnified Person otherwise arising under this Section 11.
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SECTION 24. LEASE RENEWAL.
(a) Provided that no Event of Default has occurred and is
continuing as at the date of such request, if the Lessee shall, not earlier than
450 days and not later than one year prior to the last day of the Initial Term,
request in writing that the Lessor obtain bank borrowings on terms acceptable to
it and the Lessee in order to finance the Lessor's ownership of the Property and
Equipment during the Renewal Term, the Lessor shall make reasonable efforts to
arrange for bank commitments to provide such financing.
(b) The Lessor will advise the Lessee and PCS Nitrogen Fertilizer
Operations, Inc. in writing not later than 300 days prior to the last day of the
Initial Term as to whether it has been able to obtain bank commitments on terms
and conditions acceptable to it to finance the Property and Equipment for the
period of Renewal Term. In such notice, the Lessor shall identify such terms and
conditions. In order to renew the lease of the Property and Equipment for the
Renewal Term, the Lessee must notify the Lessor in writing within thirty (30)
days of its receipt of the foregoing notice of the Lessor, indicating (i)
whether the terms and conditions of such financing are acceptable to it and (ii)
whether, if PCS Nitrogen Fertilizer Operations, Inc. does not exercise its
Purchase Option or, having exercised such option, PCS Nitrogen Fertilizer
Operations, Inc. fails to effect the purchase contemplated thereby, the Lessee
agrees to lease the Property and Equipment for the Renewal Term. The notice of
the Lessee contemplated by the preceding sentence shall be irrevocable.
(c) The lease of the Property and Equipment shall not be renewed
for the Renewal Term if (i) the Lessor shall not obtain bank commitments to
finance the Property and Equipment on terms and conditions acceptable to it and
the Lessee, (ii) the Lessee shall not give the notice of renewal set forth in
paragraph (b) above, (iii) PCS Nitrogen Fertilizer Operations, Inc. shall
purchase the Property and Equipment pursuant to the exercise of the Purchase
Option or (iv) the Lessor and the Lessee shall not have agreed on the Lease
Termination Amount for the Renewal Term.
(d) The Lessor shall schedule the closing of the financing
contemplated by the bank commitments on or before the date which is six (6)
months prior to the end of the Initial Term. The Lessor shall notify the Lessee
in writing promptly of the closing of such financing or that such financing
shall have failed to close on such scheduled date. Upon the date of such closing
the Property and Equipment shall, subject to the terms and conditions of this
Lease, be leased hereunder for the Renewal Term. If the closing shall not occur
on or before the date which is six (6) months prior to the last day of the
Initial Term, then the lease of the Property and Equipment shall terminate on
the last day of the Initial Term and the Lessee shall comply with its
obligations with respect to such termination as set forth in paragraph (b) of
Section 13 hereof.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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SECTION 25. LEASE EXPIRATION.
25.1 In the event PCS Nitrogen Fertilizer Operations, Inc. has
not purchased all Property and Equipment under this Lease pursuant to the
Purchase Option and the Lessee desires to terminate this Lease with respect to
such Property and Equipment, the Lessee shall provide notice to Lessor of such
intention at least five (5) months prior to the expiration of the Lease Term.
25.2 In the event (x) the Lessee provides the termination notice
contemplated in paragraph (a) above or (y) the circumstances referred to in the
last sentence of paragraph (d) of Section 12 shall be applicable, the Lessee
hereby covenants to the Lessor (the "Expiration Covenants") as follows: (A) on
the Lease Termination Date, (i) no Event of Default or Potential Default shall
have occurred and be continuing, (ii) no Parcel of Property shall be undergoing
any repairs, additions or alterations that would have a material adverse effect
on the fair market value of such Parcel of Property, (iii) each Parcel of
Property and Unit of Equipment shall be in compliance with all Legal
Requirements, except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (1) will not place either the Lessor or any
Assignee in any danger of any monetary civil liability for which the Lessor or
any Assignee is not adequately indemnified (the Lessee's obligations under
Section 11 of this Lease shall be deemed to be adequate indemnification if no
Event of Default exists) or any other material civil liability or penalty or
subject the Lessor or any Assignee to any criminal liability as a result of a
failure to comply therewith and (2) will not result in a material diminution in
the value of any Property or Equipment or in any material risk of the loss, sale
or forfeiture or loss of use of any thereof, (B) five (5) months prior to the
Lease Termination Date, the Lessee shall at its expense deliver to the Lessor an
environmental audit satisfactory in form and substance to the Lessor in its
reasonable discretion, the conclusion of which shall be satisfactory to the
Lessor in its reasonable discretion, and prepared by an independent
environmental consultant or engineer satisfactory to the Lessor in its
reasonable discretion, addressing the environmental hazards or liabilities
associated with any Parcel of Property or Unit of Equipment under this Lease and
(C) on or prior to the Lease Termination Date, the Lessee shall deliver to the
Lessor a report of an independent engineer (selected by the Lessor and at the
expense of the Lessee), to the effect that the Property and Equipment under this
Lease (i) have been maintained in accordance with the terms and conditions of
Section 9 of this Lease and (ii) are currently operating in accordance with the
design specifications listed in the appraisal provided to the Lessor pursuant to
Section 4 of the Agreement for Lease.
25.3 In the event the Lessee has complied with each of the
Expiration Covenants, the Lessee shall on the Lease Termination Date applicable
to a Parcel of Property or Unit of Equipment, terminate this Lease with respect
to such Property and Equipment, surrender such Property and Equipment to the
Lessor and pay to the Lessor the Lease Termination Amount with respect to such
Property and Equipment and all other amounts owing by the Lessee hereunder and
under the other Operative Documents. Upon
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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such surrender, the Lessor shall have the right to sell such Property and
Equipment to a third party and the Lessee shall have no further right, claim or
interest in such Property and Equipment (it being understood that the Lessor
shall be entitled to commence the marketing of such Property and Equipment at
any time subsequent to the first day of the fifth month prior to the Lease
Termination Date, and the Lessee agrees that it shall cooperate in connection
therewith). If the Lessor shall fail to sell the Ammonia Project within seven
(7) days of the surrender thereof by the Lessee, the Assignee shall have the
right, but not the obligation, acting on behalf of the Lessor to sell the
Ammonia Project to a third party. The proceeds of sale received by the Lessor or
such Assignee, as the case may be, from any sale of such Property and Equipment
shall be retained by the Lessor or any Assignee, as the case may be, provided
that, if the proceeds of sale, together with the Lease Termination Amount paid
by the Lessee, exceed the Acquisition Cost of such Property and Equipment and
all other amounts payable by the Lessee hereunder and under the other Operative
Documents, such excess shall be paid by the Lessor or such Assignee, as the case
may be, to the Lessee. The Lessee shall use reasonable efforts during the last
five (5) months of the Initial Term with respect to such Property and Equipment
(unless this Lease has been renewed pursuant to Section 12 hereof), and during
the last five (5) months of the Renewal Term, if any, to seek on behalf of the
Lessor bona fide arms-length bids for not less than all such Property and
Equipment from prospective purchasers who are financially capable of purchasing
such Property and Equipment for cash, on an as-is, non-installment sale basis,
without warranty by, or recourse to, the Lessor. The Lessee shall assign to any
purchaser, at such purchaser's request and for no additional consideration, any
and all assignable agreements in the Lessee's name for the acquisition,
construction, storage or transportation of the Property and the Equipment. The
Lessee shall notify the Lessor of the amount of each such bid, and the name and
address of the Person submitting such bid.
25.4 In the event the Lessee shall surrender such Property and
Equipment to the Lessor or to a purchaser of such Property and Equipment from
the Lessor pursuant to the provisions of this Section 13, on the Lease
Termination Date applicable to such Property and Equipment, the Lessee shall pay
to the Lessor all Basic Rent payable with respect to such Property and Equipment
and any Additional Rent and other amounts owing hereunder and under the other
Operative Documents. Upon payment by the Lessee to the Lessor of all amounts
owing under this Section 13 and delivery of all Property and Equipment under
this Lease to the Lessor or such purchaser, this Lease shall terminate with
respect to such Property and Equipment, except to the extent provided in Section
11 hereof.
SECTION 26. CHARACTER OF AMMONIA PROJECT.
It is the intention of the Lessor and the Lessee that the
components of the Ammonia Project identified as personal property components in
Exhibit D hereto maintain their character as personal property for commercial
law purposes. The Lessee shall take all such reasonable action to maintain such
character and shall obtain and record such instruments and take such steps as
may be necessary to prevent any Person from acquiring
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
any rights in such components by reason of such components being deemed to be
real property.
SECTION 27. LOSS OF OR DAMAGE TO PROPERTY OR EQUIPMENT.
27.1 The Lessee hereby assumes all risk of loss of or damage to
Property or Equipment, however caused. No loss of or damage to any Property or
Equipment shall impair any obligation of the Lessee under this Lease, which
shall continue in full force and effect with respect to any lost or damaged
Property or Equipment.
27.2 In the event of damage of any kind whatsoever to any
Property or Equipment (unless the same is determined by the Lessee in its
reasonable judgment to be damaged beyond repair) the Lessee, at its own cost and
expense, shall place the same in good operating order, repair, condition and
appearance. The Lessee's right to any proceeds paid under any insurance policy
or policies required under Section 10 of this Lease with respect to any such
damage to any Property or Equipment which has been so placed by the Lessee in
good operating order, repair, condition and appearance is governed by paragraph
(f) of Section 10 hereof.
27.3 If (A) all, or a substantial portion of the Ammonia Project
or any other Property or Equipment is lost, stolen, destroyed, seized,
confiscated, rendered unfit for use or damaged beyond repair (in the reasonable
judgment of the Lessee), (B) the use thereof by the Lessee in the ordinary
course of business is prevented by the act of any third Person or Persons or
governmental instrumentality for a period exceeding one hundred eighty (180)
days or, if shorter, the period ending on the last day of the Initial Term or
the Renewal Term of the Ammonia Project or of such other Property or Equipment,
as applicable, (C) the Ammonia Project or any other Property or Equipment is
attached (other than on a claim against the Lessor as to which the Lessee is not
obligated to indemnify the Lessor) and the attachment is not removed within a
period of one hundred eighty (180) days or, if shorter, the period ending on the
last day of the Initial Term or the Renewal Term of the Ammonia Project or of
such other Property or Equipment, as applicable, (D) a Taking as described in
Section 16 shall occur, or (E) the Ammonia Project or any other Property or
Equipment is damaged and the Lessee elects not to rebuild or repair the Ammonia
Project or such Property or Equipment or such rebuilding or repairs would exceed
twenty-five (25%) of the replacement cost of the Ammonia Project or such
Property or Equipment where such rebuilding or repairs could not, in the
reasonable judgment of the Lessee, restore the Ammonia Project or such Property
or Equipment to its previous working order prior to the expiration of the
Initial Term, or if the Lessee has renewed this Lease pursuant to Section 12
hereof, prior to the expiration of the Renewal Term, then in any such event, (a)
the Lessee shall replace such Property or Equipment with real property or
equipment of a similar like and kind, and of a value not less than the Property
or Equipment being replaced (assuming that the replaced Equipment or Property
was maintained in accordance
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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with the provisions hereof), and the Lessee and the Lessor shall execute a
revised Unit Leasing Record or AFL Unit Leasing Record, as the case may be, to
amend, among other things, the description of such Property or Equipment,
provided that the replacement of any Property with other real property shall be
subject to the prior written consent of the Lessor, which consent shall not be
unreasonably withheld, and to receipt by the Lessor and the Assignee of all
documentation required with respect to the acquisition of Property and Equipment
by the Lessor under the terms of any Credit Agreement or (b)(i) the Lessee shall
promptly notify the Lessor in writing of such event, (ii) on the Basic Rent
Payment Date designated by the Lessee, which shall be a date within ninety (90)
days following such event but not later than the last day of the Lease Term, the
Lessee shall pay to the Lessor an amount equal to eighty-five percent (85%) of
the Acquisition Cost of the Ammonia Project or such Property or Equipment, (iii)
the Initial Term or Renewal Term of the Ammonia Project or such Property or
Equipment shall continue until the Basic Rent Payment Date on which the Lessor
receives payment from the Lessee of the amount payable pursuant to this
paragraph (c) and of Basic Rent payable with respect to the Ammonia Project or
such Property or Equipment and any Additional Rent and other amounts owing
hereunder and under the other Operative Documents, and shall thereupon
terminate. Insurance and condemnation proceeds, if any, received by the Lessor
that, together with the amounts paid by the Lessee to the Lessor pursuant to
clause (ii) of the preceding sentence, exceed the aggregate of the Acquisition
Cost of the Ammonia Project or the affected Property or Equipment and all other
amounts payable hereunder and under the other Operative Documents, shall be paid
by the Lessor to the Lessee. For purposes of this paragraph (c), loss of or
damage to a "substantial portion of the Ammonia Project or any other Property or
Equipment" shall be deemed to occur if the Ammonia Project or such Property or
Equipment is unusable for the Lessee's ordinary business purposes in the
reasonable judgment of the Lessee.
SECTION 28. CONDEMNATION AND DEDICATION OF PROPERTY; EASEMENTS.
28.1 If the use, occupancy or title to all or a substantial
portion of the Ammonia Project or any other Parcel of Property is taken,
requisitioned or sold in, by or on account of actual or threatened eminent
domain or confiscation or similar proceedings or other action by any
governmental authority (such events collectively referred to as a "Taking"),
then the Initial Term or Renewal Term shall terminate as provided in paragraph
(c) of Section 15 hereof. Upon receipt of proceeds from any award or sale made
in connection with such Taking, if the Lessee has paid all amounts owing under
paragraph (c) of Section 15 hereof, so long as no Event of Default has occurred
and is continuing, the Lessor shall remit to the Lessee the net amount of such
proceeds remaining after reimbursement for all costs and expenses (including,
without limitation, reasonable attorneys' fees) incurred by the Lessor in
connection with the negotiation and settlement of any proceedings related to
such Taking. A Taking shall be deemed to affect a "substantial portion" of the
Ammonia Project or a Parcel of Property if, after such Taking, the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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Ammonia Project or such Parcel of Property is unusable for the Lessee's ordinary
business purposes in the reasonable judgment of the Lessee.
28.2 If less than a substantial portion of the Ammonia Project or
any other Parcel of Property is subject to a Taking, then this Lease shall
continue in effect as to the portion of the Ammonia Project or such Parcel not
taken and any net proceeds, so long as no Event of Default has occurred and is
continuing, shall be paid to the Lessee, provided that if, as a result of a
Taking or Takings of less than substantially all of a Parcel of Property, the
aggregate proceeds with respect to any Parcel of Property received is equal to
or greater than $2,000,000, at the Lessee's option, (A) the Lessee shall replace
such Property as provided in clause (a) in the first sentence of paragraph (c)
of Section 15 hereof, or (B) such proceeds shall be paid to the Lessor and the
Acquisition Cost of the affected Parcel shall be reduced by the amount of such
proceeds (such reduction to be evidenced by a revised Unit Leasing Record or AFL
Unit Leasing Record, as the case may be). If, at any time after a Cash Reserve
Trigger Event has occurred (unless a CRA Release Event has occurred since the
date of such Cash Reserve Trigger Event), the Acquisition Cost of the Ammonia
Project is reduced pursuant to this paragraph (b) of Section 16, the Lessor
shall cause the CRA Bank to remit to the Lessee an amount computed by
multiplying the total amount of proceeds paid to the Lessor pursuant to clause
(B) above by a percentage derived by multiplying the results of (1) a fraction,
the numerator of which shall be the amount of the reduction in the Acquisition
Cost and the denominator of which shall be the Acquisition Cost of the Ammonia
Project, by (2) a fraction, the numerator of which shall be the dollar amount in
the Cash Reserve Account at such date and the denominator of which shall be
fifty percent of the Acquisition Cost of the Ammonia Project.
28.3 So long as no Event of Default hereunder has occurred and is
continuing, the Lessee shall have the right (i) to grant, obtain or enter into
easements for the benefit of any Parcel of Property, (ii) to voluntarily
dedicate or convey, as required, portions of any Parcel of Property for road,
highway and other public purposes and (iii) to voluntarily execute petitions to
have any Parcel of Property or a portion thereof annexed to any municipality or
included within any utility, highway or other improvement or service district,
provided such annexation has no material adverse effect on the value of such
Parcel of Property. In connection with the Lessee's development of the Property
in accordance with the terms of this Lease, the Lessee shall at all times be
free to enter into and/or execute such agreements, dedications, easements,
conditions, covenants and restrictions in favor of other property owners,
lessees or local agencies as are necessary for the conduct of the Lessee's
operations on the Property. If any monetary consideration is paid for such
easement or dedication, the Lessee shall be entitled to receive or retain such
consideration.
Subject to the foregoing provisions of this Section 16(c), the
Lessor will cooperate, without unreasonable delay and at the Lessee's expense,
as necessary and join in the execution of any appropriate instrument or shall
execute any separate instrument as necessary. As a condition precedent to the
Lessee's exercise of any of the Lessee's powers
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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under this Section 16, (i) the Lessee shall give the Lessor five (5) Business
Days' prior written notice of the proposed action and (ii) the Lessee shall
provide to the Lessor a certificate of the Lessee stating that such action will
not in any material respect adversely affect either the fair market value of
such Property or the use of such Property for its intended purpose, will not
affect the Lessor's ability to exercise its rights and remedies under this Lease
and that the Lessee undertakes to remain obligated under this Lease to the same
extent as if the Lessee had not exercised its powers under this Section 16 and
the Lessee will perform all obligations under such instrument and shall prepare
all required documents and provide all other instruments and certificates as the
Lessor may reasonably request. If requested by the Lessee, the Lessor shall
appoint the Lessee as the Lessor's attorney-in-fact pursuant to a power of
attorney for the foregoing purposes.
SECTION 29. SURRENDER OF PROPERTY OR EQUIPMENT.
29.1 Upon termination of the lease of any Property or Equipment
under circumstances in which such Property or Equipment is to be returned to the
Lessor, the Lessee shall surrender and deliver such Property or Equipment to the
Lessor or a designee of the Lessor at the location where such Property or
Equipment is required to be located pursuant to the provisions hereof.
29.2 Upon the surrender of the Property and Equipment, the Lessee
shall deliver to the Lessor or its designee, all logs, manuals, inspection data,
books and records in the English language, if available, or with translations in
the English language or copies thereof which are applicable to the Property and
Equipment that are in accordance with sound industry practice customarily
retained (or that the Lessee actually did retain) or are required by law to be
retained with respect to similar property and equipment, including, without
limitation, all software and manuals necessary for the operation of the Ammonia
Project in accordance with the design specifications set forth in the appraisal
provided to the Lessor pursuant to Section 4 of the Agreement for Lease.
29.3 The Lessee shall be obligated to obtain all Governmental
Actions necessary for the surrender of Property and Equipment hereunder and
permitting the Lessor (without the Lessor being required to change its business
structure or otherwise to suffer any real or potential adverse effect on its
business or that of its Affiliates as a result of such surrender and receipt of
possession) to possess the Ammonia Project with or without the continued
involvement of the Lessee, which Governmental Actions shall be in full force and
effect. In connection with the Lessee's surrender of possession of the Ammonia
Project to the Lessor, the Lessee shall furnish to the Lessor copies certified
by a Responsible Officer of the Lessee of all Governmental Actions necessary to
effect such surrender and receipt of possession.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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SECTION 30. EVENTS OF DEFAULT.
Any of the following events of default shall constitute an "Event
of Default" and shall give rise to the rights on the part of the Lessor
described in Section 19 hereof:
30.1 Failure of the Lessee (x) to make any payment required by
paragraph (e) of Section 19, paragraph (c) of Section 15, paragraph (q) or (t)
of Section 2 or paragraph (l) of Section 29 hereof when due or to pay amounts
due to the Lessor on the Lease Termination Date, (y) to pay Basic Rent on or
prior to the earlier of (i) ten (10) days after such payment is due and (ii) the
Lease Termination Date, or (z) to pay any other amount payable by the Lessee
hereunder on or prior to the earlier of (i) fifteen (15) days after written
demand for such other payment and (ii) the Lease Termination Date; or
30.2 Failure to maintain the insurance required by Section 10
hereof, or default in the performance of the covenant contained in paragraph (k)
of Section 10 hereof; or
30.3 Failure to comply with any of the Expiration Covenants
described in paragraph (b) to Section 13 hereof or with Section 26 hereof; or
30.4 Default in the performance of any other obligation or
covenant of the Lessee pursuant to this Lease or any other Operative Document
(except a Ground Lease) and, if such default is capable of cure, the continuance
of such default for 30 days after written notice to the Lessee by the Lessor or
any Assignee, provided that, if such default is of a nature that it is capable
of being cured but not within such 30 day period and the Lessee shall have
diligently commenced curing such default within such 30 day period and the
Lessee shall have proceeded diligently and in good faith thereafter to complete
curing such default, such 30-day period shall be extended to one hundred eighty
(180) days but not to a date later than the Lease Termination Date; or
30.5 The entry of a decree or order for relief in respect of the
Lessee or the Guarantor by a court having jurisdiction in the premises, or the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Lessee or the Guarantor or of
any substantial part of its property, or ordering the winding up or liquidation
of the Lessee's or the Guarantor's affairs, in an involuntary case under the
U.S. Federal Bankruptcy Code, as now or hereafter constituted, or the Bankruptcy
and Insolvency Act (Canada), as now or hereafter constituted, or any other
applicable federal, state or provincial bankruptcy, insolvency reorganization,
composition or other similar law of any jurisdiction; or the commencement
against the Lessee or the Guarantor of an involuntary case under the U.S.
Federal Bankruptcy Code, as now or hereafter constituted, or the Bankruptcy and
Insolvency Act (Canada), as now or hereafter constituted, or any other
applicable federal, state or provincial bankruptcy, insolvency
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
reorganization, composition or other similar law of any jurisdiction, and the
continuance of any such case unstayed and in effect for a period of 60
consecutive days; or
30.6 The entry or deemed entry of an order for relief in any case
under the U.S. Federal Bankruptcy Code, as now or hereafter constituted, or the
Bankruptcy and Insolvency Act (Canada), involving the Lessee or the Guarantor or
the suspension or discontinuance of the Lessee's or the Guarantor's business
operations, the Lessee's or the Guarantor's insolvency (however evidenced) or
the Lessee's or the Guarantor's admission of insolvency or bankruptcy, or the
commencement by the Lessee or the Guarantor of a voluntary case under the U.S.
Federal Bankruptcy Code, as now or hereafter constituted, or the Bankruptcy and
Insolvency Act (Canada), as now or hereafter constituted, or any other
applicable federal, state or provincial bankruptcy, insolvency reorganization,
composition or other similar law of any jurisdiction, or the consent by the
Lessee or the Guarantor to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Lessee or the Guarantor or of any substantial part of
the Lessee's or the Guarantor's property, or the making by the Lessee or the
Guarantor of an assignment for the benefit of creditors, or the failure of the
Lessee or the Guarantor generally to pay its debts as such debts become due, or
the taking of partnership or corporate or other action by or on behalf of the
Lessee or the Guarantor in furtherance of any such action; or
30.7 There shall be an "Event of Default" under the PCS Term
Credit Agreement; or, other than as disclosed in Schedule H to the PCS Term
Credit Agreement, an event of default (after the expiry of all applicable grace
periods) under any one or more agreements, indentures or instruments under which
the Guarantor or any of its Material Subsidiaries has outstanding Debt in excess
of Cdn. $40,000,000 or the U.S. Dollar Equivalent thereof shall happen and be
continuing without being cured or discharged by repayment, or any Debt of the
Guarantor or any of its Material Subsidiaries in excess of Cdn. $40,000,000 or
the U.S. Dollar Equivalent thereof which is payable on demand is not paid on
demand; or
30.8 Any representation or warranty made or deemed made or
certified to by the Lessee in this Lease or any Operative Document, any Consent
or any document contemplated hereby or thereby proves to be false or inaccurate
in any material respect on or as of the date made or deemed made; or
30.9 The Lessee shall fail to observe or perform, after the
expiration of any applicable grace period, any material term, covenant or
condition of any Ground Lease relating to a Parcel of Property, to be observed
or performed, unless any such observance or performance shall have been waived
or not required by the landlord under such Ground Lease, or if any one or more
of the events referred to in the Site Lease, the Sublease or any Ground Lease
shall occur which would cause the Site Lease, the Sublease or such Ground Lease
to terminate without notice or action by the landlord thereunder or which would
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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entitle the landlord under the Site Lease, the Sublease or such Ground Lease to
terminate the Site Lease, the Sublease or such Ground Lease and the term thereof
by the giving of notice to the Lessor without opportunity to cure, as tenant
thereunder, or if any of the terms, covenants or conditions of the Site Lease,
the Sublease or any Ground Lease shall in any manner be modified, changed,
terminated, supplemented, altered or amended in any material respect without the
consent of the Lessor and Assignee; or
30.10 An Event of Default (as defined in the Agreement for Lease)
shall exist under the Agreement for Lease; or
30.11 The Gas Contract or any Ancillary Facility Agreement or any
other Operative Document shall be modified, changed, terminated, supplemented,
altered or amended in any material respect without the consent of the Lessor and
the Assignee; or
30.12 The PCS Guaranty ceases to be in full force and effect
prior to the termination thereof in accordance with its terms, or the Guarantor
defaults in the performance of any obligation or covenant contained in the PCS
Guaranty, after required notice of such default shall have been given, and any
applicable grace period shall have expired; or
30.13 Any representation or warranty made by the Guarantor in the
PCS Guaranty or in any document contemplated hereby or thereby proves to be
false, misleading or inaccurate in any material respect on or as of the date
made or deemed made; or
30.14 The Guarantor ceases to directly or indirectly own all of
the outstanding partnership interests of the Lessee and issued and outstanding
shares of the capital stock of PCS Nitrogen Fertilizer Operations, Inc.
SECTION 31. RIGHTS UPON DEFAULT.
31.1 Upon the occurrence and continuation of any Event of Default
the Lessor may, in addition to exercising any other rights and remedies
available to it under applicable law, do any one or more of the following (if,
within fifteen (15) Business Days of receipt by the Lessee of an Event of
Default Notice (as defined in Section 29(l)), the Lessee has not made a request
to purchase all Parcels of Property and Units of Equipment under Section 29(l)
or, if the Lessee has so made such a request but has not consummated within
thirty (30) Business Days of receipt of the Event of Default Notice such
purchase in full compliance with Section 29(l)):
(a) Terminate the lease of any or all Property or Equipment
leased hereunder by written notice to the Lessee, subject
to the maximum amount the Lessor shall be entitled to
recover from the Lessee, as described in paragraph (f) of
this Section 19;
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(b) Whether or not the lease of any Property or Equipment is
terminated, take immediate possession of and remove any or
all Equipment and other equipment or property of the
Lessor in the possession of the Lessee, wherever situated,
and for such purpose, enter upon any premises without
liability to the Lessee for so doing, provided that the
taking of possession of any Property or Equipment shall
take place in a commercially reasonable manner;
(c) Whether or not any action has been taken under paragraph
(i) or (ii) above, sell any Property or Equipment (free of
or subject to the rights of the Lessee or any other person
under this Lease and with or without the concurrence or
request of the Lessee);
(d) Hold, use, occupy, operate, remove, lease or keep idle any
or all Property or Equipment as the Lessor in its sole
discretion may determine, without any duty to account to
the Lessee with respect to any such action or inaction,
except that the Lessor agrees that any profit it derives
from the occupation or use of any Property or Equipment
while exercising its rights under this Section 19 will be
applied to reduce the Accrued Default Obligations; and
(e) Exercise any other right or remedy which may be available
under applicable law and in general proceed by appropriate
judicial proceedings, either at law or in equity, to
enforce the terms hereof or to recover damages for the
breach hereof.
31.2 Suit or suits for the recovery of any default in the payment
of any sum due hereunder or for damages may be brought by the Lessor from time
to time at the Lessor's election, and nothing herein contained shall be deemed
to require the Lessor to await the date whereon this Lease or the term hereof
would have expired by limitation had there been no such default by the Lessee or
no such termination or cancellation.
31.3 The receipt of any payments under this Lease by the Lessor
with knowledge of any breach of this Lease by the Lessee or of any default by
the Lessee in the performance of any of the terms, covenants or conditions of
this Lease, shall not be deemed to be a waiver of any provision of this Lease.
31.4 No receipt of moneys by the Lessor from the Lessee after the
termination or cancellation hereof in any lawful manner shall reinstate,
continue or extend the Initial Term or the Renewal Term, or affect any notice
theretofore given to the Lessee, or operate as a waiver of the right of the
Lessor to enforce the payment of Basic Rent or Additional Rent or other charges
payable hereunder, or operate as a waiver of the right of the Lessor to recover
possession of any Unit of Equipment or Parcel of Property by proper
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suit, action, proceedings or remedy; it being agreed that, after the service of
notice to terminate or cancel this Lease, and the expiration of the time therein
specified, if the default has not been cured in the meantime, or after the
commencement of any suit, action or summary proceedings or of any other remedy,
or after a final order, warrant or judgment for the possession of any Unit of
Equipment or Parcel of Property, the Lessor may demand, receive and collect any
moneys payable hereunder, without in any manner affecting such notice,
proceedings, suit, action, order, warrant or judgment; and any and all such
moneys so collected shall be deemed to be payments on account for the use and
operation of any Unit of Equipment or the use, operation and occupation of any
Parcel of Property, or at the election of the Lessor, on account of the Lessee's
liability hereunder and will be applied to reduce the Accrued Default
Obligations. Acceptance of the keys to any Parcel of Property, or any similar
act, by the Lessor, or any agent or employee of the Lessor, during the term
hereof, shall not be deemed to be an acceptance of a surrender of any Parcel of
Property unless the Lessor shall consent thereto in writing.
31.5 The Lessee hereby expressly confirms that, in any event,
including after any Event of Default, and notwithstanding any termination of
this Lease or reentry or repossession by the Lessor, the Lessee shall continue
to be liable for, and the Lessor may recover from the Lessee, (i) all Basic Rent
accrued to the date of payment, (ii) any Additional Rent owing with respect to
all Property or Equipment leased by the Lessee, (iii) all amounts payable
hereunder or under any other Operative Document and (iv) all losses, damages,
costs and expenses incurred (including, without limitation, reasonable
attorneys' fees and expenses, commissions, filing fees and sales or transfer
taxes) sustained by the Lessor by reason of such Event of Default and the
exercise of the Lessor's remedies with respect thereto, including, in the event
of a sale by the Lessor of any Property or Equipment pursuant to this Section
19, all costs and expenses associated with such sale. The amounts payable in
clauses (i) through (iv) above are hereinafter sometimes referred to as the
"Accrued Default Obligations". Accrued Default Obligations shall not include any
damages for loss of profits arising from the prospective use, operation and
occupancy by parties other than the Lessee of any Property or Equipment or the
anticipated receipt of income therefrom subsequent to the Lessee's possession of
such Property and Equipment.
31.6 After an Event of Default, the Lessor may sell its interest
in any Property and Equipment in any commercially reasonable manner upon any
terms that the Lessor deems satisfactory, free of any rights of the Lessee or
any Person claiming through or under the Lessee. In the event of any such sale
or in the event the Lessor elects not to sell any Property or Equipment, in
addition to the Accrued Default Obligations, the Lessor shall be entitled to
recover from the Lessee, as liquidated damages, and not as a penalty, an amount
equal to eighty-five percent (85%) of the Acquisition Cost of any Property or
Equipment under this Lease. Proceeds of any such sale received by the Lessor,
or, in the event the Lessor elects not to sell, proceeds at any time thereafter
received by the Lessor from any sale, occupation, operation, use or lease of any
Property or Equipment (net of all reasonable costs and expenses incurred by the
Lessor in connection with any sale,
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occupation, operation, use or lease of any Property or Equipment) in excess of
fifteen percent (15%) of the Acquisition Cost of such Property or Equipment,
shall be credited against the Accrued Default Obligations the Lessee is required
to pay under this Section 19. If such excess proceeds exceed the Accrued Default
Obligations, or, if the Lessee has paid all amounts required to be paid under
this Section 19, such excess shall be paid by the Lessor to the Lessee. If the
Lessee converts any such Property or Equipment after an Event of Default, or if
such Property or Equipment is lost or destroyed, in addition to the Accrued
Default Obligations, the Lessor may cause the Lessee to pay to the Lessor, and
the Lessee shall pay to the Lessor, as liquidated damages and not as a penalty,
an amount equal to eighty-five percent (85%) of the Acquisition Cost of such
Property or Equipment.
31.7 In the event of a sale pursuant to this Section 19, upon
receipt by the Lessor of the amounts payable hereunder, the Lessor shall
transfer all of the Lessor's right, title and interest in and to the Property
and Equipment to the purchaser thereof.
31.8 In addition to its other rights in this Section 19, the
Lessor may exercise its various rights under the Operating Agreement, the
Ancillary Facility Agreements and the Gas Contract or transfer such rights to
the purchaser in a sale.
31.9 No remedy referred to in this Section 19 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to the Lessor at law or in equity, and
the exercise in whole or in part by the Lessor of any one or more of such
remedies shall not preclude the simultaneous or later exercise by the Lessor of
any or all such other remedies. No waiver by the Lessor of any Event of Default
hereunder shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default.
31.10 If (i) an Event of Default arising solely as a result of
the Lessee's failure to comply with its obligations contained in the second
sentence of paragraph (b) of Section 9 of this Lease shall have occurred and be
continuing, (ii) the Lessor shall terminate this Lease or the Lessee's right to
the use and possession of the Ammonia Project, and (iii) the Lessor shall sell
the Ammonia Project, then if the proceeds of such sale are less than 15% of the
Acquisition Cost of the Ammonia Project, the Lessee shall pay to the Lessor the
amount by which the sales price of the Ammonia Project has been reduced as the
direct result of wear and tear in excess of the wear and tear that would have
occurred if the Lessee's obligations contained in the second sentence of
paragraph (b) of Section 9 of this Lease had been satisfied (the amount by which
the sales price of the Ammonia Project has been reduced as the direct result of
wear and tear in excess of the wear and tear that would have occurred if the
Lessee's obligations contained in the second sentence of paragraph (b) of
Section 9 of this Lease had been satisfied, to be such amount, if any, as the
Lessor and the Lessee agree, or if no agreement is reached, the amount, if any,
determined pursuant to the Appraisal Procedure), provided that, in no event
shall the Lessee be required to pay an
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amount that, when combined with the proceeds received by the Lessor from the
purchaser of the Ammonia Project, exceeds 15% of the Acquisition Cost of the
Ammonia Project.
SECTION 32. EQUIPMENT TO BE PERSONAL PROPERTY.
It is the intention and understanding of the Lessor and the
Lessee that all Equipment shall be and at all times remain personal property.
The Lessee shall obtain and record such instruments and take such steps as may
be necessary to prevent any Person from acquiring any rights in Equipment
paramount to the rights of the Lessor by reason of such Equipment being deemed
to be real property.
SECTION 33. SALE OR ASSIGNMENT BY LESSOR.
33.1 The Lessor shall have the right to obtain equity and debt
financing for the acquisition and ownership of the Property or Equipment by
selling or assigning its right, title and interest in any or all amounts due
from the Lessee or any third party under this Lease; provided that any such sale
or assignment shall be subject to the rights and interests of the Lessee under
this Lease.
33.2 Any Assignee shall, except as otherwise agreed by the Lessor
and such Assignee, have (to the exclusion of the Lessor) all the rights, powers,
privileges and remedies of the Lessor hereunder, and the Lessee's obligations as
between itself and such Assignee hereunder shall not be subject to any claims or
defense that the Lessee may have against the Lessor, other than the defense of
payment or satisfaction of the obligation, provided that the foregoing shall not
be deemed to be a waiver of any claims the Lessee may have against the Lessor.
Upon written notice to the Lessee of any such assignment, the Lessee shall
thereafter make payments of Basic Rent, Additional Rent and other sums due
hereunder to the Assignee, to the extent specified in such written notice, and
only such payments to the applicable Assignee shall discharge the obligation of
the Lessee to the Lessor hereunder and only to the extent of such payments.
Anything contained herein to the contrary notwithstanding, no Assignee shall be
obligated to perform any duty, covenant or condition required to be performed by
the Lessor hereunder, and any such duty, covenant or condition shall be and
remain the sole obligation of the Lessor.
SECTION 34. INCOME TAXES.
34.1 The Lessor agrees that it will not file any Federal, state
or local income tax returns during the Lease Term with respect to any Property
or Equipment that are inconsistent with the treatment of the Lessee as tax owner
of such Property or Equipment for Federal, state and local income tax purposes.
34.2 Paragraph (a) of Section 22 above notwithstanding, the
Lessor agrees that, at the written request of the Lessee, it will take all such
action as may be required to
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be taken by a lessor to elect under any provision of the Code substantially
similar to section 48(d) of the Internal Revenue Code of 1954, as amended prior
to the enactment of the Tax Reform Act of 1986, permitting a pass-through of an
investment tax credit to a lessee, to treat the Lessee as having acquired any
Unit of Equipment or any qualifying appliances, equipment and machinery attached
to any Parcel of Property acquired by the Lessor that would qualify for such a
credit (within the meaning of section 48(b) of the Code), provided that such
request is received by the Lessor reasonably in advance of the date on which the
Lessor is required to take such action, and the Lessee provides the Lessor in a
timely fashion with all information (other than identifying information
pertaining to the Lessor) required to take such action. The Lessor does not
represent or warrant to the Lessee that credits will be allowable with respect
to any Unit of Equipment or other property under the Code or that any election
will be effective to transfer any such credits that are allowable to the Lessee.
The Lessor shall have no liability to the Lessee resulting from the disallowance
to the Lessee of credits under the Code with respect to any Unit of Equipment or
other property unless such disallowance is directly and primarily attributable
to the failure of the Lessor to comply with its obligations under the first
sentence of this paragraph (b).
SECTION 35. NOTICES AND REQUESTS.
All notices, offers, acceptances, approvals, waivers, requests,
demands and other communications hereunder or under any other instrument,
certificate or other document delivered in connection with the transactions
described herein shall be in writing, shall be addressed as provided below and
shall be considered as properly given (a) if delivered in person, (b) if sent by
express courier service (including, without limitation, Federal Express, Emery,
DHL, Airborne Express, and other similar express delivery services), (c) in the
event overnight delivery services are not readily available, if mailed by
international airmail, postage prepaid, registered or certified with return
receipt requested, or (d) if sent by telecopy and confirmed, provided that, in
the case of a notice by telecopy, the sender shall in addition confirm such
notice by writing sent in the manner specified in clauses (a), (b) or (c) of
this Section 23. All notices shall be effective upon receipt by the addressee;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. For the purposes of notice, the addresses of the parties shall
be as set forth below; provided, however, that any party shall have the right to
change its address for notice hereunder to any other location by giving written
notice to the other party in the manner set forth herein.
The initial addresses of the parties hereto are as follows:
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If to the Lessor:
Trinidad Ammonia Company, Limited Partnership
c/o Trinidad Ammonia Capital, Inc.
North Tower
World Financial Center
250 Vesey Street
New York, NY 10281
Attention: Jean M. Tomaselli
Telephone: (212) 449-7925
Telecopy: (212) 449-2854
If to the Lessee:
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Senior Counsel
Telephone: (901) 758-5375
Telecopy: (901) 758-5201
and
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Assistant Treasurer
Telephone: (901) 758-5266
Telecopy: (901) 758-5202
With copies to the Guarantor at the following address:
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: Chief Financial Officer
Telecopy: (306) 933-8844
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and
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: General Counsel
Telecopy: (306) 933-8877
With a copy of all notices under this Section 23 to any Assignee at such address
as such Assignee may specify by written notice to the Lessor and the Lessee.
SECTION 36. COVENANT OF QUIET ENJOYMENT.
During the Lease Term of any Property or Equipment hereunder and
so long as no Event of Default or Potential Default shall have occurred and be
continuing, the Lessor recognizes the Lessee's right to uninterrupted use and
quiet enjoyment of the Property or Equipment on the terms and conditions
provided in this Lease without any interference from the Lessor or anyone
claiming through or under the Lessor.
SECTION 37. RIGHT TO PERFORM FOR LESSEE.
37.1 If the Lessee fails to perform or comply with any of its
covenants or agreements contained in this Lease, the Lessor may, upon reasonable
notice to the Lessee but without waiving or releasing any obligations or
default, itself perform or comply with such covenant or agreement, and the
amount of the reasonable expenses of the Lessor incurred in connection with such
performance or compliance, shall be payable by the Lessee, not later than
fifteen (15) days after written notice by the Lessor.
37.2 Without in any way limiting the obligations of the Lessee
hereunder, the Lessee hereby irrevocably appoints the Lessor as its agent and
attorney at the time at which the Lessee is obligated to deliver possession of
any Parcel of Property or Unit of Equipment to the Lessor, to demand and take
possession of such Parcel of Property or Unit of Equipment in the name and on
behalf of the Lessee from whomsoever shall be at the time in possession thereof.
SECTION 38. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Lessee may not consolidate with or merge into any other
corporation or sell or assign all or substantially all of its assets or its
interest in the Ammonia Project to any Person, unless the surviving corporation
or transferee Person shall assume, by execution and delivery of instruments
satisfactory to the Lessor prior to any such consolidation, merger, sale or
assignment, the obligations of the Lessee hereunder and become successor to the
Lessee, but the Lessee shall not thereby be released, without the
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consent of the Lessor, from its obligations hereunder and; provided, further,
that no Event of Default shall have occurred and be continuing, both prior and
after giving effect to any such consolidation, merger, sale or assignment and
such surviving corporation or transferee Person will, on a pro forma basis,
immediately after such consolidation, merger or sale, possess a consolidated net
worth and credit rating substantially equivalent to or greater than that of the
Lessee immediately prior to such consolidation, merger or sale. The terms and
provisions of this Lease shall be binding upon and inure to the benefit of the
Lessee and its respective successors and assigns.
SECTION 39. PERMITTED CONTESTS.
39.1 The Lessee shall not be required, nor shall the Lessor have
the right, to pay, discharge or remove any tax, assessment, levy, fee, rent,
charge or Lien, or to comply or cause any Parcel of Property or Unit of
Equipment to comply with any Legal Requirements applicable to any Parcel of
Property or Unit of Equipment or the occupancy, use or operation thereof, so
long as no Event of Default exists under this Lease with respect to any Parcel
of Property or Unit of Equipment, and, in the judgment of the Lessee's counsel,
the Lessee shall have reasonable grounds to contest the existence, amount,
applicability or validity thereof by appropriate proceedings, which proceedings
in the reasonable judgment of the Lessor, (i) shall not involve any material
danger that any Parcel of Property or Unit of Equipment or any Basic Rent or any
Additional Rent would be subject to sale, forfeiture or loss or loss of use as a
result of failure to comply therewith, (ii) shall not affect the payment of any
Basic Rent or any Additional Rent or other sums due and payable hereunder or
result in any such sums being payable to any Person other than the Lessor or any
Assignee, (iii) will not place the Lessor in any danger of any monetary civil
liability for which the Lessor is not adequately indemnified (the Lessee's
obligations under Section 11 of this Lease shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
penalty, or to any criminal liability, (iv) if involving taxes, shall suspend
the collection of taxes, and (v) shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which the Lessee or
the Parcel of Property or Unit of Equipment is subject and shall not constitute
a default thereunder (the "Permitted Contest"). The Lessee shall conduct all
Permitted Contests in good faith and with due diligence and shall promptly after
the final determination (including appeals) of any Permitted Contest pay and
discharge all amounts which shall be determined to be payable therein. The
Lessor shall at the Lessee's expense cooperate in good faith with the Lessee
with respect to all Permitted Contests conducted by the Lessee pursuant to this
Section 27, including, without limitation, in assisting in the preparation of,
and participating in, filings related to such Permitted Contests.
39.2 At least ten (10) days prior to the commencement of any
Permitted Contest, the Lessee shall notify the Lessor in writing thereof if the
amount in contest exceeds $1,000,000 and shall describe such proceeding in
reasonable detail. In the event that a taxing authority or subdivision thereof
proposes an additional assessment or levy of
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any tax for which the Lessee is obligated to reimburse the Lessor under this
Lease, or in the event that the Lessor is notified of the commencement of an
audit or similar proceeding which could result in such an additional assessment,
then the Lessor shall in a timely manner notify the Lessee in writing of such
proposed levy or proceeding.
39.3 The Lessor and the Lessee agree that no Event of Default or
Potential Default shall be deemed to have occurred if the existence of the event
causing such Event of Default or Potential Default, as the case may be, is being
contested by the Lessee as a Permitted Contest in accordance with the terms of
this Section 27.
SECTION 40. LEASEHOLD INTERESTS.
The following provisions relate to the Site Lease, the Sublease
and each additional lease under which a leasehold interest in a Parcel of
Property is subleased to the Lessee or a Permitted Sublessee hereunder (each, a
"Ground Lease"):
40.1 The Lessee hereunder covenants and agrees to perform and to
observe and to cause each Permitted Sublessee to perform and observe all of the
terms, covenants, provisions, conditions and agreements of the underlying Ground
Leases on the Lessor's part as lessee or sublessee thereunder to be performed
and observed (including, without limitation, payment of all rent, additional
rent and other amounts payable by the Lessor as lessee under any Ground Lease)
to the end that all things shall be done which are necessary to keep unimpaired
the rights of the Lessor as lessee under any Ground Lease. The Lessee further
covenants that it shall cause to be exercised any renewal option contained in
the Ground Lease which relates to renewal occurring in whole or in part during
the term of this Lease. The Lessee agrees to cooperate fully with the Lessor to
enforce the Lessor's rights as the lessee under any Ground Lease as against the
lessor under such Ground Lease.
40.2 The Lessee covenants and agrees pursuant to Section 11
hereof to indemnify and hold harmless the Lessor and any Assignee from and
against any and all liability, loss, damage, suits, penalties, claims and
demands of every kind and nature (including, without limitation, reasonable
attorneys' fees and expenses) by reason of the Lessee's or any Permitted
Sublessee's failure to comply with any Ground Lease or the provisions of this
Section 28.
40.3 The Lessor and the Lessee agree that the Lessor shall have
no obligation or responsibility to provide services or equipment required to be
provided or repairs or restorations required to be made in accordance with the
provisions of any Ground Lease by the lessor thereunder. The Lessor shall in no
event be liable to the Lessee nor shall the obligations of the Lessee hereunder
be impaired or the performance thereof excused because of any failure or delay
on the part of the lessor under any Ground Lease in providing such services or
equipment or making such restorations or repairs and such
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failure or delay shall not constitute a basis for any claim against the Lessor
or any offset against any amount payable to the Lessor under this Lease.
40.4 The Lessor's interest under any Ground Lease shall not
expire, terminate or otherwise be extinguished without the prior written consent
of the Lessor.
40.5 The Lessee shall ensure that the Site Lease and the Sublease
shall each be a Mortgageable Ground Lease.
SECTION 41. MISCELLANEOUS.
41.1 All indemnities, representations and warranties, and the
obligation to pay Additional Rent contained in this Lease shall survive the
expiration or other termination hereof.
41.2 This Lease, the Unit Leasing Records and the AFL Unit
Leasing Records covering Property or Equipment leased pursuant hereto, the other
Operative Documents and the instruments, documents or agreements referred to
herein and therein constitute the entire agreement between the parties and no
representations, warranties, promises, guarantees or agreements, oral or
written, express or implied, have been made by any party hereto with respect to
this Lease or the Property or Equipment, except as provided herein or therein.
41.3 This Lease may not be amended, modified or terminated, nor
may any obligation hereunder be waived orally, and no such amendment,
modification, termination or waiver shall be effective for any purpose unless it
is in writing, signed by the party against whom enforcement thereof is sought. A
waiver on one occasion shall not be construed to be a waiver with respect to any
other occasion.
41.4 The captions in this Lease are for convenience of reference
only and shall not be deemed to affect the meaning or construction of any of the
provisions hereof. Any provision of this Lease which is prohibited by law 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 the parties hereto shall negotiate in good
faith appropriate modifications to reflect such changes as may be required by
law, and, as nearly as possible, to produce the same economic, financial and tax
effects as the provision which is prohibited or unenforceable; and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Lessee and the Lessor hereby waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect. THIS LEASE HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW
YORK. THE LESSEE AND THE LESSOR AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY
THE LAW OF
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THE STATE OF NEW YORK, THIS LEASE, AND THE RIGHTS AND DUTIES OF THE LESSEE AND
THE LESSOR HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTIONS 5-1401
AND 5- 1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) IN ALL RESPECTS, INCLUDING
WITHOUT LIMITATION IN RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THE LESSEE HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN THE
COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND
RELATED TO OR IN CONNECTION WITH THIS LEASE OR THE TRANSACTIONS CONTEMPLATED
HEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES
AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS LEASE OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO
HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE LESSEE AGREES NOT TO SEEK AND HEREBY
WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF
ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN
ENFORCEMENT OF SUCH JUDGMENT. THE LESSEE AGREES THAT SERVICE OF PROCESS MAY BE
MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET
FORTH IN THIS LEASE OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. THE LESSOR
AND THE LESSEE EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER IN TORT OR CONTRACT OR OTHERWISE) IN ANY WAY
RELATED TO THIS LEASE OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE LESSOR AND
THE LESSEE ACKNOWLEDGE THAT THE PROVISIONS OF THIS PARAGRAPH (D) OF SECTION 29
HAVE BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN
CONNECTION THEREWITH.
41.5 In connection with any sale of Property or Equipment
pursuant to Section 15 or 19 of this Lease, when the Lessor transfers title,
such transfer shall be on an as-is, non-installment sale basis, without warranty
by, or recourse to, the Lessor, except that such title shall be free of any
Liens resulting from the Lessor's willful or knowing act or omission.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
41.6 In connection with the sale or purchase of Property or
Equipment pursuant to Section 15 or 19 of this Lease, the Lessee shall, without
limitation of any of its obligations hereunder or under any other Operative
Document, pay all transfer taxes, transfer gains taxes, mortgage recording tax,
if any, recording and filing fees and all other similar taxes, fees, expenses
and closing costs (including reasonable attorneys' fees) in connection with the
conveyance of such Property or Equipment to the Lessee or any purchaser.
41.7 If any costs of the Lessor related to the Agreement for
Lease which were not included in the Acquisition Cost of a Parcel of Property or
a Unit of Equipment are allocated to such Parcel of Property or such Unit of
Equipment pursuant to the definition of Unit Acquisition Cost in the Agreement
for Lease, the Lessee and the Lessor shall execute a revised AFL Unit Leasing
Record to amend the Acquisition Cost for such Parcel or such Unit of Equipment
to reflect such increase.
41.8 The Lessee and the Lessor agree to treat information
concerning the structure and documentation of the Agreement for Lease and this
Lease confidentially, except to the extent that disclosure is required by law
(in which circumstance such party will use reasonable efforts to notify the
other party prior to such disclosure of any information). The foregoing
constraint shall not include information: (i) that is now in the public domain
or subsequently enters the public domain without fault on the part of the party
proposing to disclose the same; (ii) currently known to the Lessee or the Lessor
from its own sources as evidenced by its prior written records; (iii) that the
Lessee or the Lessor receives from a third party not under any obligation to
keep such information confidential; or (iv) that is provided by Lessee or Lessor
to counsel, consultants, other advisors and regulatory authorities and Assignees
or proposed Assignees, provided such parties agree (including in writing if so
requested by the non-providing party) to treat any information so provided as
similarly confidential.
41.9 The Lessor recognizes the Lessee's right to call any
Property by such name or designation as the Lessee may deem appropriate or
reliable in the ordinary course of the Lessee's business and to place such
signs, labels, plates or other markings on any Property or Equipment as the
Lessee may desire in exercising such rights, subject to the provisions of
paragraph (b) of Section 8 hereof.
41.10 The Lessor shall provide to Lessee on the date hereof and
hereafter upon the reasonable request of the Lessee, a balance sheet of the
Lessor certified by the Lessor and showing that the Lessor's capitalization is
such that at least four percent (4%) of its capitalization consists of
contributions from the Lessor's general partner and limited partners.
41.11 In connection with the sale of any Property or Equipment
pursuant to the provisions of this Lease or the Purchase Option, the Lessor
shall convey, and the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
purchaser shall accept a conveyance of, the Lessor's interest in the Operating
Agreement, the Gas Contract, all easements, licenses, Ground Leases, Ancillary
Facility Agreements and similar agreements for the benefit of such Property,
adjacent property or Equipment, such conveyance to be without warranty by, or
recourse to, the Lessor, except that such interest shall be free of any Liens
resulting from the Lessor's willful or knowing act or omission unrelated to an
occurrence of an Event of Default.
41.12 Upon the occurrence of an Event of Default and upon the
written request of the Lessee, which shall be received by the Lessor and any
Assignee not later than fifteen (15) Business Days subsequent to receipt by the
Lessee of notice (an "Event of Default Notice") from the Lessor or any Assignee
pursuant to this Lease that an Event of Default has occurred, the Lessee shall
have the right but not the obligation, not later than thirty (30) Business Days
after the Lessee received the notice of the Event of Default from the Lessor or
any Assignee, to purchase all Property and Equipment at a price equal to the
Acquisition Cost for such Property and Equipment, provided that the purchase
option contained in this paragraph shall only be available to the Lessee if the
purchase price and all other amounts paid by the Lessee would not in the
circumstances in which such payment is made constitute a preferential payment or
a voidable transfer pursuant to the provisions of the Federal Bankruptcy Code in
a bankruptcy proceeding by or against the Lessee and will not otherwise result
in the payment being subject to recapture from the Lessor. In connection with,
and as a condition to, the purchase of any Property and Equipment pursuant
hereto, (i) the Lessee shall pay at the time of purchase, in addition to the
Acquisition Cost of the Property and Equipment, all other amounts payable by the
Lessee under this Lease, including, without limitation, all Accrued Default
Obligations, and all transfer taxes, transfer gains taxes, mortgage recording
tax, if any, recording and filing fees and all other similar taxes, fees,
expenses and closing costs (including reasonable attorneys' fees) in connection
with the conveyance of such Property and Equipment to the Lessee and all other
amounts owing hereunder, and (ii) when the Lessor transfers title, such transfer
shall be on an as-is, non-installment sale basis, without warranty by, or
recourse to, the Lessor, except that such title shall be free of any Liens
resulting from the Lessor's willful or knowing act or omission.
41.13 Notwithstanding any provision of this Lease to the
contrary, for purposes of any Parcel of Property for which Substantial
Completion (as defined in the Agreement for Lease) has not yet been effected,
such Parcel shall continue to be subject to the provisions of the Agreement for
Lease, and the provisions of the first sentence of paragraph (a) of Section 8 of
this Lease, the final two sentences of paragraph (e) of Section 8 of this Lease,
the second and third sentences of paragraph (b) of Section 9 of this Lease,
paragraph (e) of Section 9 of this Lease, paragraph (f) of Section 9 of this
Lease, paragraph (g) of Section 9 of this Lease and clause (i) of paragraph (c)
of Section 10 of this Lease shall not be applicable to such Parcel.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
41.14 Subject to the terms and conditions contained in each
Assignment and Consent, the Lessor hereby assigns to the Lessee all of the
Lessor's right, title and interest in, to and under the Gas Contract, the
Operating Agreement and each Ancillary Facility Agreement from the date hereof
until the termination of the Lease Term with respect to the Ammonia Project.
SECTION 42. NO RECOURSE.
42.1 The Lessor's obligations hereunder are intended to be the
obligations of a limited partnership and of the corporation which is the general
partner thereof only and no recourse for the payment of any amount due under
this Lease or any other Operative Document or for any claim based thereon or
otherwise in respect thereof, shall be had against any limited partner of the
Lessor or any incorporator, shareholder, officer, director or Affiliate, as
such, past, present or future of such corporate general partner or of any
corporate limited partner or of any successor corporation to such corporate
general partner or any corporate limited partner of the Lessor, or against any
direct or indirect parent corporation of such corporate general partner or of
any limited partner of the Lessor or any other subsidiary or Affiliate of any
such direct or indirect parent corporation or any incorporator, shareholder,
officer or director, as such, past, present or future, of any such parent or
other subsidiary or Affiliate, it being understood that the Lessor is a limited
partnership formed for the purpose of the transactions involved in and relating
to this Lease and the Operative Documents on the express understanding
aforesaid. Nothing contained in this paragraph (a) of Section 30 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Lease and the Operative Documents and any other documents referred to
herein, of rights and remedies against the limited partnership or the corporate
general partner of the Lessor or the assets of the limited partnership or the
corporate general partner of the Lessor.
42.2 The Lessee's obligations hereunder are intended to be the
obligations of a limited partnership and of the corporation which is the general
partner thereof only and no recourse for any obligation of the Lessee hereunder,
or for any claim based thereon or otherwise in respect thereof, shall be had
against any limited partner of the Lessee or any incorporator, shareholder,
officer or director, or Affiliate, as such, past, present or future of such
corporate general partner or limited partner or of any successor corporation to
such corporate general partner or any corporate limited partner of the Lessee,
or against any direct or indirect parent corporation of such corporate general
partner or of any limited partner of the Lessee or any other subsidiary or
Affiliate of any such direct or indirect parent corporation or any incorporator,
shareholder, officer or director, as such, past, present or future, of any such
parent or other subsidiary or Affiliate. Nothing contained in this paragraph (b)
of Section 30 shall be construed to limit the exercise or enforcement, in
accordance with the terms of this Lease, the PCS Guaranty and the Operative
Documents and any other documents referred to herein, of rights and remedies
against the corporate
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
general partner of the Lessee or the assets of the corporate general partner of
the Lessee or against the Guarantor under the PCS Guaranty.
SECTION 43. NO MERGER.
There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in any Parcel of Property by reason of the
fact that the same person acquires or holds, directly or indirectly, this Lease
or the leasehold estate hereby created or any interest herein or in such
leasehold estate as well as the fee estate in any Parcel of Property or any
interest in such fee estate.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this
Lease to be executed and delivered by their duly authorized officers as of the
day and year first above written.
Trinidad Ammonia Company, Limited Partnership,
by Trinidad Ammonia Capital, Inc., its
General Partner
By____________________________________
Name:
Title:
PCS Nitrogen Fertilizer, L.P., by PCS Nitrogen
Fertilizer Operations, Inc., its General Partner
By____________________________________
Name:
Title:
72
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT A
Type of Equipment or Property
1. Ammonia Project
2. Other**
- ----------
* To be determined by agreement of the Lessee and the Lessor.
73
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT B
AFL UNIT LEASING RECORD to Lessor: Trinidad Ammonia Company,
the Amended and Restated Lease Agreement, Limited Partnership
dated as of May 16, 1997, between Lessee: PCS Nitrogen Fertilizer, L.P.
Trinidad Ammonia Company,
Limited Partnership, as lessor,
and PCS Nitrogen Fertilizer, L.P.,
as lessee (the "Lease Agreement").
A. AFL ULR No.:
Effective Date of this AFL
Unit Leasing Record ("AFL ULR") __________, 19__.
B. PLEASE COMPLETE THE FOLLOWING STATEMENTS, IF APPLICABLE:
1. This AFL ULR relates to [Deed/Ground Lease] dated __________ 19__.
PROPERTY DESCRIPTION AND RENTAL INFORMATION.
C. Type of Property (use category specified in Exhibit A to the Lease
Agreement)
D. Specific Description: (See Schedule A hereto if more space needed)
__________________________________________________________________________
__________________________________________________________________________
E. Location of
Property _______________________________________________________________
State County City Country
F. Unit Acquisition Cost under the Agreement for Lease as at the date hereof
is $_____________.
G. If the Effective Date of this AFL ULR is after the first day of the month
and prior to the Lease Rate Date in such month, the partial first month's
Basic Rent for Property placed under lease by this AFL ULR will be paid
from the date of this AFL ULR until the end of the month on the Basic Rent
Payment Date in such month. If the Effective Date of the AFL ULR falls on
or after the Lease Rate Date, the partial first month's Basic Rent will be
paid from the date of this AFL ULR until the end of the month on the next
succeeding Basic Rent Payment Date.
74
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
H. The Initial Term and Renewal Term for the Property placed under lease
pursuant to this AFL ULR will be in accordance with the Lease Agreement.
I. The Basic Rent is as defined in the Lease Agreement.
J. Termination of the lease of the Property leased pursuant to this AFL ULR
will be in accordance with the Lease Agreement.
K. ACKNOWLEDGMENT AND EXECUTION
The undersigned Lessor hereby leases to the undersigned Lessee, and the
Lessee acknowledges delivery to it in good condition of the Property
described on this AFL ULR. The Lessee agrees to pay the Basic Rent,
Additional Rent and additional payments set forth in the Lease Agreement.
The covenants, terms and conditions of this lease are those appearing in
the Lease Agreement, as it may from time to time be amended, which
covenants, terms and conditions are hereby incorporated by reference. The
terms used herein have the meaning assigned to them in the Lease
Agreement.
PCS Nitrogen Fertilizer, L.P., Trinidad Ammonia Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Trinidad Ammonia Capital, Inc.,
Operations, Inc., its General Partner
its General Partner
By_____________________________ By_____________________________
Name: Name:
Title: Title:
2
75
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT C
UNIT LEASING RECORD to Lessor: Trinidad Ammonia Company,
the Amended and Restated Lease Agreement, Limited Partnership
dated as of May 16, 1997, Lessee: PCS Nitrogen Fertilizer, L.P.
between Trinidad Ammonia Company,
Limited Partnership, as lessor,
and PCS Nitrogen Fertilizer, L.P.,
as lessee (the "Lease Agreement").
A. ULR No.:
Effective Date of this
Unit Leasing Record ("ULR") __________________, 19__.
B. PLEASE COMPLETE THE FOLLOWING STATEMENTS, IF APPLICABLE:
1. This ULR relates to [Deed/Ground Lease/Bill of Sale/Invoice] dated
__________________, 19__.
PROPERTY OR EQUIPMENT DESCRIPTION AND RENTAL INFORMATION
C. Type of Property or Equipment (use category specified in Exhibit A to the
Lease Agreement)
_____________________________
D. Specific Description (See Schedule A hereto if more space needed)
__________________________________________________________________________
__________________________________________________________________________
E. Location of Property
or Equipment _____________________________________________________
State County City Country
F. Basic Cost Additional Charges Sale & Use Tax Acquisition Cost
$ + $ + $ = $
---------------- --------------- --------------- ---------------
G. If the Effective Date of this ULR is after the first day of the month and
prior to the Lease Rate Date in such month, the partial first month's
Basic Rent for Property or
76
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Equipment placed under lease by this ULR will be paid from the date of
this ULR until the end of the month on the Basic Rent Payment Date in such
month. If the Effective Date of this ULR falls on or after the Lease Rate
Date, the partial first month's Basic Rent will be paid from the date of
this ULR until the end of the month on the next succeeding Basic Rent
Payment Date.
H. The Initial Term and Renewal Term for the Property or Equipment placed
under lease pursuant to this ULR will be in accordance with the Lease
Agreement.
I. The Basic Rent is as defined in the Lease Agreement.
J. Termination of the lease of the Property or Equipment leased pursuant to
this ULR will be in accordance with the Lease Agreement.
K. ACKNOWLEDGMENT AND EXECUTION
The undersigned Lessor hereby leases to the undersigned Lessee, and the
Lessee acknowledges delivery to it in good condition of the Property or
Equipment described on this ULR. The Lessee agrees to pay the Basic Rent,
Additional Rent and additional payments set forth in the Lease Agreement.
The covenants, terms and conditions of this lease are those appearing in
the Lease Agreement, as it may from time to time be amended, which
covenants, terms and conditions are hereby incorporated by reference. The
terms used herein have the meaning assigned to them in the Lease
Agreement.
PCS Nitrogen Fertilizer, L.P., Trinidad Ammonia Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Trinidad Ammonia Capital, Inc.,
Operations, Inc., its General Partner
its General Partner
By______________________________ By______________________________
Name: Name:
Title: Title:
2
77
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT D
Description of the Ammonia Project
78
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT E
Minimum Lease Payment Calculations
79
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT F
Legal Description of Parcel of Property
Constituting Part of Ammonia Project
80
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT G
Form of CRA Agreement
81
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
TABLE OF CONTENTS
PAGE
----
PARTIES .................................................................. 1
SECTION 1. DEFINED TERMS ................................................ 1
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
LESSEE ....................................................... 17
SECTION 3. LEASE OF PROPERTY OR EQUIPMENT ............................... 22
SECTION 4. OPERATING LEASE .............................................. 24
SECTION 5. DELIVERY ..................................................... 24
SECTION 6. INITIAL TERM; RENEWAL TERM ................................... 28
SECTION 7. RENT AND OTHER PAYMENTS ...................................... 28
SECTION 8. RESTRICTED USE; COMPLIANCE WITH LAWS ......................... 30
SECTION 9. MAINTENANCE, IMPROVEMENT AND REPAIR OF PROPERTY OR
EQUIPMENT .................................................... 33
SECTION 10. INSURANCE .................................................... 35
SECTION 11. INDEMNITIES .................................................. 39
SECTION 12. LEASE RENEWAL ................................................ 42
SECTION 13. LEASE EXPIRATION ............................................. 43
SECTION 14. CHARACTER OF AMMONIA PROJECT ................................. 45
SECTION 15. LOSS OF OR DAMAGE TO PROPERTY OR EQUIPMENT ................... 45
SECTION 16. CONDEMNATION AND DEDICATION OF PROPERTY;
EASEMENTS .................................................... 47
i
82
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 17. SURRENDER OF PROPERTY OR EQUIPMENT ........................... 48
SECTION 18. EVENTS OF DEFAULT ............................................ 49
SECTION 19. RIGHTS UPON DEFAULT .......................................... 51
SECTION 20. EQUIPMENT TO BE PERSONAL PROPERTY ............................ 55
SECTION 21. SALE OR ASSIGNMENT BY LESSOR ................................. 55
SECTION 22. INCOME TAXES ................................................. 55
SECTION 23. NOTICES AND REQUESTS ......................................... 56
SECTION 24. COVENANT OF QUIET ENJOYMENT .................................. 58
SECTION 25. RIGHT TO PERFORM FOR LESSEE .................................. 58
SECTION 26. MERGER, CONSOLIDATION OR SALE OF ASSETS ...................... 58
SECTION 27. PERMITTED CONTESTS ........................................... 59
SECTION 28. LEASEHOLD INTERESTS .......................................... 60
SECTION 29. MISCELLANEOUS ................................................ 61
SECTION 30. NO RECOURSE .................................................. 64
SECTION 31. NO MERGER .................................................... 65
Exhibit A - Categories of Equipment and Property
Exhibit B - Form of AFL Unit Leasing Record
Exhibit C - Form of Unit Leasing Record
Exhibit D - Description of the Ammonia Project
Exhibit E - Minimum Lease Payment Calculations
Exhibit F - Legal Description of Parcel of Property Constituting Part of Ammonia
Project
Exhibit G - Form of CRA Agreement
ii