1
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(q)
CONFIDENTIAL AND PROPRIETARY
AMENDED AND RESTATED LEASE AGREEMENT
Dated as of May 16, 1997
BETWEEN
Nitrogen Leasing 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 Nitrogen Leasing 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
March 27, 1996, 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 insurance premiums,
survey and survey inspection charges, recording and
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 March
27, 1996, 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 E hereto located in the Republic of
Trinidad and Tobago in which the Lessor has acquired or will acquire a leasehold
interest. To the extent
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
that 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
Agreements 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.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"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.
"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 & Xxxxxxx 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:
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(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
(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 .0593125% 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 last Business Day of the preceding calendar month
to and including the day immediately preceding the last
Business 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(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.
"Basic Rent Payment Date" means the last Business Day of each calendar
month during the Lease Term of any Property or Equipment and the Lease
Termination Date.
"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 40% (or, in the event the Lessee was not required to deposit funds in the
Cash Reserve Account prior to the Effective Date pursuant to the terms of
subsection 9.15 of the Agreement for Lease, 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 Xxxxx'x 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 Xxxxx'x Investors Services,
Inc. (or any successor entity thereto).
"Code" means the Internal Revenue Code of 1986, as amended.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Companies Act" means Companies Act, Xxxxxxx 00, Xx. 0, 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.
"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 Xxxxx'x 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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;
(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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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, as the case may be; provided, however, that the Effective
Date with respect to the Ammonia Project shall, as provided in the Agreement for
Lease, not be subsequent to the Designated Effective Date (as defined in the
Agreement for Lease) with respect to the Ammonia Project.
"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.
"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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
"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 Natural Gas Supply Contract dated April 16,
1996 made by the National Gas Company of Trinidad and Tobago Limited, Arcadian
Trinidad Limited (currently PCS Nitrogen Trinidad Limited), Arcadian Trinidad
Ammonia Limited (which by novation assigned its obligations, rights and benefits
thereunder by agreement dated January 27, 1997 to the said Arcadian Trinidad
Limited, currently PCS Nitrogen Trinidad Limited) and Arcadian Nitrogen Limited
(currently PCS Nitrogen Limited).
"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.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"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 Term, 84.5% 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 Nitrogen Leasing Company, Limited Partnership or any
successor or successors to all of its rights and obligations as the Lessor
hereunder.
"License Agreements" means, collectively (i) the License Agreement
dated March 5, 1996 between Arcadian Trinidad Ammonia Limited (which by novation
assigned its obligations, rights and benefits thereunder by agreement dated
January 27, 1997 to Arcadian Trinidad Limited, currently PCS Nitrogen Trinidad
Limited), the said Arcadian Trinidad Limited (currently PCS Nitrogen Trinidad
Limited) and the Lessor and (ii) the License Agreement dated March 5, 1996
between Point Lisas and Arcadian Nitrogen Limited (currently PCS Nitrogen
Limited).
"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 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).
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"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.
"Xxxxxxx Leasing" means ML Leasing Equipment Corp., a Delaware
corporation.
"Xxxxxxx Xxxxx" means Xxxxxxx Xxxxx & 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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16
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 that certain Operating Agreement, dated as
of March 5, 1996, between Arcadian Trinidad Limited (presently the Operator) and
the Lessor.
"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 Seller.
"PCS/NT Ltd. Agreement" means the Estoppel Certificate, Consent and
Agreement dated March 27, 1996 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.
"Point Lisas" means the Point Lisas Industrial Port Development
Corporation.
"Potential Default" means any event which, but for the lapse of time,
or giving of notice, or both, would constitute an Event of Default.
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18
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"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
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 Limited (formerly Arcadian Nitrogen
Limited), a Trinidad and Tobago private limited company.
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19
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Site Lease" means the Deed of Lease dated as of July 26, 1982 between
Point Lisas and Fertilizers of Trinidad and Tobago Limited (subsequently called
Arcadian Trinidad Ammonia Limited), which was assigned to Arcadian Trinidad
Limited (currently PCS Nitrogen Trinidad Limited) by Deed of Assignment dated
January 27, 1997, as the same may be amended, restated, modified or supplemented
from time to time as permitted by and in accordance with the Operative
Documents.
"Sublease" means the Deed of Sub-Lease dated as of March 27, 1996
between Arcadian Trinidad Ammonia 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(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 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 (r) 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:
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21
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
remedies or the enforcement of rights by Lessor under, this Lease, the Site
Lease, the Sublease, any xxxx 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 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, nor any change which would materially impair the
ability of the Lessee to per form its obligations under this Lease or the
Guarantor to perform its obligations under the PCS Guaranty.
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23
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
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
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24
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
(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,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 the Seller 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 and the Seller, 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 $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 the Cash Reserve Requirement Amount, minus (ii) the
aggregate amount of all Surplus Earnings Reduction Amounts with respect to
payments pursuant to paragraph (r) 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
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26
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Bank by the Lessee shall, within one (1) Business Day thereof, be released to
the Lessee by the CRA Bank.
14.18 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 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.
14.19 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.
14.20 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.
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;
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27
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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, within twelve (12)
months of the Effective Date of such Parcel or Unit, 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 40%
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(or, in the event the Lessee was not required to deposit funds in the Cash
Reserve Account prior to the Effective Date pursuant to the terms of subsection
9.15 of the Agreement for Lease, 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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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;
(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;
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(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 XXXX 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 XXXX 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 WHAT SOEVER 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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
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").
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 F 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.
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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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. 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.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 Per sons 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 period from the date of this
Agreement until the Lease Termination Date, in an amount not to exceed, when
aggregated with (A) the expenses referred to in clause (i) of subsection 9.4 of
the Agreement for Lease, and (B) the fees and expenses of the Lessor and any
Assignee for engineering services, $130,000 in the aggregate, (ii) the
reasonable costs and expenses associated with any such inspection, and the fees
and expenses of the Lessor and any Assignee which are incurred following the
occurrence and during the continuation of any Event of Default throughout the
Lease Term
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
of the Ammonia Project and (iii) all of the Lessor's and any Assignee's mortgage
recordation, liens and filing fees, and all out-of-pocket expenses of the
Lessor's legal counsel and any Assignee's legal counsel, and all out-of-pocket
expenses of any Assignee.
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 fur-
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nished 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 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
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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 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,
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THIS AMENDED AND RESTATED LEASE AGREEMENT
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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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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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 and (ii) operate, service, maintain and repair the 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
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.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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(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 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 (a) transfer restrictions, (b) expropriation and (c) 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 sub-
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
stantial 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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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.
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SECTION 23. INDEMNITIES.
The Lessee shall, and hereby does, indemnify and hold harmless the
Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 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, 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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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 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
Nitrogen Leasing 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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
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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.
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
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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.
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
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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 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
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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 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
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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 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
84.5% 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
Prop-
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erty 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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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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
Triggering 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 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
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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.
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 Xxxxxxx 00, xxxxxxxxx (x) xx
Xxxxxxx 0, xxxxxxxxx (x) of Section 2 or paragraph (l) of Section 29 hereof when
due or to pay amounts due to the
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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 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), as now or hereafter constituted,
involving the Lessee or the
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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 con
sent 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 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
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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
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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 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
84.5% of the Acquisition Cost of any Property or Equipment under this
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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, occupation, operation, use or lease of any Property or
Equipment) in excess of 15.5% 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 84.5% 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 other wise 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 15.5% 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
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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
amount that, when combined with the proceeds received by the Lessor from the
purchaser of the Ammonia Project, exceeds 15.5% 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.
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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 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, Xxxxx, 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
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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:
If to the Lessor:
Nitrogen Leasing Company, Limited Partnership
c/o Nitrogen Leasing Capital, Inc.
North Tower
World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Lessee:
PCS Nitrogen Fertilizer, L.P.
0000 Xxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Senior Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
PCS Nitrogen Fertilizer, L.P.
0000 Xxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Assistant Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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With copies to the Guarantor at the following address:
Potash Corporation of Saskatchewan Inc.
000-0xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx X0X 0X0 Xxxxxx
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
and
Potash Corporation of Saskatchewan Inc.
000-0xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx X0X 0X0 Xxxxxx
Attention: General Counsel
Telecopy: (000) 000-0000
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 Xxxx
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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 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
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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 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.
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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 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
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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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 3.9% 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 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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.
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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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 as of the day and year first above written.
Nitrogen Leasing Company, Limited Partnership, by
Nitrogen Leasing 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:
76
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.
77
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT B
AFL UNIT LEASING RECORD to Lessor: Nitrogen Leasing Company,
the Amended and Restated Limited Partnership
Lease Agreement, dated as of Lessee: PCS Nitrogen Fertilizer, L.P.
May 16, 1997, between
Nitrogen Leasing 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.
78
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., Nitrogen Leasing Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Nitrogen Leasing
Operations, Inc., Capital, Inc.,
its General Partner its General Partner
By____________________________ By_________________________
Name: Name:
Title: Title:
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79
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT C
UNIT LEASING RECORD to Lessor: Nitrogen Leasing Company,
the Amended and Restated Limited Partnership
Lease Agreement, dated as of Lessee: PCS Nitrogen Fertilizer, L.P.
May 16, 1997, between
Nitrogen Leasing 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/Xxxx 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
$__________ + $__________________ + $______________ = $_______________
80
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 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., Nitrogen Leasing Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Nitrogen Leasing Capital, Inc.,
Operations, Inc., its General Partner
its General Partner
By____________________________ By_________________________
Name: Name:
Title: Title:
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81
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT D
Description of the Ammonia Project
82
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT E
Legal Description of Parcel of Property
Constituting Part of Ammonia Project
83
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT F
Minimum Lease Payment Calculations
84
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT G
Form of CRA Agreement
85
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............................................. 25
SECTION 5. DELIVERY.................................................... 25
SECTION 6. INITIAL TERM; RENEWAL TERM.................................. 28
SECTION 7. RENT AND OTHER PAYMENTS..................................... 29
SECTION 8. RESTRICTED USE; COMPLIANCE WITH LAWS........................ 31
SECTION 9. MAINTENANCE, IMPROVEMENT AND REPAIR OF
PROPERTY OR EQUIPMENT....................................... 34
SECTION 10. INSURANCE................................................... 36
SECTION 11. INDEMNITIES................................................. 40
SECTION 12. LEASE RENEWAL............................................... 43
SECTION 13. LEASE EXPIRATION............................................ 44
SECTION 14. CHARACTER OF AMMONIA PROJECT................................ 46
SECTION 15. LOSS OF OR DAMAGE TO PROPERTY OR EQUIPMENT.................. 47
SECTION 16. CONDEMNATION AND DEDICATION OF PROPERTY;
EASEMENTS................................................. 48
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86
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 17. SURRENDER OF PROPERTY OR EQUIPMENT.......................... 50
SECTION 18. EVENTS OF DEFAULT........................................... 50
SECTION 19. RIGHTS UPON DEFAULT......................................... 53
SECTION 20. EQUIPMENT TO BE PERSONAL PROPERTY........................... 56
SECTION 21. SALE OR ASSIGNMENT BY LESSOR................................ 56
SECTION 22. INCOME TAXES................................................ 57
SECTION 23. NOTICES AND REQUESTS........................................ 58
SECTION 24. COVENANT OF QUIET ENJOYMENT................................. 59
SECTION 25. RIGHT TO PERFORM FOR LESSEE................................. 59
SECTION 26. MERGER, CONSOLIDATION OR SALE OF ASSETS..................... 60
SECTION 27. PERMITTED CONTESTS.......................................... 60
SECTION 28. LEASEHOLD INTERESTS......................................... 61
SECTION 29. MISCELLANEOUS............................................... 62
SECTION 30. NO RECOURSE................................................. 66
SECTION 31. NO MERGER................................................... 67
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 - Legal Description of Parcel of Property Constituting Part of
Ammonia Project
Exhibit F - Minimum Lease Payment Calculations
Exhibit G - Form of CRA Agreement
-ii-
